================================================================================
FREEDOM CHEMICAL COMPANY, as Issuer,
THE BANK OF NEW YORK, as Trustee
and
FREEDOM TEXTILE CHEMICALS CO.,
HILTON DAVIS CHEMICAL CO.,
KALAMA CHEMICAL, INC.,
FREEDOM CHEMICAL DIAMALT GMBH,
KALAMA SPECIALTY CHEMICALS, INC.,
KALAMA FOREIGN SALES CORPORATION,
FREEDOM TEXTILE CHEMICAL COMPANY (SOUTH CAROLINA) INC. and
FCC ACQUISITION CORP., as
Guarantors
INDENTURE
Dated as of October 15, 1996
$125,000,000
10 5/8% Senior Subordinated Notes due 2006
================================================================================
TABLE OF CONTENTS
Page
----
PARTIES ................................................................ 1
RECITALS .............................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.01. Definitions .......................................... 1
Section 1.02. Other Definitions..................................... 26
Section 1.03. Rules of Construction ............................... 26
Section 1.04. Form of Documents Delivered to Trustee ............... 27
Section 1.05. Acts of Holders ...................................... 29
Section 1.06. Notices, etc., to the Trustee and the
Company ............................................ 30
Section 1.07. Notice to Holders; Waiver ............................ 30
Section 1.08. Conflict with Trust Indenture Act..................... 31
Section 1.09. Effect of Headings and Table of Contents ............. 31
Section 1.10. Successors and Assigns ............................... 31
Section 1.11. Separability Clause .................................. 31
Section 1.12. Benefits of Indenture ................................ 32
Section 1.13. GOVERNING LAW ........................................ 32
Section 1.14. No Recourse Against Others ........................... 32
Section 1.15. Independence of Covenants ............................ 32
Section 1.16. Exhibits and Schedules ............................... 33
Section 1.17. Counterparts ......................................... 33
Section 1.18. Duplicate Originals................................... 33
Section 1.19. Incorporation by Reference of TIA .................... 33
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating ...................................... 33
Section 2.02. Execution and Authentication; Aggregate
Principal Amount ................................... 34
Section 2.03. Restrictive Legends .................................. 35
----------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of this Indenture.
-i-
Page
----
Section 2.04. Book-Entry Provisions for Global
Security ........................................... 37
Section 2.05. Special Transfer Provisions .......................... 39
ARTICLE THREE
THE NOTES
Section 3.01. Title and Terms ...................................... 42
Section 3.02. Denominations ........................................ 42
Section 3.03. Temporary Notes ...................................... 42
Section 3.04. Registration, Registration of Trans-
fer and Exchange ................................... 43
Section 3.05. Mutilated, Destroyed, Lost and Stolen
Notes .............................................. 45
Section 3.06. Payment of Interest; Interest Rights
Preserved .......................................... 46
Section 3.07. Persons Deemed Owners ................................ 47
Section 3.08. Cancellation ......................................... 47
Section 3.09. Computation of Interest .............................. 48
Section 3.10. Legal Holidays ....................................... 48
Section 3.11. CUSIP Number ......................................... 48
Section 3.12. Payment of Additional Interest Under
Registration Rights Agreement ...................... 49
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. The Company's Option To Effect Xxxxx-
xxxxx or Covenant Defeasance ....................... 49
Section 4.02. Defeasance and Discharge ............................. 49
Section 4.03. Covenant Defeasance .................................. 50
Section 4.04. Conditions to Defeasance or Covenant
Defeasance ......................................... 51
Section 4.05. Deposited Money and U.S. Government
Obligations To Be Held in Trust;
Other Miscellaneous Provisions ..................... 53
Section 4.06. Reinstatement ........................................ 53
Section 4.07. Repayment to Company ................................. 54
-ii-
Page
----
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default .................................... 54
Section 5.02. Acceleration of Maturity; Rescission
and Annulment ...................................... 57
Section 5.03. Collection of Indebtedness and Suits
for Enforcement by Trustee;
Other Remedies ..................................... 58
Section 5.04. Trustee May File Proofs of Claims .................... 59
Section 5.05. Trustee May Enforce Claims Without
Possession of Notes ................................ 60
Section 5.06. Application of Money Collected ....................... 60
Section 5.07. Limitation on Suits .................................. 61
Section 5.08. Unconditional Right of Holders To
Receive Principal, Premium and
Interest ........................................... 62
Section 5.09. Restoration of Rights and Remedies ................... 62
Section 5.10. Rights and Remedies Cumulative ....................... 62
Section 5.11. Delay or Omission Not Waiver ......................... 63
Section 5.12. Control by Majority .................................. 63
Section 5.13. Waiver of Past Defaults .............................. 63
Section 5.14. Undertaking for Costs ................................ 64
Section 5.15. Waiver of Stay, Extension or Usury
Laws ............................................... 65
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities .................. 65
Section 6.02. Notice of Defaults ................................... 66
Section 6.03. Certain Rights of Trustee ............................ 67
Section 6.04. Trustee Not Responsible for Recitals,
Dispositions of Notes or Applica-
tion of Proceeds Thereof ........................... 68
Section 6.05. Trustee and Agents May Hold Notes;
Collections; etc. .................................. 68
Section 6.06. Money Held in Trust .................................. 69
Section 6.07. Compensation and Indemnification of
Trustee and Its Prior Claim ........................ 69
Section 6.08. Conflicting Interests ................................ 70
Section 6.09. Corporate Trustee Required; Eligi-
bility ............................................. 70
Section 6.10. Resignation and Removal; Appointment
of Successor Trustee ............................... 71
-iii-
Page
----
Section 6.11. Acceptance of Appointment by Succes-
sor ................................................ 73
Section 6.12. Successor Trustee by Merger, etc. .................... 74
Section 6.13. Preferential Collection of Claims
Against Issuers .................................... 74
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company
To Furnish Trustee Names and
Addresses of Holders ............................... 75
Section 7.02. Communications of Holders ............................ 75
Section 7.03. Reports by Trustee ................................... 75
Section 7.04. Reports by the Company ............................... 76
ARTICLE EIGHT
SUCCESSOR CORPORATION
Section 8.01. When the Company May Merge, etc. ..................... 76
Section 8.02. Successor Substituted ................................ 77
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders ........................... 77
Section 9.02. With Consent of Holders .............................. 78
Section 9.03. Compliance with Trust Indenture Act .................. 80
Section 9.04. Revocation and Effect of Consents .................... 80
Section 9.05. Notation on or Exchange of Notes ..................... 81
Section 9.06. Trustee May Sign Amendments, etc. .................... 81
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and
Interest ........................................... 81
Section 10.02. Maintenance of Office or Agency ...................... 81
-iv-
Page
----
Section 10.03. Money for Note Payments To Be Held in
Trust .............................................. 82
Section 10.04. Existence ............................................ 84
Section 10.05. Payment of Taxes and Other Claims .................... 84
Section 10.06. Maintenance of Properties ............................ 85
Section 10.07. Insurance ............................................ 85
Section 10.08. Compliance Certificate .............................. 85
Section 10.09. Provision of Financial Statements and
Reports ............................................ 87
Section 10.10. Future Guarantors .................................... 87
Section 10.11. Limitation on Incurrence of Indebted-
ness ............................................... 88
Section 10.12. Limitation on Restricted Payments .................... 91
Section 10.13. Limitations on Transactions with
Affiliates ......................................... 95
Section 10.14. Limitation on Asset Sales ............................ 96
Section 10.15. Change of Control .................................... 100
Section 10.16. Limitations on Liens Securing Certain
Debt ............................................... 102
Section 10.17. Limitation on Dividends and Other
Payment Restrictions Affecting Sub-
sidiaries .......................................... 103
Section 10.18. Limitation on Incurrence of Senior
Subordinated Indebtedness .......................... 104
Section 10.19. Designation of Unrestricted Subsid-
iaries ............................................. 104
ARTICLE ELEVEN
REDEMPTION OF NOTES
Section 11.01. Optional and Special Redemption ...................... 106
Section 11.02. Applicability of Article ............................. 107
Section 11.03. Election To Redeem; Notice to
Trustee ............................................ 107
Section 11.04. Selection by Trustee of Notes To Be
Redeemed ........................................... 107
Section 11.05. Notice of Redemption ................................. 108
Section 11.06. Deposit of Redemption Price .......................... 109
Section 11.07. Notes Payable on Redemption
Date ............................................... 109
Section 11.08. Notes Redeemed or Purchased in Part .................. 110
-v-
Page
----
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge of Inden-
ture ............................................... 110
Section 12.02. Application of Trust Money ........................... 111
ARTICLE THIRTEEN
GUARANTEE OF NOTES
Section 13.01. Guarantee ............................................ 111
Section 13.02. Execution and Delivery of Guarantee .................. 114
Section 13.03. Additional Guarantors ................................ 114
Section 13.04. Guarantee Obligations Subordinated to
Guarantor Senior Debt .............................. 115
Section 13.05. Payment Over of Proceeds upon Disso-
lution, etc., of a Guarantor ....................... 115
Section 13.06. Suspension of Guarantee Obligations
When Guarantor Senior Debt in
Default ............................................ 117
Section 13.07. Release of a Guarantor ............................... 118
Section 13.08. Waiver of Subrogation ................................ 119
Section 13.09. Guarantee Subordination Provisions
Solely To Define Relative Rights ................... 120
Section 13.10. Trustee To Effectuate Subordination
of Guarantee Obligations ........................... 121
Section 13.11. No Waiver of Guarantee Subordination
Provisions ......................................... 121
Section 13.12. Guarantors To Give Notice to Trustee ................. 122
Section 13.13. Reliance on Judicial Order or Cer-
tificate of Liquidating Agent
Regarding Dissolution, etc., of
Guarantors ......................................... 123
Section 13.14. Rights of Trustee as a Holder of
Guarantor Senior Debt; Preservation of
Trustee's Rights ................................... 124
Section 13.15. Article Thirteen Applicable to Paying
Agents ............................................. 124
Section 13.16. No Suspension of Remedies Subject to
Rights of Holders of Guarantor
Senior Debt ........................................ 124
Section 13.17. Trustee's Relation to Guarantor
Senior Debt ........................................ 124
Section 13.18. Subrogation .......................................... 125
-vi-
Page
----
ARTICLE FOURTEEN
SUBORDINATION OF NOTES
Section 14.01. Notes Subordinate to Senior Debt ..................... 126
Section 14.02. Payment Over of Proceeds upon Disso-
lution, etc. ....................................... 126
Section 14.03. Suspension of Payment When Designated
Senior Debt is in Default .......................... 128
Section 14.04. Trustee's Relation to Senior Debt .................... 129
Section 14.05. Subrogation to Rights of Holders of
Senior Debt ........................................ 130
Section 14.06. Provisions Solely To Define Relative
Rights ............................................. 130
Section 14.07. Trustee To Effectuate Subordination .................. 131
Section 14.08. No Waiver of Subordination
Provisions ......................................... 132
Section 14.09. Notice to Trustee .................................... 132
Section 14.10. Reliance on Judicial Order or Cer-
tificate of Liquidating Agent ...................... 134
Section 14.11. Rights of Trustee as a Holder of
Senior Debt; Preservation of Trust-
ee's Rights ........................................ 134
Section 14.12. Article Applicable to Paying Agents .................. 134
Section 14.13. No Suspension of Remedies ............................ 135
TESTIMONIUM ............................................................ 136
SIGNATURES ............................................................. 136
Exhibit A - Form of Initial Note ................................. A-1
Exhibit B - Form of Exchange Note ................................ B-1
Exhibit C - Form of Certificate To Be Delivered
in Connection with Transfers to Non-
QIB Accredited Investors ............................. C-1
Exhibit D - Form of Certificate To Be Delivered
in Connection with Transfers Pursuant
to Regulation S ...................................... D-1
Exhibit E - Form of Guarantee .................................... X-0
-xxx-
XXXXXXXXX, dated as of October 15, 1996, between FREEDOM CHEMICAL
COMPANY, a corporation incorporated under the laws of the State of Delaware (the
"Company" or "Freedom"), as issuer, FREEDOM TEXTILE CHEMICALS CO., a Delaware
corporation, HILTON DAVIS CHEMICAL CO., a Delaware corporation, KALAMA CHEMICAL,
INC., a Washington corporation, FREEDOM CHEMICAL DIAMALT GMBH, a corporation
existing under the laws of the Federal Republic of Germany, KALAMA SPECIALTY
CHEMICALS, INC., a Washington corporation, KALAMA FOREIGN SALES CORPORATION, a
corporation existing under the laws of Guam, FREEDOM TEXTILE CHEMICAL COMPANY
(SOUTH CAROLINA) INC., a Delaware corporation, and FCC ACQUISITION CORP., a
Delaware corporation, as guarantors (each a "Guarantor," and collectively, the
"Guarantors"), and THE BANK OF NEW YORK, a New York banking corporation, as
trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 10
5/8% Senior Subordinated Notes due 2006 (the "Initial Notes") and the Holders of
the 10 5/8% Senior Subordinated Notes due 2006 to be issued in exchange for the
Initial Notes pursuant to the Registration Rights Agreement (the "Exchange
Notes").
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person,
Indebtedness of any other Person (the "Acquired Person") existing at the time
the Acquired Person merges with or into, or becomes a Subsidiary of, such
specified Person, including Indebtedness incurred in connection with, or in
contemplation of, the Acquired Person merging with or into, or becoming a
Subsidiary of, such specified Person, provided that Indebtedness of such Person
which is redeemed, defeased, retired or otherwise repaid at the time of or
immediately upon consummation of the transactions by which such Person becomes a
Restricted Subsidiary or such Asset Acquisition shall not be Acquired Debt.
"Acquired Person" has the meaning set forth in the definition of
"Acquired Debt."
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control" (including,
-2-
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with") of any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.
"Amended and Restated Credit Agreement" means the Company's Amended
and Restated Credit Agreement, dated as of October 11, 1996 among the Company,
Freedom Chemical Diamalt, as co-borrower, Citicorp USA, Inc. as agent, the
financial institutions party thereto in their capacities as lenders and issuing
banks thereunder together with the related documents thereto (including without
limitation, any guarantee agreements and security documents), in each case as
such agreements may be amended, modified, restated, supplemented, renewed,
refunded, replaced or refinanced from time to time, including (i) any related
notes, letters of credit, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
modified, restated, supplemented, renewed, refunded, replaced or refinanced from
time to time, and (ii) any notes, guarantees, collateral documents, instruments
and agreements executed in connection with any such amendment, modification,
restatement, supplement, renewal, refunding, replacement or refinancing.
"Applicable Premium" means, with respect to a Note, the greater of
(i) 1.0% of the then outstanding principal amount of such Note and (ii) the
excess of (a) the present value of the required interest and principal payments
due on such Note, computed using a discount rate equal to the Treasury Rate plus
75 basis points, over (b) the then outstanding principal amount of such Note;
provided that in no event will the Applicable Premium exceed the amount of the
applicable redemption price upon an optional redemption less 100%, at any time
on or after October 15, 2001.
"Asset Sale" means (i) any sale, lease, conveyance or other
disposition by the Company or any Restricted Subsidiary (other than to the
Company or a Restricted Subsidiary and other than directors' qualifying Shares)
of any assets (including by way of a sale-and-leaseback) other than in the
ordinary course of business (provided that (x) the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company shall
not be an "Asset Sale" but instead shall be governed by Article Eight of this
Indenture and (y) Investments made in compliance with the Restricted Payments
covenant shall not be deemed to be Asset Sales), or (ii) the issuance or sale of
Capital Stock (other than Disqualified Stock) of any Restricted Subsidiary, in
the case of each of (i) and (ii), whether in a single transaction or a series of
related transactions, to any Person
-3-
(other than to the Company or a Restricted Subsidiary and other than directors'
qualifying shares) for Net Proceeds in excess of $1,000,000; provided, however,
the following transactions shall not be deemed Asset Sales: (i) the Company and
the Restricted Subsidiaries may (x) convey, sell, lease, transfer, assign or
otherwise dispose of assets pursuant to and in accordance with the limitation on
mergers, sales or consolidations provisions in the Indenture and (y) make
Restricted Payments permitted by the Restricted Payment covenant in the
Indenture; (ii) the Company and the Restricted Subsidiaries may create or assume
Liens (or permit any foreclosure thereon) securing Indebtedness to the extent
that such Lien does not violate Section 10.16 of this Indenture; and (iii) the
Company and the Restricted Subsidiaries may consummate any sale or series of
related sales of assets or properties of the Company and the Restricted
Subsidiaries having an aggregate Fair Market Value of less than $2,500,000 in
any fiscal year.
"Bank Agent" means Citicorp USA, Inc. or any successor or
replacement agent under the Amended and Restated Credit Agreement.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Bankruptcy Code of
1978, as amended, or any similar United States Federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors, or any amendment to, succession to or change in any such law.
"Board of Directors" means, with respect to any Person, the board of
directors, management committee or similar governing body or any authorized
committee thereof responsible for the management of the business and affairs of
such Person.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York,
State of New York, are authorized or obligated by law, regulation or executive
order to close.
"Capital Lease Obligation" of any Person means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease for property leased by such Person that would at such time be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
-4-
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person, including any Preferred Stock.
"Cash Equity Investment" means the aggregate of $10 million of new
cash equity to be invested by Xxxxxx Xxxxxxxxxx & Xxxx Fund, L.P. and Xxxxxx
Xxxxxxxxxx & Levy Fund II, L.P. and other stockholders of the Company at or
prior to the initial issuance of the Notes.
"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 Rating Services 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 Rating Services or at least P-1 from Xxxxx'x
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
(or, with respect to foreign banks, similar instruments) maturing within one
year from the date of acquisition thereof issued by any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or any member of the European Economic Community any U.S. branch of a
foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $200 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.
"Cash Flow" means, with respect to any period, the (i) Consolidated
Net Income of the Company and its Restricted Subsidiaries for such period, plus
(ii) provision for taxes based on income or profits, to the extent such
provision for taxes was included in computing such Consolidated Net Income, and
any provision for taxes utilized in computing the net losses under clause (i)
hereof, plus (iii) Consolidated Interest Expense of the
-5-
Company and its Restricted Subsidiaries for such period, plus (iv) depreciation,
amortization (including deferred financing costs and expenses) and all other
non-cash charges or expenses (including minority interests), to the extent such
depreciation, amortization and other non-cash charges or expenses (including
minority interests) were deducted in computing such Consolidated Net Income
(including amortization of goodwill and other intangibles).
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than the Permitted Holders, is or becomes
(including by merger, consolidation or otherwise) the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
shall be deemed to have "beneficial ownership" of all shares that such person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 50% or more of the voting
power of the total outstanding Voting Stock of the Company; (b) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election to such Board of Directors, or whose nomination for
election by the stockholders of the Company, was approved by a vote of 66-2/3%
of all remaining members of the Board of Directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved), cease for any
reason to constitute a majority of such Board of Directors of the Company then
in office; or (c) the sale or other disposition (including by merger,
consolidation or otherwise) of all or substantially all of the Capital Stock or
assets (where the transferee of such assets has assumed the obligation of the
Company under the Notes pursuant to Section 8.02 of this Indenture) of the
Company and its Restricted Subsidiaries to any Person or Group (as defined in
Rule 13d-5 of the Exchange Act) excluding transfers or conveyances to or among
the Company's Restricted Subsidiaries and other than to the Permitted Holders as
an entirety or substantially as an entirety in one transaction or a series of
related transactions.
"Commission" or "SEC" means the Securities and Exchange Commission,
as from time to time constituted, or if at any time after the execution of this
Indenture such Commission is not existing and performing the applicable duties
now assigned to it, then the body or bodies performing such duties at such time.
"Company" means Freedom Chemical Company, a Delaware corporation,
unless and until a successor replaces it in accordance with this Indenture, and
thereafter means such Surviving Person.
-6-
"Company Request" or "Company Order" means a written request or
order of the Company signed in the name of the Company by an officer of the
Company.
"Consolidated Cash Flow Coverage Ratio" means, with respect to any
date of determination, the ratio of (i) the aggregate amount of Cash Flow for
the period of the most recent four consecutive fiscal quarters for which
financial statements are available, to (ii) Consolidated Interest Expense for
such four fiscal quarters of the Company, determined on a pro forma basis after
giving pro forma effect to (i) the incurrence of such Indebtedness and (if
applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was incurred, and the
application of such proceeds occurred, at the beginning of such four-quarter
period; (ii) the incurrence, repayment or retirement of any other Indebtedness
by the Company and its Restricted Subsidiaries since the first day of such
four-quarter period as if such Indebtedness was incurred, repaid or retired at
the beginning of such four-quarter period; (iii) in the case of Acquired Debt,
the related acquisition as if such acquisition had occurred at the beginning of
such four-quarter period; and (iv) any acquisition or disposition by the Company
and its Restricted Subsidiaries of any company or any business or any assets out
of the ordinary course of business (without regard to clause (iii) of the
definition of Consolidated Net Income), or any related repayment of
Indebtedness, in each case since the first day of such four-quarter period,
assuming such acquisition, disposition or related repayment had been consummated
on the first day of such four-quarter period.
"Consolidated Interest Expense" means, with respect to any period,
the sum of (i) the interest expense of the Company and its Restricted
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP consistently applied (except as provided herein), including, without
limitation, (a) amortization of debt discount, (b) the net cash payments, if
any, under interest rate contracts, (c) the interest portion of any deferred
payment obligation, (d) accrued interest, and (e) all commissions, discounts and
other fees and charges owed with respect to letters of credit, bankers'
acceptance financing or similar facilities, plus (ii) the interest component of
the Capital Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company during such period, of the Company and its Restricted
Subsidiaries, plus (iii) all cash dividends paid during such period by the
Company and its Restricted Subsidiaries with respect to any Disqualified Stock
(other than by Restricted Subsidiaries of such Person to such Person or such
Person's Restricted Subsidiaries and other than any dividend paid in Capital
Stock (other than Disqualified Stock)), in each case as determined on a
consolidated basis in accordance with GAAP consistently applied; provided, that
-7-
Consolidated Interest Expense shall exclude the amortization of fees related to
the issuance of the Notes and fees (other than letters of credit) related to any
bank indebtedness of the Company or any Restricted Subsidiary, including Senior
Bank Debt.
"Consolidated Net Income" means, with respect to any period, the net
income (or loss) of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied,
adjusted, to the extent included in calculating such net income (or loss), by
excluding, without duplication, (i) extraordinary gains and losses, (ii) the
portion of net income (or loss) of the Company and its Restricted Subsidiaries
allocable to interests in unconsolidated Persons or Unrestricted Subsidiaries,
except to the extent of the amount of dividends or distributions actually paid
to the Company or its Restricted Subsidiaries by such other Person during such
period, (iii) net income (or loss) of any Person combined with the Company or
any of its Restricted Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (iv) net gain or
loss in respect of sale, transfer or disposition of assets (including, without
limitation, pursuant to sale and leaseback transactions) other than in the
ordinary course of business, (v) the net income of any Restricted Subsidiary to
the extent that the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income to the Company is not at the time
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders (other than pursuant to the Notes or the Indenture), (vi)
Refinancing Expenses (including any write-off of deferred financing costs
related to the Existing Credit Agreements) to the extent recognized as an
expense prior to December 31, 1996, (vii) the non-recurring cumulative effect of
a change in accounting principles, (viii) non-recurring gains and non-recurring,
non-cash losses and costs, (ix) any non-cash compensation expense in connection
with the exercise of, grant to or repurchase from officers, directors, and
employees of stock, stock options or stock equivalents, or (x) any non-cash
charge or expense arising by reason of the application of APB no. 16.
"consolidation" means, with respect to any Person, the consolidation
of the accounts of its Restricted Subsidiaries with those of such Person, all in
accordance with GAAP; provided, however, that "consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary with the accounts
of such Person. The term "consolidated" has a correlative meaning to the
foregoing.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall
-8-
be principally administered, which office at the date of execution of this
Indenture is located at 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, Xxx Xxxx
00000; attention: Corporate Trust Administration.
"Currency Agreement Obligations" means the obligations of any person
under a foreign exchange contract, currency swap agreement or other similar
agreement or arrangement to protect such person against fluctuations in currency
values.
"Default" means any event that is, or after the giving of notice or
passage of time or both would be, an Event of Default.
"Designated Senior Debt" means (i) the Senior Bank Debt, and (ii)
any other Senior Debt of the Company permitted to be incurred under the
Indenture the principal amount of which is $5 million or more at the time of the
designation of such Senior Debt as "Designated Senior Debt" by the Company in a
written instrument delivered to the Trustee.
"Depository" shall mean The Depository Trust Company, New York, New
York, or any successor thereto registered under the Securities Exchange Act or
other applicable statute or regulation.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Stock" means (i) any Preferred Stock of any Restricted
Subsidiary and (ii) any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof (other than upon the occurrence of an "asset sale" or a change of
control of the Company in circumstances where the holders of the Notes would
have similar rights), in whole or in part on or prior to the Stated Maturity of
the Notes.
"Dollars" or "$" means lawful money of the United States of America.
"Event of Default" shall have the meaning specified in Section 5.01
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
-9-
"Existing Credit Agreements" shall have the meaning set forth in the
Offering Memorandum.
"Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"Foreign Subsidiary" means a Subsidiary of a Person not organized
under the laws of the United States or any political subdivision thereof and the
operations of which are located substantially outside the United States.
"Freedom Credit Agreement" shall have the meaning set forth in the
Offering Memorandum.
"GAAP" means generally accepted accounting principles in the United
States set forth in the Statements of Financial Accounting Standards and the
Interpretations, Accounting Principles Board Opinions and AICPA Accounting
Research Bulletins which are applicable as of the Issue Date and consistently
applied.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantor" means (i) each of Freedom Textile Chemicals Co., Hilton
Davis Chemical Co., Kalama Chemical, Inc., Freedom Chemical Diamalt GmbH, Kalama
Specialty Chemicals, Inc., Kalama Foreign Sales Corporation, Freedom Textile
Chemical Company (South Carolina) Inc., FCC Acquisition Corp., (ii) each of the
Company's Restricted Subsidiaries who become Restricted Subsidiaries after the
Issue Date and which are not Foreign Subsidiaries and (iii) any other Restricted
Subsidiary of the Company that the Company designates as a Guarantor in a
written instrument delivered to the Trustee.
"Guarantor Senior Debt" means with respect to each Guarantor, the
principal of and interest (including post-petition interest) on, and all other
amounts owing in respect of, (i) Senior Bank Debt, (ii) any other Indebtedness
incurred by such Guarantor (including, but not limited to, reasonable fees and
expenses of counsel and all other charges, fees and expenses incurred in
connection with such Indebtedness), unless the instrument creating or evidencing
such Indebtedness or pursuant to which such Indebtedness is outstanding
expressly provides that such Indebtedness is on a parity with or subordinated in
right of
-10-
payment to the Notes. Notwithstanding the foregoing, Guarantor Senior Debt shall
not include (i) any Indebtedness for federal, state, local or other taxes, (ii)
any Indebtedness among or between the Company, any Restricted Subsidiary and/or
their Affiliates which is not pledged or otherwise assigned to the agent for the
holders of Senior Bank Debt, (iii) any Indebtedness incurred for the purchase of
goods or materials, or for services obtained, in the ordinary course of business
or any obligations in respect of any such Indebtedness, (iv) any Indebtedness
that is incurred in violation of the Indenture, or (v) Indebtedness of a Person
that is expressly subordinate or junior in right of payment to any other
Indebtedness of such Person.
"Holder" or "Noteholder" means a Person in whose name a Note is
registered in the Note Register.
"Indebtedness" means, with respect to any Person, without
duplication, and whether or not contingent, (i) all indebtedness of such Person
for borrowed money or which is evidenced by a note, bond, debenture or similar
instrument, (ii) all obligations of such Person to pay the deferred or unpaid
purchase price of property or services, which purchase price is due more than
six months after the date of placing such property in service or taking delivery
and title thereto or the completion of such service (other than obligations
related to premiums payable in connection with insurance obtained in the
ordinary course of business), (iii) all Capital Lease Obligations of such
Person, (iv) all obligations of such Person in respect of letters of credit or
bankers' acceptances issued or created for the account of such Person, (v) to
the extent not otherwise included in this definition, all net obligations of
such Person under Interest Rate Agreement Obligations or Currency Agreement
Obligations of such Person, (vi) all liabilities of others of the kind described
in the preceding clause (i), (ii) or (iii) secured by any Lien on any property
owned by such Person even though such Person has not assumed or become liable
for payment of such liabilities; provided, however, the amount of such
Indebtedness for purposes of this definition shall be limited to the lesser of
the amount of Indebtedness secured by such Lien or the value of the property
subject to such Lien, (vii) all Disqualified Stock issued by such Person and all
Preferred Stock issued by a Subsidiary of such Person, and (viii) to the extent
not otherwise included, any guarantee by such Person of any other Person's
indebtedness or other obligations described in clauses (i) through (vii) above.
"Indebtedness" of the Company and the Restricted Subsidiaries shall not include
(i) current trade payables incurred in the ordinary course of business and
payable in accordance with customary practices and (ii) non-interest bearing
installment obligations and accrued liabilities incurred in the ordinary course
of business which are not more than 90 days past due (or, if overdue for more
than 90 days, are being contested in
-11-
good faith). The principal amount outstanding of any Indebtedness issued with
original issue discount is the accreted value of such Indebtedness and
Indebtedness shall not include any liability for federal, state, local or other
taxes.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules hereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Initial Purchasers" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Xxxxxxxx Wertheim & Co. Incorporated and Xxxxx Xxxxxx Inc.
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means, when used with respect to any Note,
the Stated Maturity of an installment of interest on such Note, as set forth in
such Note.
"Interest Rate Agreement Obligations" means, with respect to any
Person, the Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Investment" in any Person means any direct or indirect advance,
loan or other extension of credit (including, without limitation, by way of
Guarantee or similar arrangement but excluding advances to customers and
employees in the ordinary course of business) to, capital contribution (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others) to, or any purchase or acquisition
of Capital Stock, bonds, notes, debentures or other similar instruments issued
by, such Person and shall include the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary. For purposes of the definition of "Unrestricted
Subsidiary" and Section 10.12 hereof, (i) "Investment" shall include the Fair
Market Value of the assets (net of liabilities) of any Restricted Subsidiary of
the Company at
-12-
the time that such Restricted Subsidiary of the Company is designated an
Unrestricted Subsidiary and shall exclude the Fair Market Value of the assets
(net of liabilities) of any Unrestricted Subsidiary at the time that such
Unrestricted Subsidiary is designated a Restricted Subsidiary of the Company and
(ii) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its Fair Market Value at the time of such transfer, in each case as
determined by the Board of Directors in good faith.
"Issue Date" means the date of first issuance of the Notes under
this Indenture, October 17, 1996.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of, or agreement to give, any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Net Proceeds" means, with respect to any Asset Sale by any Person,
the aggregate cash proceeds or Cash Equivalents received by such Person and/or
its Affiliates in respect of such Asset Sale, which amount is equal to the
excess, if any, of (i) the cash or Cash Equivalents received by such Person
and/or its Affiliates (including any cash payments received by way of deferred
payment pursuant to, or monetization of, a note or installment receivable or
otherwise, but only as and when received) in connection with such Asset Sale,
over (ii) the sum of (a) the amount of any Indebtedness that is secured by such
asset and which is required to be repaid by such Person in connection with such
Asset Sale, plus (b) all fees, commissions and other expenses incurred
(including, without limitation, the fees and expenses of legal counsel and
investment banking, underwriting and brokerage fees and expenses) by such Person
in connection with such Asset Sale, plus (c) provision for taxes, including
income taxes, attributable to the Asset Sale or attributable to required
prepayments or repayments of Indebtedness with the proceeds of such Asset Sale,
plus (d) appropriate amounts to be provided by the Company or any Restricted
Subsidiary of the Company as a reserve against any liabilities associated with
such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, plus (e) if such Person is a Restricted Subsidiary, any
dividends or distributions payable to holders of minority interests in such
Restricted Subsidiary from the proceeds of such Asset Sale.
-13-
"Non-payment Default" means, for purposes of Article Fourteen
hereof, any default (other than a Payment Default) with respect to any
Designated Senior Debt of the Company or any Guarantor pursuant to which the
maturity thereof may be accelerated.
"Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.
"Notes" mean the Initial Notes and the Exchange Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering" shall have the meaning set forth in the Offering
Memorandum.
"Offering Memorandum" means the offering memorandum dated as of
October 10, 1996 relating to the Offering and sale of the Notes.
"Officer" means, with respect to any Person, the Chairman,
President, Chief Executive Officer, Chief Financial Officer, Chief Operating
Officer, any Vice President, Treasurer or Secretary, or any other officer
designated by the Board of Directors serving in a similar capacity.
"Officers' Certificate" means a certificate signed by two Officers
or by an Officer and an Assistant Treasurer or Assistant Secretary of the
Company or a Guarantor, as the case may be.
"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel to the Company, and who shall be reasonably acceptable
to the Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company or any Affiliate
thereof) in trust for the Holders of such Notes; provided, however, that
if such Notes are to be redeemed, notice of such redemption has been duly
and
-14-
irrevocably given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Notes with respect to which the Company has effected
defeasance or covenant defeasance as provided in Article Four, to the
extent provided in Sections 4.02 and 4.03; and
(iv) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any
such Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Notes are held by a bona fide
purchaser in whose hands the Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor under the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes which the Trustee knows to be so owned shall be so
disregarded. Notes 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 Notes and that the
pledgee is not the Company or any other obligor under the Notes or any Affiliate
of the Company or such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company or
any Guarantor ranking pari passu in right of payment with the Notes or the
Guarantees, as applicable.
"Paying Agent" means any Person authorized by the Company to pay the
principal, premium, if any, or interest on any Notes on behalf of the Company.
"Payment Blockage Period" shall have the meaning set forth in
Section 14.03.
"Payment Default" means any default in the payment when due (whether
at Stated Maturity, by acceleration or otherwise) of principal or interest on,
or of unreimbursed amounts under drawn letters of credit or fees relating to
letters of credit constituting, any Senior Debt or Guarantor Senior Debt, as
applicable, of the Company or any Guarantor.
"Permitted Holders" means (i) collectively or individually Xxxxxx
Xxxxxxxxxx & Levy Fund, L.P., Xxxxxx Xxxxxxxxxx
-15-
& Levy Fund X.X. XX, The Freedom Group Partnership; or (ii) any Affiliate of any
of the Persons described in clause (i) and with respect to Xxxxxx Xxxxxxxxxx &
Levy Fund, L.P. and Xxxxxx Xxxxxxxxxx & Xxxx Fund II, L.P., any partnership or
corporation which is managed or controlled by JLL Associates, L.P. or any
Affiliate thereof. For purposes of this definition, "control," as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through ownership of voting securities or by contract or
otherwise.
"Permitted Investments" means (i) any Investment in the Company or
any Restricted Subsidiary; (ii) any Investment in Cash Equivalents; (iii) any
Investment in a Person (an "Acquired Person") if, as a result of such
Investment, (a) the Acquired Person becomes a Restricted Subsidiary, or (b) the
Acquired Person either (1) is merged, consolidated or amalgamated with or into
the Company or one of its Restricted Subsidiaries and the Company or such
Restricted Subsidiary is the Surviving Person, or (2) transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or one of
its Restricted Subsidiaries; (iv) Investments in accounts and notes receivable
acquired in the ordinary course of business; (v) any securities received in
connection with an Asset Sale that complies with Section 10.14; (vi) Interest
Rate Agreement Obligations and Currency Agreement Obligations permitted pursuant
to Section 10.11(b)(v); (vii) investments in or acquisitions of Capital Stock or
similar interests in Persons (other than Affiliates of the Company) received in
the bankruptcy or reorganization of or by such Person or any exchange of such
investment with the issuer thereof or taken in settlement of or other resolution
of claims or disputes, and, in each case, extensions, modifications and renewals
thereof; (viii) loans or advances to officers, directors and employees made in
the ordinary course of business, not to exceed $1.0 million in the aggregate;
(ix) Investments for which the sole consideration provided is the Capital Stock
of the Company (other than Disqualified Stock); (x) Investments in evidences of
Indebtedness, securities or other property received by the Company or any
Restricted Subsidiary from another Person in connection with any bankruptcy
proceeding or by reason of a composition or readjustment of debt or a
reorganization of such Person or as a result of foreclosure, perfection or
enforcement of any Lien in exchange for evidences of Indebtedness, securities or
other property of such Person held by the Company or any Restricted Subsidiary,
or for other liabilities or obligations of such other Person to the Company or
any Restricted Subsidiary that were created in accordance with the terms of the
Indenture; (xi) any Investments existing in an Acquired Person at the time of
the acquisition of such Acquired Person, provided that such Investment is not
incurred in connection with, or in contemplation of such acquisition; (xii)
-16-
loans or advances to stockholders of the Company solely for the purchase of
Capital Stock of the Company by such stockholders, not to exceed $4.0 million in
the aggregate and (xiii) any other Investments that do not exceed $1.0 million
in amount in the aggregate at any one time outstanding.
"Permitted Liens" means (i) Liens on assets or property of the
Company that secure Senior Debt of the Company and Liens on assets or property
of a Restricted Subsidiary that secure Senior Debt of such Restricted
Subsidiary; (ii) Liens securing Indebtedness of a Person existing at the time
that such Person is merged into or consolidated with the Company or a Restricted
Subsidiary; provided, however, that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of such Person; (iii) Liens on property acquired by the Company
or a Restricted Subsidiary; provided, however, that such Liens were in existence
prior to the contemplation of such acquisition and do not extend to any other
property; (iv) Liens in respect of Interest Rate Obligations and Currency
Agreement Obligations permitted under the Indenture; (v) Liens in favor of the
Company or any Restricted Subsidiary; (vi) Liens incurred, or pledges and
deposits in connection with the performance of tenders, bids, leases, workers'
compensation, bankers' acceptances, unemployment insurance and other social
security benefits, and leases, surety and appeal bonds, government contracts and
other obligations of like nature incurred by the Company or any Restricted
Subsidiary in the ordinary course of business; (vii) Liens imposed by law,
including, without limitation, mechanics', carriers', warehousemen's,
material-men's, suppliers' and vendors' Liens, incurred by the Company or any
Restricted Subsidiary in the ordinary course of business; (viii) Liens for ad
valorem, income or property taxes or assessments and similar charges which
either are not delinquent or are being contested in good faith by appropriate
proceedings for which the Company has set aside on its books reserves to the
extent required by GAAP; (ix) Liens existing on the Issue Date; (x) Liens
securing the Notes or Guarantees; (xi) Liens securing or arising from Purchase
Money Obligations permitted to be incurred under clause (ix) of the definition
of Permitted Indebtedness, provided such Liens relate to the property (and
monetary proceeds thereof) which was acquired or constructed with such Purchase
Money Obligations and the Capital Stock of any Person formed to acquire such
property and that does not own any other material property; (xii) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Restricted Subsidiaries; (xiii) leases or subleases granted to others that do
not materially interfere with the ordinary course of business of the Company and
its Restricted Subsidiaries, taken as a whole;
-17-
(xiv) Liens arising from the rendering of a final judgment or order against the
Company or any Restricted Subsidiary of the Company that does not give rise to
an Event of Default; (xv) Liens securing reimbursement obligations with respect
to letters of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (xvi) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; (xvii) Liens
encumbering customary initial deposits and margin deposits, and other Liens that
are either within the general parameters customary in the industry and incurred
in the ordinary course of business, in each case, securing Indebtedness under
Interest Rate Agreement Obligations and Currency Agreement Obligations and
forward contracts, options, future contracts, futures, options or similar
agreements or arrangements designed to protect the Company or any of its
Restricted Subsidiaries from fluctuations in the price of commodities; and
(xviii) Liens on or sales of receivables in the ordinary course of business
(including in connection with the establishment of an accounts receivable
facility).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Capital Stock of any other class of such
Person.
"Private Placement Legend" means the legend initially set forth on
the Notes in the form set forth in Section 2.03.
"Public Equity Offering" means an underwritten public offering of
Capital Stock (other than Disqualified Stock) of the Company pursuant to an
effective registration statement filed under the Securities Act, which public
equity offering results in gross proceeds to the Company of not less than $35.0
million.
"Purchase Money Obligation" means any Indebtedness secured by a Lien
on assets related to the business of the Company or the Restricted Subsidiaries,
and any additions and accessions thereto, which are purchased or constructed by
the Company or any Restricted Subsidiary at any time after the Issue Date;
provided that (i) any security agreement or conditional sales or other title
retention contract pursuant to which the Lien on such assets is created
(collectively a "Security Agreement") shall be entered into
-18-
within 180 days after the purchase or substantial completion of the construction
of such assets and shall at all times be confined solely to the assets so
purchased or acquired, any additions and accessions thereto and any proceeds
therefrom, (ii) at no time shall the aggregate principal amount of the
outstanding Indebtedness secured thereby be increased, except in connection with
the purchase of additions and accessions thereto and except in respect of fees
and other obligations in respect of such Indebtedness and (iii) (A) the
aggregate outstanding principal amount of Indebtedness secured thereby
(determined on a per asset basis in the case of any additions and accessions)
shall not at the time such Security Agreement is entered into exceed 100% of the
purchase price to the Company or any Restricted Subsidiary of the assets subject
thereto or (B) the Indebtedness secured thereby shall be with recourse solely to
the assets so purchased or acquired, any additions and accessions thereto and
any proceeds therefrom.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Redemption Date" means, with respect to any Note to be redeemed,
any date fixed for such redemption by or pursuant to this Indenture and the
terms of the Notes.
"Redemption Price" means, with respect to any Note to be redeemed,
the price at which it is to be redeemed pursuant to this Indenture and the terms
of the Notes.
"Refinancing Expenses" means (i) legal, accounting, printing,
engraving, registration, blue sky and other fees and expenses incurred by the
Company which are directly attributable to the Offering, the amendment and
restatement of the Freedom Credit Agreement, the initial borrowings under the
Amended and Restated Credit Agreement and the repayment of amounts outstanding
under the Existing Credit Agreements, the Cash Equity Investment and the
Additional Equity Investments and the Exchange Offer, and (ii) fees, discounts
and commissions paid to the Initial Purchasers in connection with the initial
sale of the Notes or to any agent or lender under the Amended and Restated
Credit Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated on or about the Issue Date between the Company, the Guarantors
and the Initial Purchasers for the benefit of themselves and the Holders as the
same may be amended from time to time in accordance with the terms thereof.
"Regular Record Date" means the Regular Record Date specified in the
Notes.
-19-
"Regulation S" means Regulation S under the Securities Act.
"Responsible Officer" means, with respect to the Trustee, the
chairman or vice chairman of the board of directors, the chairman or vice
chairman of the executive committee of the board of directors, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller and any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer of the Trustee to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Payment" means (i) any dividend or other distribution
declared or paid on any Capital Stock of the Company (other than dividends or
distributions payable solely in Capital Stock (other than Disqualified Stock) of
the Company or dividends or distributions payable to the Company or any
Restricted Subsidiary); (ii) any payment to purchase, redeem or otherwise
acquire or retire for value any Capital Stock of the Company; (iii) any
voluntary or optional payment to purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is subordinated in right of payment to
the Notes other than a purchase, redemption, defeasance or other acquisition or
retirement for value that is paid for with the proceeds of Refinancing
Indebtedness that is permitted under Section 10.11; or (iv) any Restricted
Investment.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided, however, that the Trustee shall be
entitled to receive, at its request, and conclusively rely on an Opinion of
Counsel with respect to whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means each direct or indirect Subsidiary of
the Company other than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
-20-
"Senior Bank Debt" means (i) the Indebtedness outstanding or arising
under the Amended and Restated Credit Agreement, (ii) all obligations incurred
by or owing to the holders of such Indebtedness outstanding or arising under the
Amended and Restated Credit Agreement (including, but not limited to, all fees
and expenses of counsel and all other charges, fees and expenses), and (iii) all
interest rate agreement obligations arising in connection therewith with any
party to the Amended and Restated Credit Agreement.
"Senior Debt" means with respect to the Company, the principal of
and interest (including post-petition interest) on, and all other amounts owing
in respect of, (i) Senior Bank Debt, (ii) any other Indebtedness incurred by the
Company (including, but not limited to, reasonable fees and expenses of counsel
and all other charges, fees and expenses incurred in connection with such
Indebtedness), unless the instrument creating or evidencing such Indebtedness or
pursuant to which such Indebtedness is outstanding expressly provides that such
Indebtedness is on a parity with or subordinated in right of payment to the
Notes. Notwithstanding the foregoing, Senior Debt shall not include (i) any
Indebtedness for federal, state, local or other taxes, (ii) any Indebtedness
among or between the Company, any Restricted Subsidiary and/or their Affiliates
which is not pledged or otherwise assigned to the holders of Senior Bank Debt,
(iii) any Indebtedness incurred for the purchase of goods or materials, or for
services obtained, in the ordinary course of business or any obligations in
respect of any such Indebtedness, (iv) any Indebtedness that is incurred in
violation of the Indenture, (v) Indebtedness evidenced by the Notes or (vi)
Indebtedness of a Person that is expressly subordinate or junior in right of
payment to any other Indebtedness of such Person.
"Senior Representative" means the Bank Agent or any other
representatives designated in writing to the Trustee of the holders of any class
or issue of Designated Senior Debt; provided that, in the absence of a
representative of the type described above, any holder or holders of a majority
of the principal amount outstanding of any class or issue of Designated Senior
Debt may collectively act as Senior Representative for such class or issue.
"Series A Redeemable Preferred Stock" means the 2,800 shares of
Freedom Textile Chemical Co.'s $1,000 par value Series A Preferred Stock, as the
terms of such Preferred Stock shall be in effect on the Issue Date.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X
promulgated pursuant to the Securities Act, as such Regulation S-X is in effect
on the Issue Date.
-21-
"Special Record Date" means, with respect to the payment of any
Defaulted Interest, a date fixed by the Trustee pursuant to Section 3.06 hereof.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which any principal of such Note or such installment of interest is due
and payable, and when used with respect to any other Indebtedness, means the
date specified in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company
subordinated in right of payment to the Notes.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding voting power of the Voting Stock of which is owned or
controlled, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof, or (ii) any limited partnership of which such Person or
any Subsidiary of such Person is a general partner, or (iii) any other Person
(other than a corporation or limited partnership) in which such Person, or one
or more other Subsidiaries of such Person, or such Person and one or more other
Subsidiaries thereof, directly or indirectly, have more than 50% of the
outstanding partnership or similar interests or has the power, by contract or
otherwise, to direct or cause the direction of the policies, management and
affairs thereof.
"Surviving Person" means, with respect to any Person involved in or
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two business days prior
to the date fixed for prepayment (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the then remaining term to October 15, 2001; provided, however, that if
the then remaining term to October 15, 2001 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the then remaining term to October 15, 2001 is less than one year,
-22-
the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of
1939, as amended, and as in effect from time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Subsidiary" means Indiamalt and any other Subsidiary
of the Company (other than a Guarantor) designated as such pursuant to and in
compliance with Section 10.19 of this Indenture. Any such designation may be
revoked by a Board Resolution of the Company delivered to the Trustee, subject
to the provisions of such Section.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely 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 (as defined in Section
3(a)(2) of the Securities Act) as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"Voting Stock" of a Person means Capital Stock of such Person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time the stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
-23-
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment at final maturity, in respect thereof, with (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
with respect to which all of the outstanding voting securities (other than
directors' qualifying shares) of which are owned, directly or indirectly, by the
Company or a Surviving Person of any Disposition involving the Company, as the
case may be.
Section 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Act" 1.05
"Affiliate Transaction" 10.13
"Agent Members" 2.04
"Asset Sale Offer" 10.14
"Asset Sale Offer Price" 10.14
"Asset Sale Offer Trigger Date" 10.14
"Authenticating Agent" 2.02
"Change of Control Date" 10.15
"Change of Control Offer" 10.15
"Change of Control Purchase Date" 10.15
"Change of Control Purchase Price" 10.15
"covenant defeasance" 4.03
"Defaulted Interest" 3.06
"defeasance" 4.02
"Defeased Guarantees" 4.01
"Defeased Notes" 4.01
"Excess Proceeds" 10.14
"Exchange Notes" Recitals
"Existing Indebtedness" 10.11
"Global Note" 2.01
"incur" 10.11(a)
"Initial Notes" Recitals
"Note Register" 3.04
"Note Registrar" 3.04
"Notice of Default" 5.01
"Offshore Physical Note" 2.01
"Optional Redemption Price" 11.01
"Other Obligations" 1.20
-24-
"Payment Blockage Notice" 14.03
"Permitted Indebtedness" 10.11
"Permitted Payments" 10.12
"Physical Notes" 2.01
"Refinancing Indebtedness" 10.11
"Required Filing Dates" 10.09
"U.S. Physical Notes" 2.01
Section 1.03. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) 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;
(e) all references to "$" or "dollars" shall refer to the lawful
currency of the United States of America;
(f) the words "include," "included" and "including" as used herein
shall be deemed in each case to be followed by the phrase "without
limitation";
(g) words in the singular include the plural, and words in the
plural include the singular; and
(h) any reference to a Section or Article refers to such Section or
Article of this Indenture unless otherwise indicated.
Section 1.04. Form of Documents Delivered to Trustee.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee
(a) an Officers' Certificate in form and substance reasonably satisfactory to
the Trustee stating that, in the opinion of the signers, all conditions
precedent (including any
-25-
covenants compliance with which constitutes a condition precedent), if any,
provided for in this Indenture relating to the proposed action have been
complied with, (b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of counsel, all such
conditions (including any covenants compliance with which constitutes a
condition precedent), have been complied with and (c) where applicable, a
certificate or opinion by an accountant that complies with Section 314(c) of the
Trust Indenture Act.
Each certificate and Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(a) a statement that the Person making such certificate or Opinion
of Counsel has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements contained in such certificate
or Opinion of Counsel 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.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect
-26-
to such factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated, with
proper identification of each matter covered therein, and form one instrument.
Section 1.05. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in Person or by an 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 and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution (as provided below in
subsection (b) of this Section 1.05) of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01 hereof) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient including, without limitation, by verification from a notary
public or signature guarantee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the transfer thereof or
in exchange therefor or in lieu thereof to the same extent as the original
Holder, in respect of anything done, suffered or omitted to be done by the
Trustee, any Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Note.
-27-
Section 1.06. Notices, etc., to the Trustee and the Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed, in
writing, to or with the Trustee at its Corporate Trust Office or at any
other address previously furnished in writing to the Holders and the
Company by the Trustee or at the office of any drop agent specified by or
on behalf of the Trustee to the Holders and the Company from time to time;
and
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose (except as otherwise expressly provided herein)
hereunder if in writing and mailed, first-class postage prepaid, to the
Company, addressed to it at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000, Attention: Xxxxx X. XxXxxxxx, Esq., with a copy to Skadden, Arps,
Slate, Xxxxxxx & Xxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx X. Xxxxx, Esq., or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.07. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise expressly provided
herein) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at the address of such Holder as it appears in the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of 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. Any notice when mailed
to a Holder in the aforesaid manner shall be conclusively deemed to have been
received by such Holder whether or not actually received by such Holder. 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.
-28-
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 1.08. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such provision or requirement of the Trust Indenture Act shall
control.
If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, such
provision of the Trust Indenture Act shall be deemed to apply to this Indenture
as so modified or excluded, as the case may be, if this Indenture shall then be
qualified under the TIA.
Section 1.09. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and
Trustee shall bind their respective successors and assigns, whether so expressed
or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Notes issued pursuant hereto,
express or implied, shall give to any Person (other than the parties hereto and
their successors hereunder, any Paying Agent and the Holders) any benefit or any
legal or equitable right, remedy or claim under this Indenture, except as
provided in Article Thirteen and Article Fourteen.
-29-
Section 1.13. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF). THE TRUSTEE, THE
COMPANY, EACH GUARANTOR AND ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND THE
HOLDERS AGREE TO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR
THE NOTES.
Section 1.14. No Recourse Against Others.
No director, officer, employee or stockholder of the Company or any
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Notes, the Guarantees or this Indenture. Each holder
of Notes by accepting a Note waives and releases all such liability, and such
waiver and release is part of the consideration for the issuance of the Notes.
Section 1.15. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default if such action is taken or condition exists.
Section 1.16. Exhibits and Schedules.
All exhibits and schedules attached hereto are by this reference
made a part hereof with the same effect as if herein set forth in full.
Section 1.17. 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 1.18. Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
-30-
Section 1.19. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in, and made a part of, this Indenture.
Any terms incorporated by reference in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them therein.
ARTICLE TWO
SECURITY FORMS
Section 2.01. Form and Dating.
The Initial Notes and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of Exhibit A hereto. The
Exchange Notes and the Trustee's certificate of authentication relating thereto
shall be substantially in the form of Exhibit B hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company shall approve the form of the Notes and
any notation, legend or endorsement on them. Each Note shall be dated the date
of its authentication and shall show the date of its authentication.
The additional terms and provisions contained in the forms of Notes
and Guarantees, annexed hereto as Exhibits A, B and E, respectively, shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more global Notes in registered form,
substantially in the form set forth in Exhibit A (the "Global Note"), deposited
with the Trustee, as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Section 2.03 hereof. The aggregate principal amount of the
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depository.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be represented upon issuance by a temporary Global Note,
which will be exchangeable for certificated Notes in registered form in
substantially the form set forth in
-31-
Exhibit A (the "Offshore Physical Notes") only upon the expiration of the
"40-day restricted period" within the meaning of Rule 903(c)(3) of Regulation S.
Notes offered and sold in reliance on any other exemption from registration
under the Securities Act other than as described in the preceding paragraph
shall be issued, and Notes offered and sold in reliance on Rule 144A may be
issued, in the form of certificated Notes in registered form, in substantially
the form set forth in Exhibit A (the "U.S. Physical Notes"). The Offshore
Physical Notes and the U.S. Physical Notes are sometimes collectively herein
referred to as the "Physical Notes." Physical Notes may initially be registered
in the name of the Depository or a nominee of such Depository and be delivered
to the Trustee as custodian for such Depository. Beneficial owners of Physical
Notes, however, may request registration of such Physical Notes in their names
or the names of their nominees.
Section 2.02. Execution and Authentication; Aggregate Principal
Amount.
The Notes shall be executed on behalf of the Company by two Officers
of the Company. The signature of any Officer on the Notes may be manual or
facsimile.
If an Officer or Assistant Secretary whose manual or facsimile
signature is on a Note was an Officer or Assistant Secretary at the time of such
execution but no longer holds that office or position at the time the Trustee
authenticates the Note, the Note shall nevertheless be valid.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
The Trustee shall authenticate (i) Initial Notes for original issue
in the aggregate principal amount not to exceed $125,000,000 and (ii) Exchange
Notes from time to time for issue only in exchange for a like principal amount
of Initial Notes, in each case upon a written order of the Company in the form
of an Officers' Certificate. The Officers' Certificate shall specify the amount
of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes or Exchange Notes and
whether the Notes are to be issued as Physical Notes or a Global Note or such
other information as the Trustee may reasonably request. The aggregate principal
amount of Notes outstanding at any time may not exceed $125,000,000, except as
provided in Section 3.05 hereof.
-32-
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an agent to deal with the
Company or with any Affiliate of the Company.
Section 2.03. Restrictive Legends.
Each Global Note and Physical Note that constitutes a Restricted
Security shall bear the following legend (the "Private Placement Legend") on the
face thereof until the third anniversary of the Issue Date, unless otherwise
agreed by the Company and the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER
APPLICABLE LAWS. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE"), ONLY (A) TO THE
COMPANY; (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT
-33-
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
OTHERWISE IN COMPLIANCE WITH OTHER APPLICABLE LAWS, SUBJECT TO THE
COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM. THE LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE.
Each Global Note shall also bear a legend on the face thereof in
substantially the following form:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF
THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF 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 INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.05 OF THE INDENTURE.
Section 2.04. Book-Entry Provisions for Global Security.
This Section 2.04 shall apply only to the Global Note deposited with
the Depository or its custodian.
(1) So long as the Notes are eligible for book-entry settlement with
the Depository, or unless otherwise required by
-34-
law, the Global Note initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, (ii) be delivered to the Trustee
as custodian for such Depository and (iii) bear legends as set forth in Section
2.03.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any Agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Note.
(2) Transfers of the Global Note shall be limited to transfers in
whole, but, subject to the immediately succeeding sentence, not in part, to the
Depository, its successors or their respective nominees. Interests of beneficial
owners in the Global Note may be transferred or exchanged for Physical Notes in
accordance with the rules and procedures of the Depository and the provisions of
Section 2.05 hereof. In addition, Physical Notes shall be transferred to all
beneficial owners in exchange for their beneficial interests in the Global Note
if (i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for the Global Note and a successor depositary is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Note Registrar has received a
written request from the Depository to issue Physical Notes.
(3) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (2), the Note Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
(4) In connection with the transfer of the beneficial interests in
the entire Global Note to beneficial owners pursuant to paragraph (2), the
Global Note shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and deliver to
each beneficial owner
-35-
identified by the Depository in exchange for its beneficial interest in the
Global Note, an equal aggregate principal amount of Physical Notes of authorized
denominations.
(5) Any Physical Note constituting a Restricted Security delivered
in exchange for a beneficial interest in the Global Note pursuant to paragraph
(2) or (3) shall, except as otherwise provided by paragraphs (1)(a)(x) and (3)
of Section 2.05 hereof, bear the Private Placement Legend.
(6) The owner of a beneficial interest in the Global Note may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Notes.
Section 2.05. Special Transfer Provisions.
(1) Transfers to Non-QIB Institutional Accredited
Investors and Non-U.S. Persons. The following provisions shall
apply with respect to the registration of any proposed transfer of
a Note constituting a Restricted Security to any Institutional
Accredited Investor which is not a QIB or to any Non-U.S. Person:
(a) the Note Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the third
anniversary of the Issue Date or (y) (A) in the case of a transfer to an
Institutional Accredited Investor which is not a QIB (excluding Non-U.S.
Persons), the proposed transferee has delivered to the Note Registrar a
certificate substantially in the form of Exhibit C hereto or (B) in the
case of a transfer to a Non-U.S. Person, the proposed transferor has
delivered to the Note Registrar a certificate substantially in the form of
Exhibit D hereto; and
(b) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Note Registrar
of (x) the certificate, if any, required by paragraph (a) above and (y)
written instructions given in accordance with the Depository's and the
Note Registrar's procedures,
whereupon (i) the Note Registrar shall reflect on its books and records the date
and (if the transfer does not involve a transfer of outstanding Physical Notes)
a decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (ii) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and amount.
-36-
(2) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(a) the Note Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Note stating, or has otherwise advised the Company and
the Note Registrar in writing, that the sale has been made in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has otherwise
advised the Company and the Note Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A; and
(b) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Note
Registrar of written instructions given in accordance with the
Depository's and the Note Registrar's procedures, the Note Registrar shall
reflect on its books and records the date and an increase in the principal
amount of the Global Note in an amount equal to the principal amount of
the Physical Notes to be transferred, and the Trustee shall cancel the
Physical Notes so transferred.
(3) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Note
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Note Registrar shall deliver only Notes that bear the
Private Placement Legend unless (i) the requested transfer is after the third
anniversary of the Issue Date, or (ii) there is delivered to the Note Registrar
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
-37-
(4) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Note Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.04 hereof or this
Section 2.05. The Company shall have the right to inspect and make copies of all
such letters, notices or other written communications at any reasonable time
during the Note Registrar's normal business hours upon the giving of reasonable
written notice to the Note Registrar.
In connection with any transfer of the Notes, the Trustee, the Note
Registrar and the Company shall be entitled to receive, shall be under no duty
to inquire into, may conclusively presume the correctness of, and shall be fully
protected in relying upon the certificates, opinions and other information
referred to herein (or in the forms provided herein, attached hereto or to the
Notes, or otherwise) received from any Holder and any transferee of any Note
regarding the validity, legality and due authorization of any such transfer, the
eligibility of the transferee to receive such Note and any other facts and
circumstances related to such transfer.
ARTICLE THREE
THE NOTES
Section 3.01. Title and Terms.
The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is limited to $125,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 3.03, 3.04, 3.05, 9.05,
10.12, 10.14, 10.15 or 11.08.
The Notes shall be known and designated as the "10 5/8% Senior
Subordinated Notes due 2006" of the Company. The final Stated Maturity of the
Notes shall be October 15, 2006. Interest on the Notes will accrue at the rate
of 10 5/8% per annum and will be payable semi-annually in arrears on April 15
and October 15 in each year, commencing on April 15, 1997, to holders of record
on the immediately preceding April 1 and October 1, respectively. Interest on
the Notes will accrue from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid, from the Issue Date.
-38-
The additional terms and provisions contained in the forms of Notes
and the Guarantees, annexed hereto as Exhibits A and E, respectively, shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 3.02. Denominations.
The Notes shall be issuable only in fully registered form without
coupons and in denominations of $1,000 and any integral multiple thereof.
Section 3.03. Temporary Notes.
Pending the preparation and delivery of definitive Notes, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Notes. Temporary Notes may be printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the Officers executing such Notes may consider appropriate, as
conclusively evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive
Notes to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive Notes
upon surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 10.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
Section 3.04. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency designated pursuant to Section 10.02 being herein sometimes referred to
as the "Note Register") in which, subject to such reasonable regulations as the
Person appointed as being responsible for the keeping of the Note Register (the
"Note Registrar") may prescribe, the Company shall provide for
-39-
the registration of Notes and of transfers of Notes. The Note Register shall be
in written form or in any form capable of being converted into written form
within a reasonable period of time. The Trustee is hereby initially appointed
Note Registrar for the purpose of registering Notes and transfers of Notes as
herein provided. The Company may appoint one or more co-registrars.
Upon surrender for registration of transfer of any Note at the
office or agency of the Company designated pursuant to Section 10.02, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denomination or denominations, of a like aggregate principal amount
and bearing such restrictive legends as may be required by Section 2.03.
At the option of the Holder, Notes in certificated form may be
exchanged for other Notes of any authorized denomination or denominations, of a
like aggregate principal amount, upon surrender of the Notes to be exchanged at
such office or agency. Whenever any Notes are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Notes
which the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same
indebtedness, and entitled to the same benefits under this Indenture, as the
Notes surrendered upon such registration of transfer or exchange and no such
transfer or exchange shall constitute a repayment of any obligation nor create
any new obligations of the Company.
Every Note presented or surrendered for registration of transfer, or
for exchange or redemption, shall (if so required by the Company, the Trustee,
the Note Registrar or any co-registrar) be duly endorsed or be accompanied by a
written instrument of transfer in form satisfactory to the Company, the Trustee,
and the Note Registrar or any co-registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange or redemption of Notes, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 3.03, 9.05, 10.14, 10.15 or 11.08 not
involving any transfer.
None of the Company, the Trustee, the Note Registrar or any
co-registrar shall be required (a) to issue, register the
-40-
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of the Notes
selected for redemption and ending at the close of business on the day of such
mailing, (b) to register the transfer of or exchange any Note so selected for
redemption in whole or in part, except the unredeemed portion of Notes being
redeemed in part or (c) to issue, register, transfer or exchange any Note during
a Change of Control Offer or an Asset Sale Offer, if such note is tendered
pursuant to such Change of Control Offer or Asset Sale Offer.
When Notes are presented to the Note Registrar with a request to
register the transfer or to exchange them for an equal principal amount of Notes
of other authorized denominations, the Note Registrar shall register the
transfer or make the exchange as requested if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Notes at the Note
Registrar's request.
Section 3.05. Mutilated, Destroyed, Lost and Stolen Notes.
If (a) any mutilated Note is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, and there is delivered to the Company
and the Trustee, such security or indemnity, in each case, as may be required by
them to save each of them harmless from any loss which either of them may suffer
if a Note is replaced, then, in the absence of notice to the Company or the
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and the Trustee shall authenticate and deliver, in exchange for
any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a
replacement Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
Upon the issuance of any replacement Notes under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
-41-
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 3.06. Payment of Interest; Interest Rights Preserved.
Interest on any Note which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid by check or wire
transfer to the Person in whose name that Note (or one or more Predecessor
Notes) is registered at the close of business on the Regular Record Date for
such interest.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Notes, to
the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest"), shall forthwith cease to be payable
to the Holder on the Regular Record Date and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this subsection (a) provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company in writing of such Special Record Date. In the name and
at the expense of the Company, the Trustee shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at its
address as it appears in the Note Register, not
-42-
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered on such Special Record Date and shall no longer be
payable pursuant to the following subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, if, after written notice given by the
Company to the Trustee of the proposed payment pursuant to this subsection
(b), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Note.
Section 3.07. Persons Deemed Owners.
Prior to and at the time of due presentment for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Note is registered in the Note Register
as the owner of such Note for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.06) interest on such Note and for all
other purposes whatsoever, whether or not such Note shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 3.08. Cancellation.
All Notes surrendered for payment, redemption, registration of
transfer or exchange shall be delivered to the Trustee and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, as evidenced by a Company Order instructing the Trustee that all
Notes so delivered shall be promptly cancelled by the Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section 3.08, except as expressly permitted by this Indenture. Cancelled
Notes held by the Trustee shall be disposed of as directed by a Company Order;
provided, however, that the Trustee shall not be required to destroy such
cancelled Notes. The Trustee shall provide the
-43-
Company with a list of all Notes that have been cancelled from time to time as
requested by the Company.
Section 3.09. Computation of Interest.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 3.10. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, date
established for the payment of Defaulted Interest or Stated Maturity of any Note
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Notes) payment of principal, premium, if any, or interest
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 Interest Payment Date,
Redemption Date, date established for the payment of Defaulted Interest or at
the Stated Maturity, as the case may be, and no interest shall accrue with
respect to such payment for the period from and after such Interest Payment
Date, Redemption Date, date established for the payment of Defaulted Interest or
Stated Maturity, as the case may be, to the next succeeding Business Day.
Section 3.11. CUSIP Number.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and if so, the Trustee may use the CUSIP numbers in notices
of redemption or exchange as a convenience to Holders; provided, however, that
any such notice may state that no representation is made as to the correctness
or accuracy of the CUSIP number printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes. All Notes shall bear identical CUSIP numbers. The Company shall promptly
notify the Trustee in writing of any change in the CUSIP number of the Notes.
Section 3.12. Payment of Additional Interest Under Registration
Rights Agreement.
Under certain circumstances the Company will be obligated to pay
certain additional amounts of interest to the Holders, as more particularly set
forth in section 2(e) of the Registration Rights Agreement. The terms of Section
2(e) the Registration Rights Agreement are hereby incorporated herein by
reference and the Company shall be obligated to provide a copy of such
Registration Rights Agreement to the Trustee.
-44-
ARTICLE FOUR
DEFEASANCE OR COVENANT DEFEASANCE
Section 4.01. The Company's Option To Effect Defeasance or Covenant
Defeasance.
The Company may, at its option, at any time, elect to have
terminated the obligations of the Company with respect to Outstanding Notes and
to have terminated the obligations of the Guarantors, with respect to the
Guarantees, in each case, as set forth in this Article, and elect to have either
Section 4.02 or Section 4.03 be applied to all of the Outstanding Notes (the
"Defeased Notes") and the Guarantees (the "Defeased Guarantees"), upon
compliance with the conditions set forth below in Section 4.04.
Section 4.02. Defeasance and Discharge.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.02, the Company shall be deemed to have been
released and discharged from its obligations with respect to the Defeased Notes
and each of the Guarantors shall be deemed to have been released from its
obligations with respect to the Defeased Guarantees on the date the conditions
set forth below are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Defeased Notes, which
shall thereafter be deemed to be "Outstanding" only for the purposes of Section
4.05 and the other Sections of this Indenture referred to in (a) and (b) below,
and the Company and each of the Guarantors to have satisfied all other
obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following, which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of Defeased Notes to receive, solely from the trust fund described in
Section 4.04 and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company's obligations with respect to such Defeased Notes under
Sections 3.03, 3.04, 3.05 and 10.02, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including, without limitation, the
Trustee's rights under Section 6.07, and (d) this Article Four. Subject to
compliance with this Article Four, the Company may, at its option and at any
time, exercise its option under this Section 4.02 notwithstanding the prior
exercise of its option under Section 4.03 with respect to the Notes.
-45-
Section 4.03. Covenant Defeasance.
Upon the Company's exercise under Section 4.01 of the option
applicable to this Section 4.03, the Company and the Guarantors shall be
released from their respective obligations under any covenant or provision
contained in Sections 10.05 through 10.19 and the provisions of Article Eight
shall not apply, with respect to the Defeased Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Notes shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Notes, the Company and the Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
5.01(c), but, except as specified above, the remainder of this Indenture and
such Outstanding Notes shall be unaffected thereby.
Section 4.04. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 4.02 or Section 4.03 to the Outstanding Notes:
(1) The Company shall have irrevocably deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Four applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (a) cash,
in United States dollars, in an amount, or (b) U.S. Government Obligations
maturing as to principal, premium, if any, and interest in such amounts of
money and at such times as are sufficient without consideration of any
reinvestment of such interest, to pay principal of and interest on
Defeased Notes not later than one day before the due date of any payment,
or (c) a combination thereof, in amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants
or a nationally recognized investment banking firm expressed in a written
certification thereof delivered to the Trustee, to pay and discharge and
-46-
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of, premium, if any, and interest on the
Defeased Notes on the Stated Maturity or Redemption Date in accordance
with the terms of this Indenture and the Notes; provided, however, that
the Trustee (or other qualifying trustee) shall have received an
irrevocable written order from the Company instructing the Trustee (or
other qualifying trustee) to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes;
provided, further, however, that from and after the time of deposit, the
money or U.S. Government Obligations deposited shall not be subject to the
rights of the holders of other Indebtedness of the Company;
(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Section 5.01(e) is
concerned, at any time during the period ending on the ninety-first day
after the date of such deposit;
(3) Such defeasance or covenant defeasance shall not cause the
Trustee for the Notes to have a conflicting interest with respect to any
securities of the Company;
(4) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under,
this Indenture or any other material agreement or instrument to which the
Company is a party or by which it is bound;
(5) In the case of an election under Section 4.02, the Company shall
have delivered to the Trustee an Opinion of Counsel recognized in the
United States stating that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (y) since the
date hereof, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Notes will not
recognize income, gain or loss for Federal income tax purposes as a result
of such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such defeasance had not occurred;
(6) In the case of an election under Section 4.03, the Company shall
have delivered to the Trustee an Opinion of Counsel recognized in the
United States to the effect that the Holders of the Outstanding Notes will
not recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal income
-47-
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; and
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (i) all
conditions precedent provided for relating to either the defeasance under
Section 4.02 or the covenant defeasance under Section 4.03, as the case
may be, have been complied with and (ii) if any other Indebtedness of the
Company shall then be outstanding or committed, such defeasance or
covenant defeasance will not violate the provisions of the agreements or
instruments evidencing such Indebtedness.
Opinions and certificates required to be delivered under this
Section shall be in compliance with the requirements set forth in Section 1.04
and this Section 4.04.
Section 4.05. Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.03,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or such other Person that would qualify to act as
successor trustee under Article Six, collectively for purposes of this Section
4.05, the "Trustee") pursuant to Section 4.04 in respect of the Defeased Notes
and Defeased Guarantees shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (other than the Company or any
Affiliate of the Company) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee and its agents and
hold them harmless against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to Section 4.04 or
the principal, premium, if any, and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of the Defeased Notes.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 4.04
hereof which, in the opinion of a nationally-recognized firm of independent
public
-48-
accountants expressed in a written certification thereof to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
Section 4.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 4.02 or 4.03, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations of the Company and each of the Guarantors under this Indenture, the
Notes and the Guarantees shall be revived and reinstated as though no deposit
had occurred pursuant to Section 4.02 or 4.03, as the case may be, until such
time as the Trustee or Paying Agent is permitted to apply all such money and
U.S. Government Obligations in accordance with Section 4.02 or 4.03, as the case
may be; provided, however, that if the Company or the Guarantors make any
payment of principal, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company or the Guarantors, as the case may
be, shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money and U.S. Government Obligations held by the Trustee
or Paying Agent.
Section 4.07. Repayment to Company.
The Trustee shall pay to the Company (or, if appropriate, the
Guarantors) upon Company Request any money held by it for the payment of
principal or interest that remains unclaimed for two years. After payment to the
Company or the Guarantors, Noteholders entitled to money must look to the
Company and the Guarantors for payment as general creditors unless an applicable
abandoned property law designates another person and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (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
-49-
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) the Company shall fail to pay interest on the Notes (including
any Additional Interest as defined in the Registration Rights Agreement)
when the same becomes due and payable (whether or not prohibited by the
subordination provisions of Article Fourteen) and such failure shall
continue for 30 days or more; or
(b) the Company shall fail to pay principal on the Notes (whether or
not prohibited by the subordination provisions of Article Fourteen) when
and as the same shall become due and payable at maturity, upon
acceleration, optional or mandatory redemption, required repurchase, or
otherwise; or
(c) the Company shall fail to perform or comply with any of its
other covenants, agreements or warranties in this Indenture (other than
the defaults specified in clauses (a) and (b) above or clause (h) below),
which failure continues for a period of 60 days after written notice
thereof has been given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25.0% in aggregate principal amount
of the Notes then Outstanding; or
(d) the occurrence of one or more defaults under any agreements,
indentures or instruments under which the Company or any Significant
Subsidiary then has outstanding Indebtedness in excess of $5.0 million in
the aggregate and, if not already matured at its final maturity in
accordance with its terms, such Indebtedness shall have been accelerated
and such Indebtedness shall not have been repaid or such acceleration
rescinded within 30 days; or
(e) one or more judgments, orders or decrees for the payment of
money in excess of $5.0 million, either individually or in the aggregate,
shall be entered against the Company or any Significant Subsidiary or any
of their respective properties and which judgments, orders or decrees are
not paid, discharged, bonded or stayed or stayed pending appeal for a
period of 60 days after their entry; or
(f) there shall have been entered by a court of competent
jurisdiction (a) a decree or order for relief in respect of the Company or
any Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or (b) a decree or order adjudging the Company
or any Significant Subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under
-50-
any applicable Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or any Significant Subsidiary or of any substantial part of
their respective properties, or ordering the winding up or liquidation of
their affairs, and any such decree or order for relief shall continue to
be in effect, or any such other decree or order shall be unstayed and in
effect, for a period of 60 days; or
(g) (i) the Company or any Significant Subsidiary commences a
voluntary case or proceeding under any applicable Bankruptcy Law or any
other case or proceeding to be adjudicated bankrupt or insolvent, (ii) the
Company or any Significant Subsidiary consents to the entry of a decree or
order for relief in respect of the Company or such Significant Subsidiary
in an involuntary case or proceeding under any applicable Bankruptcy Law
or to the commencement of any bankruptcy or insolvency case or proceeding
against it, (iii) the Company or any Significant Subsidiary files a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or state law, (iv) the Company or any Significant
Subsidiary (x) consents to the filing of such petition or the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or such
Significant Subsidiary or of any substantial part of their respective
property, (y) makes an assignment for the benefit of creditors or (z)
admits in writing its inability to pay its debts generally as they become
due or (v) the Company or any Significant Subsidiary takes any corporate
action in furtherance of any such actions in this paragraph (g); or
(h) the Company shall fail to comply with its obligations in Section
8.01 or 8.02; or
(i) any Guarantee of a Significant Subsidiary ceases to be in full
force and effect (other than as expressly provided for in this Indenture)
or is declared null and void, or any Guarantor which is a Significant
Subsidiary denies that it has any further liability under any Guarantee,
or gives notice to such effect (other than by reason of the termination of
this Indenture or the release of any such Guarantee in accordance with
this Indenture).
The Company shall provide an Officers' Certificate to the Trustee
promptly upon any officer of the Company obtaining knowledge of any Default or
Event of Default that has occurred and, if applicable, describe such Default or
Event of Default and the status thereof.
-51-
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.01(f) or (g) with respect to the Company) occurs and is continuing,
the Trustee or the Holders of not less than 25.0% in aggregate principal amount
of the Notes then Outstanding may, and the Trustee upon the request of the
Holders of not less than 25.0% in aggregate principal amount of the Notes then
Outstanding shall, declare all the Notes due and payable, in an amount equal to
the principal amount of the Notes, together with accrued and unpaid interest to
the date the Notes become due and payable immediately by notice in writing to
the Company, and to the Company and the Trustee, if by the Holders, specifying
the respective Event of Default and that such notice is a "notice of
acceleration," and the Notes and all accrued and unpaid interest thereon shall
thereupon become immediately due and payable. If an Event of Default specified
in Section 5.01(f) or (g) with respect to the Company above occurs and is
continuing, then the principal of, premium if any, and any accrued interest on
all the Outstanding Notes shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of the Notes.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of not less
than a majority in aggregate principal amount of the Notes Outstanding, by
written notice to the Company and the Trustee, may rescind such declaration of
acceleration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all amounts paid or advanced by the Trustee under Section
6.07, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel;
(ii) all overdue interest on all Outstanding Notes;
(iii) the principal of and premium, if any, on any Outstanding
Notes which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate then borne by the
Notes; and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate then borne by the Notes;
and
-52-
(b) all Events of Default, other than the non-payment of principal
of the Outstanding Notes that has become due solely by such declaration of
acceleration, have been cured or waived.
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Trustee; Other Remedies.
The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in Section 5.01(a) or 5.01(b) hereof
occurs and is continuing, the Company will, upon demand of the Trustee, pay to
the Trustee, for the benefit of the Holders of such Notes, the whole amount then
due and payable on such Notes for principal, premium, if any, and interest, with
interest upon the overdue principal, premium, if any, and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate then borne by the Notes; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may, but is not
obligated under this paragraph to, institute a judicial proceeding for the
collection of the sums so due and unpaid and may, but is not obligated under
this paragraph to, prosecute such proceeding to judgment or final decree, and
may, but is not obligated under this paragraph to, enforce the same against the
Company, the Guarantors or any other obligor upon the Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Notes, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion, but is not obligated under this paragraph to, (i) proceed to
protect and enforce its rights and the rights of the Holders under this
Indenture and the Notes by such appropriate private or judicial proceedings as
the Trustee shall deem most effectual to protect and enforce such rights,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or the Notes or in aid of the exercise of any power granted
herein or therein, or (ii) proceed to protect and enforce any other proper
remedy. No recovery of any such judgment upon any property of the Company shall
affect or impair any rights, powers or remedies of the Trustee or the Holders.
-53-
Section 5.04. Trustee May File Proofs of Claims.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company, the Guarantors or any other
obligor upon the Notes, or the property of the Company, the Guarantors or of
such other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Notes 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 on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise, but is not obligated under this paragraph
(a) to file and prove a claim for the whole amount of principal,
premium, if any, and interest owing and unpaid in respect of the Notes 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 the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian, in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of
Notes.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by
-54-
the Trustee shall be brought in its own name and 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 agents and counsel, be for the ratable benefit of the Holders of the Notes
in respect of which such judgment has been recovered.
Section 5.06. Application of Money Collected.
Any money 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 money on account of principal, premium, if
any, or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
First: to the Trustee for amounts due under Section 6.07;
Second: to Holders for interest accrued on the Notes, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Notes for interest;
Third: to Holders for principal amounts owing under the Notes,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal and premium; and
Fourth: to the Company or, to the extent the Trustee collects any
amount from any Guarantor, to such Guarantor.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Noteholders pursuant to this
Section 5.06.
Section 5.07. Limitation on Suits.
No Holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(b) the Holder or Holders of not less than 25.0% in principal amount
of the Outstanding Notes shall have made written request(s) to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
-55-
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Note to affect, disturb or prejudice the rights of any
other Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture or any Note except in
the manner provided in this Indenture and for the equal and ratable benefit of
all the Holders.
Section 5.08. Unconditional Right of Holders To Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
cash payment, in United States dollars, of the principal of, premium, if any,
and (subject to Section 3.06 hereof) interest on such Note on the respective
Stated Maturities expressed in such Note (or, in the case of redemption or
repurchase, on the respective Redemption Dates or date fixed for repurchase) and
to institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the express consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Note and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, the Trustee and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
-56-
Section 5.10. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note 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 Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. Control by Majority.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes 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; provided, however,
that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any Note or expose the Trustee to liability; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against any loss or expense caused by
taking such action or following such direction. This Section 5.12 shall be in
lieu of ss. 316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A) of the TIA is
hereby expressly excluded from this Indenture and the Notes, as permitted by the
TIA.
-57-
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal
amount of the Outstanding Notes may on behalf of the Holders of all the Notes
waive any past Default hereunder and its consequences, except a Default:
(a) in the payment of the principal of, premium, if any, or interest
on any Note (which may only be waived with the consent of each holder of
Notes affected); or
(b) in respect of a covenant or provision under this Indenture which
cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon. In
case of any such waiver, the Company, the Trustee and the Holders shall be
restored to their former positions and rights hereunder and under the Notes,
respectively. This paragraph of this Section 5.13 shall be in lieu of ss.
316(a)(1)(B) of the TIA and such ss. 316(a)(1)(B) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note 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 the Notes, 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 Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Notes or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Note on or after the
respective Stated Maturities expressed in such Note (or, in the case of
redemption or repurchase, on or after the respective Redemption Dates or dates
fixed for repurchase).
-58-
Section 5.15. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
which would prohibit or forgive the Company from paying all or any portion of
the principal of, premium, if any, or interest on the Notes contemplated herein
or in the Notes or which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
-59-
(c) 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 willful misconduct, except that (i) this paragraph does not
limit the effect of paragraph (a) of this Section 6.01; (ii) the Trustee shall
not be liable for any error of judgment made in good faith by an officer of the
Trustee, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and (iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive an indemnity satisfactory to it in
its sole discretion against such risk, liability, loss, fee or expense which
might be incurred by it in compliance with such request or direction.
(e) 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 6.01.
Section 6.02. Notice of Defaults.
Within 90 days after the occurrence of any Default, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Note Register, notice of such Default hereunder known to the Trustee;
provided, however, that, except in the case of a Default in the payment of the
principal of, premium, if any, or interest on any Note, 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 Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
Section 6.03. Certain Rights of Trustee.
Subject to Section 6.01 hereof and the provisions of ss. 315 of the
TIA:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond,
-60-
debenture, note, coupon, security, other evidence of indebtedness 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 or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution of the Company thereof;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate of the Company;
(d) the Trustee and its agents may consult, at the expense of the
Company, with counsel and any written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon in accordance with such advice or
Opinion of Counsel;
(e) the Trustee and its agents shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, other evidence of indebtedness or other paper or
document but the Trustee in its discretion may make such further inquiry
or investigation into such facts or matters as it may deem fit, and, if
the Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney during the reasonable business
hours of the Company;
(f) the Trustee and its agents may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent (other than an agent
who is an employee of the Trustee) or attorney appointed with due care by
it hereunder; or
(g) the Trustee shall not be charged with knowledge of any Default
or Event of Default, as the case may be, with
-61-
respect to the Notes unless either (1) a Responsible Officer of the
Trustee shall have actual knowledge of the Default or Event of Default, as
the case may be, or (2) written notice of such Default or Event of
Default, as the case may be, shall have been given to the Trustee by the
Company, any other obligor on the Notes or by any Holder of the Notes.
Section 6.04. Trustee Not Responsible for Recitals, Dispositions of
Notes or Application of Proceeds Thereof.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company
and the Guarantors, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or the Notes, except that the Trustee represents
that it is duly authorized to execute and deliver this Indenture, authenticate
the Notes and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility and Qualification on Form T-1 supplied to the
Company and the Guarantors in connection with the registration of any Notes and
Guarantees issued hereunder are true and accurate subject to the qualifications
set forth therein. The Trustee shall not be accountable for the use or
application by the Company of Notes or the proceeds thereof.
Section 6.05. Trustee and Agents May Hold Notes; Collections; etc.
The Trustee, any Paying Agent, Note Registrar or any other agent of
the Company or the Guarantors, in its individual or any other capacity, may
become the owner or pledgee of Notes, with the same rights it would have if it
were not the Trustee, Paying Agent, Note Registrar or such other agent and,
subject to Sections 6.08 and 6.13 hereof and xx.xx. 310 and 311 of the Trust
Indenture Act, may otherwise deal with the Company or the Guarantors and
receive, collect, hold and retain collections from the Company or the Guarantors
with the same rights it would have if it were not the Trustee, Paying Agent,
Note Registrar or such other agent.
Section 6.06. Money Held in Trust.
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 herein
or by law. The Trustee shall not be under any liability for interest on any
moneys received by it hereunder.
-62-
Section 6.07. Compensation and Indemnification of Trustee and Its
Prior Claim.
The Company and the Guarantors covenant and agree: (a) to pay to the
Trustee from time to time, and the Trustee shall be entitled to, reasonable
compensation for all services rendered by it hereunder (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust); (b) to 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 reasonable expense, disbursement or advance as
may arise from its negligence or bad faith; and (c) 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 the exercise or performance of any of its
powers or duties hereunder, including enforcement of this Section 6.07. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The obligations of the Company and the
Guarantors 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 an additional
obligation hereunder and shall survive the satisfaction and discharge of this
Indenture. To secure the obligations of the Company and the Guarantors to the
Trustee under this Section 6.07, the Trustee shall have a Lien prior to the
Notes upon all property and funds held or collected by the Trustee as such,
except funds and property paid by the Company or the Guarantors and held in
trust for the benefit of the Holders of particular Notes under this Indenture.
All such payments and reimbursements shall be made with interest at a rate
reasonably acceptable to the Trustee, the Company and the Guarantors. The
Trustee shall be entitled to file a proof of claim in any bankruptcy proceeding
as a secured creditor for its reasonable compensation, fees and expenses under
this Section 6.07.
When the Trustee incurs expenses under Article Five hereof, the
expenses (including reasonable fees and expenses of its counsel) and the
compensation for the service in connection therewith are intended to constitute
expense of administration under any applicable bankruptcy law.
To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and
-63-
counsel, and any other amounts due the Trustee under this Section 6.07 out of
the estate in any such proceeding, shall be denied for any reason, other than
solely because of the misconduct of the Trustee or its agents, payment of the
same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise.
Section 6.08. Conflicting Interests.
The Trustee shall be subject to and comply with the provisions of
ss. 310(b) of the TIA.
Section 6.09. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA xx.xx. 310(a)(1) and 310(a)(5) and which
shall have a combined capital, surplus and undivided profits of at least
$100,000,000, and have an office or agency at which Notes may be presented for
transfer and redemption and at which demands may be made in The City of New
York. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of United States Federal, state,
territorial or District of Columbia 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. If 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
hereinafter specified in this Article.
Section 6.10. Resignation and Removal; Appointment of Successor
Trustee.
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
The Trustee, or any trustee or trustees hereinafter appointed, may
at any time resign by giving written notice thereof to the Company and the
Guarantors at least 20 Business Days prior to the date of such proposed
resignation. Upon receiving such notice of resignation, the Company and the
Guarantors shall promptly appoint a successor trustee by written instrument, a
copy of which shall be delivered to the resigning Trustee and a copy to the
successor trustee. If an instrument of acceptance by a
-64-
successor Trustee shall not have been delivered to the Trustee within 20
Business Days after the giving of such notice of resignation, the resigning
Trustee may, or any Holder who has been a bona fide Holder of a Note for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor trustee.
The Trustee may be removed at any time by an Act of the Holders of a
majority in principal amount of the Outstanding Notes, delivered to the Trustee,
the Company and the Guarantors.
If at any time:
(1) the Trustee shall fail to comply with the provisions of ss.
310(b) of the TIA in accordance with Section 6.08 hereof after written
request therefor by the Company, the Guarantors or by any Holder who has
been a bona fide Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 hereof
and shall fail to resign after written request therefor by the Company,
the Guarantors or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose or
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company or the Guarantors may remove the
Trustee, or (ii) subject to Section 5.14, the Holder of any Note who has been a
bona fide Holder of a Note for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company or the Guarantors shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, and the Company or the Guarantors have not appointed a successor
Trustee, a successor Trustee shall be appointed by act of the Holders of a
majority in principal amount of the Outstanding
-65-
Notes delivered to the Company, the Guarantors and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company and the Guarantors. If no successor Trustee shall have
been so appointed by the Company or the Holders of the Notes and accepted
appointment in the manner hereinafter provided, the Holder of any Note who has
been a bona fide Holder for at least six months may, subject to Section 5.14, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company and the Guarantors shall give notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee by mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Notes as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company, the Guarantors and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee as if
originally named as Trustee hereunder; but, nevertheless, on the written request
of the Company, the Guarantors or the successor Trustee, upon payment of amounts
due it pursuant to Section 6.07, such retiring Trustee shall duly assign,
transfer and deliver to the successor Trustee all moneys and property at the
time held by it hereunder and shall execute and deliver an instrument
transferring to such successor Trustee all the rights, powers, duties and
obligations of the retiring Trustee. Upon request of any such successor Trustee,
the Company and the Guarantors shall execute any and all instruments 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 6.07.
No successor Trustee with respect to the Notes shall accept
appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor Trustee shall be eligible to act as Trustee under this
Article.
-66-
Upon acceptance of appointment by any successor Trustee as provided
in this Section 6.11, the Company and the Guarantors shall give notice thereof
to the Holders of the Notes, by mailing such notice to such Holders at their
addresses as they shall appear on the Note 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(f). If the Company or the Guarantors fail to give
such notice within 10 days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be given at the
expense of the Company.
Section 6.12. Successor Trustee by Merger, etc.
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 without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided such corporation shall be eligible under this
Article to serve as Trustee hereunder.
In case at the time such successor to the Trustee under this Section
6.12 shall succeed to the trusts created by this Indenture any of the Notes
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 Notes so authenticated; and, in case at that time any of the
Notes shall not have been authenticated, any successor to the Trustee under this
Section 6.12 may authenticate such Notes 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 Notes or in
this Indenture provided that the certificate of the Trustee shall have.
Section 6.13. Preferential Collection of Claims Against Issuers.
The Trustee shall comply with Section 311(a) of the TIA, excluding
any creditor relationship listed in ss. 311(b) of the TIA. If the present or any
future Trustee shall resign or be removed, it shall be subject to ss. 311(a) of
the TIA to the extent provided therein.
-67-
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Preservation of Information; Company To Furnish
Trustee Names and Addresses of Holders.
(a) The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders; provided, however, that if and for so long as the Trustee shall be
the Note Registrar, the Note Register shall satisfy the requirements relating to
such list. Neither the Company, the Guarantors or the Trustee shall be under any
responsibility with regard to the accuracy of such list.
(b) The Company will furnish or cause to be furnished to the Trustee
(i) semiannually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(ii) at such other times as the Trustee may request in writing,
within 30 days after receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Note
Registrar, no such list need be furnished pursuant to this Section 7.01(b).
Section 7.02. Communications of Holders.
Holders may communicate with other Holders with respect to their
rights under this Indenture or under the Notes pursuant to ss. 312(b) of the
TIA. The Trustee shall comply with ss. 312(b) of the TIA. The Company, the
Guarantors and the Trustee and any and all other Persons benefited by this
Indenture shall have the protection afforded by ss. 312(c) of the TIA.
Section 7.03. Reports by Trustee.
Within 60 days after June 15 of each year commencing with the first
June 15 following the date of this Indenture, the Trustee shall mail to all
Holders, as their names and addresses appear in the Note Register, a brief
report dated as of such June 15 that complies with ss. 313(a) of the TIA;
provided, however, that if no such event as described in ss. 313(a) of the TIA
has occurred within
-68-
such period then no such report need be transmitted. The Trustee shall also
comply with xx.xx. 313(b), 313(c) and 313(d) of the TIA. At the time of its
mailing to Holders, a copy of each report shall be filed with the Company, the
Guarantors, the Commission and with each national securities exchange on which
the Notes are listed. The Company shall notify the Trustee when the Notes are
listed on any stock exchange or any delisting thereof.
Section 7.04. Reports by Company.
The Company shall file with the Trustee copies of the reports and of
the information and documents which the Company is required to provide to any
Person under Section 10.09 and 10.10.
ARTICLE EIGHT
SUCCESSOR CORPORATION
Section 8.01. When Company May Merge, etc.
The Company shall not, in any single transaction or series of
related transactions, consolidate or merge with or into (whether or not the
Company is the Surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions (other than a consolidation or merger with or into
a Wholly-Owned Restricted Subsidiary; provided that, in connection with any such
merger or consolidation, no consideration (other than Common Stock in the
Surviving Person or the Company) shall be issued or distributed to the
shareholders of the Company) to, another Person, and the Company will not permit
any Restricted Subsidiary to enter into any such transaction or series of
related transactions if such transaction or series of related transactions, in
the aggregate, would result in a sale, assignment, transfer, lease, conveyance
or other disposition of all or substantially all of the properties and assets of
the Company and the Restricted Subsidiaries, taken as a whole, to another
Person, unless (i) the Surviving Person is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the Surviving Person (if other than the Company) assumes all the
obligations of the Company under the Notes (and the Guarantees of the Guarantors
shall be confirmed as applying to such Surviving Person's obligations) and this
Indenture and, if then in effect, the Registration Rights Agreement pursuant to
a supplemental indenture or other written agreement, as the case may be, in a
form reasonably satisfactory to the Trustee; (iii) at the time of and
immediately after such transaction, no Default or Event of Default shall have
occurred and be continuing; and (iv) the Surviving Person will have at the time
of such transaction and
-69-
after giving pro forma effect thereto, would be permitted to incur at least
$1.00 of additional Indebtedness pursuant to paragraph (a) of Section 10.11.
Section 8.02. Successor Substituted.
Upon any transaction (other than a lease) involving the Company in
accordance with Section 8.01 hereof, in which the Company is not the Surviving
Person, the Surviving Person or Persons shall succeed to, and be substituted
for, and may exercise every right and power of, and shall assume all of the
liabilities and obligations of, the Company under this Indenture, the Notes and,
if then in effect, the Registration Rights Agreement pursuant to a supplemental
indenture or other written agreement with the same effect as if such successor
had been named as the Company in this Indenture, the Notes and the Registration
Rights Agreement. When a successor assumes all the obligations of its
predecessor under this Indenture, the Notes and the Registration Rights
Agreement, the predecessor shall be released from those obligations, other than
its obligations under Section 6.07 hereof, which shall continue in full force
and effect notwithstanding any such assumption.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
The Company, the Guarantors and the Trustee may amend, waive or
supplement this Indenture or the Notes without notice to or consent of any
Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article Eight;
(c) to provide for uncertificated Notes in addition to certificated
Notes;
(d) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(e) to provide for additional Guarantors of the Notes;
(f) to evidence the release of any Guarantor in accordance with
Article Thirteen hereof;
-70-
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes;
(h) to amend this Indenture to delete Section 13.07(a) in its
entirety; or
(i) to make any change that would provide any additional benefit or
rights to the Holders or that does not adversely affect the rights of any
Holder.
Notwithstanding the above, the Trustee and the Company may not make
any change that adversely affects the legal rights of any Holders hereunder. The
Company shall be required to deliver to the Trustee an Officers' Certificate
stating that any such change under Section 9.01(a) or (i) of the preceding
sentence does not adversely affect the rights of any Holder.
Section 9.02. With Consent of Holders.
Subject to Section 5.08, the Company, when authorized by its Board
of Directors, and the Trustee may amend or supplement this Indenture or the
Notes with the written consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes (including consents obtained
in connection with a tender offer or exchange offer for the Notes), and the
Holders of not less than a majority in aggregate principal amount of the
Outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes) by written notice to the Trustee may waive any
Existing Default or Event of Default or compliance by the Company with any
provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 5.13, may not:
(i) reduce the principal amount of the Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal or change the fixed maturity of any Note,
or alter the provisions with respect to the redemption or repurchase of
the Notes in a manner adverse to the Holders of the Notes;
(iii) reduce the rate of or change the time for payment of interest
on any Notes;
(iv) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest on the Notes
-71-
(except that Holders of at least a majority in aggregate principal amount
of the then outstanding Notes may (a) rescind an acceleration of the Notes
that resulted from a non-payment default, and (b) waive the payment
default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) modify any of the provisions of Section 5.08 or 5.13;
(vii) modify or change any of the provisions relating to
subordination of the Notes in Article Fourteen in a manner adverse to the
Holders of the Notes; or
(viii) waive a redemption payment with respect to any Note.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of each Note affected
thereby, with a copy to the Trustee, a notice briefly describing the amendment,
supplement or waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any supplemental indenture.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment of or supplement to this Indenture or the Notes
shall comply with the TIA as then in effect if this Indenture shall then be
qualified under the TIA.
Section 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of that
Note or portion of that Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have
-72-
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to consent to such amendment, supplement or waiver or to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder of Notes, unless it makes a change described in any of clauses
(i) through (ix) of Section 9.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note.
Section 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee shall (in accordance with the specific direction of the Company)
request the Holder of the Note to deliver it to the Trustee. The Trustee shall
(in accordance with the specific direction of the Company) place an appropriate
notation on the Note about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or
issue a new Note shall not affect the validity and effect of such amendment,
supplement or waiver.
Section 9.06. Trustee May Sign Amendments, etc.
The Trustee shall sign any amendment, supplement or waiver
authorized pursuant to this Article Nine if the amendment, supplement or waiver
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing or
refusing to sign such amendment, supplement or waiver, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver is authorized or permitted by this Indenture,
that it is not inconsistent herewith and that it
-73-
will be valid and binding upon the Company in accordance with its terms.
ARTICLE TEN
COVENANTS
Section 10.01. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of, premium,
if any, and interest on the Notes in accordance with the terms of the Notes and
this Indenture.
Section 10.02. Maintenance of Office or Agency.
The Company will maintain in The City of New York, an office or
agency where Notes may be presented or surrendered for payment, where Notes and
the Guarantees may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company or any Guarantor in respect of
the Notes, the Guarantees and this Indenture may be served. The office of the
Trustee shall be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes and
the Guarantees may be presented or surrendered for any or all such purposes, and
may from time to time rescind such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan in The
City of New York for such purposes. The Company will give prompt written notice
to the Trustee of any such designation or rescission and any change in the
location of any such other office or agency.
Section 10.03. Money for Note Payments To Be Held in Trust.
-74-
If the Company shall at any time act as its own Paying Agent, the
Company will, on or before each due date of the principal of, premium, if any,
or interest on any of the Notes, segregate and hold in trust for the benefit of
the Holders entitled thereto a sum sufficient to pay the principal, premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and will promptly notify the
Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, on
or before each due date of the principal of, premium, if any, or interest on any
Notes, deposit with a Paying Agent a sum in same day funds sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be held in
trust for the benefit of the Holders entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause
each Paying Agent other than the Trustee to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section 10.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Notes in trust for the benefit of the
Holders entitled thereto until such sums shall be paid to such Holders or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal
of, premium, if any, or interest on the Notes;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture relating to the duties, rights and
liabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which
-75-
such sums were held by the Company or such Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company upon receipt of a Company Request therefor, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, shall at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), 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 notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 10.04. Existence.
Subject to Article Eight, each of the Company and each Guarantor
will do or cause to be done all things necessary to and will cause each of its
Restricted Subsidiaries to preserve and keep in full force and effect its
corporate existence and the corporate existence of each of the Restricted
Subsidiaries, and the rights (charter and statutory), licenses and franchises of
the Company and each of the Restricted Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, license or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company, the Guarantors
and their respective Restricted Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders; provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Restricted Subsidiary of the Company or any of its assets or
Capital Stock in compliance with the terms of this Indenture.
Section 10.05. Payment of Taxes and Other Claims.
The Company and each Guarantor shall pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (a) all taxes,
assessments and governmental charges
-76-
levied or imposed (i) upon such person or any of its Subsidiaries or (ii) upon
the income, profits or property of such person or any of its Subsidiaries and
(b) all lawful claims for labor, materials and supplies, which, if unpaid, might
by law become a Lien upon the property of such person or any of its
Subsidiaries; provided, however, that the Company shall not be required to pay
or discharge or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested in good
faith by appropriate proceedings properly instituted and diligently conducted.
Section 10.06. Maintenance of Properties.
The Company and each Guarantor shall, and shall cause each of their
respective Restricted Subsidiaries to, cause all properties owned by the Company
or the Restricted Subsidiaries or used or held for use in the conduct of its
business or the business of the Restricted Subsidiaries to be maintained and
kept in good condition, repair and working order (reasonable wear and tear
excepted) and supplied with all necessary equipment and will cause to be made
all repairs, renewals, replacements, betterments and improvements thereof, all
as shall be reasonably necessary so that the business carried on in connection
therewith may be conducted at all times in the ordinary course; provided,
however, that nothing in this Section 10.06 shall prevent the Company, any
Guarantor or any of their respective Subsidiaries from discontinuing the
operation and maintenance of any of such properties if (x) such discontinuance
is, in the judgment of the Company, the Guarantor, or the Restricted Subsidiary,
desirable in the conduct of its businesses or (y) if such discontinuance or
disposal is not materially adverse to either the Company, the Guarantors and
their respective Restricted Subsidiaries taken as a whole or the ability of the
Company and the Guarantors taken as a whole to otherwise satisfy its obligations
hereunder.
Section 10.07. Insurance.
The Company will at all times keep all of its and the Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company in good faith to be financially sound and responsible,
against loss or damage to the extent that property of similar character is
usually so insured by corporations similarly situated and owning like properties
(which may include self-insurance, if reasonable and in comparable form to that
maintained by companies similarly situated).
Section 10.08. Compliance Certificate.
(a) The Company will deliver to the Trustee within 60 days after the
end of each of the Company's first three fiscal
-77-
quarters and within 90 days after the end of each of the Company's fiscal years
an Officers' Certificate stating whether or not the signers know of any Default
or Event of Default by the Company, the Guarantors, or any Restricted Subsidiary
that occurred during such fiscal period. If they do know of such a Default or
Event of Default, the certificate shall describe any such Default or Event of
Default and its status. The first certificate to be delivered pursuant to this
Section 10.08(a) shall be for the first full fiscal quarter of the Company
beginning after the Issue Date. The Company shall also deliver a certificate to
the Trustee at least annually from the chief financial officer (or if the
Company does not have a chief financial officer, the Company's principal
executive, financial or accounting officer) of the Company as to his or her
knowledge of the compliance of the Company, the Guarantors and the Restricted
Subsidiaries with all conditions and covenants under this Indenture and whether
any Default or Event of Default has occurred, such compliance to be determined
without regard to any period of grace or requirement of notice provided herein.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the Company shall use
its reasonable best efforts to deliver to the Trustee within 90 days after the
end of each fiscal year a written statement by the Company's independent
certified public accountants (who shall be a firm of established national
reputation) stating (A) that nothing has come to their attention which would
lead them to believe that the Company has violated any provisions of this
Article 10 or Article 8 of this Indenture, or if any such violation has
occurred, specifying the nature and period of existence thereof, and (B)
whether, in connection with their audit examination, any Default or Event of
Default under this Indenture has come to their attention and, if such a Default
or Event of Default has come to their attention, specifying the nature and
period of existence thereof; provided, however, that, without any restriction as
to the scope of the audit examination, such independent certified public
accountants shall not be liable by reason of any failure to obtain knowledge of
any such Default or Event of Default that would not be disclosed in the course
of an audit examination conducted in accordance with GAAP.
(c) The Company will deliver to the Trustee as soon as possible, and
in any event within 10 days after the Company becomes aware of the occurrence of
any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company or the applicable
Guarantor, as the case may be, is taking or proposes to take with respect
thereto.
Section 10.09. Provision of Financial Statements and Reports.
-78-
Whether or not the Company is then subject to Section 13(a) or 15(d)
of the Exchange Act, the Company will file with the Commission (unless such
filing is not permitted under the Exchange Act), so long as the Notes are
outstanding, the annual reports, quarterly reports and other periodic reports
which the Company would have been required to file with the Commission pursuant
to such Section 13(a) or 15(d) if the Company were so subject, and such
documents shall be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company will also in
any event (i) within 15 days of each Required Filing Date, (a) transmit or cause
to be transmitted by mail to all Holders of Notes, as their names and addresses
appear in the Note register, without cost to such Holders, and (b) file with the
Trustee copies of the annual reports, quarterly reports and other periodic
reports which the Company would have been required to file with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act if the Company were
subject to such Sections and (ii) if filing such documents by the Company with
the Commission is prohibited under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective holder at the Company's cost. The
Company also shall comply with the other provisions of TIA ss. 314(a). In
addition, to the extent applicable, the Company shall cause its annual reports
to stockholders and any quarterly or other financial reports furnished to
stockholders generally to be filed with the Trustee and mailed, no later than
the date such materials are mailed or made available to the Company's
stockholders, to the Holders at their addresses as set forth in the register of
securities maintained by the Note Registrar. Additionally, the Company shall
deliver to the Trustee, on March 31 of each year during which the Notes are
outstanding a statement regarding compliance with the terms of this Indenture.
In addition, the Company, upon becoming aware of any Default or Event of
Default, shall deliver to the Trustee a statement specifying such Default or
Event of Default.
Section 10.10. Future Guarantors.
The Company and each Guarantor shall cause each Restricted
Subsidiary of the Company (other than any Foreign Subsidiary) which, after the
date of this Indenture (if not then a Guarantor), becomes a Restricted
Subsidiary to execute and deliver an indenture supplemental to this Indenture
and thereby become a Guarantor which shall be bound by the Guarantee of the
Notes in the form set forth in Exhibit E to this Indenture (without such future
Guarantor being required to execute and deliver the Guarantee endorsed on the
Notes).
-79-
Section 10.11. Limitation on Incurrence of Indebtedness.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or directly or indirectly guarantee or in
any other manner become directly or indirectly liable for (collectively, to
"incur") any Indebtedness (including any Acquired Debt), except that the Company
and any Guarantor may incur Indebtedness if, at the time of, and immediately
after giving pro forma effect to, such incurrence of Indebtedness, the
Consolidated Cash Flow Coverage Ratio of the Company for the most recently ended
four fiscal quarters for which financial statements are available would be at
least (i) 2.0 to 1.0 until October 15, 1999 and (ii) 2.25 to 1.0 thereafter.
(b) The foregoing limitations will not apply to the incurrence of
any of the following (collectively, "Permitted Indebtedness"), each of which
shall be given independent effect:
(i) Indebtedness of the Company and the Guarantors arising under
the Amended and Restated Credit Agreement not to exceed in
outstanding principal amount the greater of (a) $90.0 million
at any time outstanding or (b) the sum of (x) 80% of the
consolidated book value of the net accounts receivable of the
Person Incurring such Indebtedness and its Restricted
Subsidiaries and (y) 50% of the consolidated book value of the
inventory of the Person Incurring such Indebtedness and its
Restricted Subsidiaries, in each case determined in accordance
with GAAP;
(ii) Indebtedness of the Company and the Guarantors represented by
the Notes and the Guarantees;
(iii) Indebtedness of the Company and the Guarantors represented by
the Exchange Notes;
(iv) Indebtedness of the Company or any Restricted Subsidiaries
which is outstanding on the Issue Date ("Existing
Indebtedness");
(v) Indebtedness owed by any Restricted Subsidiary to the Company
or to another Restricted Subsidiary or owed by the Company to
any Restricted Subsidiary; provided, however, that any such
Indebtedness shall be at all times held by a Person which is
either the Company or a Restricted Subsidiary of the Company
(provided that such Indebtedness may be pledged or otherwise
assigned to the holders of Senior Bank Debt); provided,
further, however, that
-80-
upon either (a) the transfer or other disposition of any such
Indebtedness to a Person other than the Company or another
Restricted Subsidiary or (b) the sale, lease, transfer or
other disposition of shares of Capital Stock (including by
consolidation or merger) of any such Restricted Subsidiary to
a Person other than the Company or another Restricted
Subsidiary, the incurrence of such Indebtedness shall be
deemed to be an incurrence that is not permitted by this
clause (v);
(vi) Indebtedness of the Company or any Restricted Subsidiary
arising with respect to Interest Rate Agreement Obligations
and Currency Agreement Obligations incurred for the purpose of
fixing or hedging interest rate risk or currency risk with
respect to any fixed or floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding or
any receivable or liability the payment of which is determined
by reference to a foreign currency; provided in no event shall
any Restricted Subsidiary incur Indebtedness under any
Interest Rate Agreement Obligations or any Currency Agreement
Obligations under this clause (vi) relating to Indebtedness or
obligations of the Company;
(vii) Indebtedness represented by performance, completion,
guarantee, surety and similar bonds provided by the Company or
any Restricted Subsidiary in the ordinary course of business
consistent with past practice;
(viii) any Indebtedness incurred in connection with or given in
exchange for the renewal, extension, substitution, refunding,
defeasance, refinancing or replacement (a "refinancing") of
any Existing Indebtedness or any Indebtedness described in
clauses (ii) and (iii) above or any Indebtedness issued after
the Issue Date and not incurred in violation of the Indenture
("Refinancing Indebtedness"); provided, however, that (a) the
principal amount of such Refinancing Indebtedness shall not
exceed the principal amount (or accrued amount, if less) of
the Indebtedness so refinanced (plus the premiums paid in
connection therewith and the reasonable expenses incurred in
connection therewith); (b) with respect to Refinancing
Indebtedness of any Indebtedness other than Senior Debt, if
the Weighted Average Life to Maturity of
-81-
the Indebtedness being refinanced is equal to or greater than
the Weighted Average Life to Maturity of the Notes the
Refinancing Indebtedness shall have a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to
Maturity of the Notes; (c) with respect to Refinancing
Indebtedness other than Senior Debt incurred by the Company,
such Refinancing Indebtedness shall rank no more senior than,
and shall be at least as subordinated in right of payment to
the Notes as, the Indebtedness being refinanced; and (d) the
obligor on such Refinancing Indebtedness shall be the obligor
on the Indebtedness being refinanced or the Company;
(ix) Indebtedness of the Company or any Restricted Subsidiary (a)
representing Capitalized Lease Obligations and (b) in respect
of Purchase Money Obligations for property acquired in the
ordinary course of business, which taken together do not
exceed $10.0 million in aggregate amount at any time
outstanding;
(x) Indebtedness of Foreign Subsidiaries of the Company not to
exceed a principal amount outstanding at any time of $20.0
million in the aggregate for all Foreign Subsidiaries, to be
used for working capital, capital expenditures, joint
ventures, acquisitions and other general corporate purposes;
and
(xi) Indebtedness (including Acquired Debt) of the Company or any
Restricted Subsidiary in addition to that described in clauses
(i) through (x) above, and any renewals, extensions,
substitutions, refinancings or replacements of such
Indebtedness, so long as the aggregate principal amount of all
such Indebtedness incurred pursuant to this clause (xi) does
not exceed $10.0 million at any one time outstanding.
(c) Indebtedness of any Person which is outstanding at the time such
Person becomes a Restricted Subsidiary or is merged with or into or consolidated
with the Company or a Restricted Subsidiary shall be deemed to have been
incurred at the time such Person becomes a Restricted Subsidiary or is merged
with or into or consolidated with the Company or a Restricted Subsidiary, and
Indebtedness which is assumed at the time of the acquisition of any asset shall
be deemed to have been incurred at the time of such acquisition.
-82-
Section 10.12. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment, unless at
the time of and immediately after giving effect to the proposed Restricted
Payment (with the value of any such Restricted Payment, if other than cash, to
be determined reasonably and in good faith by the Board of Directors of the
Company),
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) the Company could incur at least $1.00 of additional
Indebtedness pursuant to Section 10.11(a); and
(iii) the aggregate amount of all Restricted Payments made after the
Issue Date shall not exceed the sum of (a) an amount equal to
50% of the Company's aggregate cumulative Consolidated Net
Income accrued on a cumulative basis during the period
(treated as one accounting period) beginning on October 1,
1996 and ending on the last day of the fiscal quarter of the
Company immediately preceding the date of such proposed
Restricted Payment (or if such aggregate cumulative
Consolidated Net Income for such period shall be a deficit,
minus 100% of such deficit) (treating such period as a single
accounting period), plus (b) the aggregate amount ---- of all
net cash proceeds (other than proceeds from the Cash Equity
Investment) received since the Issue Date by the Company from
(x) the issuance and sale (other than to a Restricted
Subsidiary) of Capital Stock (other than Disqualified Stock),
(y) the issuance to a Person who is not a Subsidiary of the
Company of any options, warrants or other rights to acquire
Capital Stock of the Company (in each case, exclusive of any
Disqualified Stock or any options, warrants or other rights
that are redeemable at the option of the holder, or are
required to be redeemed, prior to the Stated Maturity of the
Notes) and (z) the issuance and sale by the Company after the
Issue Date of Disqualified Stock or debt securities that have
been converted into or exchanged for Capital Stock of the
Company (other than Disqualified Stock), in each case to the
extent that such proceeds are not used to redeem, repurchase,
retire
-83-
or otherwise acquire Capital Stock or any Indebtedness of the
Company or make any Restricted Investment, pursuant to clauses
(ii) or (iv) of Section 10.12(b) below, plus (c) the amount of
the net reduction in Investments by the Company in
Unrestricted Subsidiaries resulting from (x) the payment of
dividends or the repayment in cash of the principal of loans
or the cash return on any Investment, in each case to the
extent received by the Company or any Restricted Subsidiary of
the Company from Unrestricted Subsidiaries, (y) the release or
extinguishment of any guarantee of Indebtedness of any
Unrestricted Subsidiary, and (z) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries of the
Company (valued as provided in the definition of
"Investment"), such aggregate amount of the net reduction in
Investments not to exceed in the case of any Unrestricted
Subsidiaries the amount of Restricted Investments previously
made by the Company or any Restricted Subsidiary of the
Company in such Unrestricted Subsidiary, which amount was
included in the calculation of the amount of Restricted
Payments, plus (d) to the extent that any Restricted
Investment that was made after the Issue Date is sold for cash
or otherwise liquidated or repaid for cash, the amount of cash
proceeds received with respect to such Restricted Investment,
net of taxes and the cost of disposition, not to exceed the
amount of Restricted Investments made after the Issue Date.
For purposes of this covenant, the aggregate amount of Restricted
Investments made by the Company and its Restricted Subsidiaries after the date
of the Indenture shall equal the aggregate gross amount of such Restricted
Investments, less reductions in connection with the write-down of any portion of
such Restricted Investments to the extent deducted from the Consolidated Net
Income of the Company.
(b) The provisions of Section 10.12(a) will not prohibit, so long as
there is no Default or Event of Default continuing, the following actions
(collectively, "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such payment
would have been permitted under this Indenture and such
payment shall be deemed to have been paid on such date of
-84-
declaration for purposes of clause (iii) of the preceding
paragraph;
(ii) the redemption, repurchase, retirement or other acquisition of
any Capital Stock or any Indebtedness of the Company that is
subordinated in right of payment to the Notes in exchange for,
or out of the proceeds of, the substantially concurrent sale
(other than to a Restricted Subsidiary) of Capital Stock of
the Company (other than any Disqualified Stock);
(iii) any purchase or defeasance of Subordinated Indebtedness to the
extent required upon a Change of Control or Asset Sale by this
Indenture or other agreement or instrument pursuant to which
such Subordinated Indebtedness was issued, but only if the
Company (x) in the case of a Change of Control, has complied
with its obligations under the provisions described under
Section 10.15 or (y) in the case of an Asset Sale has applied
the Net Cash Proceeds from such Asset Sale in accordance with
the provisions of Section 10.14;
(iv) any Restricted Investment made with the proceeds of the
substantially concurrent sale of Capital Stock (other than
Disqualified Stock);
(v) Restricted Investments in an amount such that the sum of the
aggregate amount of Restricted Investments made pursuant to
this clause (v) after the Issue Date and outstanding (net of
any returns in cash thereof or cash received in liquidation or
on disposition thereof) made pursuant to this clause (v) does
not exceed at any time $15.0 million;
(vi) the repurchase of Capital Stock of the Company (including
options, warrants or other rights to acquire such Capital
Stock) from departing or deceased directors, officers or
employees of the Company or its Subsidiaries pursuant to the
terms of an employee benefit plan or employee agreement;
provided that the aggregate amount of all such repurchases
shall not exceed $1.5 million in any fiscal year, provided
that the Company may carry forward up to $1.0 million of the
unused portion in any fiscal year to the next fiscal year, and
provided, further, that such payments shall not
-85-
exceed $2.5 million per annum in any subsequent fiscal year.
(vii) the payment of cash dividends required to be made on the
Series A Redeemable Preferred Stock outstanding as of the
Issue Date and the repurchase or redemption of such stock at a
price not to exceed 100% of the liquidation value plus accrued
dividends; and
(viii) Restricted Payments (other than a dividend or distribution
declared on any Capital Stock of the Company or a payment to
purchase, redeem or otherwise acquire or retire for value
Capital Stock of the Company) not to exceed $2.5 million in
the aggregate.
For purposes of clause (iii) of Section 10.12(a) above, Permitted
Payments made pursuant to clauses (i), (v), (vi) and (vii) (only with respect to
cash dividends paid with respect to Series A Redeemable Preferred Stock) of the
immediately preceding paragraph shall be included (only with respect to clause
(i), as of the date of declaration) as Restricted Payments made since the Issue
Date.
Section 10.13. Limitations on Transactions with Affiliates.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with any Affiliate
of the Company (other than the Company or a Restricted Subsidiary) (each an
"Affiliate Transaction"), unless (1) such transaction or series of transactions
is on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction in arm's-length dealings with an unrelated third party and (2) the
Company delivers to the Trustee (a) with respect to any transaction or series of
transactions involving aggregate payments in excess of $1.0 million, an
Officers' Certificate certifying that such transaction or series of related
transactions complies with clause (1) above and (b) with respect to any
transaction or series of transactions involving aggregate payments in excess of
$5 million, an Officer's Certificate certifying that such transaction or series
of related transactions has been approved by a majority of the members of the
Board of Directors of the Company and evidenced by a resolution of the Board of
Directors set forth in an Officer's Certificate, and (c) with respect to any
transaction or series of transactions
-86-
involving aggregate payments in excess of $10.0 million, an opinion as to the
fairness to the Company from a financial point of view issued by an investment
banking firm, accounting firm or appraisal firm of national standing.
Notwithstanding the foregoing, this covenant will not apply to (A)
employment agreements or compensation or employee benefit arrangements with any
officer, director or employee of the Company entered into in the ordinary course
of business (including customary benefits thereunder and including reimbursement
or advancement of out of pocket expenses, loans to officers, directors and
employees in the ordinary course of business and director's and officer's
liability insurance), (ii) any transaction entered into by or among the Company
or one of its Restricted Subsidiaries with one or more Restricted Subsidiaries
of the Company, (iii) any Restricted Payment not prohibited by Section 10.12
hereof, (iv) transactions permitted by, and complying with, the provisions of
Section 8.01, (v) any sale or issuance of Capital Stock (other than Disqualified
Stock) of the Company and (vi) the grant or performance of registration rights
with respect to securities of the Company.
Section 10.14. Limitation on Asset Sales.
The Company will not, and will not permit any Restricted Subsidiary
to, make any Asset Sale unless (a) the Company or such Restricted Subsidiary, as
the case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or other property sold or disposed
of in the Asset Sale and (ii) at least 75% of such consideration consists of
either cash or Cash Equivalents; provided, however, that, at the option of the
Company, clause (ii) shall not be applicable to Asset Sales (or portions of
Asset Sales) that, in the aggregate from the Issue Date, do not involve assets
representing less than 5% of the Consolidated Total Assets of the Company as of
the last fiscal quarter prior to the execution of the agreement for such Asset
Sale. For purposes of this Section 10.14 "cash" shall include the amount of any
Indebtedness (other than any Indebtedness that is by its terms subordinated to
the Notes) of the Company or such Restricted Subsidiary as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in the
notes thereto that is assumed by the transferee of any such assets or other
property in such Asset Sale or is no longer the liability of the Company or any
Restricted Subsidiary (and excluding any liabilities that are incurred in
connection with or in anticipation of such Asset Sale), but only to the extent
that such assumption is effected on a basis under which there is no further
recourse to the Company or any of the Restricted Subsidiaries with respect to
such liabilities, and (y) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary in connection with such
-87-
Asset Sale that are converted by the Company or such Restricted Subsidiary into
cash within 60 days of receipt shall be deemed to be cash for purposes of this
provision.
Within 365 days after any Asset Sale, the Company may elect to apply
the Net Proceeds from such Asset Sale to (a) permanently reduce any Senior Debt
of the Company and/or (b) make an investment in, or acquire assets and
properties that will be used in the business of the Company and the Restricted
Subsidiaries existing on the Issue Date or in businesses reasonably related
thereto. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Indebtedness or temporarily invest such Net Proceeds in cash
or Cash Equivalents. Any Net Proceeds from an Asset Sale not applied or invested
as provided in the first sentence of this paragraph within 365 days of such
Asset Sale will be deemed to constitute "Excess Proceeds."
Each date on which the aggregate amount of Excess Proceeds in
respect of which an Asset Sale Offer has not been made exceeds $10,000,000 shall
be deemed an "Asset Sale Offer Trigger Date". As soon as practicable, but in no
event later than 20 business days after each Asset Sale Offer Trigger Date the
Company shall commence an offer (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes and other Indebtedness of the Company that ranks pari
passu in right of payment with the Notes (to the extent required by the
instrument governing such other Indebtedness) that may be purchased out of the
Excess Proceeds. Any Notes and other Indebtedness to be purchased pursuant to an
Asset Sale Offer shall be purchased pro rata based on the aggregate principal
amount of Notes and all such other Indebtedness outstanding; and all such Notes
shall be purchased at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the date
of purchase. To the extent that any Excess Proceeds remain after completion of
an Asset Sale Offer, the Company may use the remaining amount for general
corporate purposes otherwise permitted by this Indenture. Upon the consummation
of any Asset Sale Offer, the amount of Excess Proceeds shall be deemed to be
reset to zero.
Notice of an Asset Sale Offer shall be prepared and mailed by the
Company with a copy to the Trustee not later than the 20th business day after
the related Asset Sale Offer Trigger Date to each Holder of Notes at such
Holder's registered address, stating:
(i) that an Asset Sale Offer Trigger Date has occurred and that the
Company is offering to purchase the maximum principal amount of Notes that
may be purchased out of the Excess Proceeds to the extent to be applied to
an offer to purchase Notes (as provided in the immediately preceding
-88-
paragraph), at an offer price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
date of the purchase (the "Asset Sale Offer Purchase Date"), which shall
be a Business Day, specified in such notice, that is not earlier than 30
days or later than 60 days from the date such notice is mailed;
(ii) the amount of accrued and unpaid interest, if any, as of the
Asset Sale Offer Purchase Date;
(iii) that any Note not tendered will continue to accrue interest in
accordance with the terms thereof;
(iv) that, unless the Company defaults in the payment of the
purchase price for the Notes payable pursuant to the Asset Sale Offer, any
Notes accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Asset Sale Offer Purchase Date;
(v) that Holders electing to have Notes purchased pursuant to an
Asset Sale Offer will be required to surrender their Notes to the Paying
Agent at the address specified in the notice prior to 5:00 p.m., New York
City time, on the third Business Day prior to the Asset Sale Purchase Date
with the "Option of Holder to Elect Purchase" on the reverse thereof
completed and must complete any form letter of transmittal proposed by the
Company (which letter must be completed correctly by such Holder) and
which is acceptable to the Trustee and the Paying Agent;
(vi) that Holders of Notes will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the third Business Day prior to the Asset Sale Offer
Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Notes the Holder
delivered for purchase, the Note certificate number (if any) and a
statement that such Holder is withdrawing its election to have such Notes
purchased;
(vii) that Holders whose Notes are purchased only in part will be
issued Notes equal in principal amount to the unpurchased portion of the
Notes surrendered;
(viii) the instructions that Holders must follow in order to tender
their Notes; and
(ix) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the SEC
pursuant to the Exchange Act (or, if the
-89-
Company is not then required to file any such reports with the SEC, the
comparable reports prepared pursuant to Section 10.09), a description of
material developments in the Company's business, information with respect
to pro forma historical financial information after giving effect to such
Asset Sale and such other information concerning the circumstances and
relevant facts regarding such Asset Sale and Asset Sale Offer as would be
material to a Holder of Notes in connection with the decision of such
Holder as to whether or not it should tender Notes pursuant to the Asset
Sale Offer.
On the Asset Sale Offer Purchase Date, the Company will (i) accept
for payment the maximum principal amount of Notes or portions thereof tendered
pursuant to the Asset Sale Offer that can be purchased out of Excess Proceeds
from such Asset Sale that are to be applied to an Asset Sale Offer (to the
extent provided in the second preceding paragraph), (ii) deposit with the Paying
Agent an amount in cash equal to the aggregate purchase price of all Notes or
portions thereof accepted for payment and any accrued and unpaid interest on
such Notes as of the Asset Sale Offer Purchase Date, and (iii) deliver or cause
to be delivered to the Trustee all Notes tendered pursuant to the Asset Sale
Offer. If less than all Notes tendered pursuant to the Asset Sale Offer are
accepted for payment by the Company for any reason consistent with this
Indenture, selection of the Notes to be purchased by the Company shall be in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis or by lot; provided, however, that Notes accepted for payment in
part shall only be purchased in integral multiples of $1,000. The Paying Agent
shall as promptly as practicable after the Asset Sale Offer Purchase Date mail
to each Holder of Notes or portions thereof accepted for payment an amount in
cash equal to the purchase price for such Notes plus any accrued and unpaid
interest thereon, and the Trustee shall promptly authenticate and mail to such
Holder of Notes accepted for payment in part a new Note equal in principal
amount to any unpurchased portion of the Notes, and any Note not accepted for
payment in whole or in part shall be promptly returned to the Holder of such
Note.
On and after an Asset Sale Offer Purchase Date, interest will cease
to accrue on the Notes or portions thereof accepted for payment, unless the
Company defaults in the payment of the purchase price therefor. The Company will
announce the results of the Asset Sale Offer on or as soon as practicable after
the Asset Sale Offer Purchase Date.
The Company will comply with the applicable tender offer rules,
including the requirements of Section 14(e) and Rule 14e-1 under the Exchange
Act, and all other applicable securities laws
-90-
and regulations in connection with any Asset Sale Offer and will be deemed not
to be in violation of any of its covenants herein to the extent such compliance
is in conflict with such covenants.
Section 10.15. Change of Control.
Upon the occurrence of a Change of Control (the date of such
occurrence, the "Change of Control Date"), the Company shall make an offer to
purchase (a "Change of Control Offer"), and shall, subject to the provisions
described below, purchase, all or any portion (equal to $1,000 or an integral
multiple thereof) of the then outstanding Notes validly tendered at a purchase
price in cash (the "Change of Control Purchase Price") equal to 101% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
Change of Control Purchase Date. The Company shall be required to purchase all
Notes properly tendered in the Change of Control Offer and not withdrawn.
Notice of a Change of Control Offer shall be prepared and mailed by
the Company not later than the 30th day after the Change of Control Date to the
Holders of Notes at their last registered addresses appearing on the Note
Register with a copy to the Trustee and the Paying Agent. The Offer shall remain
open from the time of mailing for at least 20 Business Days or such longer
period as may be required by law. The notice, which shall govern the terms of
the Change of Control Offer, shall include such disclosures as are required by
law and shall state:
(a) that the Change of Control has occurred and that such Holder has
the right to require the Company to purchase all or a portion (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes at a
purchase price in cash equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any, to the date of
purchase, which shall be a Business Day, specified in such notice, that is
not earlier than 30 days or later than 60 days from the date such notice
is mailed (the "Change of Control Purchase Date");
(b) the amount of accrued and unpaid interest, if any, as of the
Change Control Purchase Date;
(c) that any Note not tendered for payment will continue to accrue
interest in accordance with the terms thereof;
(d) that, unless the Company defaults in the payment of the purchase
price for the Notes payable pursuant to the Change of Control Offer, any
Notes accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Purchase Date;
-91-
(e) that Holders electing to have Notes purchased pursuant to a
Change of Control Offer will be required to surrender their Notes to the
Paying Agent at the address specified in the notice prior to 5:00 p.m.,
New York City time, on the third Business Day prior to the Change of
Control Purchase Date with the "Option of Holder to Elect Purchase" on the
reverse thereof completed and must complete any form letter of transmittal
proposed by the Company and be completed correctly by such Holder and be
acceptable to the Trustee and the Paying Agent;
(f) that Holders of Notes will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York
City time, on the third Business Day prior to the Change of Control
Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Notes the Holder
delivered for purchase, the Note certificate number (if any) and a
statement that such Holder is withdrawing its election to have such Notes
purchased;
(g) that Holders whose Notes are purchased only in part will be
issued Notes equal in principal amount to the unpurchased portion of the
Notes surrendered;
(h) the instructions that Holders must follow in order to tender
their Notes; and
(i) such other information concerning the circumstances and relevant
facts regarding such Change of Control and Change of Control Offer.
On the Change of Control Purchase Date, the Company will (i) accept
for payment all Notes or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent an amount in cash equal to the
aggregate purchase price of all Notes or portions thereof accepted for payment,
plus any accrued and unpaid interest on such Notes as of the Change of Control
Purchase Date, and (iii) deliver or cause to be delivered to the Trustee all
Notes tendered pursuant to the Change of Control Offer. The Paying Agent shall
as promptly as practicable after the Change of Control Purchase Date mail to
each Holder of Notes or portions thereof accepted for payment an amount in cash
equal to the purchase price for such Notes, plus any accrued and unpaid interest
thereon, and the Trustee shall promptly authenticate and mail to such Holders of
Notes accepted for payment in part a new Note equal in principal amount to any
unpurchased portion of the Note surrendered. Any Notes not so accepted in whole
or in part shall be promptly returned to the Holder thereof.
-92-
On and after a Change of Control Purchase Date, interest will cease
to accrue on the Notes or portions thereof accepted for payment unless the
Company defaults in the payment of the purchase price therefor. The Company will
publicly announce the results of the Change of Control Offer as soon as
practicable after the Change of Control Purchase Date.
The Company will comply with the applicable tender offer rules,
including the requirements of Section 14(e) and Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable, in the event that a Change of Control
occurs and the Company is required to purchase Notes as described above and will
be deemed not to be in violation of any of its covenants herein to the extent
such compliance is in conflict with such covenants.
Section 10.16. Limitations on Liens Securing Certain Debt.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Lien
securing Indebtedness that is pari passu with or subordinated in right of
payment to the Notes (other than Permitted Liens) on any asset of the Company or
any Restricted Subsidiary now owned or hereafter acquired, or any income or
profits therefrom, or assign or convey any right to receive income therefrom to
secure any Indebtedness, unless the Notes are equally and ratably secured
thereby.
Section 10.17. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause to suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distribution to the Company or any Restricted Subsidiary on its Capital Stock or
with respect to any other interest or participation in, or measured by, its
profits, or pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (b) make loans or advances to the Company or any other Restricted
Subsidiary, or (c) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) the Amended and Restated Credit Agreement or
any other Indebtedness as in effect on the Issue Date, and any amendments,
restatements, renewals, replacements or refinancings thereof; provided, however,
that such amendments, restatements, renewals, replacements or refinancings are
no more restrictive with respect to such dividend and other payment restrictions
than those
-93-
contained in the Amended and Restated Credit Agreement (or, if more restrictive,
than those contained in this Indenture) immediately prior to any such amendment,
restatement, renewal, replacement or refinancing, (ii) applicable law, (iii) any
instrument governing Indebtedness or Capital Stock of an Acquired Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition); provided,
however, that such restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Acquired Person, (iv) by
reason of customary non-assignment provisions in leases entered into the
ordinary course of business and consistent with past practices, (v) Purchase
Money Indebtedness for property acquired in the ordinary course of business that
only impose restrictions on the property so acquired, (vi) an agreement for the
sale or disposition of the Capital Stock or assets of such Restricted
Subsidiary; provided, however, that such restriction is only applicable to such
Restricted Subsidiary or assets, as applicable, and such sale or disposition
otherwise is permitted under Section 10.14, (vii) Refinancing Indebtedness
permitted under this Indenture; provided, however, that the restrictions
contained in the agreements governing such Refinancing Indebtedness are no more
restrictive in the aggregate than those contained in the agreements governing
the Indebtedness being refinanced immediately prior to such refinancing, (viii)
this Indenture, the Notes and the Guarantees, (ix) arising or agreed to in the
ordinary course of business, not relating to any Indebtedness, and that do not
individually or in the aggregate, detract from the value of property or assets
of the Company or any Restricted Subsidiary in any manner material to the
Company or any Restricted Subsidiary, or (x) any instrument governing
Indebtedness of a Foreign Subsidiary permitted by the terms of the Indenture.
Nothing contained in this Section 10.17 shall prevent the Company or
any Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 10.16 or (2) restricting the sale
or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
Section 10.18. Limitation on Incurrence of Senior Subordinated
Indebtedness.
The Company will not, directly or indirectly, incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
subordinated or junior in right of payment to any Senior Debt of the Company and
senior in any respect in right of payment to the Notes. For purposes of this
Section 10.18, no Indebtedness shall be deemed to be subordinated in right of
payment
-94-
to any other Indebtedness by reason of the fact that such other Indebtedness is
secured by any Lien or is subject to a Guarantee.
Section 10.19. Designation of Unrestricted Subsidiaries.
The Company will not designate any Subsidiary of the Company (other
than a newly created Subsidiary in which no Investment has previously been made)
as an Unrestricted Subsidiary (a "Designation") unless:
(a) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation;
(b) immediately after giving effect to such Designation the Company
would be able to incur $1.00 of Indebtedness pursuant to Section
10.11(a); and
(c) the Company would not be prohibited pursuant to the terms of this
Indenture from making an Investment at the time of Designation in an
amount (the "Designation Amount") equal to the Fair Market Value of
such Restricted Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
10.12 for all purposes of this Indenture in the Designation Amount. Neither the
Company nor any Restricted Subsidiary shall at any time (x) provide credit
support for, or a guarantee of, any Indebtedness of any Unrestricted Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness); provided that the Company and its Restricted Subsidiaries may
pledge Capital Stock or Indebtedness of any Unrestricted Subsidiary on a
nonrecourse basis such that the pledgee has no claim whatsoever against the
Company other than to obtain such pledged property, (y) be directly or
indirectly liable for any Indebtedness of any Unrestricted Subsidiary.
The Company may not revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation"), unless:
(a) no Default shall have occurred and be continuing at the time of and
after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation shall be deemed to
have been incurred at such time and shall have been permitted to be
incurred pursuant to this Indenture.
-95-
All Designations and Revocations must be evidenced by Board
Resolutions delivered to the Trustee certifying compliance with the foregoing
provisions.
ARTICLE ELEVEN
REDEMPTION OF NOTES
Section 11.01. Optional and Special Redemption.
Optional Redemption. Except as provided below, the Notes are not
redeemable prior to October 15, 2001. Subject to earlier redemption in the
manner described in the next two succeeding paragraphs, the Notes will be
redeemable at the option of the Company, in whole at any time or in part, at any
time on or after October 15, 2001 at the Redemption Prices (expressed as
percentages of principal amount of the Notes) set forth below, plus in each case
accrued and unpaid interest, if any, to the Redemption Date, if redeemed during
the 12-month period beginning October 15 of the years indicated below:
Redemption
Year Price
---- -----
2001 105.312%
2002 103.541
2003 101.771
2004 and thereafter 100.000
In addition, at any time prior to October 15, 1999, the Company may,
at its option, redeem up to 35% of the aggregate principal amount of Notes
originally issued with the net proceeds of one or more Public Equity Offerings,
at 109.625% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of redemption; provided, however, that not less
than $81.25 million principal amount of the Notes is outstanding immediately
after giving effect to such redemption (other than any Notes owned by the
Company or any of its Affiliates) and such redemption is effected within 60 days
of such issuance or investment.
In addition, at any time prior to October 15, 2001, upon the
occurrence of a Change of Control, the Company may, at its option, redeem, all
but not less than all of the Notes, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium plus accrued and unpaid
interest, if any, to the date of redemption. Applicable Premium shall be set
forth in an Officer's Certificate of the Company furnished to the Trustee, upon
which the Trustee shall be entitled to conclusively rely and
-96-
shall not be required to verify any calculations in respect thereof. Notice of
redemption of the Notes pursuant to this paragraph shall be mailed to holders of
the Notes not more than 60 days and not less than 30 days following the
occurrence of a Change of Control.
Section 11.02. Applicability of Article.
Redemption of Notes at the election of the Company as permitted or
required by any provision of this Indenture, shall be made in accordance with
such provision and this Article.
Section 11.03. Election To Redeem; Notice to Trustee.
The election of the Company to redeem any Notes pursuant to Section
11.01(a) shall be evidenced by a Board Resolution of the Company and an
Officers' Certificate. In case of any redemption at the election of the Company,
the Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the principal
amount of Notes to be redeemed.
Section 11.04. Selection of Notes To Be Redeemed.
In the event that less than all of the Notes are to be redeemed at
any time, selection of such Notes for redemption will be made by the Company in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not then listed on a
national securities exchange, on a pro rata basis or by lot or any other method
as the Trustee shall deem fair and appropriate; provided, however, that Notes
redeemed in part shall only be redeemed in integral multiples of $1,000;
provided, further, however, that any such redemption pursuant to the provisions
relating to a Public Equity Offering by the Company shall be made on a pro rata
basis or on as nearly a pro rata basis as practicable (subject to any procedures
of The Depository Trust Company or any other Depository). If any Note is to be
redeemed in part only, the notice of redemption that relates to such Note shall
state the portion of the principal amount thereof to be redeemed and the Trustee
shall authenticate and mail to the holder of the original Note a new Note in
principal amount equal to the unredeemed portion of the original Note promptly
after the original Note has been canceled. On and after the redemption date,
interest will cease to accrue on Notes or portions thereof called for
redemption.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed
-97-
only in part, to the portion of the principal amount of such Note which has been
or is to be redeemed.
Section 11.05. Notice of Redemption.
Notice of any optional or mandatory redemption shall be mailed by
first-class mail, postage prepaid, mailed at least 30 but not more than 60 days
before the Redemption Date, to each Holder of Notes to be redeemed at its
registered address.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if fewer than all outstanding Notes are to be redeemed, the
identification of the particular Notes to be redeemed;
(d) in the case of a Note to be redeemed in part, the principal
amount of such Note to be redeemed and that after the Redemption Date upon
surrender of such Note, a new Note or Notes in the aggregate principal
amount equal to the unredeemed portion thereof will be issued;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due
and payable upon each such Note or portion thereof, and that (unless the
Company shall default in payment of the Redemption Price) interest thereon
shall cease to accrue on and after said date;
(g) the place or places where such Notes are to be surrendered for
payment of the Redemption Price;
(h) the CUSIP number, if any, relating to such Notes; and
(i) the paragraph of the Notes pursuant to which the Notes are being
redeemed.
Notice of redemption of Notes to be redeemed shall be given by the
Company or, at the Company's written request, by the Trustee in the name and at
the expense of the Company.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the
-98-
Holder receives such notice. In any case, failure to give such notice by mail or
any defect in the notice to the Holder of any Note designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note.
Section 11.06. Deposit of Redemption Price.
On or prior to 10:00 a.m., New York City time, on each Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money in same day funds sufficient to
pay the Redemption Price of, and accrued interest on, all the Notes or portions
thereof which are to be redeemed on that date.
Section 11.07. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Notes shall
cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Notes, or one or more Predecessor Notes, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of
Section 3.06.
On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and accrued interest on Notes called for redemption shall
have been made available in accordance with Section 11.06, the Notes called for
redemption will cease to accrue interest and the only right of the Holders of
such Notes will be to receive payment of the Redemption Price of and subject to
the provision in the preceding paragraph, accrued and unpaid interest on such
Notes to the Redemption Date. If any Note called for redemption shall not be so
paid upon surrender thereof for redemption, the principal and premium, if any,
shall, until paid, bear interest from the Redemption Date at the rate then borne
by such Note.
Section 11.08. Notes Redeemed or Purchased in Part.
Any Note which is to be redeemed or purchased only in part shall be
surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 10.02 (with, if the Company, the Note Registrar or
the Trustee so requires, due
-99-
endorsement by, or a written instrument of transfer in form satisfactory to, the
Company, the Note Registrar or the Trustee duly executed by the Holder thereof
or such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Note without service charge, a new Note or Notes, of any authorized denomination
as requested by such Holder in aggregate principal amount equal to, and in
exchange for, the portion of the principal of the Note so surrendered that is
not redeemed or purchased.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 12.01. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of Notes herein
expressly provided for, the Company's obligations under Section 6.07 hereof, and
the Trustee's and Paying Agent's obligations under Section 4.06 hereof) and the
Trustee, on written demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(a) either
(i) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.05 hereof) have been delivered
to the Trustee for cancellation; or
(ii) all such Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and the Company has irrevocably
deposited or caused to be deposited with the Trustee in trust for the
purpose an amount in United States dollars sufficient to pay and discharge
the entire Indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for the principal of, premium, if any, and
interest to the date of such deposit;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions precedent
herein provided for relating to the
-100-
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.07 and, if money
shall have been deposited with the Trustee pursuant to subclause (a)(ii) of this
Section 12.01 the obligations of the Trustee under Section 12.02, shall survive.
Section 12.02. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03,
all money deposited with the Trustee pursuant to Section 12.01 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal of, premium, if
any, and interest on the Notes for whose payment such money has been deposited
with the Trustee.
ARTICLE THIRTEEN
GUARANTEE OF NOTES
Section 13.01. Guarantee.
Subject to the provisions of this Article Thirteen, each Guarantor
hereby jointly and severally and fully and unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of (i) the validity and
enforceability of this Indenture, the Notes or the obligations of the Company or
any other Guarantors to the Holders or the Trustee hereunder or thereunder or
(ii) the absence of any action to enforce the same or any other circumstances
which might otherwise constitute a legal or equitable discharge or default of a
Guarantor, that: (a) the principal of, premium, if any, and interest on the
Notes will be duly and punctually paid in full when due, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Notes and all other
obligations of the Company or the Guarantors to the Holders or the Trustee
hereunder or thereunder (including fees, expenses or other) and all other
Obligations on the Notes will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other Obligations with
respect to the Notes, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension
-101-
or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed, or failing performance of any
other obligation of the Company to the Holders, for whatever reason, each
Guarantor will be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture or the Notes
shall constitute an event of default under this Guarantee, and shall entitle the
Holders of Notes to accelerate the obligations of the Guarantors hereunder in
the same manner and to the same extent as the obligations of the Company.
Each of the Guarantors hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a Guarantee is affixed to any particular Note, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each of the Guarantors hereby waives the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and this
Guarantee. If any Holder or the Trustee is required by any court or otherwise to
return to the Company or to any Guarantor, or any custodian, trustee, liquidator
or other similar official acting in relation to the Company or such Guarantor,
any amount paid by the Company or such Guarantor to the Trustee or such Holder,
this Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor further agrees that, as between it, on the
one hand, and the Holders of Notes and the Trustee, on the other hand, (a)
subject to this Article Thirteen, the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Five hereof for the purposes of
this Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed hereby,
and (b) in the event of any acceleration of such obligations as provided in
Article Five hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Guarantee.
This Guarantee shall remain in full force and effect and continue to
be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors
-102-
or should a receiver or trustee be appointed for all or any significant part of
the Company's assets, and shall, to the fullest extent permitted by law,
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Notes are, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee
on the Notes, whether as a "voidable preference," "fraudulent transfer" or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Notes shall, to the fullest extent permitted by law, be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
No stockholder, officer, director, employer or incorporator, past,
present or future, or any Guarantor, as such, shall have any personal liability
under this Guarantee by reason of his, her or its status as such stockholder,
officer, director, employer or incorporator.
The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under this Guarantee.
Notwithstanding any of the foregoing, each Guarantor's liability
under this Section 13.01 shall be limited to the maximum amount that would not
result in such Guarantor's Guarantee under this Section 13.01 constituting a
fraudulent conveyance or fraudulent transfer under applicable law and, in the
case of Freedom Chemical Diamalt GmbH, the liability of the Guarantor shall be
limited at any time to the then maximum amount that would not result in a
depletion of such Guarantor's stated share capital ("Stammkapital") as stated in
the commercial register relating to such Guarantor.
Section 13.02. Execution and Delivery of Guarantee.
To further evidence the Guarantee set forth in Section 13.01, each
Guarantor hereby agrees that a notation of such Guarantee, substantially in the
form included in Exhibit E hereto, shall be endorsed on each Note authenticated
and delivered by the Trustee after such Guarantee is executed and executed by
either manual or facsimile signature of an Officer of each Guarantor. The
validity and enforceability of any Guarantee shall not be affected by the fact
that it is not affixed to any particular Note.
Each of the Guarantors hereby agrees that its Guarantee set forth in
Section 13.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee.
-103-
If an Officer of a Guarantor whose signature is on this Indenture or
a Note no longer holds that office at the time the Trustee authenticates such
Note or at any time thereafter, such Guarantor's Guarantee of such Note shall be
valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
Section 13.03. Additional Guarantors.
Any person may become a Guarantor by executing and delivering to the
Trustee (a) a supplemental indenture in form and substance satisfactory to the
Trustee, which subjects such person to the provisions of this Indenture as a
Guarantor, and (b) an Opinion of Counsel to the effect that such supplemental
indenture has been duly authorized and executed by such person and constitutes
the legal, valid, binding and enforceable obligation of such person (subject to
such customary exceptions concerning fraudulent conveyance laws, creditors'
rights and equitable principles as may be acceptable to the Trustee in its
discretion).
Section 13.04. Guarantee Obligations Subordinated to Guarantor
Senior Debt.
Each Guarantor covenants and agrees, and each Holder of a Note, by
its acceptance thereof, likewise covenants and agrees, that all payments
pursuant to the Guarantee made by or on behalf of such Guarantor are hereby
expressly made subordinate and subject in right of payment as provided in this
Article Thirteen to the prior payment in full in cash of all amounts payable
under all existing and future Guarantor Senior Debt of such Guarantor including
such Guarantor's guarantees of the Company's Obligations under the Amended and
Restated Credit Agreement.
This Section 13.04 and the following Sections 13.05 through 13.17 of
this Article Thirteen shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold Guarantor
Senior Debt of any Guarantor and, to the extent set forth in Section 13.06(b),
holders of Designated Senior Debt; and such provisions are made for the benefit
of the holders of Guarantor Senior Debt of each Guarantor and, to the extent set
forth in Section 13.06(b), holders of Designated Senior Debt; and such holders
(to such extent) are made obligees hereunder and they or each of them may
enforce such provisions.
-104-
Section 13.05. Payment Over of Proceeds upon Dissolution, etc., of a
Guarantor.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding-up of any Guarantor, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshalling of assets or liabilities of any Guarantor,
then and in any such event:
(1) the holders of all Guarantor Senior Debt of such Guarantor shall
be entitled to receive payment in full in cash or, as acceptable to the
holders of such Guarantor Senior Debt, in any other manner of all amounts
due on or in respect of all such Guarantor Senior Debt (including, in the
case of Obligations under the Amended and Restated Credit Agreement, and
related Currency and Interest Rate Agreement Obligations of such
Guarantor, any interest accruing subsequent to the filing of a petition
for bankruptcy at the rate provided for in the documentation governing
such Obligations under the Amended and Restated Credit Agreement, and
Interest Rate Agreement Obligations of such Guarantor, as the case may be,
whether or not such interest is an allowed claim under applicable law), or
provision shall be made for such payment, before the Holders of the Notes
are entitled to receive, pursuant to this Guarantee, any payment or
distribution of any kind or character by or on behalf of such Guarantor on
account of the Guarantor's Obligations under the Notes; and
(2) any payment or distribution of assets of such Guarantor of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the subordination provisions of this Article Thirteen shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or otherwise, directly to the holders of Guarantor Senior Debt of
such Guarantor or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Guarantor Senior Debt may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of such
Guarantor Senior Debt held or represented by each, to the extent necessary
to make payment in full in cash of all such Guarantor Senior Debt
remaining
-105-
unpaid, after giving effect to any concurrent payment or distribution to
the holders of such Guarantor Senior Debt; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 13.05, the Trustee or the Holder of any Note shall have
received any payment or distribution of assets of such Guarantor of any
kind or character, whether in cash, property or securities, in respect of
any Obligations of such Guarantor under this Guarantee before all
Guarantor Senior Debt of such Guarantor is paid in full in cash or payment
thereof provided for, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the Senior Representative for
application to the payment of all such Guarantor Senior Debt remaining
unpaid, to the extent necessary to pay all of such Guarantor Senior Debt
in full in cash, after giving effect to any concurrent payment or
distribution to or for the holders of such Guarantor Senior Debt. Any such
payment or distribution of assets received by the Trustee, which is
required to be paid over to the Senior Representative, will be held in
trust by the Trustee for the benefit of the holders of the Guarantor
Senior Debt.
Section 13.06. Suspension of Guarantee Obligations When Guarantor
Senior Debt in Default.
(a) Unless Section 13.05 shall be applicable, after the occurrence
of a Payment Default with respect to any Guarantor Senior Debt no payment or
distribution of any assets of such Guarantor of any kind or character shall be
made by or on behalf of such Guarantor on account of the Guarantor's Obligations
pursuant to the Notes or on account of the purchase, redemption, defeasance or
other acquisition of the Obligations pursuant to the Notes or on account of any
other Obligations of such Guarantor under this Guarantee unless and until such
Payment Default shall have been cured or waived or shall have ceased to exist or
the Guarantor Senior Debt as to which such Payment Default relates shall have
been discharged or paid in full in cash, after which, subject to Section 13.05
(if applicable), such Guarantor shall resume making any and all required
payments in respect of its Obligations under this Guarantee.
(b) Unless Section 13.05 shall be applicable, during any Payment
Blockage Period with respect to any Guarantor Senior Debt, no payment or
distribution of any assets of a Guarantor of any kind or character shall be made
by or on behalf of a Guarantor on account of the Guarantor's Obligations on the
Notes or on account of the purchase, redemption, defeasance or other acquisition
of the Guarantor's Obligations on the Notes or on account of any of the other
Obligations of such Guarantor under this Guarantee; provided that the foregoing
prohibition shall not apply unless such Payment
-106-
Blockage Period has been instituted under Section 14.03(b) by a Senior
Representative acting for holders of Designated Senior Debt which also
constitutes Guarantor Senior Debt. Upon the termination of any Payment Blockage
Period, subject to Section 13.05 (if applicable), such Guarantor shall resume
making any and all required payments in respect of its Obligations under this
Guarantee.
(c) In the event that, notwithstanding the foregoing, the Trustee or
the Holder of any Note shall have received any payment from a Guarantor
prohibited by the foregoing provisions of this Section 13.06, then and in such
event such payment shall be paid over and delivered forthwith to the Senior
Representative initiating the Payment Blockage Period, in trust for distribution
to the holders of Guarantor Senior Debt or, if no amounts are then due in
respect of Guarantor Senior Debt, prompt return to the Guarantor, or as a court
of competent jurisdiction shall direct.
Section 13.07. Release of a Guarantor.
(a) Anything to the contrary notwithstanding, in the event that the
articles of incorporation of Freedom Chemical Diamalt are amended with the
result that Freedom Chemical Diamalt becomes classified as a controlled foreign
corporation under U.S. federal tax law, at the option of the Company, upon
written notice to the Trustee the Guarantee of Freedom Chemical Diamalt may be
amended to eliminate the guarantee of Freedom Chemical Diamalt in the form
existing on the Issue Date and to provide instead for the full and unconditional
guarantee by Freedom Chemical Diamalt of the Obligations of the other Guarantors
under their respective Guarantees.
(b) So long as no Event of Default shall have occurred and be
continuing upon the sale or disposition (whether by merger, stock purchase,
asset sale or otherwise) of a Guarantor (or all or substantially all of the
assets of any such Guarantor or 50% or more of the Capital Stock of any such
Guarantor) to an entity which is not a Subsidiary of the Company, which
transaction is otherwise in compliance with this Indenture, such Guarantor shall
be deemed released from all its Obligations under its Guarantee of the Notes;
provided, however, that any such termination shall occur only to the extent that
all Obligations of such Guarantor under all its Guarantees of, and under all of
its pledges of assets or other security interests which secure, any Indebtedness
of the Company shall also terminate upon such release, sale or transfer. Upon
the release of any Guarantor from its Guarantee pursuant to the provisions of
the Indenture, each other Guarantor not so released shall remain liable for the
full amount of principal of, and interest on, the Notes as and to the extent
provided in the Indenture.
-107-
(c) The Trustee shall deliver an appropriate instrument evidencing
the release of a Guarantor upon receipt of a request of the Company accompanied
by an Officers' Certificate certifying as to the compliance with this Section
13.07. Any Guarantor not so released or the entity surviving such Guarantor, as
applicable, will remain or be liable under its Guarantee as provided in this
Article Thirteen.
The Trustee shall execute any documents reasonably requested by the
Company or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Notes and under this Article
Thirteen.
Except as set forth in Articles Eight and Ten and this Section
13.07, nothing contained in this Indenture or in any of the Notes shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor or shall prevent any sale or conveyance of the property of a Guarantor
as an entirety or substantially as an entirety to the Company or another
Guarantor.
Section 13.08. Waiver of Subrogation.
Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Guarantee and this Indenture, including, without limitation, any
right of subrogation, reimbursement, exoneration, indemnification, and any right
to participate in any claim or remedy of any Holder of Notes against the
Company, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Guarantor in
violation of the preceding sentence and the Notes shall not have been paid in
full, such amount shall have been deemed to have been paid to such Guarantor for
the benefit of, and held in trust for the benefit of, the Holders of the Notes,
and shall, subject to the subordination provisions of this Article Thirteen and
to Article Fourteen, forthwith be paid to the Trustee for the benefit of such
Holders to be credited and applied upon the Notes, whether matured or unmatured,
in accordance with the terms of this Indenture. Each Guarantor acknowledges that
it will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
13.08 is knowingly made in contemplation of such benefits.
-108-
Section 13.09. Guarantee Subordination Provisions Solely To Define
Relative Rights.
The subordination provisions of this Article are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Notes on the one hand and the holders of Guarantor Senior Debt of each Guarantor
and, to the extent set forth in Section 13.06, holders of Designated Senior Debt
on the other hand. Nothing contained in this Article Thirteen (other than a
release pursuant to Section 13.07) or elsewhere in this Indenture or in the
Notes is intended to or shall (a) impair, as among each Guarantor, its creditors
other than holders of its Guarantor Senior Debt and the Holders of the Notes,
the obligation of such Guarantor, which is absolute and unconditional, to make
payments to the Holders in respect of its obligations under this Guarantee as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against such Guarantor of the Holders of the
Notes and creditors of such Guarantor other than the holders of the Guarantor
Senior Debt of such Guarantor; or (c) prevent the Trustee or the Holder of any
Note from exercising all remedies otherwise permitted by applicable law upon
Default or an Event of Default under this Indenture, subject to the rights, if
any, under the subordination provisions of this Article Thirteen of the holders
of Guarantor Senior Debt of the Guarantors hereunder and, to the extent set
forth in Section 13.06, holders of Designated Senior Debt (1) in any case,
proceeding, dissolution, liquidation or other winding-up, assignment for the
benefit of creditors or other marshaling of assets and liabilities of the
Guarantor referred to in Section 13.05, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 13.06, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 13.06(c).
The failure by any Guarantor to make a payment in respect of its
obligations under this Guarantee by reason of any provision of this Article
Thirteen shall not be construed as preventing the occurrence of a Default or an
Event of Default hereunder.
Section 13.10. Trustee To Effectuate Subordination of Guarantee
Obligations.
Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Thirteen
and appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor whether in bankruptcy,
-109-
insolvency, receivership proceedings, or otherwise, the timely filing of a claim
for the unpaid balance of the indebtedness of such Guarantor owing to such
Holder in the form required in such proceedings and the causing of such claim to
be approved. If the Trustee does not file such a claim prior to 30 days before
the expiration of the time to file such a claim, the holders of Guarantor Senior
Debt, or any representative, may file such a claim on behalf of Holders of the
Notes.
Section 13.11. No Waiver of Guarantee Subordination Provisions.
(a) No right of any present or future holder of any Guarantor Senior
Debt of any Guarantor or Designated Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or any Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any non-compliance
by the Company or any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 13.11, the holders of Guarantor Senior Debt of any Guarantor may, at any
time and from time to time, without the consent of or notice to the Trustee or
the Holders of the Notes, without incurring responsibility to the Holders of the
Notes and without impairing or releasing the subordination provided in this
Article Thirteen or the obligations hereunder of the Holders of the Notes to the
holders of such Guarantor Senior Debt, do any one or more of the following: (1)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Guarantor Senior Debt or any Senior Debt as to which
such Guarantor Senior Debt relates or any instrument evidencing the same or any
agreement under which such Guarantor Senior Debt or such Senior Debt is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Guarantor Senior Debt or any
Senior Debt as to which such Guarantor Senior Debt relates; (3) release any
person liable in any manner for the collection or payment of such Guarantor
Senior Debt or any Senior Debt as to which such Guarantor Senior Debt relates;
and (4) exercise or refrain from exercising any rights against such Guarantor
and any other person; provided that in no event shall any such actions limit the
right of the Holders of the Notes to take any action to accelerate the maturity
of the Notes pursuant to Article Five hereof or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action does not
otherwise violate the terms of this Indenture.
-110-
Section 13.12. Guarantors To Give Notice to Trustee.
(a) The Company and each Guarantor shall give prompt written notice
to the Trustee of any fact known to such Guarantor which would prohibit the
making of any payment to or by the Trustee in respect of the Notes.
Notwithstanding the subordination provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Notes, unless and until the Trustee shall have
received written notice thereof at its Corporate Trust Office from the Company,
such Guarantor or a holder of its Guarantor Senior Debt or from any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written
notice, the Trustee, subject to the provisions of this Section 13.12, shall be
entitled in all respects to assume that no such facts exist; provided that if
the Trustee shall not have received the notice provided for in this Section
13.12 at least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose under this Indenture
(including, without limitation, the payment of the principal of or interest on
any Note), then, anything herein contained to the contrary notwithstanding but
without limiting the rights and remedies of the holders of such Guarantor Senior
Debt or any trustee, fiduciary or agent thereof, the Trustee shall have full
power and authority to receive such money and to apply the same to the purpose
for which such money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to such
date; nor shall the Trustee be charged with knowledge of the curing of any such
default or the elimination of the act or condition preventing any such payment
unless and until the Trustee shall have received an Officers' Certificate from
such Guarantor to such effect.
(b) Subject to the provisions of Section 6.01, the Trustee shall be
entitled to rely on the delivery to it of a written notice to the Trustee, by a
person representing himself to be a holder of Guarantor Senior Debt of any
Guarantor (or a trustee, fiduciary or agent therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any person as a holder of Guarantor Senior Debt of any Guarantor
to participate in any payment or distribution pursuant to this Article Thirteen,
the Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Guarantor Senior Debt of each
Guarantor held by such person, the extent to which such person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such person under this Article Thirteen, and if such evidence is not
furnished, the Trustee may defer any payment to such person pending
-111-
judicial determination as to the right of such person to receive such payment.
Section 13.13. Reliance on Judicial Order or Certificate
of Liquidating Agent Regarding Dissolution, etc., of Guarantors.
Upon any payment or distribution of assets of any Guarantor referred
to in this Article Thirteen, the Trustee, subject to the provisions of Section
6.01, and the Holders shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the persons entitled
to participate in such payment or distribution, the holders of Guarantor Senior
Debt of such Guarantor and other Indebtedness of such Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article Thirteen; provided that
the foregoing shall apply only if such court has been fully apprised of the
provisions of this Article Thirteen.
Section 13.14. Rights of Trustee as a Holder of Guarantor Senior
Debt; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Thirteen with respect to any Guarantor Senior
Debt of any Guarantor which may at any time be held by the Trustee, to the same
extent as any other holder of such Guarantor Senior Debt, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder. Nothing
in this Article Thirteen shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.07.
Section 13.15. Article Thirteen Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article Thirteen shall in such case (unless the
context otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article Thirteen in addition to or in place of
the Trustee; provided that Section 13.14 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
-112-
Section 13.16. No Suspension of Remedies Subject to Rights of
Holders of Guarantor Senior Debt.
Nothing contained in this Article Thirteen shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article Five or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Thirteen of the holders, from time to time, of Guarantor Senior
Debt of the Guarantors.
Section 13.17. Trustee's Relation to Guarantor Senior Debt.
With respect to the holders of Guarantor Senior Debt of any
Guarantor, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article Thirteen
(and in Article Fourteen with respect to Senior Debt), and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt of any
Guarantor shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Debt of any Guarantor and the Trustee shall not be liable to any holder of
Guarantor Senior Debt of any Guarantor if it shall mistakenly pay over or
deliver to Holders, the Company or any other person moneys or assets to which
any holder of Guarantor Senior Debt of any Guarantor shall be entitled by virtue
of this Article Thirteen or otherwise.
Section 13.18. Subrogation.
Upon the payment in full in cash of all amounts payable under or in
respect of Guarantor Senior Debt of the Guarantors and of all Senior Debt of the
Company, the Holders shall be subrogated to the rights of the holders of such
Guarantor Senior Debt of the Guarantors to receive payments or distributions of
assets of any Guarantor made on such Guarantor Senior Debt of the Guarantors
until all amounts due under the Guarantee shall be paid in full; and for the
purposes of such subrogation, no payments or distributions to holders of such
Guarantor Senior Debt of the Guarantors of any cash, property or securities to
which Holders of the Notes would be entitled except for the provisions of this
Article Thirteen, and no payment pursuant to the provisions of this Article
Thirteen to holders of such Guarantor Senior Debt of the Guarantors by the
Holders, shall, as between each Guarantor, its creditors other than holders of
such Guarantor Senior Debt of the Guarantors and the Holders, be deemed to be a
payment by such Guarantor to or on account of such Guarantor Senior Debt of the
Guarantors, its being understood that the provisions of this Article Thirteen
are solely for the purpose of defining the
-113-
relative rights of the holders of such Guarantor Senior Debt of the Guarantors,
on the one hand, and the Holders, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Thirteen shall have
been applied, pursuant to the provisions of this Article Thirteen, to the
payment of all amounts payable under the Guarantor Senior Debt of the
Guarantors, then and in such case, the Holders shall be entitled to receive from
the holders of such Guarantor Senior Debt of the Guarantors at the time
outstanding any payments or distributions received by such holders of Guarantor
Senior Debt of the Guarantors in excess of the amount sufficient to pay all
amounts payable under or in respect of such Guarantor Senior Debt of the
Guarantors in full.
ARTICLE FOURTEEN
SUBORDINATION OF NOTES
Section 14.01. Notes Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Note, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article Fourteen, the Indebtedness
represented by the Notes are hereby expressly made subordinate and subject in
right of payment as provided in this Article to the prior payment in full in
cash of all amounts payable under all existing and future Senior Debt (including
the indebtedness under the Amended and Restated Credit Agreement).
This Article Fourteen shall constitute a continuing offer to all
persons who, in reliance upon such provisions, become holders of, or continue to
hold Senior Debt (including the indebtedness under the Amended and Restated
Credit Agreement); and such provisions are made for the benefit of the holders
of Senior Debt (including the indebtedness under the Amended and Restated Credit
Agreement); and such holders are made obligees hereunder and they or each of
them individually or through their representative may enforce such provisions.
Section 14.02. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other
winding-up of the
-114-
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, then and in any such event:
(1) the holders of all Senior Debt shall be entitled to receive
payment in full in cash of all Obligations due in respect of such Senior
Debt (including, in the case of obligations under the Amended and Restated
Credit Agreement and Interest Rate Agreement Obligations, any interest
accruing subsequent to the filing of any such proceedings at the rate
specified in the agreements governing such Senior Debt whether or not
interest is an allowed claim under applicable law) before the Holders of
the Notes are entitled to receive any payment or distribution of any kind
or character on account of the Notes; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article shall be paid by the liquidating trustee or
agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Debt or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Debt may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Debt held or represented by each, to the extent
necessary to make payment in full in cash of all Senior Debt remaining
unpaid, after giving effect to any concurrent payment or distribution to
the holders of such Senior Debt; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 14.02, the Trustee or the Holder of any Note shall have
received any payment or distribution of properties or assets of the
Company of any kind or character, whether in cash, property or securities,
by set off or otherwise in respect of the Notes before all Senior Debt is
paid or provided for in full in cash, then and in such event such payment
or distribution shall be paid over or delivered forthwith to the trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other person making payment or distribution of assets of the Company
for application to the payment of all Senior Debt remaining unpaid, to the
extent necessary to pay all Senior Debt in full in cash, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Debt. Any such payment or distribution of the assets received by
the Trustee, which is required to be paid over to the Senior
-115-
Representative, will be held in trust by the Trustee for the benefit of
the holders of the Senior Debt.
The consolidation of the Company with, or the merger of the Company
with or into, another person or the liquidation or dissolution of the Company
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety to another person upon the terms and conditions set
forth in Article Eight hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company for the purposes of this
Article if the person formed by such consolidation or the surviving entity of
such merger or the person which acquires by conveyance, transfer or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply
with the conditions set forth in such Article Eight.
Section 14.03. Suspension of Payment When Designated Senior Debt is
in Default.
(a) Unless Section 14.02 shall be applicable, upon the occurrence of
a Payment Default, no direct or indirect payment or distribution of any assets
of the Company of any kind or character shall be made by or on behalf of the
Company on account of the Notes unless and until such Payment Default shall have
been cured or waived or shall have otherwise ceased to exist or such Senior Debt
shall have been discharged or paid in full in cash, after which, subject to
Section 14.02 (if applicable), the Company shall resume making any and all
required payments in respect of the Notes, including any missed payments.
(b) Unless Section 14.02 shall be applicable, upon (1) the
occurrence of a Non-payment Default and (2) receipt by the Trustee from the
representatives of any holders of Designated Senior Debt of written notice of
such occurrence (a "Payment Blockage Notice") stating that a Non-Payment Default
has occurred and is continuing pursuant to Section 14.03(b) of this Indenture,
no payment or distribution of any assets of the Company of any kind or character
shall be made by or on behalf of the Company on account of the Notes for a
period ("Payment Blockage Period") commencing on the date of receipt by the
Trustee of such notice unless and until the earlier to occur of the following
events (subject to any blockage of payments that may then be in effect under
Section 14.02 or subsection (a) of this Section 14.03) (x) 179 days shall have
elapsed since the Payment Blockage Notice was received by the Trustee, (y) such
Non-payment Default shall have been cured or waived or shall have ceased to
exist (provided that no other Payment Default or Non-payment Default has
occurred and is then continuing after giving effect to such cure or waiver)
-116-
or (z) such Payment Blockage Period shall have been terminated by written notice
to the Company or the Trustee from the representatives initiating such Payment
Blockage Period, after which, subject to Section 14.02 (if applicable), the
Company shall promptly resume making any and all required payments in respect of
the Notes, including any missed payments. Notwithstanding any other provision of
this Indenture, during any consecutive 365-day period, the aggregate number of
days in which payments due on the Notes may not be made as a result of
nonpayment defaults on Designated Senior Debt shall not exceed 179 days, and
there shall be a period of at least 186 consecutive days in each consecutive
365-day period when such payments are not prohibited. No event or circumstance
that creates a default under any Designated Senior Debt that (i) gives rise to
the commencement of a Payment Blockage Period or (ii) exists at the commencement
of or during any Payment Blockage Period shall be made the basis for the
commencement of any subsequent Payment Blockage Period unless such default has
been cured or waived for a period of not less than 90 consecutive days following
the commencement of the initial Payment Blockage Period.
(c) In the event that, notwithstanding the foregoing, the Trustee or
the Holder of any Note shall have received any payment or distribution
prohibited by the foregoing provisions of this Section 14.03, then and in such
event such payment or distribution shall be paid over and delivered forthwith to
representatives of the Holders or as a court of competent jurisdiction shall
direct for application to the payment of any due and unpaid Senior Debt, to the
extent necessary to pay all such due and unpaid Senior Debt in cash, after
giving effect to any concurrent payment to or for the holders of Senior Debt.
Section 14.04. Trustee's Relation to Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Fourteen (and in Article Thirteen with
respect to existing and future Guarantor Senior Debt of the respective
Guarantors, including obligations under the Amended and Restated Credit
Agreement), and no implied covenants or obligations with respect to the holders
of Senior Debt shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and the Trustee shall not be liable to any holder of Senior Debt if it
shall mistakenly pay over or deliver to Holders, the Company, the Guarantors or
any other person moneys or assets to which any holder of Senior Debt shall be
entitled by virtue of this Article Fourteen or otherwise.
-117-
Section 14.05. Subrogation to Rights of Holders of Senior Debt.
Upon the payment in full in cash of all Senior Debt, the Holders of
the Notes shall be subrogated to the rights of the holders of such Senior Debt
to receive payments and distributions of cash, property and securities
applicable to the Senior Debt until the principal of and interest on the Notes
shall be paid in full in cash or cash equivalents. For purposes of such
subrogation, no payments or distributions to the holders of Senior Debt of any
cash, property or securities to which the Holders of the Notes or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Notes or the Trustee shall, as among the Company, its creditors
other than holders of Senior Debt, and the Holders of the Notes, be deemed to be
a payment or distribution by the Company to or on account of the Senior Debt.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Fourteen shall have
been applied, pursuant to the provisions of this Article Fourteen, to the
payment of all amounts payable under the Senior Debt of the Company, then and in
such case the Holders shall be entitled to receive from the holders of such
Senior Debt at the time outstanding any payments or distributions received by
such holders of such Senior Debt in excess of the amount sufficient to pay all
amounts payable under or in respect of such Senior Debt in full in cash or cash
equivalents.
Section 14.06. Provisions Solely To Define Relative Rights.
The provisions of this Article Fourteen are and are intended solely
for the purpose of defining the relative rights of the Holders of the Notes on
the one hand and the holders of Senior Debt on the other hand. Nothing contained
in this Article Fourteen or elsewhere in this Indenture or in the Notes is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Debt and the Holders of the Notes, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the Notes
the principal of, premium, if any, and interest on the Notes as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Notes and
creditors of the Company other than the holders of Senior Debt; or (c) prevent
the Trustee or the Holder of any Note from exercising all remedies otherwise
permitted by applicable law upon a Default or an Event of Default under this
Indenture, subject to the rights, if any, under this Article Fourteen of the
holders of Senior Debt
-118-
(1) in any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 14.02, to receive, pursuant to
and in accordance with such Section, cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 14.03, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 14.03(c).
The failure to make a payment on the Notes by reason of any
provision of this Article Fourteen shall not be construed as preventing the
occurrence of a Default or an Event of Default hereunder.
Section 14.07. Trustee To Effectuate Subordination.
Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Fourteen
and appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the Indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Trustee
does not file such a claim prior to 30 days before the expiration of the time to
file such a claim, the holders of Senior Debt, or any Senior Representative, may
file such a claim on behalf of Holders of the Notes.
Section 14.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 14.08, the holders of Senior Debt may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article Fourteen or
the obligations
-119-
hereunder of the Holders of the Notes to the holders of Senior Debt, do any one
or more of the following: (1) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding; (2)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Debt; (3) release any person liable in any manner
for the collection or payment of Senior Debt; and (4) exercise or refrain from
exercising any rights against the Company and any other person; provided that in
no event shall any such actions limit the right of the Holders of the Notes to
take any action to accelerate the maturity of the Notes pursuant to Article Five
hereof or to pursue any rights or remedies hereunder or under applicable laws if
the taking of such action does not otherwise violate the terms of this
Indenture.
Section 14.09. Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Notes. Notwithstanding the provisions of
this Article Fourteen or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in respect of the Notes,
unless and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, fiduciary or agent
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of this Section 14.09, shall be entitled in all
respects to assume that no such facts exist; provided that if the Trustee shall
not have received the notice provided for in this Section 14.09 at least two
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose under this Indenture (including, without
limitation, the payment of the principal of or interest on any Note), then,
anything herein contained to the contrary notwithstanding but without limiting
the rights and remedies of the holders of Senior Debt or any trustee, fiduciary
or agent thereof, the Trustee shall have full power and authority to receive
such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date; nor shall the
Trustee be charged with knowledge of the curing of any such default or the
elimination of the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such effect.
(b) Subject to the provisions of Section 6.01, the Trustee shall be
entitled to rely on the delivery to it of a
-120-
written notice to the Trustee by a person representing himself to be a holder of
Senior Debt (or a trustee, fiduciary or agent therefor) to establish that such
notice has been given by a holder of Senior Debt (or a trustee, fiduciary or
agent therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any person as a holder
of Senior Debt to participate in any payment or distribution pursuant to this
Article Fourteen, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt held by
such person, the extent to which such person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
person under this Article Fourteen, and if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.
Section 14.10. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article Fourteen, the Trustee, subject to the provisions of Section
6.01, and the Holders, shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
Senior Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article; provided that the foregoing shall apply
only if such court has been fully apprised of the provisions of this Article
Fourteen.
Section 14.11. Rights of Trustee as a Holder of Senior Debt;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Fourteen with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article Fourteen shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 6.07.
-121-
Section 14.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article Fourteen in addition to or in place of the Trustee;
provided that Section 12.11 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 14.13. No Suspension of Remedies.
Nothing contained in this Article Fourteen shall limit the right of
the Trustee or the Holders of Notes to take any action to accelerate the
maturity of the Notes pursuant to Article Five or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article Fourteen of the holders, from time to time, of Senior Debt.
-122-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
FREEDOM CHEMICAL COMPANY
By: /s/ Xxxxx X. XxXxxxxx
------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Secretary
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxxx Xxxxxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
Title: Asst. Vice President
FREEDOM TEXTILE CHEMICAL CO.,
as Guarantor
By: /s/ Xxxxx X. XxXxxxxx
------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Secretary
HILTON DAVIS CHEMICAL CO.,
as Guarantor
By: /s/ Xxxxx X. XxXxxxxx
------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Secretary
KALAMA CHEMICAL, INC.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
-123-
FREEDOM CHEMICAL DIAMALT GMBH,
as Guarantor
By: /s/ Xxxxxx Xxxx
------------------------------
Name: Xxxxxx Xxxx
Title: Managing Director
KALAMA SPECIALTY CHEMICALS, INC.
as Guarantor
By: /s/ Xxxxxx X Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
KALAMA FOREIGN SALES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
FCC ACQUISITION CORP.
By: /s/ Xxxxx X. XxXxxxxx
------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Secretary
FREEDOM TEXTILE CHEMICAL COMPANY
(SOUTH CAROLINA) INC.
By: /s/ Xxxxx X. XxXxxxxx
------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Secretary
EXHIBIT A
FREEDOM CHEMICAL COMPANY
10 5/8% SENIOR SUBORDINATED NOTE DUE 2006
CUSIP No._________
No._________ $_________
FREEDOM CHEMICAL COMPANY, a Delaware corporation (the "Company,"
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to _________ or registered assigns, the
principal sum of _________ United States Dollars on October 15, 2006, at the
office or agency of the Company referred to below, and to pay interest thereon
on April 15, and October 15, in each year, commencing on April 15, 1997 (each an
"Interest Payment Date"), accruing from the Issue Date or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at
the rate of 10 5/8% per annum, until the principal hereof is paid or duly
provided for. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on the April 1 or
October 1 (each a "Regular Record Date"), whether or not a Business Day, as the
case may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the then applicable interest rate borne by the Notes, to the extent lawful,
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and may be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the Corporate Trust office or
A-1
agency of the Trustee maintained for that purpose in The City of New York, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check (which may
be a check of the Company) mailed to the address of the Person entitled thereto
as such address shall appear on the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned
Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:___________________________________
Authorized Signatory
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
FREEDOM CHEMICAL COMPANY
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
A-3
(REVERSE OF NOTE)
10 5/8% Senior Subordinated Note due 2006
1. Indenture. This Note is one of a duly authorized issue of Notes
of the Company designated as its 10 5/8% Senior Subordinated Notes due 2006 (the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $125,000,000, which may be issued under
an indenture (the "Indenture") dated as of October 15, 1996, by and among the
Company, as Issuer, Freedom Textile Chemicals Co., a Delaware corporation,
Hilton Davis Chemical Co., a Delaware corporation, Kalama Chemical, Inc., a
Washington corporation, Freedom Chemical Diamalt GmbH, a corporation organized
under the laws of the Federal Republic of Germany, Kalama Foreign Sales
Corporation, a corporation existing under the laws of Guam, Kalama Specialty
Chemicals, Inc., a Washington corporation, FCC Acquisition Corp., a Delaware
corporation, and Freedom Textile Chemical Company (South Carolina) Inc., a
Delaware corporation, as guarantors (each a "Guarantor," and collectively, the
"Guarantors") and The Bank of New York, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Guarantors, the Trustee and the Holders of the
Notes, and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
No reference herein to the Indenture and no provisions of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. Guarantees. This Note is entitled to certain senior subordinated
Guarantees made for the benefit of the Holders. Reference is hereby made to
Article Fourteen of the Indenture for terms relating to the Guarantees.
3. Subordination. The Indebtedness evidenced by the Notes is, to the
extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full in cash of all existing and future
Senior Debt (including the Indebtedness under the Amended and Restated Credit
Agreement). Each Holder of this Note, by accepting the same, (a)
A-4
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; provided
that the Indebtedness evidenced by this Note shall cease to be so subordinate
and subject in right of payment upon any defeasance of this Note referred to in
Paragraph 7 below.
4. Redemption.
(a) Optional Redemption. Except as set forth below, the Notes are
not redeemable prior to October 15, 2001. Subject to earlier redemption in the
manner described in the next two succeeding paragraphs, the Notes will be
redeemable at the option of the Company, in whole or in part, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest, if any, to the redemption date, if redeemed during
the 12-month period beginning October 15 of the years indicated below:
Year Redemption Price
---- ----------------
2001 105.312%
2002 103.541
2003 101.771
2004 and thereafter 100.000
In addition, at any time on or prior to October 15, 1999, the
Company may, at its option, redeem up to 35% of the aggregate principal amount
of Notes originally issued with the net proceeds of one or more Public Equity
Offerings, at 109.625% of the aggregate principal amount thereof plus accrued
and unpaid interest, if any, to the date of redemption; provided, however, that
not less than $81.25 million principal amount of the Notes is outstanding
immediately after giving effect to such redemption (other than any Notes owned
by the Company or any of its Affiliates) and such redemption is effected within
60 days of such issuance or investment.
In addition, at any time on or prior to October 15, 2001, upon the
occurrence of a Change of Control, the Company may, at its option, redeem all
but not less than all of the Notes at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium plus accrued and unpaid
interest, if any, to the date of redemption. Notice of redemption of the Notes
pursuant to this paragraph shall be mailed to holders of the Notes not more than
60 days and not less than 30 days following the occurrence of a Change of
Control.
(b) Sinking Fund. The Company will not be required to make any
mandatory sinking fund payments in respect of the Notes.
A-5
(c) Interest Payments. In the case of any redemption of the Notes,
interest installments whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of such Notes, or one or more Predecessor
Notes, of record at the close of business on the relevant Record Date referred
to on the face hereof. Notes (or portions thereof) for whose redemption and
payment provision is made in accordance with the Indenture shall cease to bear
interest from and after the Redemption Date.
(d) Partial Redemption. In the event of redemption of the Note in
part only, a new Note or Notes for the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
5. Offers to Purchase. Sections 10.14 and 10.15 of the Indenture
provide that following certain Asset Sales (with respect to Section 10.14) and
upon the occurrence of a Change of Control (with respect to Section 10.15) and
subject to further limitations contained therein, the Company shall make an
offer to purchase certain amounts of the Notes in accordance with the procedures
set forth in the Indenture.
6. Defaults and Remedies. If an Event of Default shall occur and be
continuing, the principal of all of the outstanding Notes, plus all accrued and
unpaid interest, if any, to the date the Notes become due and payable, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
7. Defeasance. The Indenture contains provisions (which provisions
apply to this Note) for defeasance at any time of (a) the entire indebtedness of
the Company on this Note and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company with
certain conditions set forth therein.
8. Amendments and Waivers. The Company and the Trustee (if a party
thereto) may, without the consent of the Holders of any Outstanding Notes,
amend, waive or supplement the Indenture or the Notes for certain specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies, maintaining the qualification of the Indenture under the Trust
Indenture Act of 1939, as amended, and making any change that does not adversely
affect the rights of any Holder. Other amendments and modifications of the
Indenture or the Notes may be made by the Company and the Trustee with the
consent of the Holders of not less than a majority of the aggregate principal
amount of the Outstanding Notes, subject to certain exceptions requiring the
consent of the Holders of the particular Notes to be affected. Any such consent
or waiver by or on behalf of the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu
A-6
hereof whether or not notation of such consent or waiver is made upon this Note.
9. Denominations, Transfer and Exchange. The Notes are issuable only
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of the authorized denomination, as requested by the
Holder surrendering the same.
The transfer of this Note is registrable on the Note Register of the
Company, upon surrender of this Note for registration of transfer at the office
or agency of the Company maintained for such purpose in the Borough of Manhattan
in The City of New York or at such other office or agency of the Company as may
be maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Note
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
10. Persons Deemed Owners. Prior to and at the time of due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
11. Registration Rights. Pursuant to the Registration Rights
Agreement among the Company, the Guarantors and the Initial Purchasers for
themselves and on behalf of the Holders of the Initial Notes, the Company will
be obligated to consummate an exchange offer pursuant to which the Holder of
this Note shall have the right to exchange this Note for the Company's 10 5/8%
Senior Subordinated Notes due 2006 (the "Exchange Notes"), which will have been
registered under the Securities Act, in like principal amount and having terms
identical in all material respects as the Initial Notes. The Holders of the
Initial Notes shall be entitled to receive certain additional interest payments
in the event such exchange offer is not consummated and upon certain other
conditions, all pursuant to and in accordance with the terms of the Registration
Rights Agreement.
12. No Recourse Against Others. No director, officer, employee or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company, or any Guarantor under the Notes, the
Guarantees or this Indenture. Each Holder of Notes by accepting a Note waives
and releases all such
A-7
liability, and such waiver and release is part of the consideration for the
issuance of the Notes.
13. GOVERNING LAW. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF). THE TRUSTEE,
THE COMPANY, ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND THE HOLDERS AGREE TO
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE
COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR THIS NOTE.
A-8
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
Date:___________________ Your signature:______________________________
(Sign exactly as your
name appears on the other
side of this Note)
By:___________________________
NOTICE: To be
executed by an
executive officer
NOTICE: Signature(s) must be guaranteed by an institution which is
a participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
A-9
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the third anniversary of the Issue Date, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with and that such transfer is:
[Check One]
(1) ____ to the Company or a subsidiary thereof; or
(2) ____ pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
(3) ____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of which
letter can be obtained from the Trustee); or
(4) ____ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or
(5) ____ pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933, as amended; or
(6) ____ pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(7) ____ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof, provided, that if box (3), (4), (5) or (7) is
checked, the Company or the Trustee may require, prior to registering any such
transfer of the Notes, in its sole discretion, such written legal opinions,
certifications (including an investment letter in the case of box (3) or (4),
and other information as the Trustee, Note Registrar or the Company 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, as amended.
A-10
If none of the foregoing boxes are checked, the Trustee or Note
Registrar shall not be obligated to register this Note in the name of any person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.05 of the Indenture
shall have been satisfied.
Dated:_____________________ Signed:_____________________________________
(Sign exactly as name
appears on the other
side of this Security)
Signature Guarantee:____________________________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Date:______________________ ____________________________________________
NOTICE: To be executed by an
an executive officer
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.14 or 10.15 of the Indenture, check the Box: [ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.14 or 10.15 of the Indenture, state the amount:
$____________________
Date:_____________ Your Signature: ___________________________________________
(Sign exactly as your name
appears on the other side
of this Note)
By:________________________________________
NOTICE: To be signed
by an executive officer
NOTICE: Signature(s) must be guaranteed by an institution which is
a participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
A-12
EXHIBIT B
FREEDOM CHEMICAL COMPANY
10 5/8% SENIOR SUBORDINATED NOTE DUE 2006
CUSIP No._________
No._________ $_________
FREEDOM CHEMICAL COMPANY, a Delaware corporation (the "Company,"
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to ___________, or registered assigns, the
principal sum of _________ United States Dollars on October 15, 2006, at the
office or agency of the Company referred to below, and to pay interest thereon
on April 15 and October 15 in each year, commencing on April 15, 1997 (each an
"Interest Payment Date"), accruing from the Issue Date or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at
the rate of 10 5/8% per annum, until the principal hereof is paid or duly
provided for. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture referred to on
the reverse hereof, be paid to the Person in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on the April 1 or
October 1 (each a "Regular Record Date"), whether or not a Business Day, as the
case may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the then applicable interest rate borne by the Notes, to the extent lawful,
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and may be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice of which shall be given to Holders of Notes not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in such Indenture.
Payment of the principal of, premium, if any, and interest on this
Note will be made at the corporate trust office or agency of the Trustee
maintained for that purpose in The City of
B-1
New York, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts:
provided, however, that payment of interest may be made at the option of the
Company by check (which may be a check of the Company) mailed to the address of
the Person entitled thereto as such address shall appear on the Note Register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof by manual signature,
this Note shall not be entitled to any benefit under the Indenture, or be valid
or obligatory for any purpose.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned
Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By:______________________________________
Authorized Signatory
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
FREEDOM CHEMICAL COMPANY
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
B-3
(REVERSE OF NOTE)
10 5/8% Senior Subordinated Note due 2006
1. Indenture. This Note is one of a duly authorized issue of Notes
of the Company designated as its 10 5/8% Senior Subordinated Notes due 2006 (the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $125,000,000, which may be issued under
an indenture (the "Indenture") dated as of October 15, 1996, by and among the
Company, as Issuer, Freedom Textile Chemicals Co., a Delaware corporation,
Hilton Davis Chemical Co., a Delaware corporation, Kalama Chemical, Inc., a
Washington corporation, Freedom Chemical Diamalt GmbH, a corporation organized
under the laws of the Federal Republic of Germany, Kalama Foreign Sales
Corporation, a corporation existing under the laws of Guam, Kalama Specialty
Chemicals, Inc., a Washington corporation, FCC Acquisition Corp., a Delaware
corporation and Freedom Textile Chemical Company (South Carolina) Inc., a
Delaware corporation, as guarantors (each a "Guarantor," and collectively, the
"Guarantors"), and The Bank of New York, as trustee (the "Trustee," which term
includes any successor Trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Guarantors, the Trustee and the Holders of the
Notes, and of the terms upon which the Notes are, and are to be, authenticated
and delivered.
All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
No reference herein to the Indenture and no provisions of this Note
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
2. Guarantees. This Note is entitled to certain senior subordinated
Guarantees made for the benefit of the Holders. Reference is hereby made to
Article Fourteen of the Indenture for terms relating to the Guarantees.
3. Subordination. The Indebtedness evidenced by the Notes is, to the
extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full in cash of all existing and future
Senior Debt (including the Indebtedness under the Amended and Restated Credit
Agreement). Each Holder of this Note, by accepting the same, (a)
B-4
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee, on behalf of such Holder, to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)
appoints the Trustee attorney-in-fact of such Holder for such purpose; provided
that the Indebtedness evidenced by this Note shall cease to be so subordinate
and subject in right of payment upon any defeasance of this Note referred to in
Paragraph 7 below.
4. Redemption.
(a) Optional Redemption. Except as set forth below, the Notes are
not redeemable prior to October 15, 2001. Subject to earlier redemption in the
manner described in the next two succeeding paragraphs, the Notes will be
redeemable at the option of the Company, in whole or in part, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest, if any, to the redemption date, if redeemed during
the 12-month period beginning October 15 of the years indicated below:
Year Redemption Price
---- ----------------
2001 105.312%
2002 103.541
2003 101.771
2004 and thereafter 100.000
In addition, at any time on or prior to October 15, 1999, the
Company may, at its option, redeem up to 35% of the aggregate principal amount
of Notes originally issued with the net proceeds of one or more Public Equity
Offerings, at 109.625% of the aggregate principal amount thereof plus accrued
and unpaid interest, if any, to the date of redemption; provided, however, that
not less than $81.25 million principal amount of the Notes is outstanding
immediately after giving effect to such redemption (other than any Notes owned
by the Company or any of its Affiliates) and such redemption is effected within
60 days of such issuance or investment.
In addition, at any time on or prior to October 15, 2001, upon the
occurrence of a Change of Control, the Company may, at its option, redeem, all
but not less than all of the Notes, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium plus accrued and unpaid
interest, if any, to the date of redemption. Notice of redemption of the Notes
pursuant to this paragraph shall be mailed to holders of the Notes not more than
60 days and not less than 30 days following the occurrence of a Change of
Control.
(b) Sinking Fund. The Company will not be required to make any
mandatory sinking fund payments in respect of the Notes.
B-5
(c) Interest Payments. In the case of any redemption of the Notes,
interest installments whose Stated Maturity is on or prior to the Redemption
Date will be payable to the Holders of such Notes, or one or more Predecessor
Notes, of record at the close of business on the relevant Record Date referred
to on the face hereof. Notes (or portions thereof) for whose redemption and
payment provision is made in accordance with the Indenture shall cease to bear
interest from and after the Redemption Date.
(d) Partial Redemption. In the event of redemption of the Note in
part only, a new Note or Notes for the unredeemed portion hereof shall be issued
in the name of the Holder hereof upon the cancellation hereof.
5. Offers to Purchase. Sections 10.14 and 10.15 of the Indenture
provide that following certain Asset Sales (with respect to Section 10.14) and
upon the occurrence of a Change of Control (with respect to Section 10.15) and
subject to further limitations contained therein, the Company shall make an
offer to purchase certain amounts of the Notes in accordance with the procedures
set forth in the Indenture.
6. Defaults and Remedies. If an Event of Default shall occur and be
continuing, the principal of all of the outstanding Notes, plus all accrued and
unpaid interest, if any, to the date the Notes become due and payable, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
7. Defeasance. The Indenture contains provisions (which provisions
apply to this Note) for defeasance at any time of (a) the entire indebtedness of
the Company on this Note and (b) certain restrictive covenants and related
Defaults and Events of Default, in each case upon compliance by the Company with
certain conditions set forth therein.
8. Amendments and Waivers. The Company and the Trustee (if a party
thereto) may, without the consent of the Holders of any Outstanding Notes,
amend, waive or supplement the Indenture or the Notes for certain specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies, maintaining the qualification of the Indenture under the Trust
Indenture Act of 1939, as amended, and making any change that does not adversely
affect the rights of any Holder. Other amendments and modifications of the
Indenture or the Notes may be made by the Company and the Trustee with the
consent of the Holders of not less than a majority of the aggregate principal
amount of the Outstanding Notes, subject to certain exceptions requiring the
consent of the Holders of the particular Notes to be affected. Any such consent
or waiver by or on behalf of the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu
B-6
hereof whether or not notation of such consent or waiver is made upon this Note.
9. Denominations, Transfer and Exchange. The Notes are issuable only
in registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Notes are exchangeable for a like aggregate
principal amount of Notes of the authorized denomination, as requested by the
Holder surrendering the same.
The transfer of this Note is registrable on the Note Register of the
Company, upon surrender of this Note for registration of transfer at the office
or agency of the Company maintained for such purpose in the Borough of Manhattan
in The City of New York or at such other office or agency of the Company as may
be maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Note
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
10. Persons Deemed Owners. Prior to and at the time of due
presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note shall be overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
11. No Recourse Against Others. No director, officer or employee or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company, or any Guarantor under the Notes, the
Guarantees or the Indenture. Each Holder of Notes by accepting a Note waives and
releases all such liability, and such waiver and release is part of the
consideration for the issuance of the Notes.
12. GOVERNING LAW. THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF). THE TRUSTEE,
THE COMPANY, ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND THE HOLDERS AGREE TO
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE
COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE OR THIS NOTE.
B-7
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or tax ID number)____________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for such agent.
Date:__________________ Your signature:__________________________________
(Sign exactly as your
name appears on the other
side of this Note)
By:_____________________________
NOTICE: To be
executed by an
executive officer
NOTICE: Signature(s) must be guaranteed by an institution which is
a participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
B-8
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 10.14 or 10.15 of the Indenture, check the Box:
[ ]
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 10.14 or 10.15 of the Indenture, state the amount:
$__________
Date:_____________ Your Signature:______________________________________
(Sign exactly as your name
appears on the other side
of this Note)
By:_______________________________
NOTICE: To be signed
by an executive officer
NOTICE: Signature(s) must be guaranteed by an institution which is
a participant in the Securities Transfer Agent Medallion Program
("STAMP") or similar program.
B-9
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
__________, ____
XXX XXXX XX XXX XXXX
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: Freedom Chemical Company (the "Company")
10 5/8% Senior Subordinated Notes
due 2006 (the "Notes")
----------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $ aggregate principal
amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated October 10, 1996, relating to the Notes and such other
information as we deem necessary in order to make our investment decision.
We acknowledge that we have read and agreed to the matters stated in the
section entitled "Notice to Investors" of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
dated as of October 15, 1996 relating to the Notes (the "Indenture") and
the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Notes except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the Notes have not been registered under the
Securities Act, and that the Notes may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter stated, that
C-1
if we should sell any Notes within three years after the original issuance
of the Notes, we will do so only (A) to the Company or any subsidiary
thereof, (B) inside the United States in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) inside the United States to an "institutional accredited
investor" (as defined below) that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to you a signed
letter substantially in the form of this letter, (D) outside the United
States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available), or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing any of the Notes from us a notice
advising such purchaser that resales of the Notes are restricted as stated
herein.
4. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certification, written
legal opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment, as the case may be.
6. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
C-2
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_________________________________________
Authorized Signature
C-3
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_________,_____
XXX XXXX XX XXX XXXX
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: Freedom Chemical Company (the "Company")
10 5/8% Senior Subordinated Notes
due 2006 (the "Notes")
----------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal amount
of the Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
D-1
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You, the Company and counsel for the Company are entitled to rely
upon this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_________________________________________
Authorized Signature
D-2
EXHIBIT E
SENIOR SUBORDINATED GUARANTEE
For value received, the undersigned hereby unconditionally
guarantees to the Holder of this Note the payments of principal of, premium, if
any, and interest on this Note in the amounts and at the time when due and
interest on the overdue principal, premium, if any, and interest, if any, of
this Note, if lawful, and the payment or performance of all other obligations of
the Company under the Indenture or the Notes, to the Holder of this Note and the
Trustee, all in accordance with and subject to the terms and limitations of this
Note, Article Thirteen of the Indenture and this Guarantee. This Guarantee will
become effective in accordance with Article Eleven of the Indenture and its
terms shall be evidenced therein. The validity and enforceability of any
Guarantee shall not be affected by the fact that it is not affixed to any
particular Note.
The obligations of the undersigned to the Holders of Notes and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth
in Article Thirteen of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Guarantee and all of the other provisions
of the Indenture to which this Guarantee relates. The Indebtedness evidenced by
this Guarantee is, to the extent and in the manner provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full in cash
of all Guarantor Senior Debt as defined in the Indenture, and this Guarantee is
issued subject to such provisions. Each Holder of a Note, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and directs
the Trustee, on behalf of such Holder, to take such action as may be necessary
or appropriate to effectuate the subordination as provided in the Indenture and
(c) appoints the Trustee attorney-in-fact of such Holder for such purpose;
provided that such subordination provisions shall cease to affect amounts
deposited in accordance with the defeasance provisions of the Indenture upon the
terms and conditions set forth therein.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
FREEDOM TEXTILE CHEMICALS CO.
By:___________________________________
Name:
Title:
E-1
HILTON DAVIS CHEMICAL CO.
By:___________________________________
Name:
Title:
E-2
KALAMA CHEMICAL, INC.
By:___________________________________
Name:
Title:
E-3
FREEDOM CHEMICAL DIAMALT GmbH
By:___________________________________
Name:
Title:
E-4
KALAMA SPECIALTY CHEMICALS, INC.
By:___________________________________
Name:
Title:
E-5
KALAMA FOREIGN SALES CORPORATION
By:___________________________________
Name:
Title:
E-6
FCC ACQUISITION CORP.
By:___________________________________
Name:
Title:
E-7
FREEDOM TEXTILE CHEMICAL COMPANY
(SOUTH CAROLINA) INC.
By:___________________________________
Name:
Title:
E-8
