EXHIBIT 4.5
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CONGOLEUM CORPORATION, Issuer
and
FIRST UNION NATIONAL BANK, as Trustee
INDENTURE
Dated as of August 3, 1998
---------------
$100,000,000
8_% Senior Notes Due 2008
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CONGOLEUM CORPORATION, Issuer
and
FIRST UNION NATIONAL BANK, as Trustee
INDENTURE
Dated as of August 3, 1998
---------------
$100,000,000
8_% Senior Notes Due 2008
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CROSS-REFERENCE SHEET
Provisions of the Trust Indenture Act of 1939 and Indenture to be
dated as of August 3, 1998 between Congoleum Corporation and First Union
National Bank, Trustee, providing for 8_% Senior Notes Due 2008:
Section of the Act..................... Section of Indenture
------------------ --------------------
310(a)(1), (2) and (5)................. 6.9
310(a)(3) and (4)...................... Inapplicable
310(b)................................. 6.8 6.10 and:11.4
310(c)................................. Inapplicable
311(a)................................. 6.13(a) and (c)(1) and
(2)
311(b)................................. 6.13(b)
311(c)................................. Inapplicable
312(a)................................. 4.1 and 4.2(a)
312(b)................................. 4.2(a) and (b)
312(c)................................. 4.2(c)
313(a)................................. 4.4
313(b)(1).............................. 4.4
313(b)(2).............................. 4.4
313(c)................................. 4.4 and 11.4
313(d)................................. 4.4
314(a)................................. 4.3 and 11.4
314(b)................................. Inapplicable
314(c)................................. 11.5
314(d)................................. Inapplicable
314(e)................................. 11.5
314(f)................................. Inapplicable
315(a), (c) and (d).................... 6.1
315(b)................................. 5.11 and 11.4
315(e)................................. 5.12
316(a)(1).............................. 5.9 and 5.10
316(a)(2).............................. Inapplicable
316(a) (last sentence)................. 7.4
316(b)................................. 5.7
317(a)................................. 5.2
317(b)................................. 3.4(a) and (b)
318(a)................................. 11.7
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS..................................................10
SECTION 1.1 Certain Terms Defined........................................10
SECTION 1.2 Accountants' Certificate Conclusive..........................29
ARTICLE II ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES........29
SECTION 2.1 Authentication and Delivery of Securities....................29
SECTION 2.2 Execution of Securities......................................30
SECTION 2.3 Certificate of Authentication................................30
SECTION 2.4 Form, Denomination and Date of Securities;
Payments of Interest .....................................30
SECTION 2.5 Registration, Transfer and Exchange..........................31
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen Securities....32
SECTION 2.7 Cancellation of Securities; Destruction Thereof..............33
SECTION 2.8 Temporary Securities.........................................33
ARTICLE III COVENANTS OF THE ISSUER......................................34
SECTION 3.1 Payment of Principal, Interest and Liquidated Damages........34
SECTION 3.2 Offices for Payments, Etc....................................34
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee...........34
SECTION 3.4 Paying Agents................................................34
SECTION 3.5 Limitation on Indebtedness...................................35
SECTION 3.6 Limitation on Restricted Payments............................37
SECTION 3.7 Limitation on Sale of Assets.................................40
SECTION 3.8 Limitation on Liens..........................................41
SECTION 3.9 Limitation on Payment Restrictions Affecting Subsidiaries....42
SECTION 3.10 Limitation on Transactions with Affiliates...................42
SECTION 3.11 Officers' Certificates as to Default and as to Compliance....43
SECTION 3.12 Change of Control............................................43
SECTION 3.13 Maintenance of Properties, Etc...............................45
SECTION 3.14 Limitation on Lines of Business..............................46
SECTION 3.15 Stay, Extension and Usury Laws...............................46
ARTICLE IV SECURITYHOLDERS' LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE ...............................46
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders..............................46
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SECTION 4.2 Preservation and Disclosure of Securityholders' Lists........46
SECTION 4.3 Reports by the Issuer........................................48
SECTION 4.4 Reports by the Trustee.......................................48
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT.......................................49
SECTION 5.1 Event of Default Defined; Acceleration of Maturity; Waiver
of Default ...............................................49
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt ...............................................51
SECTION 5.3 Application of Proceeds......................................53
SECTION 5.4 Suits for Enforcement........................................53
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings..........54
SECTION 5.6 Limitations on Suits by Securityholders......................54
SECTION 5.7 Unconditional Right of Securityholders to Institute
Certain Suits ............................................54
SECTION 5.8 Powers and Remedies Cumulative: Delay or Omission Not
Waiver of Default.........................................54
SECTION 5.9 Control by Securityholders...................................55
SECTION 5.10 Waiver of Past Defaults......................................55
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold
in Certain Circumstances.....................................56
SECTION 5.12 Right of Court to Require Filing of Undertaking to
Pay Costs.................................................56
SECTION 5.13 Trustee May Enforce Claims Without Possession of
Securities................................................56
SECTION 5.14 Rights and Remedies Cumulative...............................57
SECTION 5.15 Delay or Omission Not Waiver.................................57
ARTICLE VI CONCERNING THE TRUSTEE.......................................57
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default.................................57
SECTION 6.2 Certain Rights of the Trustee................................58
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof.............60
SECTION 6.4 Trustee and Agents May Hold Securities; Collections, Etc.....60
SECTION 6.5 Moneys Held by Trustee.......................................60
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim...............................................60
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, Etc.......61
SECTION 6.8 Qualification of Trustee; Conflicting Interests..............61
SECTION 6.9 Persons Eligible for Appointment as Trustee..................61
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee....61
SECTION 6.11 Acceptance of Appointment by Successor Trustee...............62
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee.......................................63
SECTION 6.13 Preferential Collection of Claims Against the Issuer.........64
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ARTICLE VII CONCERNING THE SECURITYHOLDERS...............................68
SECTION 7.1 Evidence of Action Taken by Securityholders..................68
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities................................................68
SECTION 7.3 Holders to Be Treated as Owners..............................68
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding............68
SECTION 7.5 Right of Revocation of Action Taken..........................69
ARTICLE VIII SUPPLEMENTAL INDENTURES......................................69
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders...69
SECTION 8.2 Supplemental Indentures with Consent of Securityholders......70
SECTION 8.3 Effect of Supplemental Indenture.............................72
SECTION 8.4 Documents to Be Given to Trustee.............................72
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures................................................72
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE....................73
SECTION 9.1 When Issuer May Merge, Etc...................................73
SECTION 9.2 Opinion of Counsel to Trustee; Officers' Certificate.........74
SECTION 9.3 Successor Corporation Substituted............................74
ARTICLE X SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS..........................................75
SECTION 10.1 Satisfaction and Discharge of Indenture......................75
SECTION 10.2 Defeasance and Discharge of Indenture........................75
SECTION 10.3 Defeasance of Certain Obligations............................76
SECTION 10.4 Application by Trustee of Funds Deposited for Payment of
Securities................................................77
SECTION 10.5 Repayment of Moneys Held by Paying Agent.....................77
SECTION 10.6 Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Two Years.............................................78
SECTION 10.7 Reinstatement................................................78
ARTICLE XI MISCELLANEOUS PROVISIONS.....................................78
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability...................78
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and
Securityholders...........................................79
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture..........79
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders...........................................79
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SECTION 11.5 Compliance Certificates and Opinions of Counsel;
Statements to Be Contained Therein........................80
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays..............81
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939.....................................81
SECTION 11.8 New York Law to Govern.......................................81
SECTION 11.9 Counterparts.................................................82
SECTION 11.10 Effect of Headings...........................................82
ARTICLE XII REDEMPTION OF SECURITIES.....................................82
SECTION 12.1 Right of Optional Redemption; Prices.........................82
SECTION 12.2 Notice of Redemption; Partial Redemptions....................82
SECTION 12.3 Payment of Securities Called for Redemption..................83
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption..................................84
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THIS INDENTURE, dated as of August 3, 1998 between Congoleum
Corporation, a Delaware corporation (the "Issuer"), and First Union National
Bank, as Trustee (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue of its 8_% Senior
Notes Due 2008 (the "Securities") and, to provide, among other things, for the
authentication, delivery and administration thereof, the Issuer has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Securities and the Trustee's certificate of
authentication shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
No. $
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY 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 DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DTC (AND ANY PAYMENT HEREON 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 SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING
THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES OF AMERICA AND OTHER JURISDICTIONS. THE
HOLDER OF THIS SECURITY AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
CONGOLEUM CORPORATION
__% Senior Note Due 2008
Congoleum Corporation, a Delaware corporation (the "Issuer"), for
value received hereby promises to pay to , or
registered assigns, the principal sum of ___________ Dollars at the Issuer's
office or agency for said purpose, on August 1, 2008 in such coin or currency of
the United States of America as at the time of payment shall be legal tender for
the payment of public and private debts, and to pay interest semi-annually on
February 1 and August 1 (each an "Interest Payment Date") of each year,
commencing with February 1, 1999, on said principal sum in like coin or currency
at __% per annum at said office or agency from the most recent Interest Payment
Date to which interest on the Securities has been paid or duly provided for
unless the date hereof is a date to which interest on the Securities is paid or
duly provided for, in which case from the date of this Security, or unless no
interest has been paid or duly provided for on the Securities, in which case
from the date of issuance.
The interest so payable on any Interest Payment Date will, except as
otherwise provided in the Indenture referred to on the reverse hereof, be paid
to the Person in whose name this Security is registered at the close of business
on January 15 or July 15 (each an "Interest Record Date") next preceding such
Interest Payment Date, whether or not such day is a business day. Interest may
be paid, at the option of the Issuer, by mailing a check therefor payable to the
registered Holder entitled thereto at his last address as it appears on the
Security register. Notwithstanding the foregoing, if the date hereof is after an
Interest Record Date and before the
2
immediately following Interest Payment Date, this Security shall bear interest
from such Interest Payment Date; provided that if the Issuer shall default in
the payment of interest due on such Interest Payment Date, then this Security
shall bear interest at the rate borne by this Security from the next preceding
Interest Payment Date to which interest on the Securities has been paid or duly
provided for, or, if no interest has been paid or duly provided for on the
Securities since the original issue date of this Security, from such date.
Interest on this Security will be calculated on the basis of a
360-day year, consisting of twelve 30-day months.
Principal, premium, if any, and Liquidated Damages (as defined in
the Indenture), if any, on the Notes will be payable at the office or agency of
the Company maintained for such purpose within the State of New Jersey or, at
the option of the Company, payment of interest and Liquidated Damages, if any,
may be made by check mailed to the Holders at their respective addresses set
forth in the register of the Notes; provided that all payments of principal,
premium and Liquidated Damages, if any, with respect to Notes the Holders of
which have given wire transfer instructions to the Company will be required to
be made by wire transfer of immediately available funds to the respective
accounts specified by the Holders thereof. Until otherwise designated by the
Company, the Company's office or agency in New Jersey will be the office of the
Paying Agent and registrar of the Notes. Initially, the Trustee will act as
Paying Agent and registrar of the Notes. The Company may change any paying agent
and registrar without notice. The Notes will be issued in denominations of
$1,000 and integral multiples thereof.
This Security shall not be valid or obligatory until the certificate
of authentication hereon shall have been duly signed by an authorized officer of
the Trustee acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
[Seal] CONGOLEUM CORPORATION
By:________________________
(Name and Title)
By:________________________
(Name and Title)
3
[FORM OF REVERSE OF SECURITY]
Congoleum Corporation
--% Senior Note Due 2008
This Security is one of a duly authorized issue of debt securities
of the Issuer, limited to the aggregate principal amount of $100,000,000 (except
as otherwise provided in the Indenture mentioned below), issued or to be issued
pursuant to an Indenture dated as of July __, 1998 (the "Indenture"), duly
executed and delivered by the Issuer to First Union National Bank, as Trustee
(herein called the "Trustee"). Reference is hereby made to the Indenture and all
indentures supplemental thereto for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the Issuer
and the Holders (the words "Holders" or "Holder" meaning the registered holders
or registered holder) of the Securities.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal and interest and Liquidated Damages
(if any) in respect of all of the Securities then outstanding may be declared
due and payable in the manner and with the effect, and subject to the
conditions, provided in the Indenture. The Indenture provides that in certain
events such declaration and its consequences will or may be waived by the
Holders of a majority in aggregate principal amount of the Securities then
outstanding and that, prior to any such declaration, such Holders may waive any
past default under the Indenture and its consequences except a default in the
payment of principal of or interest or Liquidated Damages, if any, on any of the
Securities. Any such consent or waiver by the Holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Security and any Security
which may be issued in exchange or substitution therefor, whether or not any
notation thereof is made upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the consent
of the Holders of not less than a majority in aggregate principal amount of the
Securities at the time outstanding, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of
the Securities; provided that no such supplemental indenture shall, without the
consent of each Holder affected thereby, (a) reduce the amount of Securities
whose Holders must consent to any amendment, supplement or waiver, (b) reduce
the rate of or extend the time for payment of interest on any Security, (c)
reduce the principal of (or change the manner of computing the amount due on
acceleration) or extend the final maturity of any Securities, (d) reduce any
amount payable on redemption, (e) adversely affect any right of repayment at the
option of the Holder of any Security in connection with a Change of Control or
certain asset dispositions as provided in the
4
Indenture, or (f) impair or affect the right of any Holder of Securities to
institute suit for the payment of any Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligations of the
Issuer, which are absolute and unconditional, to pay the principal of and the
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and integral multiples thereof.
At the office or agency of the Issuer referred to on the face hereof
and in the manner and subject to the limitations provided in the Indenture,
Securities may be exchanged for a like aggregate principal amount of Securities
of other authorized denominations.
Upon due presentment for registration of transfer of this Security
at the above-mentioned office or agency of the Issuer, a new Security or
Securities of authorized denominations, for a like aggregate principal amount,
will be issued to the transferee as provided in the Indenture. No service charge
shall be made for any such transfer, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
Except as described in the next succeeding paragraph, the Securities
may not be redeemed prior to August 1, 2003. On or after such date, the
Securities may be redeemed at the option of the Issuer, as a whole, or from time
to time in part, on any date prior to maturity, upon mailing a notice of such
redemption not less than 30 nor more than 60 days prior to the date fixed for
redemption to the Holders of Securities to be redeemed, all as provided in the
Indenture, at the redemption prices set forth below (presented as percentages of
principal amount), together with accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date fixed for redemption if redeemed during the
twelve-month period beginning August 1 of each year indicated below:
If Redeemed During
the 12-Month Period Redemption
Beginning August 1, Price
------------------- ----------
2003 %
2004 %
2005 %
2006 100.000%
5
In addition, at any time prior to August 1, 2001, the Issuer may
redeem up to 30% of the aggregate principal amount of the Securities initially
issued with the proceeds of one or more Public Equity Offerings (as defined in
the Indenture) at a redemption price (expressed as a percentage of principal
amount) of [ ]%, plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the redemption date; provided that at least $70 million of
the aggregate principal amount of the Notes remains outstanding; and provided,
further, that such redemption shall occur within 60 days of the date of the
closing of such Public Equity Offerings.
Upon a notice to the Holders, as provided in the Indenture, of a
Change of Control, each Holder of Securities shall have the right, upon the
terms and subject to the conditions provided for in the Indenture, to require
the Issuer to repurchase, in whole or in part, the Securities of such Holder at
a purchase price of 101% of principal amount, plus accrued and unpaid interest
to the repurchase date. The Issuer may also be required to apply the proceeds of
certain dispositions of assets to make an offer to repurchase Securities at a
price equal to 100% of the principal amount of Securities to be repurchased plus
accrued interest thereon to the date of repurchase.
Subject to payment by the Issuer of a sum sufficient to pay the
amount due upon redemption or required repurchase, interest on this Security (or
portion hereof if this Security is redeemed or repurchased in part) shall cease
to accrue upon the date duly fixed for redemption or required repurchase of this
Security (or portion hereof if this Security is redeemed or repurchased in
part).
The Issuer, the Trustee and any authorized agent of the Issuer or
the Trustee may deem and treat the registered Holder hereof as the absolute
owner of this Security (whether or not this Security shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Issuer or the Trustee or any authorized agent of the Issuer or
the Trustee), for the purpose of receiving payment of, or on account of, the
principal hereof and premium, if any, and subject to the provisions on the face
hereof, interest hereon and for all other purposes, and neither the Issuer nor
the Trustee nor any authorized agent of the Issuer or the Trustee shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of,
premium, if any, or the interest on this Security, for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture or
any indenture supplemental thereto, against any incorporator, shareholder,
officer or director, as such, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
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THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAW PROVISIONS THEREOF.
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
First Union National Bank, as Trustee
By:__________________________________
Authorized Officer
7
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to:
________________________________________________________________________________
________________________________________________________________________________
_________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints _______________________________________________________
________________________________________________________________________________
___________________________________________agent to transfer this Security on
the books of the Issuer. The agent may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Security)
8
Signature Guarantee*: ___________________________________
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* Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities and Exchange Act of 1934, as
amended.
9
In connection with any transfer of any of the Securities evidenced by this
certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) |_| exchanged for the undersigned's own account without
transfer; or
(2) |_| transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) |_| transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) |_| transferred 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 acquiring the
Preferred Security for its own account, or for the account
of such an institutional "accredited investor," for
investment purposes and not with a view to, or for offer or
sale in connection with, any distribution in violation of
the Securities Act; or
(5) |_| transferred pursuant to another available exemption from
the registration requirements of the Securities Act of
1933; or
(6) |_| transferred pursuant to an effective registration statement.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3), (4) or
(5) is checked, the Registrar may require, prior to registering any such
transfer of the Securities such legal opinions, certifications and other
information as the Issuer has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act; provided, further, that (i) if
box 2 is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box 4 is checked, the
transferee must also provide a Transferee Representation Letter in the form
attached to the Indenture, dated August 3, 1998, after the date that a
Registration Statement has been filed and so long as such Registration Statement
continues to be effective, the Exchange Agent may only permit transfers for
which box (5) has been checked.
___________________________
Signature
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AND WHEREAS, all things necessary to make the Securities, when
executed by the Issuer and authenticated and delivered by the Trustee as in this
Indenture provided, the valid, binding and legal obligations of the Issuer, and
to constitute these presents a valid indenture and agreement according to its
terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities
by the Holders thereof, the Issuer and the Trustee mutually covenant and agree
for the equal and proportionate benefit of the respective Holders from time to
time of the Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture which are defined in the Trust Indenture Act of 1939 (the
"Trust Indenture Act") or the definitions of which in the Securities Act of
1933, as amended, are referred to in the Trust Indenture Act of 1939 (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of this Indenture. The words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article include the plural as well as the
singular.
"Acceleration Notice" shall have the meaning specified in Section
5.1.
"Accountants' Certificate" means a certificate of a nationally
recognized firm of independent public accountants. Each such certificate shall
include the statements provided for in Section 11.5, if and to the extent
required hereby.
"Acquired Indebtedness" of any specified Person means Indebtedness
of any other Person and its Subsidiaries existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person or assumed
by the specified Person in connection with the acquisition of assets from such
other Person, including, without limitation, Indebtedness of such other Person
and its Subsidiaries incurred by the specified Person in connection with or in
anticipation of (a) such other Person and its Subsidiaries being merged with or
into or becoming a Subsidiary of such specified Person or (b) such acquisition
by the specified Person.
11
"Affiliate" means, when used with reference to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, the referent Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct or cause the direction of management or policies of the referent
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; provided that beneficial ownership of 10%
or more of the Voting Stock of a person shall be deemed to be control, and the
terms "controlling" and "controlled" have meanings correlative of the foregoing.
"American Biltrite" means American Biltrite Inc., a Delaware
corporation, or its successors in interest.
"Asset Sale" means any sale, lease, transfer, exchange or other
disposition (or series of related sales, leases, transfers, exchanges or
dispositions), including, without limitation, dispositions pursuant to merger,
consolidation or sale and leaseback transactions, of (a) shares of Capital Stock
of a Subsidiary of the Issuer, whether by such Subsidiary or another Person, (b)
all or substantially all of the properties and assets of any division or line of
business of the Issuer or any Subsidiary of the Issuer or (c) any other property
or assets of the Issuer or of any Subsidiary of the Issuer outside the ordinary
course of business of the Issuer or such Subsidiary (each referred to for
purposes of this definition as a "disposition") by the Issuer or by any of its
Subsidiaries (other than (i) dispositions by a Subsidiary of the Issuer to the
Issuer or to a Wholly Owned Subsidiary of the Issuer, (ii) sales or other
dispositions in the ordinary course of business of inventory determined in
accordance with GAAP, and (iii) any disposition of properties or assets that is
consummated in accordance with the provisions of Article Nine).
"Asset Sale Offer" shall have the meaning specified in Section 3.7.
"Associate" of, or a Person "associated" with, any Person means (i)
any trust or other estate in which such Person has a substantial beneficial
interest or as to which such Person serves as trustee or in a similar fiduciary
capacity and (ii) any relative or spouse of such Person, or any relative of such
spouse, who has the same home as such Person.
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or security, the quotient obtained by dividing (a) the sum
of the product of (i) the number of years from such date to the date of each
successive scheduled principal or redemption payment of such Indebtedness or
security multiplied by (ii) the amount of such principal or redemption payment
by (b) the sum of all such principal or redemption payments.
"Board of Directors" means the Board of Directors of the Issuer or
any committee of such Board duly authorized to act hereunder.
"Business Day" means a day other than a Saturday or a Sunday which
in the city (or in any of the cities, if more than one) where amounts are
payable in respect of the Securities,
12
as specified on the face of the form of Security recited above, or in the city
in which the Corporate Trust Office of the Trustee is located, is neither a
legal holiday nor a day on which banking institutions are required or authorized
by law or regulation to close.
"Business Relations Agreement" means the Business Relations
Agreement dated as of March 11, 1993 between the Issuer and American Biltrite,
as amended through the Issue Date and as thereafter amended from time to time.
"Capitalized Lease Obligation" means an obligation under a lease
that is required to be classified and accounted for as a capital lease
obligation under GAAP and, for purposes of the Indenture, the amount of such
obligation at any date shall be the capitalized amount of such obligation at
such date, determined in accordance with such principles. The Stated Maturity of
such obligation shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may be
terminated by the lessee without penalty.
"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,
including each class of Common Stock or Preferred Stock of such Person, whether
outstanding on the Issue Date or issued after the Issue Date, and any and all
rights, warrants or options exchangeable for or convertible into such capital
stock.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof, (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc., (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Ratings Group or at least P-1 from Xxxxx'x
Investors Service, Inc., (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any United States branch of a
foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $500 million, (v) repurchase obligations with 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 (iv) above, and (vi) investments in money market funds which invest
substantially all their assets in securities of the types described in clauses
(i) through (v) above.
13
"Change of Control" means the occurrence of one or more of the
following events (whether or not approved by the Board of Directors of the
Issuer): (a) an event or series of events by which any Person or other entity
(other than any Permitted Holder) or group of Persons or other entities
(excluding Permitted Holders) acting in concert as determined in accordance with
Section 13(d) of the Exchange Act, whether or not applicable (a "Group of
Persons"), together with its or their Affiliates and Associates shall, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases, merger or otherwise (including pursuant to receipt of
revocable proxies) (A) be or become, directly or indirectly, the beneficial
owner (within the meaning of Rule 13d-3 and Rule 13d-5 under the Exchange Act,
whether or not applicable, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time) of more than 50.0% of the combined voting power of the then outstanding
Voting Stock of the Issuer or (B) otherwise has the ability, directly or
indirectly, to elect, directly or indirectly, a majority of the members of the
Board of Directors of the Issuer or other equivalent governing body thereof, (b)
individuals who at the beginning of any period of two consecutive calendar years
constituted the Board of Directors of the Issuer (together with any new
directors (i) elected by the Permitted Holders or (ii) whose election to the
Board of Directors of the Issuer, or whose nomination for election by the
Issuer's shareholders was approved by a vote of at least two-thirds of the
members of the Board of Directors of the Issuer then still in office who either
were members of the Board of Directors of the Issuer at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the members of the Board of
Directors of the Issuer then in office or (c) the Issuer consolidates with or
merges with or into another Person or the Issuer or any of its Subsidiaries,
directly or indirectly, sells, assigns, conveys, transfers, leases or otherwise
disposes of, in one transaction or a series of related transactions, all or
substantially all of the property or assets of the Issuer and its Subsidiaries
to any Person, or any Person consolidates with, or merges with or into, the
Issuer, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Issuer is converted into or exchanged for cash, securities
or other property, other than any such transaction where the Voting Stock of the
Issuer outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Capital Stock) of the
surviving or transferee corporation representing more than 50.0% of the combined
voting power of the then outstanding Voting Stock of the surviving or transferee
corporation and immediately after such transaction no "person" or "group" (as
such terms are used in Section 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall be deemed to have
beneficial ownership of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50.0% of the combined voting
power of the then outstanding Voting Stock of the surviving or transferee
corporation.
"Change of Control Offer" means upon the occurrence of a Change of
Control, the Company will notify the Holders in writing of such occurrence and
will make an offer to purchase, on a Business Day (the "Change of Control
Payment Date"), not earlier than 30 nor
14
later than 60 days following the date of notification of the Change of Control
is first given, all or any part (equal to $1,000 or an integral multiple
thereof) of the Securities then outstanding at a purchase price equal to 101.0%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to such Change of Control Payment Date.
"Change of Control Payment Date" has the meaning set forth in the
definition of Change of Control Offer.
"Change of Control Payment" means all or any part (equal to $1,000
or an integral multiple thereof) of the Securities then outstanding at a
purchase price equal to 101.0% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to such Change of Control
Payment Date.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Consolidated EBITDA" for any Person means for any period for which
it is to be determined the sum of, without duplication, the amounts for such
period, taken as a single accounting period, of (i) Consolidated Net Income;
plus (ii) only to the extent Consolidated Net Income has been reduced thereby
during such period, (A) Consolidated Tax Expense of such Person and its
Consolidated Subsidiaries paid or accrued; (B) Consolidated Interest Expense of
such Person and its Consolidated Subsidiaries; (C) depreciation and amortization
expenses (including, without limitation, amortization of capitalized debt
issuance costs); and (D) non-recurring, non-cash expenses (excluding any such
non-cash expense to the extent that it represents an accrual or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period); less (iii) without duplication, the amounts for such
period, taken as a single accounting period, of consolidated non-cash items
increasing Consolidated Net Income, all as determined on a consolidated basis in
conformity with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of (a) the aggregate amount of Consolidated EBITDA of such
Person for the four full fiscal quarters ending on or immediately prior to the
date of the transaction (the "Transaction Date") giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio (such four full fiscal
quarter period being referred to herein as the "Four Quarter Period") to (b) the
aggregate Consolidated Fixed Charges of such Person for such Four Quarter
Period. In addition to and without limitation of the foregoing, for purposes of
this definition, Consolidated EBITDA and Consolidated Fixed Charges shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to (i) the incurrence or retirement, as the case may be, of any
Indebtedness (including Acquired Indebtedness) or preferred stock of such Person
or of any of its
15
Subsidiaries, or one third of cash rental expense attributable to operating
leases paid or accrued by such Person and its Consolidated Subsidiaries, but
excluding all amortization of debt issuance costs, in each case during the
period commencing on the first day of the Four Quarter Period to and including
the Transaction Date (the "Reference Period"), including, without limitation,
the incurrence of the Indebtedness giving rise to the need to make such
calculation, as if such incurrence or retirement, as the case may be, occurred
on the first day of the Reference Period, provided that any Indebtedness repaid
under a revolving credit or similar credit facility shall not be deemed repaid
during such period other than to the extent the commitment thereunder has been
permanently reduced, and (ii) the Consolidated EBITDA during the Reference
Period attributable to any acquired or divested Person, business, property or
asset, provided that with respect to any such acquisition, only to the extent
the Consolidated EBITDA of such Person is otherwise includible in the referent
Person's Consolidated EBITDA, as if such transaction occurred on the first day
of the Reference Period. If the Person for whom this ratio is being calculated
or any of its Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if such Person or any Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness as of the
first day of the Reference Period. Furthermore, in calculating "Consolidated
Fixed Charges" for purposes of determining the denominator (but not the
numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1) 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 have
accrued 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 be optionally
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 in
effect on the Transaction Date will be deemed to have been in effect during the
Four Quarter Period; and (3) notwithstanding the foregoing, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to interest swap agreements, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation of
such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum of, without duplication, the amounts for such period, taken
as a single accounting period, of (i) Consolidated Interest Expense; and (ii)
the product of (x) the amount of all dividend requirements (whether or not
declared) on Preferred Stock of such Person and its Consolidated Subsidiaries,
whether in cash or otherwise (except dividends payable in shares of Common
Stock) paid, accrued or scheduled to be paid or accrued 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
(as reflected in the audited consolidated financial statements of such Person
for the most recently completed fiscal year).
"Consolidated Interest Expense" means, with respect to any Person
for any period, the aggregate of the interest expense (without deduction of
interest income) of such
16
Person and its Consolidated Subsidiaries for such period, on a consolidated
basis, as determined in accordance with GAAP, including (a) all amortization of
original issue discount, (b) the interest component of Capitalized Lease
Obligations paid or accrued by such Person and its Consolidated Subsidiaries
during such period, (c) net cash costs under all Interest Rate Protection
Agreements (including amortization of fees), (d) all capitalized interest, (e)
the interest portion of any deferred payment obligations for such period, (f)
cash contributions to any employee stock ownership plan to the extent such
contributions are used by such employee stock ownership plan to pay interest or
fees to any Person (other than the referent Person or one of its Wholly Owned
Subsidiaries) in connection with loans incurred by such employee stock ownership
plan to purchase Capital Stock of the referent Person and (g) one third of cash
rental expense attributable to operating leases paid or accrued by such Person
and its Consolidated Subsidiaries during such period, determined on a
consolidated basis, for such Person and its Consolidated Subsidiaries but
excluding all amortization of debt issuance costs.
"Consolidated Net Income" means, with respect to any Person for any
period, the consolidated net income (or deficit) of such Person and its
Consolidated Subsidiaries for such period, on a consolidated basis, as
determined in accordance with GAAP consistently applied, provided that the net
income of any other Person (other than a Subsidiary) in which the referent
Person or any Subsidiary of the referent Person has a joint interest with a
third party (which interest does not cause the net income of such other Person
to be consolidated into the net income of the referent Person in accordance with
GAAP) shall be included only to the extent of the amount that has been actually
received by the referent Person or a Wholly Owned Subsidiary of the referent
Person in the form of cash dividends or similar cash distributions (subject to,
in the case of a dividend or other distribution to a Wholly owned Subsidiary of
the referent Person, the limitations set forth in clause (i) of the next proviso
hereof), provided, further, that there shall be excluded (i) the net income (but
not loss) of any Subsidiary of the referent Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary; (ii) the net income of any Person acquired in a
pooling of interests transaction accrued prior to the date it became a
Subsidiary of the referent Person or is merged into or consolidated with the
referent Person or any Subsidiary of the referent Person; (iii) any restoration
to income of any contingency reserve, except to the extent that provision for
such reserve was made out of Consolidated Net Income earned at any time
following the Issue Date; (iv) any gain (but not loss), together with any
related provisions for taxes, realized upon the sale or other disposition
(including, without limitation, dispositions pursuant to sale and leaseback
transactions) of any property or assets which are not sold or otherwise disposed
of in the ordinary course of business and upon the sale or other disposition of
any Capital Stock of any Subsidiary of the referent Person; (v) any gain arising
from the acquisition of any securities, or the extinguishment, under GAAP, of
any Indebtedness of the referent Person; (vi) any extraordinary gain (but not
extraordinary loss) together with any related provision for taxes on any such
extraordinary gain and any one time gains or losses (including, without
limitation, those related to the adoption of new accounting standards), realized
by the referent Person or any of its Subsidiaries during the period for which
such
17
determination is made; and (vii) except for calculations made pursuant to clause
(b)(ii) of Section 9.1, in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets, any
earnings of the successor corporation prior to such consolidation, merger or
transfer of assets and the net income of any Subsidiary shall be calculated
after deducting preferred stock dividends payable by such Subsidiary to Persons
other than the Company and its other Subsidiaries.
"Consolidated Net Worth" of a Person at any date means the
Consolidated Stockholders' Equity of such Person plus (a) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of Preferred Stock (other than Disqualified Stock) that by its terms is
not entitled to the payment of dividends unless such dividends may be declared
and paid only out of net earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such Person upon
issuance of such Preferred Stock, less (x) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets of
a going concern business made within 12 months after the acquisition of such
business) subsequent to the date of the Indenture in the book value of any asset
owned by such Person or a Consolidated Subsidiary of such Person and (y) all
investments as of such date in unconsolidated Subsidiaries and in Persons that
are not Subsidiaries (except, in each case, Permitted Investments).
"Consolidated Stockholders' Equity" as of any date means with
respect to any Person the amount by which the assets of such Person and of its
Subsidiaries on a consolidated basis exceed the sum of (a) the total liabilities
of such Person and of its Subsidiaries on a consolidated basis, plus (b) any
redeemable Preferred Stock of such Person or any redeemable Preferred Stock of
any Subsidiary of such Person.
"Consolidated Subsidiary" of any Person means a Subsidiary which for
financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such Person as a consolidated Subsidiary.
"Consolidated Tax Expense" means, with respect to any Person for any
period, the aggregate of the United States Federal, state and local tax expense
attributable to taxes based on income and foreign income tax expenses of such
Person and its Consolidated Subsidiaries for such period (net of any income tax
benefit), determined in accordance with GAAP.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxx Xxxxxx
00000, Attention: Corporate Trustee Administration Department.
"Credit Facility" means the Financing Agreement dated as of April
19, 1991, as amended, among the Issuer and the Lenders (as therein defined)
party thereto, and any Refinancing, extension, renewal, modification,
restatement or replacement thereof (in whole or in part,
18
and without limitation as to amount, terms, conditions, covenants and other
provisions), as the same may be amended, supplemented or otherwise modified from
time to time.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Issuer or any of its Subsidiaries against fluctuations in currency values to or
under which the Issuer or any of its Subsidiaries is a party or a beneficiary on
the date of this Indenture or becomes a party or a beneficiary thereafter.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Disqualified Capital Stock" means any Capital Stock that, other
than solely at the option of the Issuer thereof, by its terms (or by the terms
of any security into which it is convertible or exchangeable) is, or upon the
happening of an event or the passage of time would be, required to be redeemed
or repurchased, in whole or in part, or has, or upon the happening of an event
or the passage of time would have, a redemption or similar payment due on or
prior to August 1, 2009, or is convertible into or exchangeable for debt
securities at the option of the holder thereof at any time prior to August 1,
2009.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Default" means any event or condition specified as such in
Section 5.1 which shall have continued for the period of time, if any, therein
designated.
"Excess Proceeds" has the meaning set forth in Section 3.7 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Debt" has the meaning set forth in the definition of
Permitted Refinancing Indebtedness.
"Fair Market Value" or "fair value" means, with respect to any asset
or property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between an informed and willing seller and an informed
and willing and able buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. The Fair Market Value of any non-cash
Restricted Payment shall be determined by the Board of Directors of the Issuer
acting reasonably and in good faith and shall be evidenced by a resolution of
the Board of Directors (certified by the Secretary or an Assistant Secretary of
the Issuer) delivered to the Trustee, such determination to be based upon an
opinion or appraisal issued by an investment bank of national standing if such
fair market value exceeds $5.0 million.
19
"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 other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or Pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part), provided that the term "guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "guarantee" used as a verb has a corresponding meaning.
"Holder," "Securityholder" or any other similar term means a Person
in whose name a Security is registered on the Security registration books of the
Issuer maintained pursuant to Section 2.5.
"incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable, contingently or otherwise, in
respect of such Indebtedness or other obligation or the recording, as required
pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on
the balance sheet of such Person (and "incurrence," "incurred," and "incurring"
shall have meanings correlative to the foregoing), provided that the accrual of
interest (whether such interest is payable in cash or in kind) and the accretion
of original issue discount shall not be deemed an incurrence of Indebtedness,
provided, further, that (A) any Indebtedness of a Person existing at the time
such Person becomes (after the Issue Date) a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) of the Issuer shall be deemed to be
incurred by such Subsidiary at the time it becomes a Subsidiary of the Issuer
and (B) any amendment, modification or waiver of any document pursuant to which
Indebtedness was previously incurred shall be deemed to be an incurrence of
Indebtedness unless such amendment, modification or waiver does not increase the
principal or premium thereof or interest rate thereon (including by way of
original issue discount).
"Indebtedness" means, with respect to any Person, at any date, any
of the following, 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
20
Person or only to a portion thereof), (B) evidenced by a note, bond, 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 (whether issued or assumed) relating to the
deferred purchase price of property; (ii) all conditional sale obligations and
all obligations under any title retention agreement (even if the rights and
remedies of the seller under such agreement in the event of default are limited
to repossession or sale of such property), but excluding trade accounts payable
arising in the ordinary course of business that are not overdue by 90 days or
more or are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted; (iii) all obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction entered into in the ordinary course of business; (iv) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
any asset or property (including, without limitation, leasehold interests and
any other tangible or intangible property) of such Person, whether or not such
Indebtedness is assumed by such Person or is not otherwise such Person's legal
liability, provided that if the obligations so secured have not been assumed in
full by such Person or are otherwise not such Person's legal liability in full,
the amount of such indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of the Indebtedness secured by such Lien or
the Fair Market Value of the assets or property securing such Lien; (v) all
Indebtedness of others (including all dividends of other Persons the payment of
which is) guaranteed, directly or indirectly, by such Person or that is
otherwise its legal liability or which such Person has agreed to purchase or
repurchase or in respect of which such Person has agreed contingently to supply
or advance funds; (vi) all Disqualified Capital Stock issued by such Person and
all Preferred Stock issued by Subsidiaries of such Person, with the amount of
Indebtedness represented by such Disqualified Capital Stock or Preferred Stock
being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends if any; and (viii) all obligations under Currency Agreements and
Interest Rate Protection Agreements. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Capital Stock or Preferred Stock which
does not have a fixed repurchase price shall be calculated in accordance with
the terms of such Disqualified Capital Stock or Preferred Stock, as the case may
be, as if such Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the Fair Market Value of such Disqualified Capital Stock
or Preferred Stock, such Fair Market Value shall be determined reasonably and in
good faith by the board of directors of the issuer of such Disqualified Capital
Stock or Preferred Stock, as the case may be. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date, provided that the amount outstanding at any time of
any Indebtedness issued with original issue discount is the full amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP.
21
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable and good faith judgment of the Board of Directors of the Issuer,
qualified to perform the task for which such firm has been engaged and is
disinterested and independent with respect to the Issuer and its Affiliates.
"Initial Purchasers" means Xxxxxxx, Xxxxx & Co., Credit Suisse First
Boston Corporation and ING Barings Xxxxxx Xxxx, LLC.
"Interest Rate Protection Agreement" means any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement designed to protect a Person or any of its Subsidiaries against
fluctuations in interest rates to or under which such Person or any of its
Subsidiaries is a party or a beneficiary on the Issue Date or becomes a party or
a beneficiary thereafter.
"Investment" by any Person means any direct or indirect (i) loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property (valued at the Fair Market Value thereof as
of the date of transfer) to others or payments for property or services for the
account or use of others, or otherwise), (ii) purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by any other Person (whether by merger, consolidation, amalgamation or
otherwise and whether or not purchased directly from the issuer of such
securities or evidences of Indebtedness), (iii) guarantee or assumption of the
Indebtedness of any other Person and (iv) all other items that would be
classified as investments (including, without limitation, purchases of assets
outside the ordinary course of business) on a balance sheet of such Person
prepared in accordance with GAAP. Investments shall exclude extensions of trade
credit and advances to customers and suppliers to the extent made in the
ordinary course of business and made in accordance with customary industry
practice. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Issue Date" means the date on which the Securities are originally
issued under the Indenture.
"Issuer" means the Congoleum Corporation and, subject to Article
Nine, its successors and assigns, and to the extent required by Sections 310 to
317 of the Trust Indenture Act of 1939, any other obligor on the Securities.
"Lien" means, with respect to any Person, any mortgage, pledge,
lien, encumbrance, easement, restriction, covenant, right-of-way, charge or
adverse claim affecting title or
22
resulting in an encumbrance against real or personal property of such Person, or
a security interest of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option, right of first
refusal or other similar agreement to sell, in each case securing obligations of
such Person and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statute or statutes) of any
jurisdiction other than to reflect ownership by a third party of property leased
to the referent Person or any of its Subsidiaries under a lease that is not in
the nature of a conditional sale or title retention agreement).
"Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement, dated August 3, 1998 between the Company and the
Initial Purchasers.
"Material Subsidiary" means, at any date of determination, any
Subsidiary of the Issuer that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Issuer accounted for more than 10% of the consolidated
revenues of the Issuer or (ii) as of the end of such fiscal year, was the owner
of more than 10% of the consolidated assets of the Issuer, all as set forth on
the most recently available consolidated financial statements of the Issuer and
its Consolidated Subsidiaries for such fiscal year prepared in conformity with
GAAP.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or Cash Equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or Cash Equivalents (except to the extent such obligations are financed
or sold with recourse to the Issuer or any Subsidiary of the Issuer) and
proceeds from the conversion of other property received when converted to cash
or Cash Equivalents, net of (i) reasonable third party brokerage commissions and
other reasonable third party fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii) provisions for
all taxes as a result of such Asset Sale, (iii) payments made to repay
indebtedness or any other obligation outstanding at the time of such Asset Sale
that was incurred in accordance with the Indenture and that either (a) is
secured by a Lien incurred in accordance with the Indenture on the property or
assets sold or (b) is required to be paid as a result of such sale in each case
to the extent actually repaid in cash and (iv) appropriate amounts to be
provided by the Issuer or any Subsidiary of the Issuer as a reserve against
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP. For
purposes of this definition and Section 3.7, "cash" means United States dollars
or such money as is freely and readily convertible into United States dollars.
"Net Equity Proceeds" means (a) in the case of any sale by the
Issuer of Qualified Capital Stock of the Issuer, the aggregate net proceeds
received by the Issuer, after payment of expenses, commissions and the like
incurred in connection therewith, whether such proceeds are in cash or in other
property (valued as determined reasonably and in good faith by the Board of
23
Directors of the Issuer, as evidenced by a resolution of the Board of Directors
(certified by the Secretary or an Assistant Secretary of the Issuer) delivered
to the Trustee, at the Fair Market Value thereof at the time of receipt) and (b)
in the case of any exchange, exercise, conversion or surrender of any
outstanding Indebtedness of the Issuer or any Subsidiary for or into shares of
Qualified Capital Stock of the Issuer, the amount of such indebtedness (or, if
such Indebtedness was issued at an amount less than the stated principal amount
thereof, the accrued amount thereof as determined in accordance with GAAP) as
reflected in the consolidated financial statements of the Issuer prepared in
accordance with GAAP as of the most recent date next preceding the date of such
exchange, exercise, conversion or surrender (plus any additional amount required
to be paid by the holder of such Indebtedness to the Issuer or to any Wholly
Owned Subsidiary of the Issuer upon such exchange, exercise, conversion or
surrender and less any and all payments made to the holders of such
Indebtedness, and all other expenses incurred by the Issuer in connection
therewith), in each case (a) and (b) to the extent consummated after the Issue
Date, provided that the exchange, exercise, conversion or surrender of any
Indebtedness outstanding on the Issue Date which is subordinated (whether
pursuant to its terms or by operation of law) to the Securities shall not be or
be deemed to be included in Net Equity Proceeds.
"New Debt" has the meaning set forth in the definition of Permitted
Refinancing Indebtedness.
"Officers' Certificate" means a certificate signed, in the case of
the Issuer, by the Chairman of the Board of Directors or the President or any
Vice President (whether or not designated by a number or numbers or a word or
words added before or after the title "Vice President") and by the Treasurer or
the Secretary or any Assistant Treasurer or Secretary and delivered to the
Trustee. Each such certificate shall include the statements provided for in
Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Issuer. Each such opinion
shall include the statements provided for in Section 11.5, if and to the extent
required hereby.
"outstanding," when used with reference to Securities, means,
subject to the provisions of Sections 6.8 and 7.4, as of any particular time,
all Securities authenticated and delivered by the Trustee under this Indenture,
except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
(i) of which moneys in the necessary amount shall have been deposited in trust
with the Trustee or with any paying agent (other than the Issuer) or shall have
been set aside, segregated and held in trust by the Issuer (if the Issuer shall
act as paying agent) or (ii) of which moneys and/or U.S. Government Obligations
as contemplated by Section 10.2 in the necessary amount have been theretofore
24
deposited with the Trustee in trust for the Holders of such Securities in
accordance with Section 10.2 and the conditions set forth therein have been
satisfied; provided that if such Securities are to be redeemed prior to the
maturity, thereof, notice of such redemption shall have been given as herein
provided, or provision satisfactory to the Trustee shall have been made for
giving such notice; and
(c) Securities in substitution for which other Securities shall have
been authenticated and delivered, or which shall have been paid, pursuant to the
terms of Section 2.6 (unless proof satisfactory to the Trustee is presented that
any of such Securities is held by a Person in whose hands such Security is a
legal, valid and binding obligation of the Issuer).
"Permitted Holders" means American Biltrite or its Subsidiaries.
"Permitted Investments" means (a) investments in cash and Cash
Equivalents; (b) Investments in any Wholly Owned Subsidiary of the Issuer by the
Issuer or by any other Wholly Owned Subsidiary of the Issuer, provided that such
Investment shall only be a Permitted Investment so long as any such Wholly Owned
Subsidiary in which the Investment has been made or which has made such
Investment remains a Wholly Owned Subsidiary of the Issuer; (c) Investments, not
exceeding $5 million at any one time in the aggregate, in joint ventures,
partnerships or Persons that are not Wholly Owned Subsidiaries of the Issuer
that are made solely for the purpose of acquiring a business related to the
Issuer's business; (d) Investments of the Issuer and its Subsidiaries arising as
a result of any Asset Sale otherwise complying with the terms of the Indenture,
provided that for each Asset Sale the maximum aggregate amount of Investments
permitted under this clause (d) shall not exceed 20% of the total consideration
received for such Asset Sale by the Issuer or any Subsidiary of the Issuer; and
(e) Investments in the Issuer by any Subsidiary of the Issuer, provided that any
Indebtedness evidencing such Investment is subordinated to the Securities.
"Permitted Liens" means (a) Liens for taxes, assessments and
governmental charges (other than any Lien imposed by the Employee Retirement
Income Security Act of 1974, as amended) that are not yet delinquent or are
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which adequate reserves have been established or
other provisions have been made in accordance with GAAP; (b) statutory
mechanics', workmen's, materialmen's, operators' or similar Liens imposed by law
and arising in the ordinary course of business for sums which are not yet due or
are being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted and for which adequate reserves have been established
or other provisions have been made in accordance with GAAP; (c) imperfections
of, or encumbrances on, title that do not impair the value of property for its
intended use; (d) Liens (other than any Lien under the Employee Retirement
Income Security Act of 1974, as amended) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (e) Liens incurred or
deposits made to secure the performance of tenders, bids, leases, statutory or
regulatory obligations, bankers' acceptances, surety and appeal bonds,
government
25
contracts, performance and return of money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (f) easements, rights-of-way,
municipal and zoning ordinances and similar charges, encumbrances, title defects
or other irregularities that do not materially interfere with the ordinary
course of business of the Issuer or of any of its Subsidiaries; (g) Liens
(including extensions and renewals thereof) upon real or tangible personal
property acquired after the Issue Date, provided that (I) such Lien is created
solely for the purpose of securing Indebtedness (1) that is incurred in
accordance with paragraph (b)(ix) of Section 3.5 to finance the cost (including
the cost of improvement or construction) of the item of property or assets
subject thereto and such Lien is created prior to, at the time of or within 120
days after the later of the acquisition, the completion of construction or the
commencement of full operation of such property or (2) that is Permitted
Refinancing Indebtedness to Refinance any Indebtedness previously so secured,
(II) the principal amount of the Indebtedness secured by such Lien does not
exceed 100% of such cost and (III) any such Lien shall not extend to or cover
any property or assets of the Issuer or of any of its Subsidiaries other than
such item of property or assets and any improvements on such item; (h) Liens
incurred in ordinary course of business of the Issuer or of any of its
Subsidiaries with respect to obligations that do not exceed $5.0 million at any
one time outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Issuer or such Subsidiary; (i) Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Issuer or of any of its Subsidiaries
relating to such property or assets; (j) any interest or title of a lessor in
the property subject to any Capitalized Lease Obligation, provided that such
sale-leaseback transaction related thereto otherwise complies with this
Indenture; (k) Liens arising from filing Uniform Commercial Code financing
statements regarding leases; (1) Liens in favor of the Issuer (but only so long
as such Lien is held by the Issuer); (m) Liens arising from the rendering of a
final judgment or order against the Issuer or any Subsidiary of the Issuer that
does not give rise to an Event of Default; (n) Liens securing reimbursement
obligations with respect to letters of credit incurred in the ordinary course of
business and in accordance with this Indenture that encumber documents and other
property relating to such letters of credit and the products and proceeds
thereof; and (o) Liens in favor of the Trustee arising under this Indenture.
"Permitted Refinancing Indebtedness" means Indebtedness of the
Issuer or of any of the Issuer's Subsidiaries, the net proceeds of which are
used to Refinance outstanding Indebtedness of the Issuer or of any of the
Issuer's Subsidiaries that was incurred in accordance with this Indenture,
provided that (a) if the Indebtedness (including the Securities) being
Refinanced (the "Existing Debt") is pari passu with or subordinated to the
Securities then such Indebtedness Refinancing the Existing Debt (the "New Debt")
shall be pari passu with or subordinated to, as the case may be, the Securities
at least to the same extent and in the same manner as the Existing Debt is to
the Securities; (b) such New Debt has a Stated Maturity no earlier than the
Stated Maturity of the Existing Debt; (c) such New Debt has an Average Life at
the time such New Debt is proposed to be incurred that is greater than the
Average Life of the
26
Existing Debt as of the date of such proposed Refinancing; (d) such New Debt is
in an aggregate principal amount (or, if such New Debt is issued at a price less
than the principal amount thereof, the aggregate amount of gross proceeds
therefrom is) not in excess of the aggregate principal amount and accrued
interest outstanding under the Existing Debt on the date of the proposed
Refinancing thereof (or if the Existing Debt was issued at a price less than the
principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP as of the date of such
proposed Refinancing); and (e) if such Existing Debt is Indebtedness of the
Issuer, such New Debt is Indebtedness solely of the Issuer.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Personal Services Agreement" means the Personal Services Agreement
dated as of March 11, 1993 between the Issuer and American Biltrite as amended
through the Issue Date and as thereafter amended from time to time.
"Plan of Liquidation" means a plan (including by operation of law)
that provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously) (i) the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the referent Person otherwise than as an entirety or substantially as an
entirety and (ii) the distribution of all or substantially all of the proceeds
of such sale, lease, conveyance or other disposition and all or substantially
all of the remaining assets of the referent Person to holders of Capital Stock
of the referent Person.
"Preferred Stock" means, as applied to the Capital Stock of any
Person, the Capital Stock of such Person (other than the Common Stock of such
Person) of any class or classes (however designated) that ranks prior, as to the
payment of dividends or the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding-up of such Person, to shares of
Capital Stock of any other class of such Person.
"principal" wherever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include the principal amount
of the Security plus, when appropriate, the premium, if any.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of the Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included on the most recent consolidated balance sheet of such Person in
accordance with GAAP.
27
"Public Equity Offering" means an underwritten primary public
offering of Common Stock of the Issuer pursuant to an effective registration
statement under the Securities Act.
"Qualified Capital Stock" means, with respect to any Person, any
Capital Stock of such Person that is not Disqualified Capital Stock or
convertible into or exchangeable or exercisable for Disqualified Capital Stock.
"Reference Period" has the meaning set forth in the definition of
"Consolidated Fixed Charge Coverage Ratio."
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, and
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated August 3, 1998 between the Company and the Initial Purchasers.
"Responsible Officer" when used with respect to the Trustee means
any officer in its Corporate Trust Office with direct responsibility for the
administration of this Indenture, or any other officer or assistant officer of
the Trustee to whom any corporate trust matter relating to this Indenture is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Payment" means with respect to any Person, (i) the
declaration or payment of any dividend or the making of any other distribution
(whether in any such case is cash, securities or other property or assets of
such Person or of any of its Subsidiaries) on such Person's or any of its
Subsidiaries' Capital Stock, or to the holders (as such) of such Person's or any
of its Subsidiaries' Capital Stock, whether outstanding on the Issue Date or
thereafter (other than dividends or distributions payable solely in Qualified
Capital Stock of such Person or of such Subsidiary and other than any dividend
or distribution declared or paid by any Subsidiary of such Person to such Person
or one of its Wholly Owned Subsidiaries); (ii) the making of any Investment by
such Person or any of its Subsidiaries in any Person other than Permitted
Investments; (iii) any purchase, redemption, retirement or other acquisition for
value of (including, without limitation, in connection with any merger or
consolidation involving the Company or its Subsidiaries) any Capital Stock of
such Person or of any of its Subsidiaries or of any Affiliate of such Person,
whether outstanding on the Issue Date or thereafter, or any warrants, rights or
options to purchase or acquire shares of the Capital Stock of such Person or of
any of its Subsidiaries or of any Affiliate of such Person, whether outstanding
on the Issue Date or thereafter, held by any Person other than such Person or
one of its Wholly Owned Subsidiaries, other than through the issuance in
exchange therefor solely of Qualified Capital Stock of such Person or of such
Subsidiary; or (iv) the prepayment, acquisition, decrease or retirement for
value prior to maturity, (including any contingent obligation to repay, redeem
or repurchase any such
28
interest or principal prior to the date originally scheduled for the payment
thereof) scheduled repayment or scheduled sinking fund payment of any
Indebtedness of such Person that is subordinated (whether pursuant to its terms
or by operation of law) to the Securities (other than any such Indebtedness
owing to a Wholly Owned Subsidiary of such Person). The dollar amount of any
non-cash dividend or distribution by such Person or any of its Subsidiaries on
such Person's or any Subsidiary's Capital Stock shall be equal to the Fair
Market value of such dividend or distribution at the time of such dividend or
distribution.
"Restricted Security" shall mean Securities that bear or are
required to bear the legends set forth in Exhibit A hereto.
"Rule 144A" shall mean Rule 144A under the Securities Act, as such
Rule may be amended from time to time, or under any similar rule or regulation
hereafter adopted by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Security" or "Securities" means any of the 8_% Senior Notes Due
2008 authenticated and delivered under this Indenture.
"Stated Maturity" means, with respect to any security or
Indebtedness of a Person, the date specified therein as the fixed date on which
any principal of such security or Indebtedness is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision
providing for the repurchase thereof at the option of the holder thereof).
"Subsidiary" means, with respect to any Person, (a) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries of such Person or (b) any other Person (other than a
corporation) in which such Person, a Subsidiary of such Person or such Person
and one or more Subsidiaries of such Person, directly or indirectly, at the date
of determination thereof, have at least a majority ownership interest.
"Transaction Date" shall have the meaning specified in the
definition of Consolidated Fixed Charge Coverage Ratio.
"TIA" or "Trust Indenture Act of 1939" except as otherwise provided
in Sections 8.1 and 8.2, means the Trust Indenture Act of 1939 as in force at
the date of this Indenture.
"Trustee" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii)
29
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such U.S. Government
Obligations or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Wholly Owned Subsidiary" means, with respect to any Person, any
subsidiary of such Person all the outstanding shares of Capital Stock (other
than directors' qualifying shares, if applicable) of which are owned directly by
such Person or another Wholly Owned Subsidiary of such Person.
SECTION 1.2 Accountants' Certificate Conclusive. An Accountants'
Certificate shall be conclusive evidence of the following: (a) the Issuer's
Consolidated EBITDA, (b) the Issuer's Consolidated Net Income for any period,
(c) the aggregate Indebtedness of the Issuer and its Subsidiaries outstanding as
of any date of determination (and the amounts of such Indebtedness meeting the
criteria of any subsection of Section 3.5(b) hereof), (d) Consolidated Net Worth
as of any date of determination, and (e) the Issuer's Consolidated Fixed Charge
Coverage Ratio as of any date of determination. Notwithstanding the foregoing,
the Trustee shall be under no duty to require that it be furnished with an
Accountants' Certificate either annually or at any other periodic interval or in
any event.
ARTICLE II
ISSUE, EXECUTION, FORM AND
REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities. Upon the
execution and delivery of this Indenture, or from time to time hereafter,
Securities in an aggregate principal amount not in excess of the amount
specified in the form of Security hereinabove recited (except as otherwise
provided in Section 2.6) may be executed by the Issuer and delivered to the
Trustee for authentication, and an authorized officer of the Trustee shall
thereupon authenticate and
30
deliver said Securities to the Issuer or upon the written order of the Issuer,
signed by both (a) the Chairman of the Board of Directors or any Vice Chairman
of the Board of Directors, or its President or any Vice President (whether or
not designated by a number or numbers or a word or words added before or after
the title "Vice President") and (b) by its Treasurer or Secretary or any
Assistant Treasurer or Assistant Secretary without any further action by the
Issuer.
SECTION 2.2 Execution of Securities. The Securities shall be signed
on behalf of the Issuer by both (a) its Chairman of the Board of Directors or
any Vice Chairman of the Board of Directors or its President or any Vice
President (whether or not designated by a number or numbers or a word or words
added before or after the title "Vice President") and (b) by its Treasurer or
Secretary or any Assistant Treasurer or Assistant Secretary, under its corporate
seal which may, but need not, be attested. Such signatures may be the manual or
facsimile signatures of the present or any future such officers. The seal of the
Issuer may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security which
has been duly authenticated and delivered by the Trustee.
In case any such officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Security had not ceased to be
such officer of the Issuer; and any Security may be signed on behalf of the
Issuer by such Persons as, at the actual date of the execution of such Security,
shall be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such Person was not such officer.
SECTION 2.3 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinabove recited, executed by the Trustee by manual signature of one of its
authorized officers, shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Trustee upon any
Security executed by the Issuer shall be conclusive evidence that the Security
so authenticated has been duly authenticated and delivered hereunder and that
the Holder is entitled to the benefits of this Indenture.
SECTION 2.4 Form, Demonination and Date of Securities; Payments of
Interest. The Securities and the Trustee's certificates of authentication shall
be substantially in the form recited above. The Securities shall be issuable as
registered securities without coupons and in denominations provided for in the
form of Security above recited. The Securities shall be numbered, lettered, or
otherwise distinguished in such manner or in accordance with such plans as the
officers of the Issuer executing the same may determine with the approval of the
Trustee.
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Any of the Securities may be issued with appropriate insertions,
omissions, substitutions and variations, and may have imprinted or otherwise
reproduced thereon such legend or legends, not inconsistent with the provisions
of this Indenture, as may be required to comply with any law or with any rules
or regulations pursuant thereto, or with the rules of any securities market in
which the Securities are admitted to trading, or to conform to general usage.
Each Security shall be dated the date of its authentication, shall
bear interest from the applicable date and shall be payable on the dates
specified on the face of the form of Security recited above.
The Person in whose name any Security is registered at the close of
business on any record date with respect to any interest payment date shall be
entitled to receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the extent
the Issuer shall default in the payment of the interest due on such interest
payment date, in which case such defaulted interest shall be paid to the Persons
in whose names outstanding Securities are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established after
arrangements for payment reasonably satisfactory to the Trustee have been made
by the Issuer by notice given by mail by or on behalf of the Issuer to the
Holders of Securities not less than 15 days preceding such subsequent record
date. The term "record date" as used with respect to any interest payment date
(except a date for payment of defaulted interest) shall mean the fifteenth day
of the month immediately preceding the month in which such interest payment date
falls, whether or not such record date is a Business Day.
SECTION 2.5 Registration, Transfer and Exchange. The Issuer will
keep at each office or agency to be maintained for the purpose as provided in
Section 3.2 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Securities as in this Article provided. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Security
at each such office or agency, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities in authorized denominations for a like aggregate
principal amount.
Any Security or Securities may be exchanged for a Security or
Securities in other authorized denominations, in an equal aggregate principal
amount. Securities to be exchanged shall be surrendered at each office or agency
to be maintained by the Issuer for the purpose as provided in Section 3.2, and
the Issuer shall execute and the Trustee shall authenticate and
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deliver in exchange therefor the Security or Securities which the Securityholder
making the exchange shall be entitled to receive, bearing numbers not
contemporaneously outstanding.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer) be duly endorsed by,
or be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the Holder or his
attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any exchange
or registration of transfer of Securities. No service charge shall be made for
any such transaction.
The Issuer shall not be required to exchange or register a transfer
of (a) any Securities for a period of 15 days next preceding the first mailing
of notice of redemption of Securities to be redeemed, or (b) any Securities
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 so to be redeemed.
All Securities issued upon any registration of transfer or exchange
of Securities shall be valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
SCTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become mutilated,
defaced or be apparently destroyed, lost or stolen, the Issuer in its discretion
may execute, and upon the written request of an officer of the Issuer, the
Trustee shall authenticate and deliver, a new Security bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated or
defaced Security, or in lieu of or in substitution for the Security so
apparently destroyed, lost or stolen. In every case, the applicant for a
substitute Security shall furnish to the Issuer and to the Trustee and any agent
of the Issuer or the Trustee such security or indemnity as may be required by
them to indemnify and defend and to save each of them harmless and, in every
case of destruction, loss or theft, evidence to their satisfaction of the
apparent destruction, loss or theft of such Security and of the ownership
thereof.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. In case any Security
which has matured or is about to mature shall become mutilated or defaced or be
apparently destroyed, lost or stolen, the Issuer may, instead of issuing a
substitute Security, pay or authorize the payment of the same with written
direction to the Trustee (without surrender thereof except in the case of a
mutilated or defaced Security), if the applicant for such payment shall furnish
to the Issuer and to the Trustee and any agent of the Issuer or the
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Trustee such security or indemnity as any of them may require to save each of
them harmless from all risks, however remote, and in every case of apparent
destruction, loss or theft the applicant shall also furnish to the Issuer and
the Trustee and any agent of the Issuer or the Trustee evidence to their
satisfaction of the apparent destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Security is apparently destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Issuer, whether or not the apparently destroyed, lost or stolen Security shall
be at any time enforceable by anyone and shall be entitled to all the benefits
of (but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, or apparently destroyed, lost or stolen Securities and shall
preclude any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
SECTION 2.7 Cancellation of Securities; Destruction Thereof. All
Securities surrendered for payment, redemption, registration of transfer or
exchange, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if surrendered
to the Trustee, shall be cancelled by it; and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall destroy cancelled Securities held by it and deliver
a certificate of destruction to the Issuer. If the Issuer shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Debt represented by such Securities unless and until the
same are delivered to the Trustee for cancellation.
SECTION 2.8 Temporary Securities. Pending the preparation of
definitive Securities, the Issuer shall prepare and may execute and the Trustee
shall authenticate and deliver temporary Securities (printed, lithographed,
typewritten or otherwise reproduced, in each case in form satisfactory to the
Trustee). Temporary Securities shall be issuable as registered securities
without coupons, of any authorized denomination, and substantially in the form
of the definitive Securities but with such omissions, insertions and variations
as may be appropriate for temporary Securities, all as may be determined by the
Issuer with the concurrence of the Trustee. Temporary Securities may contain
such reference to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the Issuer
shall execute and shall furnish definitive Securities and thereupon temporary
Securities may be surrendered in exchange therefor without charge at each office
or agency to be maintained by the Issuer for the purpose pursuant to Section
3.2, and the Trustee shall authenticate and deliver in exchange for such
temporary
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Securities a like aggregate principal amount of definitive Securities of
authorized denominations. Until so exchanged, the temporary Securities shall be
entitled to the same benefits under this Indenture as definitive Securities.
ARTICLE III
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal, Interest and Liquidated Damages.
The Issuer covenants and agrees for the benefit of the Holders of the Securities
that it will duly and punctually pay or cause to be paid the principal of, and
interest on, each of the Securities at the place or places, at the respective
times and in the manner provided in the Securities. Each installment of interest
on the Securities may be paid by mailing checks for such interest payable to or,
at the Issuer's option, upon the written order of the Holders of Securities
entitled thereto, to such address and in such name as they shall appear on the
registry books of the Issuer. The Company further covenants to pay any and all
amounts including, without limitation, Liquidated Damages, if any, on the dates
and in the manner required under the Registration Rights Agreement.
SECTION 3.2 Offices for Payments, Etc. So long as any of the
Securities remain outstanding, the Issuer will maintain in New Jersey and at
such other place, if any, as may be designated by the Issuer, the following: (a)
an office or agency where the Securities may be presented for payment, (b) an
office or agency where the Securities may be presented for registration of
transfer and for exchange as in this Indenture provided and (c) an office or
agency where notices and demands to or upon the Issuer in respect of the
Securities or of this Indenture may be served. The Issuer will give to the
Trustee written notice of the location of any such office or agency and of any
change of location thereof. In case the Issuer shall fail to maintain any such
office or agency or shall fail to give such notice of the location or of any
change in the location thereof, presentations and demands may be made and
notices may be served at the Corporate Trust Office.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee, it will cause such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall agree with
the Trustee, subject to the provisions of this Section:
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest or Liquidated Damages, if any, on the
Securities (whether such sums
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have been paid to it by the Issuer or by any other obligor on the Securities) in
trust for the benefit of the Holders of the Securities or of the Trustee; and
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities) to make any payment of the
principal of or interest or Liquidated Damages, if any, on the Securities when
the same shall be due and payable.
The Issuer will, on or prior to each due date of the principal of or
interest or Liquidated Damages, if any, on the Securities, deposit with the
paying agent a sum which is in immediately available funds on the due date
sufficient to pay such principal or interest, and (unless such paying agent is
the Trustee) the Issuer will promptly notify the Trustee of any failure to take
such action.
If the Issuer shall act as its own paying agent, it will, on or
before each due date of the principal of or interest or Liquidated Damages, if
any, on the Securities, set aside, segregate and hold in trust for the benefit
of the Holders of the Securities a sum sufficient to pay such principal or
interest or Liquidated Damages, if any, so becoming due. The Issuer will
promptly notify the Trustee of any failure to take such action.
Notwithstanding anything in this Section 3.4 to the contrary, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Issuer or any paying agent hereunder,
as required by this Section, such sums to be held by the Trustee upon the trusts
herein contained.
Notwithstanding anything in this Section to the contrary, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Sections 10.4 and 10.5.
SECTION 3.5 Limitation on Indebtedness. (a) The Issuer will not, and
will not cause or permit any of its Subsidiaries to, incur any Indebtedness
(including, without limitation, Acquired Indebtedness), provided that the Issuer
may incur Indebtedness (including, without limitation, Acquired Indebtedness)
if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of the proposed incurrence thereof or shall occur
as a result of such proposed incurrence; and
(ii) after giving effect to such proposed incurrence the
Issuer's Consolidated Fixed Charge Coverage Ratio would be greater than
2.25 to 1.0.
(b) Notwithstanding clause (a) above, the Issuer and its
Subsidiaries may incur each and all of the following:
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(i) Indebtedness of the Issuer pursuant to the Credit Facility
in an aggregate principal amount at any time outstanding not to exceed $30
million less the aggregate amount of all Excess Proceeds of Asset Sales
applied to repay the Indebtedness under the Credit Facility pursuant to
the covenant described under the caption "-Limitation on Sale of Assets";
(ii) Indebtedness of the Issuer evidenced by the Securities;
(iii) Indebtedness of the Issuer under Interest Rate
Protection Agreements covering Indebtedness (which Indebtedness (A) bears
interest at fluctuating interest rates and (B) is incurred in accordance
with the Consolidated Fixed Charge Coverage Ratio test of clause (a) or in
accordance with clauses (b)(i), (b)(ix) or (b)(x) of this Section 3.5) to
the extent the notional principal amount of such Interest Rate Protection
Agreements does not exceed the principal amount of the Indebtedness to
which such Interest Rate Protection Agreements relate;
(iv) Indebtedness of a Wholly Owned Subsidiary of the Issuer
to the Issuer for so long as such Indebtedness is held by the Issuer or
another Wholly Owned Subsidiary of the Issuer, provided that such
Indebtedness is not subordinated to any other Indebtedness or other
obligation of such Subsidiary;
(v) Indebtedness of the Issuer or of a Wholly Owned Subsidiary
of the Issuer (an "Obligor Subsidiary") to a Wholly Owned Subsidiary of
the Issuer (an "Obligee Subsidiary"), provided that (i) any Indebtedness
of the Issuer to any Obligee Subsidiary is unsecured and subordinate with
respect to payment in full in cash of all obligations under the Securities
and (ii) any subsequent issuance of Capital Stock of an Obligee Subsidiary
that results in such Obligee Subsidiary ceasing to be a Wholly Owned
Subsidiary of the Issuer or any transfer of such Indebtedness owing by the
Issuer or an Obligor Subsidiary to such Obligee Subsidiary (other than to
the Issuer or another Wholly Owned Subsidiary of the Issuer) shall in each
case be deemed the incurrence of Indebtedness not permitted by this clause
(v) by the Issuer and each Obligor Subsidiary of such Obligee Subsidiary
to the extent indebted to such Obligee Subsidiary that is no longer a
Wholly Owned Subsidiary of the Issuer or that has transferred such
Indebtedness;
(vi) The guarantee by the Issuer of Indebtedness of a
Subsidiary of the Issuer that was permitted to be incurred by another
provision of this covenant;
(vii) Indebtedness under Currency Agreements related to
payment obligations in respect of Indebtedness of the Issuer or of its
Subsidiaries incurred in accordance with this Indenture and Indebtedness
in respect of Cur-
37
rency Agreements entered into with respect to payables and receivables of
the Issuer and its Subsidiaries, provided that in the case of Currency
Agreements that relate to Indebtedness, such Currency Agreements do not
increase the Indebtedness of the Issuer or of its Subsidiaries outstanding
at any time other than as a result of fluctuations in foreign currency or
exchange rates;
(viii) Indebtedness incurred in respect of performance bonds,
bankers' acceptances or letters of credit of the Issuer and of any
Subsidiary of the Issuer and surety bonds provided by the Issuer or any
Subsidiary of the Issuer in the ordinary course of business, the
Indebtedness incurred under this clause (viii) not to exceed $5 million in
the aggregate;
(ix) Indebtedness of the Issuer and of its Subsidiaries
outstanding on the Issue Date (as in effect on the Issue Date) and listed
on a schedule ___ attached hereto, after giving effect to the issuance and
sale of the Securities and the application of the net proceeds therefrom;
(x) Indebtedness incurred under Acquired Indebtedness,
Capitalized Lease Obligations, purchase money obligations or other
construction financing not to exceed $12.5 million at any time
outstanding;
(xi) Indebtedness in an amount not to exceed $7.5 million at
any time outstanding; and
(xii) Permitted Refinancing Indebtedness incurred by the
Issuer or by any Subsidiary of the Issuer to Refinance any Indebtedness
incurred in accordance with the Consolidated Fixed Charge Coverage Ratio
test of clause (a) above or to Refinance any Indebtedness incurred under
subclauses (ii) and (viii) of this clause (b).
The Issuer will not incur any Indebtedness that is contractually
subordinated in right of payment to any other Indebtedness of the Issuer unless
such Indebtedness is also contractually subordinated in right of payment to the
Notes on substantially identical terms; provided, however, that no Indebtedness
of the Issuer shall be deemed to be contractually subordinated in right of
payment to any other Indebtedness of the Issuer solely by virtue of being
unsecured.
SECTION 3.6 Limitation on Restricted Payments. (a) The Issuer will
not, nor will the Issuer permit or cause any of its Subsidiaries to, directly or
indirectly, make any Restricted Payment (other than to the Issuer) unless, at
the time of such proposed Restricted Payment (including Investments which are
then outstanding), and on a pro forma basis immediately after giving effect
thereto:
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(i) no Default or Event of Default has occurred and is
continuing or would occur as a consequence thereof;
(ii) the aggregate amount expended for all Restricted Payments
(other than to the Issuer) subsequent to the Issue Date would not exceed
the sum of:
(A) 50% of aggregate Consolidated Net Income of the
Issuer (or if such Consolidated Net Income is a loss, minus 100% of
such loss) earned on a cumulative basis during the period (treated
as one accounting period) beginning on the first date of the
Issuer's fiscal quarter commencing after the Issue Date, and ending
on the last date of the Issuer's fiscal quarter immediately
preceding such proposed Restricted Payment; plus
(B) 100% of the aggregate Net Equity Proceeds received
by the Issuer from any Person (other than from a Subsidiary of the
Issuer) from the issuance and sale subsequent to the Issue Date of
Qualified Capital Stock of the Issuer (excluding (x) any Qualified
Capital Stock of the Issuer paid as a dividend on any Capital Stock
of the Issuer or of any of its Subsidiaries, (y) the issuance of
Qualified Capital Stock upon the conversion of, or in exchange for,
any Capital Stock of the Issuer or of any of its Subsidiaries and
(z) any Qualified Capital Stock of the Issuer with respect to which
the purchase price thereof has been financed directly or indirectly
using funds (1) borrowed from the Issuer or from any of its
Subsidiaries, unless and until and to the extent such borrowing is
repaid or (2) contributed, extended, guaranteed or advanced by the
Issuer or by any of its Subsidiaries (including, without limitation,
in respect of any employee stock ownership or benefit plan);
provided that there shall be excluded from this clause (B) any Net
Equity Proceeds from the issuance and sale of Capital Stock of the
Issuer used to redeem the Securities pursuant to Section 12.1(b);
and
(iii) the Issuer would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period, have
been able to incur $1.00 of additional Indebtedness under paragraph (a) of
Section 3.5.
(b) The foregoing provisions of such clauses (ii) and (iii) of
clause (a) of this Section 3.6 shall not prevent any of the following (to the
extent they may otherwise constitute Restricted Payments):
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(i) the payment of any dividend within 60 days after the date
of its declaration if at such date of declaration the payment of such
dividend would comply with the provisions set forth above, provided that
such dividend will be deemed to have been paid as of its date of
declaration for the purposes of this covenant; or
(ii) (A) the purchase, redemption, retirement or acquisition
of any shares of Capital Stock of the Issuer or of any Subsidiary or any
Indebtedness of the Issuer that is subordinated to the Securities solely
with or out of the net cash proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Issuer) of shares of Qualified Capital
Stock of the Issuer and neither such purchase, redemption, retirement or
acquisition nor the proceeds of any such sale will be included in any
computation made under subclause (a)(ii)(B) above, (B) the payment of any
dividend by a Subsidiary of the Company to the holders of its common
Equity Interests on a pro rata basis; (C) the prepayment, acquisition,
retirement or decrease of Indebtedness of the Issuer that is subordinated
(whether pursuant to its terms or by operation of law) to the Securities
that is prepaid, acquired, decreased or retired (x) by conversion into or
in exchange for Qualified Capital Stock of the Issuer or (y) in exchange
for or with or out of the net cash proceeds of the substantially
concurrent sale (other than by the Issuer to a Subsidiary of the Issuer)
of Permitted Refinancing Indebtedness, (D) the purchase, redemption,
acquisition, cancellation or other retirement for value of shares of
Capital Stock of the Issuer or of any Subsidiary of the Issuer, provided
that the aggregate amount paid for all such purchases, redemptions,
acquisitions, cancellations or other retirements for value of such shares
of Capital Stock after the Issue Date does not exceed $5 million in the
aggregate, and no Event of Default shall have occurred and be continuing
immediately after such transaction, (E) any transaction with an officer or
director of the Issuer entered into in the ordinary course of business
(including compensation and employee benefit arrangements with any officer
or director of the Issuer), (F) the payment and expense by the Issuer of a
consulting or management fee to American Biltrite, provided that (x) the
aggregate of all such payments in any fiscal year do not exceed $500,000
plus (y) an additional amount, not to exceed $250,000 per fiscal year, to
the extent that such amount was not payable in the prior year, and
provided further, that the obligation of the Issuer to pay such consulting
or management fee will be subordinated to the obligations of the Issuer
under the Securities, (G) the payment of amounts due in lieu of
compensation under the Personal Services Agreement, provided that any
incentive fees payable shall be approved by a majority of the
disinterested directors of the Issuer and (H) the payment of amounts in
lieu of federal and state taxes in connection with a consolidated tax
return if and to the extent that the amount paid by the Issuer for any
taxable period does not exceed the aggregate tax liability, if any, of the
Issuer and its Subsidiaries for such period (calculated as if the Issuer
and its Subsidiaries had been filing on a consolidated
40
return basis as a separate affiliated group during such period). The
amounts expended pursuant to clauses (i), (ii)(D) and (ii)(F) of this
clause (b) will be included in computing the amounts available for
Restricted Payments for purposes of clause (a) of this Section 3.6.
SECTION 3.7 Limitation on Sale of Assets. The Issuer will not make,
and will not permit any of its Subsidiaries to make, any Asset Sale unless (a)
the Issuer, or such Subsidiary, as the case may be, receives consideration at
the time of each such Asset Sale at least equal to the Fair Market Value of the
shares or assets sold or otherwise disposed of, and (ii) not less than 75.0% of
the consideration received by the Issuer, or such Subsidiary, as the case may
be, is in the form of cash, provided that the amount of (i) any liabilities (as
shown on the Issuer's or any such Subsidiary's most recent balance sheet or in
the notes thereto) of the Issuer or any such Subsidiary that are assumed by the
transferee (other than contingent liabilities and liabilities that are by their
terms subordinated to the Securities) in respect of any Asset Sale and (ii) any
non-cash consideration received by the Issuer or any such Subsidiary from such
transferee in respect of an Asset Sale that is converted into or sold or
otherwise disposed of for cash within 30 days of the receipt thereof shall be
included as cash. Within 360 days from the date of any such Asset Sale that
causes Net Cash Proceeds to exceed $5 million in any twelve-month period, the
Net Cash Proceeds thereof shall be used by the Issuer or its Subsidiary to
invest in its existing lines of business, provided that the Issuer commits to
make such investment no later than 180 days from the date of such Asset Sale. To
the extent that Net Cash Proceeds from such disposition are not so applied
(hereinafter referred to as "Excess Proceeds"), the Issuer, or such Subsidiary,
as the case may be, shall use the Excess Proceeds to (x) permanently reduce the
Credit Facility, or (y) make an offer to purchase the Securities (an "Asset Sale
Offer") for cash at a price of not less than 100% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon. The provisions of this paragraph shall not be deemed to apply to any
Asset Sale or series of Asset Sales having aggregate Net Cash Proceeds of $5
million or less in any twelve-month period, provided that to the extent such
aggregate Net Cash Proceeds exceed $5 million in any twelve-month period, the
provisions of this paragraph shall apply to the entire amount.
The Issuer will accept Securities tendered pursuant to an Asset Sale
Offer an a pro rata basis based upon the aggregate principal amount of
Securities submitted by Holders accepting such Asset Sale Offer. An Asset Sale
Offer shall be consummated on a date not less than 40 nor more than 70 days
following the date of mailing of such Asset Sale Offer but in any event within
360 days of the date of such Asset Sale (the "Proceeds Purchase Date"). The
Asset Sale Offer shall be made for the maximum amount of Securities that can be
purchased with such Excess Proceeds at a price equal to 100% of the aggregate
principal amount of the Securities to be repurchased, plus accrued and unpaid
interest and Liquidated Damages, if any, to the Proceeds Purchase Date.
Notwithstanding the foregoing, the Issuer will not be required to
make an Asset Sale Offer if the Excess Proceeds available therefor are less than
$5 million, in which case such
41
Excess Proceeds shall be carried forward to determine whether an Asset Sale
Offer is required after any subsequent Asset Sale. To the extent any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Issuer may use
such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.
If the aggregate principal amount of Securities tendered in such Asset Sale
Offer surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Securities to be purchased on a pro rata basis. Upon
completion of an Asset Sale Offer, the amount of Excess Proceeds shall be reset
at zero.
If an offer is made to repurchase the Securities pursuant to an
Asset Sale Offer, the Issuer will and will cause its Subsidiaries to comply with
all tender offer rules under state and Federal securities laws, including, but
not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder,
to the extent applicable to such offer.
SECTION 3.8 Limitation on Liens. The Issuer will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Liens upon any of their respective properties or assets whether owned on the
Issue Date or acquired after the Issue Date, or on any income or profits
therefrom, or assign or otherwise convey any right to receive income or profits
thereon, other than (a) Liens granted by the Issuer on receivables and inventory
(and documents of title) securing Indebtedness under the Credit Facility; (b)
Liens granted by the Issuer on property or assets of the Issuer securing
Indebtedness of the Issuer incurred in accordance with the Indenture that is
pari passu with the Securities, provided that the Securities are secured on an
equal and ratable basis with such Liens; (c) Liens granted by the Issuer on
property or assets of the Issuer securing Indebtedness of the Issuer incurred in
accordance with the Indenture that is subordinated to the Securities, provided
that the Securities are secured by Liens ranking prior to such Liens; (d) Liens
existing on the Issue Date to the extent and in the manner such Liens are in
effect on the Issue Date; (e) Permitted Liens; (f) Liens in respect of Acquired
Indebtedness incurred in accordance with Section 3.5, provided that the Lien in
respect of such Acquired Indebtedness secured such Acquired Indebtedness at the
time of the incurrence of such Acquired Indebtedness by the Issuer or by one of
its Subsidiaries and such Lien was not incurred by the Issuer or any of its
Subsidiaries or by the Person being acquired or from whom the assets were
acquired in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the Issuer or by one of its Subsidiaries and provided,
further that such Liens in respect of such Acquired Indebtedness do not extend
to or cover any property or assets of the Issuer or of any of its Subsidiaries
other than the property or assets that secured the Acquired Indebtedness prior
to the time such Indebtedness became Acquired Indebtedness of the Issuer or of
one of its Subsidiaries; and (g) Liens in respect of Permitted Refinancing
Indebtedness incurred in accordance with the Indenture to Refinance any of the
Indebtedness set forth in clauses (a), (b), (c), (d) and (f) above, provided
that such Liens in respect of such Permitted Refinancing Indebtedness are no
less favorable to the Issuer or its Subsidiaries and the Holders than the Liens
in respect of the Indebtedness being Refinanced and such Liens in respect of
such Indebtedness do not extend to or cover any property or assets of the Issuer
or of any of the Issuer's Subsidiaries other than the property or assets that
secured the Indebtedness being Refinanced.
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SECTION 3.9 Limitation on Payment Restrictions Affecting
Subsidiaries. The Issuer will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create or suffer to exist or allow to become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (a) pay dividends, in cash or otherwise, or make other
payments or distributions on its Capital Stock or any other equity interest or
participation in, or measured by, its profits, owned by the Issuer or by any of
its Subsidiaries, or make payments on any Indebtedness owed to the Issuer or to
any of its Subsidiaries, (b) make loans or advances to the Issuer or to any of
its Subsidiaries, (c) transfer any of their respective property or assets to the
Issuer or to any of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law, (ii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of any of the Issuer's Subsidiaries, (iii) Acquired
Indebtedness incurred in accordance with the Indenture, provided that such
encumbrance or restriction in respect of such Acquired Indebtedness is not
applicable to any Person, or the property or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired and that such
Acquired Indebtedness was not incurred by the Issuer or by any of its
Subsidiaries or by the Person being acquired in connection with or anticipation
of such acquisition, (iv) with respect to clause (c) above, purchase money
obligations for property acquired in the ordinary course of business, (v)
Indebtedness outstanding immediately after the Issue Date (as in effect on the
Issue Date) after giving effect to the issuance and sale of the Securities and
the application of proceeds therefrom, (vi) the Credit Facility, or (vii) any
Permitted Refinancing Indebtedness incurred in accordance with the Indenture to
Refinance any of the Indebtedness set forth in clauses (iii), (v) and (vi) above
to the extent such encumbrance or restriction in respect of such Permitted
Refinancing Indebtedness is no less favorable to the Issuer and its Subsidiaries
and the Holders and no more restrictive than such encumbrances or restrictions
contained in the Indebtedness being Refinanced as of the date of such
Refinancing and does not extend to or cover any other Person or the property of
any other Person other than the Person in respect of whom such encumbrance or
restriction relating to the Indebtedness being Refinanced applied.
SECTION 3.10 Limitation on Transactions with Affiliates. (a) The
Issuer will not, nor will the Issuer permit any of its Subsidiaries to, (i)
sell, lease, transfer or otherwise dispose of any of its property or assets to,
(ii) purchase any property or assets from, (iii) make any Investment in, or (iv)
enter into or amend any contract, agreement or understanding with or for the
benefit of, any Affiliate of the Issuer or of any Subsidiary of the Issuer (an
"Affiliate Transaction"), other than Affiliate Transactions that are reasonably
necessary and desirable for the Issuer or such Subsidiary in the conduct of its
business and are on terms (which terms are in writing) that are fair and
reasonable to the Issuer or the Subsidiary and that are no less favorable to the
Issuer or such Subsidiary than those that could be obtained in a comparable
arm's length transaction by the Issuer or such Subsidiary from an unaffiliated
party, as determined reasonably and in good faith by the Board of Directors of
the Issuer, provided that if the Issuer or any Subsidiary of the Issuer enters
into an Affiliate Transaction or series of Affiliate Transactions involving or
having an aggregate value of more than $2 million, such Affiliate Transaction
shall, prior to the consummation thereof, have been approved by a majority of
the disinterested
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directors of the Issuer, and provided, further that with respect to any such
transaction or series of related transactions that involves an aggregate value
of more than $5 million, the Issuer or such Subsidiary shall, prior to the
consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to itself or its Subsidiary from a
financial point of view from an Independent Financial Advisor and file the same
with the Trustee.
(b) The foregoing restrictions shall not apply to (i) any
transactions between Wholly Owned Subsidiaries of the Issuer, or between the
Issuer and any Wholly Owned Subsidiary of the Issuer if such transaction is not
otherwise prohibited by the terms of the Indenture, (ii) any Restricted Payment
made in accordance with Section 3.6 and (iii) any transaction contemplated by
the Business Relations Agreement and the Personal Services Agreement as in
effect on the Issue Date.
SECTION 3.11 Officers' Certificates as to Default and as to
Compliance. The Issuer will, so long as any of the Securities are outstanding:
(a) deliver to the Trustee, promptly upon becoming aware of any
default or defaults in the performance of any covenant, agreement or condition
contained in this Indenture (including notice of any Default) or of any Event of
Default or Events of Default, an Officers' Certificate specifying such default,
defaults, Event of Default or Events of Default; and
(b) deliver to the Trustee within 120 days after the end of each
fiscal year of the Issuer beginning with the fiscal year ending December 31,
1998, an Officers' Certificate to the effect that:
(i) a diligent review of the activities of the Issuer and its
Subsidiaries during such year and of performance under this Indenture has
been made under such officers' supervision; and
(ii) to the best of such officers' knowledge, based on such
review, the Issuer has fulfilled all its obligations under this Indenture
throughout such year, or if there has been a default in the fulfillment of
any such obligation, specifying each such default known to them and the
nature and status thereof.
SECTION 3.12 Change of Control. (a) If a Change of Control occurs,
each Holder shall have the right to require the Issuer to repurchase in whole or
in part (equal to $1,000 or an integral thereof) such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
repurchase, in accordance with the terms of the notice given pursuant to Section
3.12(b).
(b) Within 30 days following any notice of a Change of Control, the
Issuer shall mail a notice to each Holder and a description of the transaction
or transactions that constitute a Change of Control (with a copy to the Trustee)
stating:
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(1) that a Change of Control has occurred and that such Holder
has the right to require the Issuer to repurchase in whole or in part such
Holder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, to the date of repurchase;
(2) such other information as may be required by applicable
law and regulations;
(3) the repurchase date (which shall be no earlier than 20
Business Days nor later than 30 Business Days from the date such notice is
mailed); and
(4) the instructions determined by the Issuer, consistent with
this Section 3.12 and applicable law, that a Holder must follow in order
to have its Securities repurchased.
(c) On the Change of Control Payment Date, the Issuer will, to the
extent lawful, (i) accept for payment all Securities or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Change of Control Payment in respect of all
Securities or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate stating the aggregate principal amount of Securities or portions
thereof being purchased by the Issuer. The Paying Agent will promptly mail to
each Holder of Securities so tendered the Change of Control Payment for such
Securities, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Securities surrendered, if any; provided that
each such new Security will be in a principal amount of $1,000 or an integral
multiple thereof. The Issuer will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. The Change of Control provisions described above will be applicable
whether or not any other provisions of the Indenture are applicable.
The Issuer will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to a Change of Control Offer made by the Issuer and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.
(d) The Issuer shall comply with all applicable tender offer rules
(including, without limitation, Rule 14e-1 under the 0000 Xxx) in the event that
the Issuer is required to make an offer to repurchase the Securities following a
Change of Control.
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SECTION 3.13 Maintenance of Properties, Etc. The Issuer shall, and
shall cause each of its Subsidiaries to, maintain its material properties and
assets in normal working order and condition and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto,
ordinary wear and tear excepted, all as in the judgment of the Issuer may be
necessary so that the business carried on in connection therewith may be
conducted at all times; provided, however, that nothing in this Section 3.13
shall prevent the Issuer or one of its Subsidiaries from discontinuing the
operation and maintenance of any of its properties if such discontinuance is, in
the judgment of the Issuer or such Subsidiary, desirable in the conduct of its
business.
The Issuer shall, and shall cause each of its Subsidiaries to,
maintain with insurers which the Issuer believes in good faith to be financially
sound and reputable such insurance as may be required by law and such other
insurance (or self-insurance), to such extent and against such hazards and
liabilities, as it in good faith determines is customarily maintained by
companies similarly situated with like properties.
The Issuer shall, and shall cause each of its Subsidiaries to, use
its commercially reasonable efforts to do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
and franchises, except to the extent permitted by this Indenture and except in
such cases where the Board of Directors of the Issuer determines in good faith
that failure to do so would not have a material adverse effect on the business,
earnings, properties, assets, financial condition or results of operation of the
Issuer and its Subsidiaries taken as a whole.
The Issuer shall, and shall cause each of its Subsidiaries to, in
good faith attempt to comply with all statutes, laws, ordinances, or government
rules and regulations to which it is subject, noncompliance with which would
materially adversely affect the business, earnings, properties, assets,
financial condition or results of operations of the Issuer and its Subsidiaries
taken as a whole.
The Issuer shall, and shall cause each of its Subsidiaries to, pay
prior to delinquency all taxes, assessments and governmental levies which if not
paid would have a material adverse effect on the business, earnings, properties,
assets, financial condition or results of operations of the Issuer and its
Subsidiaries taken as a whole, and except as contested in good faith and by
appropriate proceedings.
SECTION 3.14 Limitation on Lines of Business. For as long as the
Securities are outstanding, the Issuer will engage principally in the business
of producing, distributing and marketing flooring products as well as the
reasonable expansion or extension thereof.
46
SECTION 3.15 Stay, Extension and Usury Laws. The Issuer covenants
(to the extent that it may lawfully do so) 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, extension or usury law whenever enacted, now or at any time
hereafter in force, that may affect the Issuer's obligation to pay the
Securities; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law insofar as such law
applies to the Securities, and covenants that it will not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS
BY THE ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer covenants and agrees that it will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the Holders of the
Securities:
(a) semi-annually and not more than 15 days after each record date
for the payment of interest on the Securities, as hereinabove specified, as of
such record date; and
(b) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Issuer of any such request as of a date not
more than 15 days prior to the time such information is furnished;
provided that if and so long as the Trustee shall be the Security registrar,
such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders' Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
Holders of Securities contained in the most recent list furnished to it as
provided in Section 4.1 or maintained by the Trustee in its capacity as Security
registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
47
Holders of Securities with respect to their rights under this Indenture or under
the Securities and it is accompanied by a copy of the form of proxy or other
communication which such applicants purpose to transmit, then the Trustee shall,
within five Business Days after the receipt of such application, at its
election, either:
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2; or
(ii) inform such applicants as to the approximate number of
Holders of Securities whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the provisions of
subsection (a) of this Section 4.2, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access
to such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Securities or would be in violation of applicable law. Such written statement
shall specify the basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after the
entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the objections so
sustained have been met, and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender.
(c) Each and every Holder of the Securities, by receiving and
holding the same, agrees with the Issuer and the Trustee that neither the Issuer
nor the Trustee nor any agent of the Issuer or the Trustee shall be held
accountable by reason of the disclosure or non-disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with the provisions of subsection (b) of this Section 4.2, regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under said subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
48
(a) to file with the Commission and, within 15 days after it files
them with the Commission, file with the Trustee and mail or cause the Trustee to
mail to the Holders at their addresses as set forth in the register of the
Securities copies of the annual reports and of the information, documents and
other reports which the Issuer is required to file with the Commission pursuant
to Section 13 or 15(d) of the Exchange Act or which the Issuer would be required
to file with the Commission if the Issuer then had a class of securities
registered under the Exchange Act. In addition, the Issuer shall cause its
annual report to stockholders and any quarterly or other financial reports
furnished to its stockholders generally to be filed with the Trustee and mailed,
no later than the date such materials are mailed or made available to the
Issuer's stockholders, to the Holders at their addresses as set forth in the
register of Securities;
(b) to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents, and reports with respect to compliance by the
Issuer with the conditions and covenants provided for in this Indenture as may
be required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to subsections
(a) and (b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission; and
(d) to comply with the other provisions of Section 314(a) of the
Trust Indenture Act of 1939.
SECTION 4.4 Reports by the Trustee. To the extent required by TIA
ss. 313(a), within 60 days of May 15 of each year, for so long as any Securities
are outstanding hereunder, the Trustee shall transmit by mail as provided below
to the Securityholders, as hereinafter in this Section provided, a brief report
dated as of such date that complies with TIA ss. 313(a). The Trustee also shall
comply with TIA ss. 313(b), (c) and (d). A copy of such report at the time of
its mailing to Securityholders shall be filed with the Commission, if required,
and each stock exchange, if any, on which the Securities are listed.
The Issuer shall promptly notify the Trustee if the Securities
become listed on any stock exchange and the Trustee shall comply with TIA ss.
313(d).
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
49
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default. In case one or more of the following Events of Default
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of principal of, or premium, if any, on,
the Securities when due at maturity, upon repurchase, upon acceleration or
otherwise, including, without limitation, failure of the Issuer to repurchase
the Securities on the date required pursuant to Section 3.7 or 3.12 and failure
to make any optional redemption payment when due; or
(b) default in the payment of any installment of interest or
Liquidated Damages on the Securities when due (including any interest payable in
connection with any optional redemption payment) and continuance of such default
for more than 30 days; or
(c) the Issuer fails to observe, perform or comply with any of the
provisions described under Section 3.8, 3.12 or 9.1; or
(d) default (other than a default set forth in clauses (a), (b) and
(c) above) in the performance of, or breach of, any other covenant or warranty
of the Issuer in this Indenture or the Securities and failure to remedy such
default or breach within a period of 30 days after written notice shall have
been given to the Issuer by the Trustee or to the Issuer and the Trustee by the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities, each such notice specifying such default or breach and stating that
such notice is a "Notice of Default" hereunder; or
(e) (x) a failure to pay at maturity or a default in the obligation
to pay the principal of, interest on, or any other payment obligation when due
on one or more classes of Indebtedness (other than the Securities) of the Issuer
or of any Subsidiary of the Issuer, whether such Indebtedness exists on the
Issue Date or shall be incurred after the Issue Date, having, individually or in
the aggregate, an outstanding principal amount in excess of $7.5 million which
permits the acceleration of the maturity of such Indebtedness or (y) in the case
of a default other than a payment default referred to in clause (x), when one or
more classes of Indebtedness (other than the Securities) of the Issuer or of any
Subsidiary of the Issuer, whether such Indebtedness exists on the Issue Date or
shall be incurred after the Issue Date, having, individually or in the
aggregate, an outstanding principal amount in excess of $7.5 million is payable
prior to its stated maturity by or on behalf of the holders thereof; or
(f) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Issuer or any of its Material Subsidiaries
in an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the Issuer
or
50
any of its Material Subsidiaries or for any substantial part of the property
of the Issuer or any of its Material Subsidiaries or ordering the winding up or
liquidation of the affairs of the Issuer or any of its Material Subsidiaries and
such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(g) the Issuer or any of its Material Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent to the entry of an order for relief in an
involuntary case under any such law, or consent to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Issuer or any of its Material Subsidiaries or for
any substantial part of the property of the Issuer or any of its Material
Subsidiaries, or the Issuer or any of its Material Subsidiaries shall make any
general assignment for the benefit of creditors; or
(h) the entry by a court of competent jurisdiction of one or more
judgments or orders against the Issuer or any Subsidiary of the Issuer or any of
their respective property or assets in an aggregate amount in excess of $5
million that are not covered by insurance written by third parties, which
judgments or orders have not been vacated, discharged, satisfied or stayed
pending appeal within 60 days from the entry thereof;
then, and in each and every such case (other than an Event of Default specified
in clause (f) or (g) above relating to the Issuer), unless the principal of all
of the Securities shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of the
Securities then outstanding hereunder, by notice in writing to the Issuer (and
to the Trustee if given by Securityholders) (the "Acceleration Notice"), may
declare all the Securities and the accrued interest thereon to be due and
payable immediately (the "Acceleration Date"). If an Event of Default specified
in clause (f) or (g) above occurs with respect to the Issuer, all unpaid
principal of, and premium, if any, and accrued and unpaid interest on, the
Securities then outstanding will ipso facto become due and payable without any
declaration or other act on the part of the Trustee or any Holder.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
August 1, 2003 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to August 1, 2003, then the premium
specified in the Indenture shall also become immediately due and payable to the
extent permitted by law upon the acceleration of the Notes.
51
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the payment
of any installment of interest on any of the Securities when such interest shall
have become due and payable, and such default shall have continued for a period
of 30 days, or (b) in case default shall be made in the payment of all or any
part of the principal of any of the Securities when the same shall have become
due and payable, whether upon maturity or upon any redemption or by declaration
or otherwise -- then upon demand by the Trustee the Issuer will pay to the
Trustee for the benefit of the Holders of the Securities the whole amount that
then shall have become due and payable on all such Securities for principal or
interest, as the case may be (with interest to the date of such payment upon the
overdue principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest at the
rate borne by the Securities); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee,
except as a result of its negligence or bad faith, and all other amounts due the
Trustee under Section 6.6.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities to the registered Holders, whether
or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceeding at law or
in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Issuer or other obligor upon the
Securities and collect in the manner provided by law out of the Property of the
Issuer or other obligor upon the Securities, wherever situated, the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or the property of the Issuer or such other
obligor, or in case of any judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Securities, and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for reasonable compensation
to the Trustee and each predecessor Trustee, and their respective
52
agents, attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith, and for all other
amounts due the Trustee under Section 6.6) and of the Securityholders allowed in
any judicial proceedings relative to the Issuer or other obligor upon the
Securities, or to the creditors or Property of the Issuer or such other obligor;
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Securities in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other bankruptcy
or insolvency proceedings or Person performing similar functions in comparable
proceedings; and
(c) collect and receive any moneys or other Property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee, except as a result of negligence or bad faith, and
for all other amounts due the Trustee under Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for 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 except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof in any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities, and it shall not be necessary to make any Holders of the
Securities parties to any such proceedings.
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SECTION 5.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article shall be applied in the following order at the
date or dates fixed by the Trustee and, in case of the distribution of such
moneys on account of principal or interest, upon presentation of the several
Securities and stamping (or otherwise noting) thereon the payment, or issuing
Securities in reduced principal amounts in exchange for the presented Securities
if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses, including reasonable
compensation to the Trustee and each predecessor Trustee and their respective
agents and attorneys and of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith, and all other amounts due the Trustee under Section
6.6;
SECOND: In case the principal of the Securities shall not have
become and be then due and payable, to the payment of interest in default in the
order of the maturity of the installments of such interest, with interest (to
the extent that such interest has been collected by the Trustee) upon the
overdue installments of interest at the rate borne by the Securities, such
payments to be made ratably to the Persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities shall have become and
shall be then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities for principal and interest, with interest upon
the overdue principal, and (to the extent that such interest has been collected
by the Trustee) upon overdue installments of interest at the rate borne by the
Securities; and in case such moneys shall be insufficient to pay in full the
whole amount so due and unpaid upon the Securities, then to the payment of such
principal and interest, without preference or priority of principal over
interest, or of interest over principal, or of any installment of interest over
any other installment of interest, or of any Security over any other Security,
ratably to the aggregate of such principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Issuer.
SECTION 5.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined
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adversely to the Trustee, then and in every such case the Issuer and the Trustee
shall be restored respectively to their former positions and rights hereunder,
and all rights, remedies and powers of the Issuer, the Trustee and the
Securityholders shall continue as though no such proceedings had been taken.
SECTION 5.6 Limitations on Suits by Securityholders. No Holder shall
have any right by virtue or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Indenture, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of an Event of Default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than 25% in aggregate principal amount of the Securities then
outstanding shall have made written request upon the Trustee to institute such
action or proceeding in its own name as trustee hereunder and shall have offered
to the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby and the Trustee for
60 days after its receipt of such notice, request and offer of indemnity shall
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 5.9; it being understood and intended, and being expressly
covenanted by the Holder of every Security with every other Holder and the
Trustee, that no one or more Holders of Securities shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holder of Securities, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Securities. For
the protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 5.7 Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder to receive payment of the
principal of and interest on such Security on or after the respective due dates
expressed in such Security, or to institute suit for the .enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative: Delay or Omission Not
Waiver of Default. Except as provided in Section 2.6, no right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or thereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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No delay or omission of the Trustee or of any Holder to exercise any
right or power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and subject to
Section 5.6, every power and remedy given by this Indenture or by law to the
Trustee or to the Securityholders may be exercised from time to time, as often
as shall be deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.9 Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding shall have
the right to direct the time, method, and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee by this Indenture; provided that such direction shall not be
otherwise than in accordance with law and the provisions of this Indenture; and
provided, further, that (subject to the provisions of Section 6.1) the Trustee
shall have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding so
directed may not lawfully be taken or if the Trustee in good faith by its board
of directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee shall determine that the action or
proceeding so directed would involve the Trustee in any financial or other
liability or if the Trustee in good faith shall so determine that the actions or
forbearances specified in or pursuant to such direction shall be unduly
prejudicial to the interests of Holders of the Securities not joining in the
giving of said direction, it being understood that (subject to Section 6.1) the
Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Securityholders.
SECTION 5.10 Waiver of Past Defaults. (a) Prior to the declaration
of acceleration of the maturity of the Securities as provided in Section 5.1,
the Holders of a majority in aggregate principal amount of the Securities at the
time outstanding may on behalf of all Holders waive any Default or Event of
Default hereunder and its consequences, except a default in the payment of
principal of or premium, if any, or interest on any of the Securities or in
respect of a covenant or provision of this Indenture which cannot be modified or
amended without the consent of all Holders.
(b) The Holders of a majority in aggregate principal amount of the
Securities then outstanding by notice to the Trustee may rescind an acceleration
and its consequences if all existing Events of Default (other than the
nonpayment of principal of and premium, if any, and interest on the Securities
which has become due solely by virtue of such acceleration) have been cured or
waived and if the rescission would not conflict with any judgment or decree. No
such rescission shall affect any subsequent Default or impair any right
consequent thereon.
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(c) In the case of any such waiver, the Issuer, the Trustee and the
Holders of the Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon. Upon any such waiver, such
Default shall cease to exist and be deemed to have been cured and not to have
occurred, and any Event of Default arising therefrom shall be deemed to have
been cured, and not to have occurred for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon.
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall transmit to the Securityholders, as the
names and addresses of such Holders appear on the registry books, notice by mail
of all Defaults actually known to a Responsible Officer of the Trustee, such
notice to be transmitted within 90 days after the occurrence thereof, unless
such Defaults shall have been cured before the giving of such notice; provided
that, except in the case of Default in the payment of the principal of or
interest on any of the Securities, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interests of
the Securityholders.
SECTION 5.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of Securities by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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, suffered
or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders holding in the aggregate more than 10% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or
interest on any Security on or after the due date expressed in such Security.
SECTION 5.13 Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel and any other
amounts due the Trustee under Section 6.6, be for the ratable benefit of the
Holders of the Securities.
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SECTION 5.14 Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.15 Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiving of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived) the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against
the Trustee; and
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(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Holders of not less than a majority in principal amount of the Securities at
the time outstanding relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Indenture; and
(d) whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial or
other liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if repayment of such funds or adequate indemnity
against such liability is not assured to the reasonable satisfaction of the
Trustee.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed), and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Issuer;
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(c) the Trustee may consult with counsel and any advice or Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security and/or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, 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, consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document unless requested in writing so to do by the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding; provided that if the payment within a reasonable
time to the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms of
this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses of
every such examination shall be paid by the Issuer or, if paid by the Trustee or
any predecessor trustee, shall be repaid by the Issuer upon demand;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be charged with knowledge of any Default
or Event of Default with respect to the Securities unless either (1) a
Responsible Officer of the Trustee assigned to the Corporate Trust Department of
the Trustee (or any successor division or department of the Trustee) shall have
actual knowledge of such Default or Event of Default or (2) written notice of
such Default or Event of Default shall have been given to the Trustee by the
Issuer or any other obligor on the Securities or by any Holder of the
Securities.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the
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Trustee assumes no responsibility for the correctness of the same. The Trustee
makes no representation as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
Etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and, subject to
Sections 6.8 and 6.13, if operative, may otherwise deal with the Issuer and
receive, collect, hold and retain collections from the Issuer with the same
rights it would have if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.6 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee, and each predecessor trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The obligations
of the Issuer under this Section to compensate and indemnify the Trustee and
each predecessor trustee and to pay or reimburse the Trustee and each
predecessor trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the resignation or removal
of the Trustee and the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be a senior claim to that of the Securities upon
all Property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities, and the
Securities are hereby subordinated to such senior claim. When the Trustee incurs
expenses or renders services in connection with an Event of Default specified in
Section 5.1(f) or (g), the expenses and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy law.
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SECTION 6.7 Right of Trustee to Rely on Officers' Certificate, Etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee, and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant and protection to the Trustee for any action taken, suffered or omitted
by it under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. The
Trustee shall comply with TIA ss. 310(b); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation in
other securities, of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA ss. 310(b)(1) are met. The provisions of TIA ss. 310
shall apply to the Issuer, as obligor of the Securities.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or of any State or territory or of the
District of Columbia having a combined capital and surplus of at least
$50,000,000 (or being a member of a bank holding system with an aggregate
combined capital and surplus), and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal, State, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Issuer nor any
Person directly or indirectly controlling, controlled by or under common control
with the Issuer may serve as Trustee hereunder. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect specified
in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. The Trustee may resign at any time by so notifying the Issuer in
writing, such resignation to be effective upon the appointment of a successor
Trustee. If such appointment does not occur within 30 days after giving such
notice, then the resigning Trustee may petition any court of competent
jurisdiction for 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 Issuer's consent which consent shall not be unreasonably
withheld. The Issuer may remove the Trustee if:
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(a) the Trustee fails to comply with Section 6.8,
(b) the Trustee is adjudged a bankrupt or an insolvent;
(c) a receiver or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer 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 Issuer.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. 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 6.6), 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 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer 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 6.8, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
6.10, the Issuer's obligations under Section 6.6 shall continue for the benefit
of the retiring Trustee.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor Trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as Trustee herein; but, nevertheless, on the written request
of the Issuer or of the successor Trustee, upon payment of its charges then
unpaid, the Trustee ceasing to act shall, subject to Section 10.4, pay over to
the successor Trustee all moneys at the time held by it hereunder and
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shall execute and deliver an instrument transferring to such successor Trustee
all such rights, powers, duties and obligations. Upon request of any such
successor Trustee, the Issuer shall execute any and all instruments in writing
for more fully and certainly vesting in and confirming to such successor Trustee
all such rights and powers. Any trustee ceasing to act shall, nevertheless,
retain a prior claim upon all Property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
6.6.
No successor Trustee shall accept appointment as provided in this
Section 6.11 unless at the time of such acceptance such successor Trustee shall
be qualified under the provisions of Section 6.8 and eligible under the
provisions of Section 6.9.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 6.11, the Issuer shall mail notice thereof by first class mail to
the Holders of Securities at their last addresses as they shall appear in the
Security register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 6.10.
If the Issuer fails to mail such notice within 10 days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be qualified under the
provisions of Section 6.8 and eligible under the provisions of Section 6.9,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee to authenticate Securities in the name of
any predecessor Trustee shall have; provided that the right to adopt the
certificate of authentication of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
(a) Subject to the provisions in this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Issuer
within three months prior to a default, as defined in
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subsection (c) of this Section, or subsequent to such a default, then, unless
and until such default can be cured, the Trustee shall set apart and hold in a
special account for the benefit of the Trustee individually and the Holders of
the Securities and the holders of other indenture securities (as defined in this
Section):
(i) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three-month period and
valid as against the Issuer and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in subsection (a)(ii) of this Section, or from the exercise of
any right of set-off which the Trustee could have exercised if a petition
in bankruptcy had been filed by or against the Issuer upon the date of
such default; and
(ii) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Issuer and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(w) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Issuer) who is liable
thereon, (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the Issuer
in bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable state law;
(x) to realize, for its own account, upon any Property held by it as
security for any such claim, if such Property was so held prior to the
beginning of such three-month period;
(y) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any Property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such Property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such Property was so received the
Trustee had no reasonable cause to believe that a default as defined in
subsection (c) of this Section would occur within three months; or
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(z) to receive payment on any claim referred to in paragraph (x) or
(y) against the release of any property held as security for such claim as
provided in such paragraph (x) or (y), as the case may be, to the extent
of the fair value of such Property.
For the purposes of paragraphs (x), (y) and (z), Property
substituted after the beginning of such three-month period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the Property released, have the same status as the Property released, and, to
the extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and Property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Issuer in
bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable state law, the same percentage
of their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Issuer of the funds and
Property in such special account and before crediting to the respective claims
of the Trustee, the Securityholders and the holders of other indenture
securities dividends on claims filed against the Issuer in bankruptcy or
receivership or in proceeding for reorganization pursuant to Title 11 of the
United States Code or applicable state law, but after crediting thereon receipts
on account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim,
in bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable state law, whether such
distribution is made in cash, securities or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee, the Securityholders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, the Securityholders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
Property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
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Any Trustee who has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three-month period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of Property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such three-month
period; and,
(ii) such receipt of Property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of this Section a
creditor relationship arising from:
(i) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(ii) advances authorized by a receivership or bankruptcy court
of competent jurisdiction or by this Indenture for the purpose of
preserving any Property which shall at any time be subject to the Lien of
this Indenture or of discharging tax Liens or other prior Liens or
encumbrances thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the Securityholders at the time
and in the manner provided in this Indenture;
(iii) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(iv) an indebtedness created as a result of services rendered
or premises rented or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c)(iii)
below;
(v) the ownership of stock or of other securities or a
corporation organized under the provisions of Section 25(a) of the Federal
Reserve Act, as amended, which is directly or indirectly a creditor of the
Issuer; or
(vi) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c)(iv) of this Section.
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(c) As used in this Section:
(i) the term "default" shall mean any failure to make payment
in full of the principal of or interest upon any of the Securities or upon
other indenture securities when and as such principal or interest becomes
due and payable;
(ii) the term "other indenture securities" shall mean
securities upon which the Issuer is an obligor (as defined in the Trust
Indenture Act of 1939) outstanding under any other indenture (A) under
which the Trustee is also a trustee and (B) under which a default exists
at the time of the apportionment of the funds and property held in said
special account;
(iii) the term "cash transaction" shall mean any transaction
in which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(iv) the term "self-liquidating paper" shall mean any draft,
xxxx of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Issuer for the purpose of financing the
purchase, processing, manufacture, shipment, storage or sale of goods,
wares or merchandise and which is secured by documents evidencing title
to, possession of, or a Lien upon the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Issuer arising from the making, drawing, negotiating
or incurring of the draft, xxxx of exchange, acceptance or obligation; and
(v) the term "Issuer" shall mean any obligor upon the
Securities.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Securityholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee. Proof
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of execution of any instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Sections 6.1 and
6.2) conclusive in favor of the Trustee and the Issuer if made in the manner
provided in this Article.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument by
a Securityholder or his agent or proxy may be proved in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holdings of Securities shall
be proved by the Security register or by a certificate of the registrar thereof.
SECTION 7.3 Holders to Be Treated as Owners. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the Person in
whose name any Security shall be registered upon the Security register as the
absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject
to the provisions of this Indenture, interest on such Security and for all other
purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or
the Trustee shall be affected by any notice to the contrary. All such payments
so made to any such Person, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on the
Securities or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Issuer or any other obligor
on the Securities shall be disregarded and deemed not to be outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, consent
or waiver only Securities which a Responsible Officer of the Trustee knows are
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Issuer or any other obligor upon the
Securities or any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer or any other obligor of
the Securities. In case of a dispute as to such right, the advice of counsel
shall be full protection in respect of any decision made by the Trustee in
accordance with such advice. Upon request of the Trustee, the Issuer shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above described Persons; and, subject to Sections 6.1 and
6.2, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth.
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SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities specified in this Indenture in connection with such
action, any Holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities the Holders
of which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Security. Except as aforesaid, any
such action taken by the Holder of any Security shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities specified in this Indenture in connection with such action
shall be conclusively binding upon the Issuer, the Trustee and the Holders of
all the Securities.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors (a copy, certified by the Issuer's Secretary or an Assistant
Secretary, of which has been delivered to the Trustee), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall, as evidenced by an Opinion of Counsel delivered to the
Trustee, conform to the provisions of the Trust Indenture Act of 1939 as in
force at the date of the execution thereof) for one or more of the following
purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities any Property or assets;
(b) to evidence the succession of another Person to the Issuer or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer's Board of Directors, as
evidenced by a resolution of the Board of Directors (a copy, certified by the
Issuer's Secretary or an Assistant Secretary, of which has been delivered to the
Trustee), and the Trustee shall consider to be for the protection of the Holders
of Securities, and to make the occurrence, or the occurrence and continuance, of
a Default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth; provided that
in respect of any such additional covenant, restriction, condition or provision
such supplemental indenture may provide for a particular period of grace
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after Default (which period may be shorter or longer than that allowed in the
case of other Defaults) or may provide for an immediate enforcement upon such an
Event of Default or may limit the remedies available to the Trustee upon such an
Event of Default or may limit the right of the Holders of a majority in
aggregate principal amount of the Securities to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture;
(e) to provide for the issuance under this Indenture of Securities
in registered form (including Securities registrable as to principal only) and
to provide for exchangeability of such Securities with Securities issued
hereunder in fully registered form, and to make all appropriate changes for such
purpose;
(f) to comply with the provisions of the Trust Indenture Act of
1939; and
(g) to make any change that does not adversely affect the rights of
any Holder, provided that the Issuer has delivered to the Trustee an Opinion of
Counsel stating that such change does not adversely affect the rights of any
Holder.
The Trustee is hereby authorized to join in the execution of any
such supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any Property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article Seven) of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
outstanding, the Issuer, when authorized by a resolution of its Board of
Directors (a copy, certified by the Issuer's Secretary or an Assistant
Secretary, of which has been delivered to the Trustee), and the Trustee may,
from time to time and at any time, enter into an indenture or indentures
supplemental hereto (which shall, as evidenced by an Opinion of Counsel, conform
to the provisions of the Trust Indenture Act of 1939 as in force at the date of
execution thereof) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities; provided that no such supplemental indenture shall, without
the consent of each Holder affected thereby, (a) reduce the amount of Securities
whose Holders must consent to an amendment or
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waiver; (b) reduce the rate of, or extend the time for payment of, interest,
including defaulted interest, on any of the Securities; (c) reduce the principal
of or premium on or change the fixed maturity of any of the Securities or alter
the redemption provisions with respect thereto; (d) make the principal of, or
interest on, any of the Securities payable in money other than as provided for
in the Indenture and the Securities; (e) make any change in provisions relating
to waivers of Defaults, the ability of Holders to enforce their rights under the
Indenture or in the matters discussed in these clauses (a) through (h); (f)
waive a default in the payment of principal of or interest on, or redemption or
repurchase payment with respect to, any Securities, including, without
limitation, a default to make a payment when required upon a Change of Control
or after an Asset Sale; (g) affect the ranking of the Securities; or (h) after
the Issuer's obligation to purchase the Securities arises thereunder, amend,
modify or change the obligation of the Issuer to make and consummate a Change of
Control Offer or an Asset Sale Offer or waive any default in the performance
thereof or modify any of the provisions or definitions with respect to any such
offers.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any indenture
supplemental hereto. If a record date is fixed, then 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 supplemental indenture or to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date.
Upon the request of the Issuer accompanied by a copy of a resolution
of the Board of Directors certified by the Secretary or an Assistant Secretary
of the Issuer authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
and other documents, if any, required by Section 7.1, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first class mail to the Holders of Securities at
their addresses as they shall appear on the registry books of the Issuer,
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Issuer to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
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SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. In connection with the
execution and delivery of any supplemental indenture pursuant to this Article
Eight, the Trustee shall receive an Officers' Certificate and an Opinion of
Counsel (complying as to form with the provisions of Section 11.5) and, subject
to the provisions of Sections 6.1 and 6.2, may rely thereon as conclusive
evidence that any such supplemental indenture complies with the applicable
provisions of this Indenture. The Opinion of Counsel delivered pursuant to this
Section 8.4 shall include a statement that (i) all conditions precedent to the
execution and delivery of such supplemental indenture have been satisfied and
(ii) the execution, delivery and performance of such supplemental indenture by
the Issuer will not result in a breach or violation of, or constitute a Default
under, this Indenture or the Credit Facility, which breach, violation or default
could have a material adverse effect on the business or financial condition of
the Issuer and its Subsidiaries in the aggregate.
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee as to any matter provided for by such
supplemental indenture or as to any action taken at any such meeting. If the
Issuer or the Trustee shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Board of Directors, as evidenced
by a resolution of the Board of Director (a copy, certified by the Issuer's
Secretary or an Assistant Secretary, of which has been delivered to the
Trustee), to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Issuer, authenticated
by the Trustee and delivered in exchange for the Securities then outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 When Issuer May Merge, Etc. The Issuer will not, in a
single transaction or series of related transactions, consolidate or merge with
or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its and its Subsidiaries' assets (determined on a
consolidated basis) to, any Person or adopt a Plan of Liquidation, whether or
not the Issuer shall be the surviving or continuing corporation, unless:
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(a) the Person formed by such consolidation or into which the Issuer
is merged or the Person which acquires by conveyance, transfer or lease the
properties and assets of the Issuer substantially as an entirety or in the case
of a Plan of Liquidation, or Person to which assets of the Issuer have been
transferred, (i) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of Columbia and
(ii) shall expressly assume, by supplemental indenture, the due and punctual
payment of the principal of, and premium, if any, and interest and liquidated
damages, if any, on all of the Securities and the performance of every
obligation of the Issuer under the Registration Rights Agreement, the Securities
and the Indenture on the part of the Issuer to be performed or observed;
(b) immediately after giving effect to such transaction and the
assumption contemplated by clause (a)(ii) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction), such Person (i) shall have a
Consolidated Net Worth (immediately after the transaction but prior to any
purchase accounting adjustments relating to such transaction) equal to or
greater than the Consolidated Net Worth of the Issuer immediately prior to such
transaction and (ii) shall be able to incur at least $1.00 of additional
Indebtedness under paragraph (a) of Section 3.5, provided that in determining
the "Consolidated Fixed Charge Coverage Ratio" of the resulting, transferee or
surviving Person, such ratio shall be calculated as if the transaction
(including the incurrence of any Indebtedness or Acquired Indebtedness) took
place on the first day of the Reference Period;
(c) immediately before and after giving effect to such transaction
and the assumption contemplated by clause (a)(ii) above (including giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred in connection with or in respect of the transaction) no Default and no
Event of Default shall have occurred or be continuing;
(d) the Issuer or such Person shall have delivered to the Trustee
(i) an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease or Plan of Liquidation and,
if a supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this provision of this Indenture and
that all conditions precedent in the Indenture relating to such transaction have
been satisfied and (ii) an Accountants' Certificate stating that the Issuer has
made the calculations required by clause (b) above in accordance with the terms
of this Indenture; and
(e) neither the issuer nor any Subsidiary of the Issuer nor such
Person, as the case may be, would thereupon become obligated with respect to any
Indebtedness (including Acquired Indebtedness), nor any of its Property or
assets subject to any Lien, unless the Issuer or such Subsidiary or such Person,
as the case may be, could incur such Indebtedness (including Acquired
Indebtedness) or create such Lien under this Indenture (giving effect to such
Person being bound by all the terms of this Indenture).
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A Wholly Owned Subsidiary of the Issuer may consolidate with, or
merge with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to the Issuer without
complying with clause (b)(ii) above.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the Properties or assets of one or more Subsidiaries of the
Issuer, the Capital Stock of which constitutes all or substantially all of the
Properties and assets of the Issuer, shall be deemed to be the transfer of all
or substantially all of the properties and assets of the Issuer.
SECTION 9.2 Opinion of Counsel to Trustee: Officers' Certificate. In
connection with the consummation of any transaction contemplated by Section 9.1,
the Trustee, subject to the provisions of Sections 6.1 and 6.2, shall receive an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, lease or conveyance, and any such assumption,
complies with the applicable provisions of this Indenture and that all
conditions precedent herein provided relating to such transaction have been
complied with.
SECTION 9.3 Successor Corporation Substituted. Upon any such
consolidation, merger, conveyance, lease or transfer in accordance with the
foregoing, the successor Person formed by such consolidation or into which the
Issuer is merged or to which such conveyance, lease or transfer is made will
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such successor had
been named as the Issuer therein, and thereafter (except in the case of a sale,
assignment, transfer, lease, conveyance or other disposition) the predecessor
corporation will be relieved of all further obligations and covenants under this
Indenture and the Securities.
ARTICLE X
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to (A) rights of registration of
transfer and exchange, and the Issuer's right of optional redemption, (B)
substitution of mutilated, defaced, destroyed, lost or stolen Securities, (C)
rights of Holders to receive payments of principal thereof and interest thereon,
(D) the rights, obligations and immunities of the Trustee hereunder and (E) the
rights of
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the Securityholders as beneficiaries hereof with respect to the Property so
deposited with the Trustee under the provisions of this Section 10.1) when (a)
either (i) all the Securities theretofore authenticated and delivered (except
lost, stolen or destroyed Securities which have been replaced or paid and
Securities for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the Issuer
or discharged from such trust) have been delivered to the Trustee for
cancellation or (ii) all Securities not theretofore delivered to the Trustee for
cancellation have become due and payable and the Issuer has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Securities not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Securities to the date of deposit together
with irrevocable instructions from the Issuer directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may be;
(b) the Issuer has paid all other sums payable under the Indenture by the
Issuer; and (c) the Issuer has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent under the
Indenture relating to the satisfaction and discharge of the Indenture have been
complied with. The Trustee, on demand of the Issuer accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the Issuer,
shall execute proper instruments acknowledging such satisfaction of and
discharging this Indenture, subject to the provisions of Section 10.7. The
Issuer agrees to reimburse the Trustee for any costs or expenses (including the
reasonable fees of its counsel) thereafter reasonably and properly incurred, to
compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Securities and
to indemnify the trust referred to in Section 10.2(a) for any tax liability and
pay any expenses of such trust not otherwise provided for pursuant to such
Section.
SECTION 10.2 Defeasance and Discharge of Indenture. The Issuer shall
be deemed to have paid and discharged the entire Indebtedness on all the
outstanding Securities on the 91st day after the date of the deposit referred to
in subparagraph (a) hereof, and the provisions of this Indenture, as it relates
to such outstanding Securities, shall no longer be in effect (and the Trustee,
at the expense of the Issuer, shall execute proper instruments acknowledging the
same, subject to the provisions of Section 10.7), except as to: (1) rights of
registration of transfer and exchange, and the Issuer's right of optional
redemption, (2) substitution of apparently mutilated, defaced, destroyed, lost
or stolen Securities, (3) rights of Holders to receive payments of principal
thereof and interest thereon, (4) the rights, obligations and immunities of the
Trustee hereunder and (5) the rights of the Securityholders as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them; provided that all of the following conditions shall have been
satisfied:
(a) the Issuer shall have irrevocably deposited with the Trustee, in
trust, for the benefit of the Holders of the Securities, cash in United States
dollars, U.S. Government Obligations, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Securities to redemption or maturity;
76
(b) the Issuer 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 defeasance or 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 defeasance had not occurred (such opinion referring to and
being based upon a ruling of the Internal Revenue Service or a change in
applicable Federal income tax laws);
(c) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(d) such defeasance shall not cause the Trustee to have a
conflicting interest with respect to any securities of the Issuer;
(e) such defeasance shall not result in a breach or violation of, or
constitute a default under, any material agreement or instrument to which the
Issuer is a party or by which it is bound;
(f) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the trust funds will not be subject to any rights
of holders of any other Indebtedness of the Issuer and (B) after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and
(g) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent under the Indenture to defeasance have been complied with.
SECTION 10.3 Defeasance of Certain Obligations. The Issuer may omit
to comply with any term, provision or condition set forth in Sections 3.5 to
3.11 inclusive and Sections 3.13 and 9.1, with respect to the Securities, if all
of the following conditions have been satisfied:
(a) the Issuer shall have irrevocably deposited with the Trustee, in
trust, for the benefit of the Holders of the Securities, cash in United States
dollars, U.S. Government Obligations, or a combination thereof, in such amounts
as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Securities to redemption or maturity;
(b) the Issuer 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 defeasance or covenant defeasance and will be
77
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;
(c) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
(d) such covenant defeasance shall not cause the Trustee to have a
conflicting interest with respect to any securities of the Issuer;
(e) such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, any material agreement or
instrument to which the Issuer is a party or by which it is bound;
(f) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the trust funds will not be subject to any rights
of holders of any other Indebtedness of the Issuer and (B) after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally; and
(g) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent under the Indenture to covenant defeasance have been complied with.
SECTION 10.4 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.6, all moneys deposited with the Trustee
pursuant to Sections 10.1, 10.2 and 10.3 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Issuer acting as paying agent), to the Holders of the particular Securities for
the payment or redemption of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest;
but such money need not be segregated from other funds except to the extent
required by law.
SECTION 10.5 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture, all moneys then held by
any paying agent under the provisions of this Indenture shall, upon demand of
the Issuer, be repaid to the Issuer or paid to the Trustee and thereupon such
paying agent shall be released from all further liability with respect to such
moneys.
SECTION 10.6 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any
paying agent for the payment of the principal of or interest on any Security and
not applied but remaining unclaimed for two years after the date upon which such
principal or interest shall have become due and payable shall, upon the written
request of the Issuer and unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be repaid to the
Issuer
78
by the Trustee or such paying agent, and the Holder of such Security shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for any
payment which such Holder may be entitled to collect, and all liability of the
Trustee or any paying agent with respect to such moneys shall thereupon cease;
provided, however, that the Trustee or such paying agent before being required
to make any such repayments may, at the expense of the Issuer, cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, the City of New York, notice that such money remains unclaimed and
that after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer.
SECTION 10.7 Reinstatement. If the Trustee or paying agent is unable
to apply any moneys or U.S. Government Obligations in accordance with this
Article Ten by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuer's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Ten until such time as the Trustee
or paying agent is permitted to apply all such moneys or U.S. Government
Obligations in accordance with this Article; provided, however, that if the
Issuer has made any payment of principal of or interest on any Securities
because of the reinstatement of its obligations, the Issuer shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
moneys or U.S. Government Obligations held by the Trustee or paying agent.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Shareholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such, or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the Holders thereof and as
part of the consideration for the issue of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholders. Nothing in this Indenture or in the Securities, express or
implied, shall give or be construed to give to any Person, other then the
parties hereto and their successors and the Holders of the Securities, any legal
or equitable right, remedy or claim under this Indenture or
79
under any covenant or provision herein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and their successors
and of the Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer shall be given or served by (i) delivery in
person, (ii) telecopy (confirmed by copy sent by first-class mail) or (iii)
certified or registered mail, return receipt requested (except as otherwise
specifically provided herein), in each case addressed (until another address of
the Issuer is filed by the Issuer with the Trustee) to Congoleum Corporation,
0000 Xxxxxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, Attention: Chief
Financial Officer (Telecopy No.: (000) 000-0000). Any notice, direction, request
or demand by the Issuer or any Securityholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
served by one of the methods described in the first sentence of this Section,
addressed to the Corporate Trust Office (Telecopy No.: (000) 000-0000).
Where this Indenture provides for notice to Holders, including any
notice delivered in connection with TIA ss. 310(b), TIA ss. 313(c), TIA ss.
314(a) and TIA ss. 315(b), such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder entitled thereto, at his last address as it
appears in the Security register. Any notice which is delivered, telecopied (and
confirmed by mail) or mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the addressee receives such notice.
In any case where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice or confirm by mail
telecopy notice to the Issuer and Securityholders when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
SECTION 11.5 Compliance Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon an application or demand by the Issuer
to the Trustee to take any action under any of the provisions of this Indenture,
the Issuer shall furnish to the Trustee (i) an
80
Officers' Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and (ii) an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with and (iii) if appropriate, an
Accountants' Certificate stating that in the opinion of such accountants all
such conditions precedent have been complied with, except that in the case of
any such application or demand as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee 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 or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
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.
Any certificate, statement or opinion of an officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters and information which is in the possession of the
Issuer, upon the certificate, statement or opinion of or representations by an
officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
81
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal of the Securities or the date fixed
for redemption of any Security shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision which is required to be
included herein by any of Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, such required provision shall control.
SECTION 11.8 New York Law to Govern. THIS INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS (OTHER
THAN CHOICE OF LAW RULES) OF SAID STATE. THE ISSUER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK CITY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE OR THE SECURITIES AND THE ISSUER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH UNITED STATES FEDERAL OR NEW YORK STATE COURT. THE ISSUER
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDINGS IN
SUCH RESPECTIVE JURISDICTIONS. THE ISSUER IRREVOCABLY CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY COURT IN OR
OF THE STATE OF NEW YORK BY THE DELIVERY OF COPIES OF SUCH PROCESS TO THE
ISSUER, AT ITS ADDRESS SPECIFIED IN SECTION 11.4 HEREOF OR BY CERTIFIED MAIL
DIRECT TO SUCH ADDRESS.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
ARTICLE XII
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REDEMPTION OF SECURITIES
SECTION 12.1 Right of Optional Redemption; Prices. (a) Except as set
forth in clause (b) of this Section 12.1, the Securities may not be redeemed
prior to August 1, 2003. On and after August 1, 2003, the Issuer at its option
may redeem all, or from time to time any part of, the Securities upon payment of
the redemption price as set forth in the terms of the Security, together with
accrued and unpaid interest to the date fixed for redemption.
(b) At any time prior to August 1, 2001, the Issuer may redeem up to
30% of the aggregate principal amount of the Securities initially issued with
the proceeds of one or more Public Equity Offerings at a redemption price
(expressed as a percentage of principal amount) of 108.625%, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date;
provided that at least $70 million of the aggregate principal amount of the
Securities originally issued remains outstanding; and provided, further, that
such redemption shall occur within 60 days of the date of the closing of such
Public Equity Offering.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities to be redeemed as a whole or in part
shall be given by mailing notice of such redemption by first-class mail, postage
prepaid, at least 30 but not more than 60 days prior to the date fixed for
redemption to such Holders of Securities at their last addresses as they shall
appear upon the registry books. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part, shall not affect the validity of the proceedings for the redemption of
any other Security. Securities called for redemption become due on the date
fixed for redemption.
The notice of redemption to each such Holder shall specify the
principal amount of each Security held by such Holder to be redeemed, the date
fixed for redemption, the redemption price, the place or places of payment, that
payment will be made upon presentation and surrender of such Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. In case any Security is to be
redeemed in part only the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities to be redeemed at the option
of the Issuer shall be given by the Issuer or, at the Issuer's request, by the
Trustee in the name and at the expense of the Issuer. The Issuer shall notify
the Trustee of such redemption at least 15 days prior to the date the notice of
redemption is to be sent to the Holders and shall specify in such notice whether
the Trustee is to give such notice.
83
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer is acting as paying
agent, set aside, segregate and hold in trust as provided in Section 3.4) an
amount of money sufficient to redeem in immediately available funds on the
redemption date all the Securities so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. If less than all the outstanding Securities are to be redeemed the
Issuer will deliver to the Trustee at least 45 days prior to the date fixed for
redemption an Officers' Certificate stating the aggregate principal amount of
Securities to be redeemed.
If less than all of the Securities are to be redeemed, the Trustee
will select the Notes to be redeemed by lot or pro rata or by a method that
complies with the requirements of any exchange on which the Notes are listed or
by such method as the Trustee considers fair and appropriate. Securities may be
redeemed in part in multiples of $1,000 principal amount only. The Trustee shall
promptly notify the Issuer in writing of the Securities selected for redemption
and, in the case of any Securities selected for partial redemption, the
principal amount thereof to be redeemed. For all purposes of this Indenture,
unless the context otherwise requires, all provisions relating to the redemption
of Securities shall relate, in the case of any Security redeemed or to be
redeemed only in part, to the portion of the principal amount of such Security
which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue and, except as provided in Sections 6.5 and 10.7, such Securities shall
cease from and after the date fixed for redemption to be entitled to any benefit
or security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
said Securities or the specified portions thereof shall be paid and redeemed by
the Issuer at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that any semi-annual payment
of interest becoming due on the date fixed for redemption shall be payable to
the Holders of such Securities registered as such on the relevant record date
subject to the terms and provisions of Section 2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Security.
84
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officers' Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, (a) the
Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
85
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and, where appropriate, their respective corporate seals to be
hereunto affixed and attested, all as of August 3, 1998.
CONGOLEUM CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx III
-----------------------------
(signature)
Xxxxxx X. Xxxxx III
Sr. Vice President - Finance
[CORPORATE SEAL]
Attest:
By: ________________________
FIRST UNION NATIONAL BANK, as Trustee
By: /s/ Xxxx Xxxxxx
-----------------------------
Asst. Vice President
-----------------------------
(Name and Title)
[CORPORATE SEAL]
Attest:
By: _________________________
00
XXXXX XX XXX XXXX )
ss.:
COUNTY OF NEW YORK )
On the ________ day of August, 1998, before me personally came
Xxxxxx X. Xxxxx III, to me known, who, being by me duly sworn, did depose and
say that he resides at 00 Xxxxxxx Xxxx, Xxxxxxxxxx Xxxxxxxx, Xxxxxxxxxxxx 00000;
that he is Senior Vice President, Finance of CONGOLEUM CORPORATION, a Delaware
corporation and the corporation described in and which executed the foregoing
instrument; and that he signed his name thereby by authority of the Board of
Directors of said corporation.
_____________________________
Notary Public
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and, where appropriate, their respective corporate seals to be
hereunto affixed and attested, all as of August 3, 1998.
CONGOLEUM CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx III
---------------------------------
(signature)
Xxxxxx X. Xxxxx III
Sr. Vice President - Finance
[CORPORATE SEAL]
Attest:
By: _________________________
FIRST UNION NATIONAL BANK, as Trustee
By: /s/ Xxxx Xxxxxx
---------------------------------
(signature)
---------------------------------
Xxxx Xxxxxx
Assistant Vice President
[CORPORATE SEAL]
Attest:
By: __________________________
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On the ____ day of August, 1998, before me personally came
_____________, to me known, who, being by me duly sworn, did depose and say that
he resides at Dunellen, N.J.; that he is an Assistant Vice President of First
Union National Bank, a national banking association described in and which
executed the foregoing instrument; and that he signed his name thereto by
authority of the Board of Directors of said Corporation.
_____________________________
Notary Public
My commission expires:
_____________________________
[NOTARIAL SEAL]
