Exhibit 4.1
EXECUTION COPY
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VERASUN ENERGY CORPORATION,
as Issuer,
Each of the Subsidiary Guarantors named herein,
and
XXXXX FARGO BANK, N.A.,
as Trustee
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INDENTURE
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Dated as of December 21, 2005
9 7/8% Senior Secured Notes due 2012
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
----------- -----------------
310(a)(1)................................................... 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N.A.
(a)(4)................................................... N.A.
(a)(5)................................................... 7.8; 7.10
(b)...................................................... 7.8; 7.10
(c)...................................................... N.A.
311(a)...................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a)...................................................... 2.5
(b)...................................................... 14.3
(c)...................................................... 14.3
313(a)...................................................... 7.6
(b)(1)................................................... 7.6
(b)(2)................................................... 7.6
(c)...................................................... 7.6; 14.2
(d)...................................................... 7.6
314(a)...................................................... 4.8; 4.10; 14.2
(b)...................................................... 10.5
(c)(1)................................................... 7.2; 14.4; 14.5
(c)(2)................................................... 7.2; 14.4; 14.5
(c)(3)................................................... N.A.
(d)...................................................... 10.7
(e)...................................................... 14.5
(f)...................................................... N.A.
315(a)...................................................... 7.1(b)
(b)...................................................... 7.5
(c)...................................................... 7.1
(d)...................................................... 6.5; 7.1(c)
(e)...................................................... 6.11
316(a)(last sentence)....................................... 2.9
(a)(1)(A)................................................ 6.5
(a)(1)(B)................................................ 6.4
(a)(2)................................................... N.A.
(b)...................................................... 6.7
(c)...................................................... 9.5
317(a)(1)................................................... 6.8
(a)(2)................................................... 6.9
(b)...................................................... 2.4
318(a)...................................................... 14.1
(c)...................................................... 14.1
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N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..................... 1
1.1 DEFINITIONS................................................... 1
1.2 INCORPORATION BY REFERENCE OF TIA............................. 29
1.3 RULES OF CONSTRUCTION......................................... 29
ARTICLE II THE SECURITIES................................................ 30
2.1 FORM AND DATING............................................... 30
2.2 EXECUTION AND AUTHENTICATION.................................. 31
2.3 REGISTRAR AND PAYING AGENT.................................... 32
2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.......................... 33
2.5 HOLDER LISTS.................................................. 33
2.6 TRANSFER AND EXCHANGE......................................... 33
2.7 REPLACEMENT SECURITIES........................................ 35
2.8 OUTSTANDING SECURITIES........................................ 35
2.9 TREASURY SECURITIES........................................... 35
2.10 TEMPORARY SECURITIES.......................................... 35
2.11 CANCELLATION.................................................. 36
2.12 DEFAULTED INTEREST............................................ 36
2.13 CUSIP AND ISIN NUMBERS........................................ 36
2.14 RESTRICTIVE LEGENDS........................................... 36
2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY..................... 38
2.16 SPECIAL TRANSFER PROVISIONS................................... 39
ARTICLE III REDEMPTION; OFFER TO PURCHASE................................ 43
3.1 NOTICES TO TRUSTEE............................................ 43
3.2 SELECTION OF SECURITIES TO BE REDEEMED........................ 43
3.3 NOTICE OF REDEMPTION.......................................... 43
3.4 EFFECT OF NOTICE OF REDEMPTION................................ 44
3.5 DEPOSIT OF REDEMPTION PRICE................................... 44
3.6 SECURITIES REDEEMED IN PART................................... 45
3.7 OFFER TO PURCHASE............................................. 45
ARTICLE IV COVENANTS..................................................... 46
4.1 PAYMENT OF SECURITIES......................................... 46
4.2 MAINTENANCE OF OFFICE OR AGENCY............................... 46
4.3 LIMITATION ON RESTRICTED PAYMENTS............................. 47
4.4 LIMITATION ON INDEBTEDNESS.................................... 50
4.5 CORPORATE EXISTENCE........................................... 53
4.6 PAYMENT OF TAXES AND OTHER CLAIMS............................. 53
4.7 MAINTENANCE OF PROPERTIES AND INSURANCE....................... 53
4.8 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT..................... 54
4.9 COMPLIANCE WITH LAWS.......................................... 54
4.10 COMMISSION REPORTS AND REPORTS TO HOLDERS..................... 54
4.11 WAIVER OF STAY, EXTENSION OR USURY LAWS....................... 55
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4.12 LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES... 55
4.13 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES........................................ 57
4.14 ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES............ 58
4.15 LIMITATION ON LIENS........................................... 59
4.16 REPURCHASE OF NOTES UPON CHANGE OF CONTROL.................... 60
4.17 LIMITATION ON ASSET SALES..................................... 61
4.18 LIMITATION ON BUSINESS ACTIVITIES............................. 62
4.19 LIMITATION ON IMPAIRMENT OF SECURITY INTEREST................. 62
4.20 EVENTS OF LOSS................................................ 62
4.21 ESCROW OF PROCEEDS TO BE USED FOR XXXXXXX CITY FACILITY....... 63
ARTICLE V SUCCESSOR CORPORATION.......................................... 63
5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS...................... 63
5.2 SUCCESSOR CORPORATION SUBSTITUTED............................. 65
ARTICLE VI DEFAULT AND REMEDIES.......................................... 66
6.1 EVENTS OF DEFAULT............................................. 66
6.2 ACCELERATION.................................................. 68
6.3 OTHER REMEDIES................................................ 68
6.4 WAIVER OF PAST DEFAULTS; RESCISSION OF ACCELERATION........... 68
6.5 CONTROL BY MAJORITY........................................... 69
6.6 LIMITATION ON SUITS........................................... 69
6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.......................... 69
6.8 COLLECTION SUIT BY TRUSTEE.................................... 70
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.............................. 70
6.10 PRIORITIES.................................................... 70
6.11 UNDERTAKING FOR COSTS......................................... 71
6.12 RESTORATION OF RIGHTS AND REMEDIES............................ 71
6.13 RIGHTS AND REMEDIES CUMULATIVE................................ 71
ARTICLE VII TRUSTEE...................................................... 71
7.1 DUTIES OF TRUSTEE............................................. 71
7.2 RIGHTS OF TRUSTEE............................................. 73
7.3 INDIVIDUAL RIGHTS OF TRUSTEE.................................. 74
7.4 TRUSTEE'S DISCLAIMER.......................................... 74
7.5 NOTICE OF DEFAULT............................................. 74
7.6 REPORTS BY TRUSTEE TO HOLDERS................................. 75
7.7 COMPENSATION AND INDEMNITY.................................... 75
7.8 REPLACEMENT OF TRUSTEE........................................ 76
7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.............................. 77
7.10 ELIGIBILITY; DISQUALIFICATION................................. 77
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER.......... 77
7.12 DIRECTION TO TRUSTEE.......................................... 78
ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE.......................... 78
8.1 TERMINATION OF THE ISSUER'S OBLIGATIONS....................... 78
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8.2 LEGAL DEFEASANCE AND COVENANT DEFEASANCE...................... 79
8.3 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE......... 80
8.4 APPLICATION OF TRUST MONEY.................................... 82
8.5 REPAYMENT TO THE ISSUER....................................... 82
8.6 REINSTATEMENT................................................. 83
ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS........................... 83
9.1 WITHOUT CONSENT OF HOLDERS.................................... 83
9.2 WITH CONSENT OF HOLDERS....................................... 84
9.3 [INTENTIONALLY OMITTED]....................................... 85
9.4 COMPLIANCE WITH TIA........................................... 85
9.5 REVOCATION AND EFFECT OF CONSENTS............................. 85
9.6 NOTATION ON OR EXCHANGE OF SECURITIES......................... 86
9.7 TRUSTEE TO SIGN AMENDMENTS, ETC............................... 86
ARTICLE X COLLATERAL..................................................... 86
10.1 RIGHTS OF THE TRUSTEE......................................... 86
10.2 COLLATERAL AND SECURITY DOCUMENTS............................. 87
10.3 APPLICATION OF PROCEEDS OF COLLATERAL......................... 87
10.4 POSSESSION, USE AND RELEASE OF COLLATERAL..................... 88
10.5 OPINION OF COUNSEL............................................ 88
10.6 FURTHER ASSURANCES............................................ 88
10.7 TRUST INDENTURE ACT REQUIREMENTS.............................. 89
10.8 SUITS TO PROTECT THE COLLATERAL............................... 89
10.9 PURCHASER PROTECTED........................................... 90
10.10 POWERS EXERCISABLE BY RECEIVER OR TRUSTEE..................... 90
10.11 RELEASE UPON TERMINATION OF OBLIGATIONS...................... 90
10.12 COLLATERAL MONIES............................................. 90
ARTICLE XI COLLATERAL SHARING WITH PARITY LIENS.......................... 91
11.1 PREREQUISITES TO INCURRING PARITY LIEN INDEBTEDNESS........... 91
11.2 EQUAL AND RATABLE LIEN SHARING BY HOLDERS OF SECURITIES AND
HOLDERS OF PARITY LIEN INDEBTEDNESS........................... 93
11.3 ENFORCEMENT................................................... 93
11.4 AMENDMENT..................................................... 93
ARTICLE XII GUARANTEE OF SECURITIES...................................... 94
12.1 UNCONDITIONAL NOTE GUARANTEE.................................. 94
12.2 LIMITATIONS ON NOTE GUARANTEES................................ 96
12.3 EXECUTION AND DELIVERY OF NOTE GUARANTEE...................... 96
12.4 RELEASE OF A SUBSIDIARY GUARANTOR............................. 96
12.5 WAIVER OF SUBROGATION......................................... 97
12.6 IMMEDIATE PAYMENT............................................. 97
12.7 NO SET-OFF.................................................... 98
12.8 NOTE OBLIGATIONS ABSOLUTE..................................... 98
12.9 NOTE OBLIGATIONS CONTINUING................................... 98
12.10 NOTE OBLIGATIONS NOT DISCHARGED............................... 98
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12.11 NOTE OBLIGATIONS REINSTATED................................... 98
12.12 NOTE OBLIGATIONS NOT AFFECTED................................. 99
12.13 WAIVER........................................................ 100
12.14 NO OBLIGATION TO TAKE ACTION AGAINST THE ISSUER............... 100
12.15 DEALING WITH THE ISSUER AND OTHERS............................ 100
12.16 DEFAULT AND ENFORCEMENT....................................... 101
12.17 [INTENTIONALLY OMITTED]....................................... 101
12.18 ACKNOWLEDGMENT................................................ 101
12.19 COSTS AND EXPENSES............................................ 101
12.20 NO MERGER OR WAIVER; CUMULATIVE REMEDIES...................... 101
12.21 SURVIVAL OF OBLIGATIONS....................................... 102
12.22 NOTE GUARANTEE IN ADDITION TO OTHER OBLIGATIONS............... 102
ARTICLE XIII [INTENTIONALLY OMITTED]..................................... 102
ARTICLE XIV MISCELLANEOUS................................................ 102
14.1 TIA CONTROLS.................................................. 102
14.2 NOTICES....................................................... 102
14.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.................. 103
14.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT............ 103
14.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION................. 104
14.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR..................... 104
14.7 LEGAL HOLIDAYS................................................ 104
14.8 GOVERNING LAW................................................. 104
14.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS................. 105
14.10 NO RECOURSE AGAINST OTHERS.................................... 105
14.11 SUCCESSORS.................................................... 105
14.12 DUPLICATE ORIGINALS........................................... 105
14.13 SEVERABILITY.................................................. 105
SIGNATURES............................................................ S-1
Exhibit A - Form of Initial Note
Exhibit B - Form of Exchange Note
Exhibit C - Form of Certificate for Transfers to Non-QIB Accredited Investors
Exhibit D - Form of Certificate for Transfers Pursuant to Regulation S
Exhibit D-1 - Form of Certificate of Beneficial Ownership of Temporary Offshore
Global Security
Exhibit E - Form of Note Guarantee
Exhibit F - Form of Escrow Agreement
Exhibit G - Form of Mortgage
Exhibit H - Form of Security Agreement
Note: This Table of Contents shall not, for any purpose, be deemed to be part of
this Indenture
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INDENTURE dated as of December 21, 2005 among VERASUN ENERGY CORPORATION, a
South Dakota corporation (the "Issuer"), VERASUN AURORA CORPORATION, a South
Dakota corporation, VERASUN FORT DODGE, LLC, a Delaware limited liability
company, VERASUN XXXXXXX CITY, LLC, a Delaware limited liability company,
VERASUN MARKETING, LLC, a Delaware limited liability company (each of the
foregoing, a "Subsidiary Guarantor" and, collectively, the "Subsidiary
Guarantors"), and XXXXX FARGO BANK, N.A., as Trustee (the "Trustee").
Each of the Issuer, the Subsidiary Guarantors and the Trustee agrees as
follows for the benefit of each other and for the equal and ratable benefit of
the Holders of the Securities:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 DEFINITIONS
"Accredited Investor" has the meaning set forth in Section 2.16(a).
"Acquired Indebtedness" means (1) Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or Indebtedness of a Restricted
Subsidiary assumed in connection with an Asset Acquisition by such Restricted
Subsidiary or (2) Indebtedness secured by a Lien encumbering an asset acquired
by a Person at the time of such acquisition.
"Actual Knowledge" means the actual fact or statement of knowing, without
any duty to make any investigation with regard thereto.
"Additional Notes" means additional Notes (other than the Initial Notes)
issued under this Indenture in accordance with clause (iii) of the fourth
paragraph of Section 2.2 and Section 4.4; provided that any such Additional
Notes, together with the Initial Notes and the Parity Lien Indebtedness, will
not collectively exceed $500,000,000 at any one time outstanding.
"Additional Notes Collateral" has the meaning set forth in Section 10.2(c).
"Adjusted Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Issuer and its Restricted Subsidiaries for such period
determined in conformity with GAAP; provided that the following items shall be
excluded in computing Adjusted Consolidated Net Income (to the extent included
in aggregate net income (or loss) and without duplication):
(1) the net income (or loss) of any Person that is not a Restricted
Subsidiary (except to the extent of the amount of dividends or distributions
paid in cash to the Issuer or any of its Restricted Subsidiaries);
(2) the net income (or loss) of any Person accrued prior to the date it
becomes a Restricted Subsidiary or is merged into or consolidated with the
Issuer or any of its Restricted Subsidiaries or all or substantially all of the
property and assets of such Person are acquired by the Issuer or any of its
Restricted Subsidiaries;
(3) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of such net income is not at the time permitted by the operation of
the terms of its charter or any instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to such Restricted Subsidiary (other
than any restriction permitted under Section 4.13(b)(vii)) except to the extent
that cash was distributed by such Restricted Subsidiary to the Issuer or another
Restricted Subsidiary during such period;
(4) any gains or losses (on an after-tax basis) attributable to sales of
assets outside the ordinary course of business of the Issuer and its Restricted
Subsidiaries;
(5) all extraordinary gains or losses;
(6) any non-cash compensation expense realized from grants of stock
appreciation or similar rights, stock options or other rights to officers,
directors or employees of the Issuer or any of its Restricted Subsidiaries;
(7) any net after-tax income or loss from discontinued operations;
(8) the cumulative effect of a change in accounting principles;
(9) any expense with respect to which, and to the extent that, the Issuer
is indemnified by a third party (but only if and to the extent that the related
indemnification payment from such third party is not included in the calculation
of the net income of the Issuer);
(10) any non-cash asset impairment charges resulting from application of
Statement of Financial Accounting Standards No. 142;
(11) any non-cash gain or loss attributable to any Commodity Agreement
until such time as it is settled, at which time the net gain or loss shall be
included;
(12) any unrealized non-cash gains or losses or charges attributable to any
Currency Agreement or Interest Rate Agreement entered into in accordance with
the terms of this Indenture (including those resulting from the application of
Statement of Financial Accounting Standards No. 133); and
(13) any non-recurring charges associated with any premium or penalty paid,
write-off of deferred financing costs or other financial recapitalization
charges in connection with redeeming or retiring any Indebtedness prior to its
Stated Maturity.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to 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 contract or otherwise.
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"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning set forth in Section 2.15(a).
"Asset Acquisition" means (1) an investment by the Issuer or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Issuer or any of its Restricted Subsidiaries or (2) an acquisition by the Issuer
or any of its Restricted Subsidiaries of the property and assets of any Person
other than the Issuer or any of its Restricted Subsidiaries that constitute
substantially all of a division or line of business of such Person.
"Asset Disposition" means the sale or other disposition by the Issuer or
any of its Restricted Subsidiaries of (1) all or substantially all of the
Capital Stock of any Restricted Subsidiary or (2) all or substantially all of
the assets that constitute a division or line of business of the Issuer or any
of its Restricted Subsidiaries.
"Asset Sale" means any sale, lease, transfer, conveyance or other
disposition (including by way of merger, consolidation and Sale and Leaseback
Transaction) in one transaction or a series of related transactions by the
Issuer or any of its Restricted Subsidiaries to any Person other than the Issuer
or any of its Restricted Subsidiaries of:
(1) all or any of the Capital Stock of any Restricted Subsidiary,
(2) all or substantially all of the property and assets of an operating
unit or business of the Issuer or any of its Restricted Subsidiaries, or
(3) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of the Issuer or any of its Restricted
Subsidiaries outside the ordinary course of business of the Issuer or such
Restricted Subsidiary, in each case, that is not governed by Article V;
provided that "Asset Sale" shall not include:
(a) sales or other dispositions of inventory, receivables and other current
assets in the ordinary course of business;
(b) sales, transfers or other dispositions of assets constituting a
Permitted Investment or Restricted Payment permitted to be made under Section
4.3;
(c) sales, transfers or other dispositions of assets with a fair market
value not in excess of $7,000,000 in any transaction or series of related
transactions (other than sales, transfers or other dispositions of any property
or assets constituting part of the Collateral);
(d) any sale, transfer, assignment or other disposition of any property
equipment that has become damaged, worn out, obsolete or otherwise unsuitable
for use in connection with the business of the Issuer or its Restricted
Subsidiaries; or
3
(e) sales or grants of licenses to use the Issuer's or any Restricted
Subsidiary's patents, trade secrets, know-how and technology to the extent that
such license does not prohibit the licensor from using the patent, trade secret,
know-how or technology.
"Attributable Debt" in respect of a Sale and Leaseback Transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
Sale and Leaseback Transaction, including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Aurora Facility" means the ethanol plant with 120 million gallons per year
production capacity located in Aurora, South Dakota and described in the
Offering Memorandum.
"Average Life" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing (1) the sum of the products of (a)
the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (2) the sum of all such principal payments.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal, state
or foreign law for the relief of debtors.
"Biodiesel" means VeraSun Biodiesel, LLC, a Delaware limited liability
company.
"Bluestem" means investment funds, advised, managed or controlled by
Bluestem Capital Company.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation or any committee thereof duly authorized to act on behalf of such
board;
(2) with respect to a partnership, the Board of Directors or other
governing body of the general partner of the partnership;
(3) with respect to a limited liability company, the Board of Directors or
other governing body, and in the absence of same, the manager or board of
managers or the managing member or members or any controlling committee thereof;
and
(4) with respect to any other Person, the board or committee of such Person
serving a similar function.
"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.
4
"Borrowing Base" means, as of any date, an amount equal to the sum of: (1)
75% of the book value of all accounts receivable owned by the Issuer and its
Restricted Subsidiaries as of such date, plus (2) 75% of the book value of all
inventory of the Issuer and its Restricted Subsidiaries, all calculated on a
consolidated basis and in accordance with GAAP. In the event that information
with respect to any element of the Borrowing Base is not available as of any
date then the most recently available information shall be utilized.
"Business Day" means any day other than a Saturday, Sunday or any other day
on which banking institutions in New York, New York or Minneapolis, Minnesota
are required or authorized by law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the Issue
Date or issued thereafter, including, without limitation, all common stock and
preferred stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means, at the time any determination is to
be made, the amount of the liability in respect of a Capitalized Lease that
would at the time be required to be capitalized on a balance sheet in accordance
with GAAP.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Issuer and its Restricted Subsidiaries, taken as a whole, to any "person"
(within the meaning of Section 13(d) of the Exchange Act);
(2) the adoption of a plan relating to the liquidation or dissolution of
the Issuer;
(3) a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) other than Permitted Holders becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of more
than 50% of the total voting power of the Voting Stock of the Issuer on a fully
diluted basis; or
(4) individuals who on the Issue Date constituted the Board of Directors
(together with any new directors whose election by the Board of Directors or
whose nomination by the Board of Directors for election by the Issuer's
shareholders was approved by a vote of at least a majority of the members of the
Board of Directors then in office who either were members of the Board of
Directors on the Issue Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board of Directors then in office.
5
"Xxxxxxx City Facility" means the ethanol plant with 110 million gallons
per year production capacity to be located in Xxxxxxx City, Iowa and described
in the Offering Memorandum.
"Collateral" means all assets, whether now owned or hereafter acquired by
the Issuer or any Restricted Subsidiary, in which a Lien is granted or purported
to be granted to the Joint Collateral Agent pursuant to the Security Documents
as security for any Secured Obligation (as defined in the Security Agreement) or
Parity Lien Obligation.
"Collateral Account" means an account of the Issuer established at Xxxxx
Fargo Bank, N.A., and pledged as Collateral to the Joint Collateral Agent, for
the benefit of the Trustee, the Holders, any holders of Parity Lien Indebtedness
and the Parity Lien Representative and into which the Net Cash Proceeds
corresponding to the Collateral sold in a Collateral Asset Sale or the Net Loss
Proceeds from an Event of Loss are deposited in accordance with Sections 4.17 or
4.20, respectively.
"Collateral Agency Agreement" means the Collateral Agency Agreement dated
the Issue Date among the Issuer, the Restricted Subsidiaries and the Joint
Collateral Agent.
"Collateral Asset Sale" means an Asset Sale consisting of the disposition
of assets constituting Collateral (including the disposition of Capital Stock of
a Subsidiary which results in the disposition of assets constituting
Collateral).
"Collateral Investments" means:
(1) Treasury Securities;
(2) investment in time deposit accounts, certificates of deposit and money
market deposits maturing not later than one year from the date of issuance or
creation, in each case, entitled to U.S. Federal deposit insurance for the full
amount thereof or issued by a bank or trust company (including the Joint
Collateral Agent or the Escrow Agent or an Affiliate of the Joint Collateral
Agent or the Escrow Agent, as the case may be) that is organized under the laws
of the United States of America or any State thereof having capital, surplus and
undivided profits aggregating in excess of $500,000,000; and
(3) investments in commercial paper maturing not later than 270 days from
the date of issuance and having, at the date of acquisition, a rating no lower
than A-l from S&P, P-l from Moody's or F-l from Fitch Ratings Ltd.
"Collateral Monies" means all cash and Collateral Investments received by
the Joint Collateral Agent:
(1) upon the release of Collateral from the Note Liens or the Security
Documents or from the Parity Liens, including all proceeds of Collateral Asset
Sales and all monies received in respect of the principal of all purchase money,
governmental and other obligations;
(2) as Net Loss Proceeds;
6
(3) pursuant to the Security Documents;
(4) as proceeds of any sale or other disposition of all or any part of the
Collateral by or on behalf of the Joint Collateral Agent or any collection,
recovery, receipt, appropriation or other realization of or from all or any part
of the Collateral pursuant to this Indenture or any of the Security Documents or
otherwise; or
(5) for application as provided in the relevant provisions of this
Indenture or any Security Document for which disposition is not otherwise
specifically provided for in this Indenture or in any Security Document.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, with respect to the
Commission's duties under the TIA, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the TIA, then the body performing such duties at such time.
"Commodity Agreement" means any forward contract, commodity swap agreement,
commodity futures contract, commodity option agreement or other similar
agreement or arrangement.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income:
(1) Fixed Charges;
(2) income taxes;
(3) depreciation expense;
(4) amortization expense;
(5) all other non-cash items (including non-cash asset impairment charges
and amortization of pre-paid cash expenses that were paid in a prior period)
reducing Adjusted Consolidated Net Income (other than items that shall require
cash payment within twelve months of the Transaction Date and for which an
accrual or reserve is, or is required by GAAP to be, made (except for
restructuring charges, in which case, Consolidated EBITDA shall be increased by
an amount equal to the portion of such charges which do not reflect a cash
expense during the period), provided that any such cash payment (except for any
cash payment related to restructuring charges) made after such twelve-month
period shall be deducted from net income in the calculation of Consolidated
EBITDA for the Four Quarter Period in which such payment occurs), less all
non-cash items increasing Adjusted Consolidated Net Income (other than items
which represent the reversal of an accrual or reserve for anticipated cash
charges in any prior period), all as determined on a consolidated basis for the
Issuer and its Restricted Subsidiaries in conformity with GAAP; and
7
(6) any non-capitalized transaction costs incurred in connection with
actual, proposed or abandoned financings, acquisitions or divestitures,
including, but not limited to, any earn-out or similar expense in connection
with acquisitions or dispositions and financing and refinancing fees and costs
incurred in connection with the offering of the Securities and related
transactions;
provided that, if any Restricted Subsidiary is not a Wholly Owned Restricted
Subsidiary, Consolidated EBITDA shall be reduced (to the extent not otherwise
reduced in accordance with GAAP) by an amount equal to (A) the amount of the
Adjusted Consolidated Net Income attributable to such Restricted Subsidiary
multiplied by (B) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period by the Issuer or
any of its Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate amount
of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs (gains) associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Issuer or any of its
Restricted Subsidiaries); imputed interest with respect to Attributable Debt;
and all but the principal component of rentals in respect of Capitalized Lease
Obligations paid, in each case, accrued or scheduled to be paid or to be accrued
by the Issuer and its Restricted Subsidiaries during such period, less interest
income for such period; excluding, however, (1) any amount of such interest of
any Restricted Subsidiary if the net income of such Restricted Subsidiary is
excluded in the calculation of Adjusted Consolidated Net Income pursuant to
clause (3) of the definition thereof (but only in the same proportion as the net
income of such Restricted Subsidiary is excluded from the calculation of
Adjusted Consolidated Net Income pursuant to clause (3) of the definition
thereof) and (2) any premiums, fees and expenses (and any amortization thereof)
payable in connection with the offering of the Securities, all as determined on
a consolidated basis (without taking into account Unrestricted Subsidiaries) in
conformity with GAAP.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at Xxxxx Fargo Bank, N.A., Corporate Trust Services, Xxxxx Xxxxxx &
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000; Attn: VeraSun Administrator.
"Covenant Defeasance" has the meaning set forth in Section 8.2(c).
"Credit Agreement" means the $30,000,000 borrowing base operating line of
credit, with a $10,000,000 sublimit for letters of credit, dated as of the Issue
Date, between the Issuer and First National Bank of Omaha, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and, in each case, as amended, modified, renewed,
refunded, replaced or refinanced from time to time, including any agreement:
(1) extending or shortening the maturity of any Indebtedness incurred
thereunder or contemplated thereby;
8
(2) adding or deleting borrowers or guarantors thereunder;
(3) increasing the amount of indebtedness incurred thereunder or available
to be borrowed thereunder; or
(4) otherwise altering the terms and conditions thereof.
"Credit Facilities" means one or more debt facilities (including, without
limitation, the Credit Agreement), commercial paper facilities or indentures
providing for revolving credit loans, term loans, notes, or other financing or
letters of credit or other credit facilities, in each case, as amended,
modified, renewed, refunded, replaced or refinanced, from time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depository" shall mean The Depository Trust Company, New York, New York,
or a successor thereto registered under the Exchange Act or other applicable
statute or regulation.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (1) required to be redeemed prior to
the Stated Maturity of the Securities, (2) redeemable at the option of the
holder of such class or series of Capital Stock at any time prior to the Stated
Maturity of the Securities or (3) convertible into or exchangeable for Capital
Stock referred to in clause (1) or (2) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Securities; provided that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of the Securities shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Sections 4.16 and 4.17
and such Capital Stock specifically provides that such Person shall not
repurchase or redeem any such stock pursuant to such provision prior to the
Issuer's repurchase of such Securities as are required to be repurchased
pursuant to Sections 4.16 and 4.17.
"Domestic Subsidiary" means any Subsidiary of the Issuer that is not a
Foreign Subsidiary.
"Equally and Ratably" means, in reference to sharing of Liens, guarantees,
supporting obligations or loss sharing rights or proceeds thereof as between the
holders of Note Obligations, on the one hand, and holders of Parity Lien
Obligations, on the other hand, that such Liens, guarantees, supporting
obligations or loss sharing rights or proceeds:
9
(1) shall be allocated and distributed first to the Trustee for account of
the Holders, on the one hand, and to an agent or representative appointed by and
acting as Paying Agent for the holders of Parity Lien Indebtedness, on the other
hand, ratably in proportion to the principal of and interest and premium (if
any) outstanding on the Securities when the allocation or distribution is made,
on the one hand, and the principal of and interest and premium (if any)
outstanding on the Parity Lien Indebtedness when the allocation or distribution
is made, on the other hand; and, thereafter,
(2) shall be allocated and distributed (if any remain after payment in full
of all of the principal of and interest and premium (if any) on the Securities
and the Parity Lien Indebtedness) to the Trustee for account of the holders of
any remaining Note Obligations, on the one hand, and to such Paying Agent or
other agent for account of the holders of any remaining Parity Lien Obligations,
on the other hand, ratably in proportion to the aggregate unpaid amount of such
remaining Note Obligations due and demanded (with written notice to the Trustee
and the Joint Collateral Agent) prior to the date such distribution is made, on
the one hand, and the aggregate unpaid amount of such remaining Parity Lien
Obligations due and demanded (with written notice to the Trustee and the Joint
Collateral Agent) prior to the date such distribution is made, on the other
hand.
"Escrow Agent" means Xxxxx Fargo Bank, N.A., as escrow agent under the
Escrow Agreement.
"Escrow Agreement" means that certain Security and Escrow Agreement, dated
as of the Issue Date, among the Issuer, the Trustee, the Joint Collateral Agent
and the Escrow Agent in substantially the form attached hereto as Exhibit F, as
amended, modified, restated, supplemented or replaced from time to time.
"Escrow Account" has the meaning set forth in the Escrow Agreement.
"Event of Default" has the meaning set forth in Section 6.1.
"Event of Loss" means, with respect to any Collateral, (1) loss,
destruction or damage of such Collateral, (2) condemnation, seizure or taking by
exercise of the power of eminent domain or otherwise of such Collateral, or
confiscation of such Collateral or the requisition of the use of such
Collateral, or (3) settlement in lieu of clause (2) above.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"Exchange Notes" means the notes issued in the Exchange Offer pursuant to
the Indenture.
"Exchange Offer" has the meaning set forth for such term in the
Registration Rights Agreement.
"fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing
10
buyer under no compulsion to buy, as determined in good faith by the Board of
Directors, whose determination shall be conclusive if evidenced by a resolution
of the Board of Directors.
"Fixed Charge Coverage Ratio" means, for any Person on any Transaction
Date, the ratio of (1) the aggregate amount of Consolidated EBITDA for the then
most recent four fiscal quarters prior to such Transaction Date for which
internal financial statements are available (the "Four Quarter Period") to (2)
the aggregate Fixed Charges during such Four Quarter Period. In making the
foregoing calculation:
(a) pro forma effect shall be given to any Indebtedness Incurred or repaid
during the period (the "Reference Period") commencing on the first day of the
Four Quarter Period and ending on the Transaction Date (other than Indebtedness
Incurred or repaid under a revolving credit agreement or similar arrangement) in
each case as if such Indebtedness had been Incurred or repaid on the first day
of such Reference Period;
(b) Consolidated Interest Expense attributable to interest on any
Indebtedness (whether existing or being Incurred) computed on a pro forma basis
and bearing a floating interest rate shall be computed as if the rate in effect
on the Transaction Date (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months or, if shorter, at least equal to the remaining term
of such Indebtedness) had been the applicable rate for the entire period;
(c) pro forma effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to the application of proceeds
of any Asset Disposition) that occur during such Reference Period as if they had
occurred and such proceeds had been applied on the first day of such Reference
Period, including giving effect to expense and cost reductions, and other
operating improvements reasonably expected to be realized in connection with
that acquisition, as determined in the good faith and reasonable judgment of the
chief financial officer or similar principal financial officer of the Issuer
(regardless of whether those cost savings could then be reflected in pro forma
financial statements under GAAP, Regulation S-X promulgated by the Commission or
any other regulation or policy of the Commission);
(d) pro forma effect shall be given to asset dispositions, asset
acquisitions (including giving pro forma effect to the application of proceeds
of any asset disposition) that have been made by any Person that has become a
Restricted Subsidiary or has been merged with or into the Issuer or any
Restricted Subsidiary during such Reference Period and that would have
constituted Asset Dispositions or Asset Acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary as if such asset
dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions
that occurred on the first day of such Reference Period, including giving effect
to expense and cost reductions, and other operating improvements reasonably
expected to be realized in connection with that acquisition, as determined in
the good faith and reasonable judgment of the chief financial officer of the
Issuer or similar principal financial officer of the Issuer (regardless of
whether those cost savings could then be reflected in pro forma financial
statements under GAAP, Regulation S-X promulgated by the Commission or any other
regulation or policy of the Commission); provided that to the extent that clause
(c) or (d) of this sentence requires that pro forma effect be given to an Asset
Acquisition or Asset Disposition, such pro forma calculation shall be based upon
the four fiscal quarters immediately
11
preceding the Transaction Date of the Person, or division, plant, unit or line
of business of the Person, that is acquired or disposed for which financial
information is available; provided further that if an entity, division, plant,
unit or line of business acquired commenced and completed commercial operations
for one full fiscal quarter during such four fiscal quarters then such pro forma
calculation shall be based on the annualized results of commercial operations of
such entity, plant, unit, division or line of business since the date it began
commercial operations; and
(e) pro forma effect shall be given to any entity, division, plant, unit or
line of business that commenced and completed commercial operations for at least
one full fiscal quarter during such Reference Period as if such entity,
division, plant, unit or line of operations commenced commercial operations on
the first day of such Reference Period and such pro forma calculation shall be
based on the annualized results of commercial operations of such entity, plant,
unit, division or line of business since the date it began commercial
operations.
"Fixed Charges" means, with respect to any Person for any period, the sum,
without duplication, of:
(1) Consolidated Interest Expense; plus
(2) the amount of all dividend payments on any series preferred stock of
such Person or any of its Restricted Subsidiaries (other than dividends payable
solely in Capital Stock of such Person or such Restricted Subsidiary (other than
Disqualified Stock) or to such Person or a Restricted Subsidiary of such Person)
paid, accrued or scheduled to be paid or accrued during such period.
"Foreign Subsidiary" means any Subsidiary of the Issuer that is an entity
which is a controlled foreign corporation under Section 957 of the Internal
Revenue Code.
"Fort Dodge Facility" means the ethanol plant with 110 million gallons per
year production capacity located in Fort Dodge, Iowa and described in the
Offering Memorandum.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principals Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity or entities as have been approved by a significant segment of the
accounting profession in the United States, which are in effect from time to
time.
"Global Security" has the meaning set forth in Section 2.1.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (1) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (2) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to
12
protect such obligee against loss in respect thereof (in whole or in part);
provided that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Holder" means a holder of any Securities.
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness;
provided that (1) any Indebtedness of a Person existing at the time such Person
becomes a Restricted Subsidiary shall be deemed to be incurred by such
Restricted Subsidiary at the time it becomes a Restricted Subsidiary and (2)
neither the accrual of interest nor the accretion of original issue discount nor
the payment of interest in the form of additional Indebtedness (to the extent
provided for when the Indebtedness on which such interest is paid was originally
issued) shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication):
(1) all indebtedness of such Person for borrowed money;
(2) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(3) all obligations of such Person in respect of letters of credit or other
similar instruments (including reimbursement obligations with respect thereto,
but excluding obligations with respect to letters of credit (including trade
letters of credit) securing obligations (other than obligations described in
clause (1) or (2) above or clause (5), (6) or (7) below) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed
no later than the third Business Day following receipt by such Person of a
demand for reimbursement);
(4) all obligations of such Person to pay the deferred and unpaid purchase
price of any 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 services, except Trade Payables;
(5) all Capitalized Lease Obligations and Attributable Debt;
(6) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person;
provided that the amount of such Indebtedness shall be the lesser of (a) the
fair market value of such asset at such date of determination and (b) the amount
of such Indebtedness;
(7) all Indebtedness of other Persons Guaranteed by such Person to the
extent such Indebtedness is Guaranteed by such Person;
13
(8) to the extent not otherwise included in this definition, obligations
under Commodity Agreements, Currency Agreements and Interest Rate Agreements
(other than Commodity Agreements, Currency Agreements and Interest Rate
Agreements entered into in the ordinary course of business and not for
speculative purposes and entered into to protect the Issuer or its Restricted
Subsidiaries against fluctuations in commodity prices, foreign currency exchange
rates or interest rates and that do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in commodity
prices, foreign currency exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder); and
(9) all Disqualified Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Stock being equal to the greater
of its voluntary or involuntary liquidation preference and its maximum fixed
repurchase price, but excluding accrued dividends, if any.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided that:
(a) the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP, and (b) Indebtedness shall not
include: (x) any liability for federal, state, local or other taxes, (y)
performance, surety or appeal bonds provided in the ordinary course of business
or (z) agreements providing for indemnification, adjustment of purchase price or
similar obligations, or Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Issuer or any of its
Restricted Subsidiaries pursuant to such agreements, in any case, Incurred in
connection with the disposition of any business, assets or a Subsidiary (other
than Guarantees of Indebtedness Incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition), so long as the principal amount does not exceed the
gross proceeds actually received by the Issuer or any Restricted Subsidiary in
connection with such disposition.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Initial Notes" means the $210,000,000 in aggregate principal amount of the
9 7/8% Senior Secured Notes due 2012 of the Issuer issued on the Issue Date and
authenticated and delivered under this Indenture pursuant to Section 2.2.
"Institutional Accredited Investor" has the meaning set forth in Section
2.16(a).
"Initial Subsidiary Guarantors" means VeraSun Aurora Corporation, VeraSun
Xxxxxxx City, LLC, VeraSun Fort Dodge, LLC and VeraSun Marketing, LLC, in each
case, together with its successors.
"Interest Payment Date" means each June 15 and December 15, beginning June
15, 2006.
14
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"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 or suppliers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable, prepaid expenses or deposits on the balance sheet of the
Issuer or its Restricted Subsidiaries and endorsements for collection or deposit
arising in the ordinary course of business) or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
such Person and shall include (1) the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary and (2) the retention of the Capital Stock (or any
other Investment) by the Issuer or any of its Restricted Subsidiaries of (or in)
any Person that has ceased to be a Restricted Subsidiary. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.3, (a) the amount of or a
reduction in an Investment shall be equal to the fair market value thereof at
the time such Investment is made or reduced and (b) in the event the Issuer or a
Restricted Subsidiary makes an Investment by transferring assets to any Person
and as part of such transaction receives Net Cash Proceeds, the amount of such
Investment shall be the fair market value of the assets less the amount of Net
Cash Proceeds so received, provided that the Net Cash Proceeds are applied in
accordance with clause (b)(i) or (b)(ii) of Section 4.17.
"Issue Date" means December 21, 2005, the date of original issuance of the
Initial Notes.
"Issuer" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter shall mean such successor
Person.
"Joint Collateral Agent" means a bank or trust company that:
(1) is authorized to exercise corporate trust powers;
(2) is reasonably satisfactory to the Trustee; and
(3) has been appointed by the Issuer and has agreed, pursuant to the
Collateral Agency Agreement, to act as collateral agent for the equal and
ratable benefit of all present and future Holders and holders of Parity Lien
Indebtedness, whenever incurred, and also for the benefit of the present and
future holders of all other Note Obligations and Parity Lien Obligations, in its
capacity as such collateral agent, and any successor in such capacity.
"Joint Venture" means a corporation, partnership or other entity (other
than a Subsidiary) engaged in a Permitted Business in respect of which the
Issuer or a Restricted Subsidiary beneficially owns at least 25% of the shares,
interests or other equivalents of Capital Stock of such entity.
"Legal Defeasance" has the meaning set forth in Section 8.2(b).
15
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof or any agreement to
give any security interest).
"Maturity Date" means December 15, 2012.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means:
(1) with respect to any Asset Sale, the proceeds of such Asset Sale in the
form of cash or Temporary Cash Investments, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or Temporary
Cash Investments and proceeds from the conversion of other property received
when converted to cash or Temporary Cash Investments, net of:
(a) brokerage commissions and other fees and expenses (including fees
and expenses of counsel and investment bankers) related to such Asset Sale;
(b) provisions for all taxes paid or payable as a result of such Asset
Sale without regard to the consolidated results of operations of the Issuer
and its Restricted Subsidiaries, taken as a whole;
(c) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either (x) is secured by a
Lien on the property or assets sold or (y) is required to be paid as a
result of such sale; and
(d) appropriate amounts to be provided by the Issuer or any Restricted
Subsidiary 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, all as determined in conformity with GAAP; and
(2) with respect to any issuance or sale of Capital Stock, the proceeds of
such issuance or sale in the form of cash or Temporary Cash Investments,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or Temporary Cash Investments and proceeds from the
conversion of other property received when converted to cash or Temporary Cash
Investments, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Net Loss Proceeds" means, with respect to any Event of Loss, the proceeds
in the form of (a) cash or Temporary Cash Investments and (b) insurance
proceeds, condemnation awards or damages awarded by any judgment, in each case,
received by the Issuer or any of its Subsidiaries from such Event of Loss, net
of:
16
(1) reasonable out-of-pocket expenses and fees relating to such Event of
Loss (including without limitation, legal, accounting and appraisal or insurance
adjuster fees);
(2) taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions and any
tax sharing arrangements;
(3) any repayment of Indebtedness that is secured by, or directly related
to, the property or assets that are the subject of such Event of Loss; and
(4) appropriate amounts to be provided by the Issuer or any Restricted
Subsidiary, against any liabilities associated with such Event of Loss,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Event of Loss, all as
determined in conformity with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Issuer nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the holders
of the Indebtedness may have to take enforcement action against the relevant
Unrestricted Subsidiary) would permit upon notice, lapse of time or both any
holder of any other Indebtedness of the Issuer or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment of the Indebtedness to be accelerated or payable prior to its Stated
Maturity; and
(3) as to which the lenders have been notified in writing that they shall
not have any recourse to the stock or assets of the Issuer or any of its
Restricted Subsidiaries.
"Non-U.S. Person" means a Person that is not a "U.S. Person" (as defined in
Regulation S).
"Note Guarantee" means any Guarantee of the obligations of the Issuer under
this Indenture and the Securities by any Subsidiary Guarantor.
"Note Lien" means, to the extent securing Note Obligations, a Lien granted
by the Security Documents as security for Note Obligations or, to the extent
securing Note Obligations and Parity Lien Obligations, a Lien granted by the
Security Documents as security for Note Obligations and Parity Lien Obligations.
"Note Obligations" means the Securities, the Note Guarantees and all other
Obligations of any Obligor under the Securities, the Note Guarantees and the
Security Documents in respect of the Securities and the Note Guarantees.
17
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Obligors" means the Issuer, the Subsidiary Guarantors and each other
Subsidiary which has granted the Joint Collateral Agent a Lien upon any of its
property as security for any Note Obligations or Parity Lien Obligations.
"Offer to Purchase" has the meaning set forth in Section 3.7.
"Offering Memorandum" means the Offering Memorandum dated December 21, 2005
relating to the offering of the Initial Notes issued on the Issue Date.
"Officer" means, with respect to any Person, the chairman of the board, the
principal executive officer, the president, any vice president, the chief
financial officer, the controller, the treasurer or the secretary of such
Person.
"Officers' Certificate" means a certificate signed by two Officers, at
least one of whom shall be the principal executive officer, principal accounting
officer, a vice president, the treasurer or the principal financial officer of
the Issuer and delivered to the Trustee.
"Offshore Global Securities" has the meaning provided in Section 2.1.
"Offshore Physical Securities" has the meaning provided in Section 2.1.
"Opinion of Counsel" means a written opinion from legal counsel, which
opinion and counsel are reasonably acceptable to the Trustee.
"Parity Lien" means, to the extent securing Parity Lien Obligations, a Lien
that (1) is granted by a security agreement or similar agreement and held by the
Joint Collateral Agent as security for Note Obligations and Parity Lien
Obligations and (2) is not subordinated, by contract or pursuant to a judicial
order requiring equitable subordination, to any other Lien.
"Parity Lien Indebtedness" means the principal of and interest and premium
(if any) on Indebtedness of the Issuer (other than Additional Notes) permitted
to be incurred if the condition set forth in the first sentence of clause (a) of
Section 4.4 is satisfied; provided that:
(1) such Parity Lien Indebtedness is Guaranteed by each Restricted
Subsidiary which, on the date of incurrence of such Indebtedness, is obligated
as a Subsidiary Guarantor under a Note Guarantee;
(2) such Parity Lien Indebtedness is secured when incurred, Equally and
Ratably with the Securities and all other Parity Lien Indebtedness, by perfected
Liens (to the extent the Note Liens are perfected) duly granted to the Joint
Collateral Agent by the Issuer and each Restricted Subsidiary upon all of the
Collateral (other than the Escrow Account and the escrowed funds held therein),
which Liens have the same priority as the Note Liens immediately prior to the
incurrence of such Parity Lien Indebtedness;
18
(3) such Parity Lien Indebtedness is not subordinated in right of payment
to any other Indebtedness of the Issuer or any Subsidiary Guarantor;
(4) such Parity Lien Indebtedness matures no earlier than the maturity of
the Securities and requires no prepayments, sinking fund payments or offer to
purchase (except when, as and to the extent an Offer to Purchase the Securities
is required by the provisions described under Sections 4.16, 4.17 and 4.20 and
except as otherwise set forth in clause (7) below);
(5) such Parity Lien Indebtedness is governed by an indenture or agreement
which provides (for the enforceable benefit of the Trustee and Holders) that all
Note Obligations and Parity Lien Obligations shall be and are secured Equally
and Ratably by all Liens, guarantees, supporting obligations and loss sharing
rights at any time granted by the Issuer or any Subsidiary or any other Person
as security for such Indebtedness or any obligations in respect of such
Indebtedness, whether or not otherwise constituting Collateral (except that the
Parity Liens shall not extend to the Escrow Account and the escrowed funds held
therein), that all such Liens, guarantees, supporting obligations and loss
sharing rights are transferred to the Joint Collateral Agent and shall be
enforceable by the Joint Collateral Agent, and that the holders of such
Indebtedness and obligations in respect of such Indebtedness consent to and
direct the Joint Collateral Agent to perform its obligations as set forth under
the Security Documents;
(6) such Parity Lien Indebtedness is incurred for the purpose of and the
proceeds are utilized to Invest in (i) cash or Temporary Cash Investments or
(ii) (x) property (both tangible and intangible), plant and equipment of the
Issuer and its Restricted Subsidiaries, whether existing on the Issue Date or
thereafter acquired, including, without limitation, the property, plant and
equipment constituting the Aurora Facility, the Fort Dodge Facility and the
Xxxxxxx City Facility, (y) the Capital Stock of any Restricted Subsidiary of the
Issuer that is a Domestic Subsidiary, whether existing on the Issue Date or
thereafter created or acquired, and 65% of the Capital Stock of any Restricted
Subsidiary of the Issuer that is a direct Foreign Subsidiary of the Issuer
whether existing on the Issue Date or thereafter created or acquired and (z)
Collateral Monies, and that is used in a Permitted Business, and each of the
Investments referred to in clause (i) and (ii) of this clause (6) become subject
to Parity Liens;
(7) to the extent the net proceeds from any such issuance of Parity Lien
Indebtedness is deposited into an escrow account (other than the Escrow Account)
pending their investment as described in clause (6) above, such net proceeds may
be utilized to the extent required by the terms of such Parity Lien Indebtedness
and to the extent not Invested as described in clause (6) above on or prior to
180 days after the date of issuance of such Parity Lien Indebtedness to, not
later than the next Business Day following such 180th day, commence an Offer to
Purchase such Parity Lien Indebtedness in an amount equal to the amount of such
net proceeds remaining in the escrow account at such time, at a purchase price
equal to 100% of their principal amount, plus, in each case, accrued interest
(if any) to the payment date;
(8) the security agreements in respect of such Parity Lien Indebtedness
contain provisions with respect to the release of Collateral substantially
similar and no less restrictive on the Issuer and its Restricted Subsidiaries
than the provisions of this Indenture and the Security Documents; and
19
(9) such Parity Lien Indebtedness is designated by the Issuer, in an
Officers' Certificate delivered to the Trustee on or before the date of
incurrence of such Indebtedness, as Parity Lien Indebtedness for the purposes of
this Indenture.
"Parity Lien Obligations" means Parity Lien Indebtedness and all other
Obligations of any Obligor under each indenture or agreement governing, securing
or relating to any Parity Lien Indebtedness.
"Parity Lien Representative" means the trustee or other representative of
the holders of Parity Lien Obligations who becomes a party to the Collateral
Agency Agreement.
"Paying Agent" has the meaning set forth in Section 2.3.
"Permanent Offshore Global Securities" has the meaning provided in Section
2.1.
"Permitted Business" means the business of the Issuer and its Subsidiaries
engaged in on the Issue Date and any other activities that are related,
ancillary or complementary to such business.
"Permitted Holder" means, at any time, Xxxxxx X. Xxxxxx, or any Person
controlled by Xxxxxx X. Xxxxxx, and Bluestem. In addition, any person or group
whose acquisition of beneficial ownership constitutes a Change of Control in
respect of which an Offer to Purchase is made in accordance with the
requirements of this Indenture shall thereafter, together with its Affiliates,
constitute an additional Permitted Holder.
"Permitted Investment" means:
(1) an Investment in the Issuer or a Restricted Subsidiary or a Person
which will, upon the making of such Investment, become a Restricted Subsidiary
or be merged or consolidated with or into, or transfer or convey all or
substantially all its assets to, the Issuer or a Restricted Subsidiary;
provided, however, that any such Investment that is or involves a direct or
indirect advance, loan, capital contribution, transfer, assignment, conveyance
or other disposition of any property or assets constituting all or part of the
Collateral (a) to any entity that is not an Obligor shall not be a Permitted
Investment and (b) to any entity that is an Obligor shall not be Permitted
Investment unless such property or assets shall, immediately following the
consummation of such Investment, be subject to the Note Lien to the same extent
as such property or assets were so subject immediately prior to such
consummation;
(2) Temporary Cash Investments;
(3) payroll, travel and similar advances to cover matters that are expected
at the time of such advances ultimately to be treated as expenses in accordance
with GAAP;
(4) stock, obligations or securities received in satisfaction of judgments;
(5) Commodity Agreements, Interest Rate Agreements and Currency Agreements
entered into to protect the Issuer or its Restricted Subsidiaries against
fluctuations in commodity prices, interest rates or foreign currency exchange
rates;
20
(6) loans and advances to employees and officers of the Issuer and its
Restricted Subsidiaries made in the ordinary course of business for bona fide
business purposes not to exceed $2,000,000 in the aggregate at any one time
outstanding;
(7) Investments in securities of trade creditors or customers received:
(a) pursuant to any plan of reorganization or similar arrangement upon
the bankruptcy or insolvency of such trade creditors or customers; or
(b) in settlement of delinquent obligations of, and other disputes
with, customers, suppliers and others, in each case arising in the ordinary
course of business or otherwise in satisfaction of a judgment;
(8) Investments:
(a) made by the Issuer or its Restricted Subsidiaries consisting of
consideration received in connection with an Asset Sale made in compliance
with Section 4.17; or
(b) consisting of consideration received by the Issuer or any of its
Restricted Subsidiaries in connection with a transaction that would be an
Asset Sale if it consisted of aggregate consideration received by the
Issuer or any of its Restricted Subsidiaries of $5,000,000 or more;
(9) Investments of a Person or any of its Subsidiaries existing at the time
such Person becomes a Restricted Subsidiary of the Issuer or at the time such
Person merges or consolidates with the Issuer or any of its Restricted
Subsidiaries, in either case, in compliance with this Indenture; provided that
such Investments were not made by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
of the Issuer or such merger or consolidation;
(10) repurchases of the Securities and, to the extent required as a result
of the repurchase of Securities, pro rata repurchases of Parity Lien
Indebtedness;
(11) any Investment in a Person engaged in a Permitted Business (other than
an Investment in a Subsidiary of the Issuer) having an aggregate fair market
value, taken together with all other Investments made pursuant to this clause
(11) that are at that time outstanding, not to exceed 15% of Total Assets at the
time of that Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent changes in
value); provided that such Person shall not use the proceeds of such Investment
to purchase, redeem, retire or otherwise acquire for value any shares of the
Capital Stock of the Issuer; and
(12) additional Investments (including Investments in Joint Ventures and
Unrestricted Subsidiaries) at any one time outstanding not to exceed the greater
of (a) $7,500,000 and (b) 2.5% of Total Assets; provided that, in the event of
an Investment in any Person that is not a Restricted Subsidiary, such Person
shall not use the proceeds of such Investment to purchase, redeem, retire or
otherwise acquire for value any shares of the Capital Stock of the Issuer;
21
provided, however, that with respect to any Investment, the Issuer may, in its
sole discretion allocate all or any portion of any Investment and later
re-allocate all or any portion of any Investment, to one or more of the clauses
(1) through (12) above so that the entire Investment would be a Permitted
Investment.
"Permitted Liens" means:
(1) Liens for taxes, assessments, governmental charges or claims that are
not yet delinquent or are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made;
(2) statutory and common law Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other similar Liens arising in
the ordinary course of business and with respect to amounts not yet delinquent
or being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made;
(3) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security;
(4) Liens incurred or deposits made to secure the performance of tenders,
bids, leases, statutory or regulatory obligations, bankers' acceptances, surety
and appeal bonds, government contracts, performance and return-of-money bonds
and other obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money);
(5) easements, rights-of-way, municipal and zoning ordinances and similar
charges, encumbrances, title defects or other irregularities in respect of real
property that do not materially adversely affect the value of said real property
or materially interfere with the ordinary course of business of the Issuer or
any of its Restricted Subsidiaries;
(6) leases or subleases granted to others that do not materially interfere
with the ordinary course of business of the Issuer and its Restricted
Subsidiaries, taken as a whole;
(7) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Issuer or its Restricted
Subsidiaries relating to such property or assets;
(8) any interest or title of a lessor, including Liens arising from
precautionary UCC financing statement filings, in the property subject to any
Capitalized Lease or operating lease entered into in the ordinary course of
business;
(9) Liens on property of, or on shares of Capital Stock or Indebtedness of,
any Person existing at the time such Person becomes, or becomes a part of, any
Restricted Subsidiary; provided that such Liens do not extend to or cover any
property or assets of the Issuer or any Restricted Subsidiary other than the
property or assets acquired;
22
(10) Liens in favor of the Issuer or any Restricted Subsidiary;
(11) judgment Liens arising from the rendering of a final judgment or order
against the Issuer or any Restricted Subsidiary that does not give rise to an
Event of Default, so long as any appropriate legal proceeding that may have been
duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such legal proceedings may be initiated
shall not have expired;
(12) 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;
(13) 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;
(14) Liens encumbering customary initial deposits and margin deposits, and
other Liens that are within the general parameters customary in the industry and
incurred in the ordinary course of business, in each case, securing Indebtedness
under Interest Rate Agreements, Currency Agreements or Commodity Agreements
entered into to protect the Issuer or any of its Restricted Subsidiaries from
fluctuations in interest rates, currencies or the price of commodities;
(15) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Issuer or any of
its Restricted Subsidiaries in the ordinary course of business in accordance
with the past practices of the Issuer and its Restricted Subsidiaries prior to
the Issue Date;
(16) Liens on or sales of receivables (other than Liens on receivables of
the Issuer or any Subsidiary Guarantor);
(17) Liens in the ordinary course of business securing Indebtedness not
exceeding $2,000,000 at any one time outstanding that (a) are not incurred in
connection with borrowing of money and (b) do not materially detract from the
value of the property or materially impair its use;
(18) Liens securing additional Indebtedness of the Issuer and its
Restricted Subsidiaries in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding; and
(19) Liens securing Indebtedness permitted under clause (a) (4) of Section
4.4, provided that, in the event such Indebtedness is Incurred for the purpose
of defeasing the Securities, such Lien does not cover any of the cash or cash
equivalents that are deposited with the Trustee or otherwise to defease the
Securities.
"Person" means any individual, corporation, partnership, Joint Venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Physical Securities" has the meaning provided in Section 2.1.
23
"Private Placement Legend" means the legend initially set forth on the
Initial Notes in the form set forth in the first paragraph of Section 2.14.
"QIB" means any "qualified institutional buyer" (as defined under the
Securities Act).
"Qualified Proceeds" means any of the following or any combination of the
following:
(1) Net Cash Proceeds;
(2) the fair market value of any assets (other than Investments) that are
used or useful in a Permitted Business; and
(3) the fair market value of any Capital Stock of any Person engaged in a
Permitted Business if (a) that Person is or, in connection with the receipt by
the Issuer or any Restricted Subsidiary of that Capital Stock, becomes a
Restricted Subsidiary of the Issuer; or (b) that Person is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Issuer or any Restricted Subsidiary of the
Issuer.
"Record Date" means the applicable record date specified in the Securities.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Securities.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price fixed for such redemption, payable in immediately available
funds, pursuant to this Indenture and the Securities.
"Registrar" has the meaning set forth in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated the Issue Date among the Issuer, the Initial Subsidiary Guarantors, Xxxxxx
Brothers Inc. and Xxxxxx Xxxxxxx & Co. Incorporated.
"Regulation S" means Regulation S under the Securities Act.
"Replacement Assets" means, on any date, property or assets of a nature or
type or that are used in a Permitted Business (or an Investment in a Permitted
Business); provided that, in the event that any Replacement Assets replace
assets constituting Collateral, such Replacement Assets shall constitute
Collateral and the Issuer shall, or shall cause the relevant Subsidiary to,
execute such collateral documents and other instruments and take such other
measures as shall be reasonably necessary to cause such Replacement Assets to
become subject to the Note Lien and, to the extent applicable, any Parity Lien
and to perfect each such Lien in respect of such assets, in each case, in the
manner and to the extent required under the Security Documents; provided however
that any license received as a result of the sale, transfer or other disposition
of membership interests in Biodiesel to any Person shall not constitute
Collateral to the extent such license contains non-assignment provisions that
would prevent the assignment of such license to the Joint Collateral Agent and
the fair market value of such license is not in excess of $10,000,000.
24
"Responsible Officer" means, when used with respect to the Trustee, any
managing director, director, vice president, assistant vice president, assistant
treasurer, assistant secretary, associate or any other officer within the
corporate trust department of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
shall mean, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Restricted Payment" has the meaning set forth in Section 4.3.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Security constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Issuer other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, and its successors.
"Sale and Leaseback Transaction" means a transaction whereby a Person sells
or otherwise transfers assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
such Person intends to use for substantially the same purpose or purposes as the
assets or properties sold or otherwise transferred.
"Securities" means the Initial Notes, the Exchange Notes and any Additional
Notes treated as a single class of securities, as amended or supplemented from
time to time in accordance with the terms hereof, that are issued pursuant to
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"Security Agreement" means that certain Security Agreement, dated as of the
Issue Date, among the Issuer, the Restricted Subsidiaries and the Joint
Collateral Agent.
"Security Documents" means (1) the Security Agreement, (2) the Escrow
Agreement, (3) that certain Mortgage, Assignment, Assignment of Rents, Security
Agreement, Fixture Filing and Financing Statement, dated as of the Issue Date,
by the Issuer to the Joint Collateral Agent with respect to the Fort Dodge
Facility, (4) that certain Mortgage, Assignment, Assignment of Rents, Security
Agreement, Fixture Filing and Financing Statement, dated as of the Issue Date,
by the Issuer to the Joint Collateral Agent with respect to the Aurora Facility,
(5) that certain Mortgage, Assignment, Assignment of Rents, Security Agreement,
Fixture Filing and Financing Statement, dated as of or after the Issue Date, by
the Issuer to the Joint Collateral Agent with respect to the Xxxxxxx City
Facility, (6) the Collateral Agency Agreement and (7) all other security
agreements, pledges, collateral assignments, mortgages, deeds of trust, escrow
25
agreements or other instruments evidencing or creating any security interests in
favor of the Joint Collateral Agent, for the benefit of the Trustee and the
Holders of the Securities, in all or any portion of the Collateral, in each
case, as amended, modified, restated supplemented or replaced from time to time.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (1) for the most
recent fiscal year of the Issuer, accounted for more than 10% of the
consolidated revenues of the Issuer and its Restricted Subsidiaries or (2) as of
the end of such fiscal year, was the owner of more than 10% of the consolidated
assets of the Issuer and its Restricted Subsidiaries, all as set forth on the
most recently available consolidated financial statements of the Issuer for such
fiscal year.
"Special Offer to Purchase" has the meaning set forth in Section 4.21.
"Stated Maturity" means (1) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (2) with respect to
any scheduled installment of principal of or interest on any debt security, the
date specified in such debt security as the fixed date on which such installment
is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
or one or more other Subsidiaries of such Person.
"Subsidiary Guarantor" means any Initial Subsidiary Guarantor and any other
Restricted Subsidiary of the Issuer which provides a Note Guarantee of the
Issuer's obligations under this Indenture and the Securities pursuant to Section
4.14.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter the TIA as then in effect, as amended from time to time.
"Temporary Cash Investment" means any of the following:
(1) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the United States
of America or any agency thereof, in each case, maturing within one year unless
such obligations are deposited by the Issuer (a) to defease any Indebtedness or
(b) in a collateral or escrow account or similar arrangement to prefund the
payment of interest on any indebtedness;
(2) time deposit accounts, certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof issued by a
bank or trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $100,000,000 (or the foreign
26
currency equivalent thereof) and has outstanding debt which is rated "A" (or
such similar equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act) or any money market fund sponsored by a registered broker dealer or mutual
fund distributor;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered into
with a bank or trust company meeting the qualifications described in clause (2)
above;
(4) commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate of the Issuer)
organized and in existence under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
with a rating at the time as of which any investment therein is made of "P-l"
(or higher) according to Moody's or "A-l" (or higher) according to S & P;
(5) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any political
subdivision or taxing authority thereof, and rated at least "A" by S&P or
Moody's;
(6) any mutual fund that has at least 95% of its assets continuously
invested in investments of the types described in clauses (1) through (5) above;
and
(7) overnight deposits and demand deposit accounts (in the respective local
currencies) maintained in the ordinary course of business.
"Temporary Offshore Global Securities" has the meaning provided in Section
2.1.
"Total Assets" means the total consolidated assets of the Issuer and its
Restricted Subsidiaries as shown on the Issuer's most recent consolidated
balance sheet.
"Trade Payables" means, with respect to any Person, any accounts payable or
any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness, the date such Indebtedness is to be Incurred and, with respect to
any Restricted Payment, the date such Restricted Payment is to be made.
"Treasury Securities" means any investment in obligations issued or
guaranteed by the United States government or agency thereof, in each case,
maturing not later than one year.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"UCC" means the Uniform Commercial Code as in effect, from time to time, in
the State of New York or, where applicable as to specific Collateral, any other
relevant state.
27
"Unrestricted Subsidiary" means (1) any Subsidiary of the Issuer that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below; and (2) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Issuer but excluding any Restricted Subsidiary to which any property or assets
constituting Collateral are transferred) to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any
property of, the Issuer or any Restricted Subsidiary; provided that (a) any
Guarantee by the Issuer or any Restricted Subsidiary of any Indebtedness of the
Subsidiary being so designated shall be deemed an "Incurrence" of such
Indebtedness and an "Investment" by the Issuer or such Restricted Subsidiary (or
both, if applicable) at the time of such designation; (b) either (I) the
Subsidiary to be so designated has total assets of $1,000 or less or (ii) if
such Subsidiary has assets greater than $1,000, such designation would be
permitted under Section 4.3 and (c) if applicable, the Incurrence of
Indebtedness and the Investment referred to in clause (a) of this proviso would
be permitted under Sections 4.3 and 4.4. The Board of Directors may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that (A) no
Default or Event of Default shall have occurred and be continuing at the time of
or after giving effect to such designation and (B) all Liens and Indebtedness of
such Unrestricted Subsidiary outstanding immediately after such designation
would, if Incurred at such time, have been permitted to be Incurred (and shall
be deemed to have been Incurred) for all purposes of this Indenture. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Global Securities" has the meaning provided in Section 2.1.
"U.S. Government Obligations" means securities that are (1) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the Issuer thereof at any time prior
to the Stated Maturity of the Securities, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. Physical Securities" has the meaning set forth in Section 2.1.
28
"Voting Stock" means with respect to any Person, Capital Stock of any class
or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
1.2 INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in, and made a part of, this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Issuer, any Subsidiary Guarantor
or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
1.3 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural, and words in the plural
include the singular;
(6) "will" shall be interpreted to express a command;
(7) provisions apply to successive events and transactions;
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(8) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision;
(9) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth in Section 1.1;
(10) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement or successor sections or rules
adopted by the Commission from time to time; and
(11) all references to Sections or Articles refer to Sections or
Articles in this Indenture unless otherwise indicated.
ARTICLE II
THE SECURITIES
2.1 FORM AND DATING.
The Initial Notes and the Trustee's related certificate of authentication
shall be substantially in the form set forth in Exhibit A and the Exchange Notes
and the Trustee's certificate of authentication shall be substantially in the
form set forth in Exhibit B. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Issuer and the
Trustee shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the Securities annexed hereto as
Exhibits A and B and the Note Guarantees annexed hereto as Exhibit E shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Issuer, the Subsidiary Guarantors and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Securities in registered
form, substantially in the form set forth in Exhibit A (the "U.S. Global
Securities"), registered in the name of the nominee of the Depository, deposited
with the Trustee, as custodian for the Depository, duly executed by the Issuer
and authenticated by the Trustee as hereinafter provided, and shall bear the
legends set forth in Section 2.14. The aggregate principal amount of the U.S.
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
Securities issued in exchange for interests in the U.S. Global Securities
pursuant to Section 2.15 or 2.16 may be issued in the form of physical
Securities, substantially in the form set forth in Exhibit A, (the "U.S.
Physical Securities") and shall bear the first legend set forth in Section 2.14.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Securities in registered form,
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substantially in the form set forth in Exhibit A (the "Temporary Offshore Global
Securities"), registered in the name of the nominee of the Depository, deposited
with the Trustee, as custodian for the Depository, duly executed by the Issuer
and authenticated by the Trustee as hereinafter provided, and shall bear the
legends set forth in Section 2.14. At any time on or after the 41st day after
the Issue Date, upon receipt by the Trustee, the Registrar and the Issuer of a
certificate substantially in the form set forth in Exhibit D-1, the owner of a
beneficial interest in a Temporary Offshore Global Security may exchange such
interest for an equivalent interest in one or more permanent global Securities
in registered form, substantially in the form set forth in Exhibit A (the
"Permanent Offshore Global Securities") and together with the Temporary Offshore
Global Securities, the "Offshore Global Securities"), duly executed by the
Issuer and authenticated by the Trustee, which shall be deposited with the
Trustee, as custodian for the Depository or its nominee, and the Registrar shall
reflect on its books and records the date and a decrease in the principal amount
of the Temporary Offshore Global Securities in an amount equal to the principal
amount of the beneficial interest in the Temporary Offshore Global Securities
exchanged for Permanent Offshore Global Securities. The aggregate principal
amount of the Offshore Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Securities issued in exchange for interests in the Permanent Offshore
Global Securities pursuant to Section 2.15 may be issued in the form of
permanent physical Securities in registered form (the "Offshore Physical
Securities").
The Offshore Physical Securities and the U.S. Physical Securities are
sometimes collectively herein referred to as the "Physical Securities." The U.S.
Global Securities and the Offshore Global Securities are sometimes referred to
herein as the "Global Securities."
2.2 EXECUTION AND AUTHENTICATION.
Two Officers, or an Officer and an Assistant Secretary, of the Issuer shall
sign, or one Officer shall sign and one Officer or an Assistant Secretary of the
Issuer (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Securities for the Issuer by
manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the time
of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall nevertheless be valid.
A Security shall not be valid until an authorized signatory of the Trustee
signs the certificate of authentication on the Security by manual signature. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue on the
Issue Date in the aggregate principal amount equal to $210,000,000, (ii)
Exchange Notes and (iii) subject to the Issuer's compliance with Sections 4.4
and 10.2(c) and provided that the Securities and the Parity Lien Indebtedness,
collectively, shall not exceed $500,000,000 at any one time outstanding, one or
more series of Additional Notes for original issue after the Issue Date (such
Additional Notes
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to be substantially in the form of Exhibit A), in each case, upon written orders
of the Issuer in the form of an Officers' Certificate, which Officers'
Certificate shall, in the case of any issuance pursuant to clause (iii) above,
certify that such issuance is in compliance with Sections 4.4, 4.15 and 10.2(c);
provided, however, that after giving effect to the issuance of such Additional
Notes and the taking of the actions referred to in Section 10.2(c), the Note
Liens securing the Note Obligations shall be of the same priority as the Note
Liens securing the Note Obligations immediately prior to such issuance. In
addition, each such Officers' Certificate shall specify the amount of Securities
to be authenticated, the date on which the Securities are to be authenticated,
whether the Securities are to be Initial Notes issued under clause (i) of the
preceding sentence, Exchange Notes or Additional Notes issued under clause (iii)
of the preceding sentence and the aggregate principal amount of Securities
outstanding on the date of authentication, and shall further specify the amount
of such Securities to be issued as a Global Security or Physical Securities.
Such Securities shall initially be in the form of one or more Global Securities,
which (i) shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, the Securities to be issued, (ii) shall be
registered in the name of the Depository for such Global Security or Securities
or its nominee and (iii) shall be held by the Trustee as custodian for the
Depository or its nominee or pursuant to the Depository's instruction. All
Securities issued under this Indenture shall vote and consent together on all
matters as one class and no series of Securities shall have the right to vote or
consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Issuer to authenticate the Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuer and Affiliates of the Issuer.
The Securities shall be issuable only in registered form, without coupons,
in denominations of $2,000 of principal amount and integral multiples of $1,000.
2.3 REGISTRAR AND PAYING AGENT.
The Issuer shall maintain an office or agency where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Securities may be presented or surrendered for payment (the
"Paying Agent") and (c) notices and demands to or upon the Issuer in respect of
the Securities and this Indenture may be served. The Issuer may also from time
to time designate one or more other offices or agencies where the Securities may
be presented or surrendered for any or all such purposes and may from time to
time rescind such designations. The Issuer may act as its own Registrar or
Paying Agent except that for the purposes of Articles III and VIII and Sections
4.16, 4.17 and 4.20, neither the Issuer nor any Affiliate of the Issuer shall
act as Paying Agent. The Registrar shall keep a register of the Securities and
of their transfer and exchange. The Issuer, upon notice to the Trustee, may have
one or more co-Registrars and one or more additional Paying Agents reasonably
acceptable to the Trustee. The term "Paying Agent" includes any additional
Paying Agent. The Issuer hereby initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has been
appointed.
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The Issuer shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which agreement shall implement the provisions of
this Indenture that relate to such Agent. The Issuer shall notify the Trustee,
in advance, of the name and address of any such Agent. If the Issuer fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such.
2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.
The Issuer shall require each Paying Agent other than the Trustee to agree
in writing that, subject to Article X, each Paying Agent shall hold in trust for
the benefit of Holders or the Trustee all assets held by the Paying Agent for
the payment of principal of, premium, if any, or interest on, the Securities
(whether such assets have been distributed to it by the Issuer or any other
obligor on the Securities), and shall notify the Trustee of any Default or Event
of Default by the Issuer (or any other obligor on the Securities) in making any
such payment. If the Issuer or a Subsidiary acts as Paying Agent, it shall
segregate such assets and hold them as a separate trust fund. The Issuer at any
time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default or payment Event of Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Issuer to the Paying Agent, the Paying Agent shall have no further liability for
such assets.
2.5 HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which list
may be conclusively relied upon by the Trustee.
2.6 TRANSFER AND EXCHANGE.
(a) Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the
Securities surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Issuer and the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfers and exchanges, the Issuer shall execute and the Trustee shall
authenticate Securities at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Issuer may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchanges or
transfers pursuant to Section 2.2, 2.10, 3.6, 3.7, 4.16, 4.17, 4.20, 4.21 or
9.6). The
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Registrar or co-Registrar shall not be required to register the transfer of or
exchange of any Security (i) during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Securities and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Security being redeemed in part, and (iii) during an Offer to
Purchase made pursuant to Section 4.16, 4.17, 4.20 or 4.21 if such Security is
tendered pursuant to such Offer to Purchase and not withdrawn. A Global Security
may be transferred, in whole but not in part, in the manner provided in this
Section 2.6(a), only to a nominee of the Depository for such Global Security, or
to the Depository, or a successor Depository for such Global Security selected
or approved by the Issuer, or to a nominee of such successor Depository.
(b) If at any time the Depository for the Global Security or Securities
notifies the Issuer that it is unwilling or unable to continue as Depository for
such Global Security or Securities or the Issuer become aware that the
Depository has ceased to be a clearing agency registered under the Exchange Act,
the Issuer shall appoint a successor Depository with respect to such Global
Security or Securities. If a successor Depository for such Global Security or
Securities has not been appointed within 90 days after the Issuer receives such
notice or becomes aware of such ineligibility, the Issuer shall execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Physical Securities, shall authenticate and deliver, Physical
Securities, in an aggregate principal amount at maturity equal to the principal
amount at maturity of the Global Security representing such Securities, in
exchange for such Global Security. The Issuer shall reimburse the Registrar, the
Depository and the Trustee for expenses they incur in documenting such exchanges
and issuances of Securities.
The Issuer may at any time and in its sole discretion determine that the
Securities shall no longer be represented by such Global Security or Securities.
In such event the Issuer shall execute, and the Trustee, upon receipt of a
written order for the authentication and delivery of Physical Securities in
exchange in whole or in part for such Global Security or Securities accompanied
by an Officers' Certificate, shall authenticate and deliver Physical Securities
in an aggregate principal amount equal to the principal amount of such Global
Security or Securities in exchange for such Global Security or Securities.
In any exchange provided for in any of the preceding two paragraphs, the
Issuer shall execute and the Trustee shall authenticate and deliver Physical
Securities in authorized denominations. Upon the exchange of a Global Security
for Physical Securities, such Global Security shall be cancelled by the Trustee.
Physical Securities issued in exchange for a Global Security pursuant to this
Section 2.6(b) shall be registered in such names and in such authorized
denominations as the Depository for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the Persons
in whose names such Securities are so registered in the manner and to the
addresses specified by the Depository.
None of the Issuer, the Trustee, any Paying Agent or the Registrar shall
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
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2.7 REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Issuer shall issue and the Trustee shall authenticate a replacement Security
if the Trustee's and Issuer's requirements are met. If required by the Trustee
or the Issuer, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Issuer and the Trustee, to protect the
Issuer, the Trustee or any Agent from any loss which any of them may suffer if a
Security is replaced. The Issuer may charge such Holder for its reasonable
out-of-pocket expenses in replacing a Security pursuant to this Section 2.7,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Issuer.
2.8 OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because either of the Issuer, any
Subsidiary Guarantor or any of their respective Subsidiaries or Affiliates holds
the Security.
If a Security is replaced pursuant to Section 2.7 (other than a mutilated
Security surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Security is held by
a bona fide purchaser or a protected purchaser. A mutilated Security ceases to
be outstanding upon surrender of such Security and replacement thereof pursuant
to Section 2.7. If the principal amount of any Security is considered paid under
Section 4.1, it ceases to be outstanding and interest ceases to accrue.
If on a Redemption Date or the Maturity Date the Paying Agent (other than
either of the Issuer or a Subsidiary) holds U.S. Legal Tender sufficient to pay
all of the principal, premium, if any, and interest due on the Securities
payable on that date, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
2.9 TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Issuer, any of its Subsidiaries or any of their respective Affiliates
shall be disregarded, except that, for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Securities that a Responsible Officer of the Trustee has Actual Knowledge
are so owned shall be disregarded.
2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Issuer may prepare
and the Trustee shall authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities but may have
variations that the Issuer considers appropriate for
35
temporary Securities, as evidenced by execution of such temporary Securities by
the Issuer. Without unreasonable delay, the Issuer shall prepare and the Trustee
shall authenticate definitive Securities in exchange for temporary Securities.
Until such exchange, temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities. Notwithstanding the foregoing,
so long as the Securities are represented by a Global Security, such Global
Security may be in typewritten form.
2.11 CANCELLATION.
The Issuer at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than either of the Issuer or a Subsidiary), and no one else,
shall cancel and shall dispose of all Securities surrendered for registration of
transfer, exchange, payment or cancellation. Subject to Section 2.7, the Issuer
may not issue new Securities to replace Securities that it has paid or delivered
to the Trustee for cancellation. If the Issuer or any Subsidiary Guarantor shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
2.12 DEFAULTED INTEREST.
If the Issuer defaults in a payment of interest on the Securities, it
shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, in any lawful manner. The Issuer may pay the defaulted
interest to the Persons who are Holders on a subsequent special record date,
which date shall be the fifteenth day next preceding the date fixed by the
Issuer for the payment of defaulted interest or the next succeeding Business Day
if such date is not a Business Day. At least 15 days before any such subsequent
special record date, the Issuer shall mail to each Holder, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.
2.13 CUSIP AND ISIN NUMBERS.
The Issuer in issuing the Securities may use "CUSIP" and "ISIN" numbers,
and if so, the Trustee shall use the CUSIP and ISIN 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 and ISIN numbers printed in the notice or on the
Securities, and that reliance may be placed only on the other identification
numbers printed on the Securities and that any such redemption or exchange shall
not be affected by any defect or omission of such CUSIP and ISIN numbers. The
Issuer shall promptly notify the Trustee of any change in CUSIP or ISIN number.
2.14 RESTRICTIVE LEGENDS.
Unless and until a Security is exchanged for an Exchange Note or sold in
connection with an effective registration statement under the Securities Act
pursuant to the Registration Rights
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Agreement, the U.S. Global Securities, U.S. Physical Securities and Temporary
Offshore Global Securities shall bear the following legend set forth below (the
"Private Placement Legend") on the face thereof:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (5) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS) OR (6)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF
THE UNITED STATES.
The Temporary Offshore Global Securities shall bear the following legend
set forth on the face thereof:
THIS SECURITY IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION
OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD APPLICABLE HERETO,
BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN
(1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH
INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). BENEFICIAL
INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL SECURITIES OTHER
THAN IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS
LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.
Each Global Security shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL THIS SECURITY 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
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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 ISSUER 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 2.16 OF THE INDENTURE GOVERNING
THIS SECURITY.
2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) Each Global Security 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 2.14.
Members of, or participants in, the Depository ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depository, or the Trustee as its custodian, or under any Global
Security, and the Depository may be treated by the Issuer, the Trustee and any
agent of the Issuer or the Trustee as the absolute owner of each Global Security
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in whole,
but not in part, to the Depository, its successors or their respective nominees.
Interests of beneficial owners in any Global Security may be transferred or,
subject to Section 2.1, exchanged for Physical Securities in accordance with the
rules and procedures of the Depository and the provisions of Section 2.16. In
addition, U.S. Physical Securities and Offshore Physical Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in U.S. Global Securities or Offshore
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Global Securities, as the case may be, (i) in accordance with Section 2.6 or
(ii) if an Event of Default has occurred and is continuing and the Registrar has
received a written request from the Depository or the Trustee to issue Physical
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
clause (b) above, the Registrar shall (if one or more Physical Securities are to
be issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in such Global Security to be transferred, and
the Issuer shall execute, and the Trustee shall authenticate and deliver, one or
more U.S. Physical Securities or Offshore Physical Securities, as the case may
be, of like tenor and amount.
(d) In connection with the transfer of U.S. Global Securities or Offshore
Global Securities, in whole, to beneficial owners pursuant to clause (b) above,
the U.S. Global Securities or the Offshore Global Securities, as the case may
be, shall be deemed to be surrendered to the Trustee for cancellation, and the
Issuer shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in such U.S. Global Securities or Offshore Global Securities, as the
case may be, an equal aggregate principal amount of U.S. Physical Securities or
Offshore Physical Securities, as the case may be, of authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered in
exchange for an interest in a Global Security pursuant to clause (b) or (c)
above shall bear the legend regarding transfer restrictions applicable to the
Physical Securities set forth in Section 2.14.
(f) The Holder of a Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
2.16 SPECIAL TRANSFER PROVISIONS.
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
provisions shall apply with respect to the registration of any proposed transfer
of a beneficial interest in a Security constituting a Restricted Security to any
institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) (an "Accredited Investor" or an "Institutional
Accredited Investor") which is not a QIB (excluding Non-U.S. Persons):
(i) the Registrar shall register the transfer of, or beneficial
interest in, any Security constituting a Restricted Security, whether or
not such Security bears the Private Placement Legend, if the proposed
transferee has delivered to the Registrar a certificate substantially in
the form of Exhibit C hereto, and if such transfer is in respect of an
aggregate principal amount of Securities of less than $100,000, the
proposed transferee has delivered to the Registrar and the Issuer an
opinion of counsel acceptable to the Issuer that such transfer is in
compliance with the Securities Act and such other certifications, legal
opinions or other information that the Trustee may reasonably request in
order to confirm that such transaction is being made pursuant to an
exemption from or in a transaction not subject to the registration
requirements of the Securities Act; and
39
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in a U.S. Global Security, the Registrar shall register
the transfer of any Security constituting a Restricted Security, whether or
not such Security bears a Private Placement Legend, upon receipt by the
Registrar of (x) the certificate and opinion, if any, required by clause
(i) above and (y) instructions given in accordance with the Depository's
and the Registrar's procedures, whereupon (a) the Registrar shall reflect
on its books and records the date and a decrease in the principal amount of
the applicable U.S. Global Security in an amount equal to the principal
amount of the beneficial interest in such U.S. Global Security to be
transferred, and an increase in the principal amount of the applicable
Global Security to which the beneficial interest is to be transferred or
shall authenticate and deliver one or more U.S. Physical Securities of like
tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect to
the registration of any proposed transfer of a beneficial interest in a Security
to a QIB (excluding transfers to Non-U.S. Persons, which shall be governed by
clause (e) below):
(i) if the Security to be transferred consists of (x) either Offshore
Physical Securities prior to the removal of the Private Placement Legend or
U.S. Physical Securities, the 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 Security stating, or has otherwise advised the
Issuer and the Registrar in writing, that the sale has been made in
compliance with the provisions of Rule 144A to a transferee who has signed
the certification provided for on the form of Security stating, or has
otherwise advised the Issuer and the Registrar in writing that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding the Issuer 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 or (y) a beneficial interest in the U.S. Global Securities,
the transfer of such beneficial interest may be effected only through the
book entry system maintained by the Depositary; and
(ii) if the proposed transferee is an Agent Member, and the Securities
to be transferred consist of U.S. Physical Securities which after transfer
are to be evidenced by a beneficial interest in a U.S. Global Security,
upon receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount of
the applicable U.S. Global Security in an amount equal to the principal
amount of the U.S. Physical Securities to be transferred, and the Trustee
shall cancel the U.S. Physical Securities so transferred.
(c) Transfers of Interests in the Temporary Offshore Global Securities. The
following provisions shall apply with respect to registration of any proposed
transfer of a beneficial interest in a Temporary Offshore Global Security:
40
(i) the Registrar shall register the transfer of a beneficial interest
in any Temporary Offshore Global Security if the proposed transferee is a
QIB and the proposed transferor has checked the box provided for on the
form of Security stating, or has otherwise advised the Issuer and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise advised the
Issuer and the Registrar in writing that it is purchasing the Security for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Issuer as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, upon receipt by
the Registrar of (x) the documents referred to in clause (i) above and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the U.S. Global Securities in an
amount equal to the principal amount of the beneficial interest in such
Temporary Offshore Global Security to be transferred, and the Trustee shall
decrease the principal amount of the Temporary Offshore Global Security.
(d) Transfers of Interests in the Permanent Offshore Global Securities or
Offshore Physical Securities. The following provisions shall apply with respect
to any transfer of beneficial interests in Permanent Offshore Global Securities
or Offshore Physical Securities. The Registrar shall register the transfer of
any such Security without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any transfer of a beneficial interest in a Security
to a Non-U.S. Person:
(i) prior to the 41st day after the date on which such Security is
originally issued, the Registrar shall register any proposed transfer of,
or beneficial interest in, a Security to a Non-U.S. Person upon receipt of
a certificate substantially in the form of Exhibit D hereto from the
proposed transferor;
(ii) on and after the 41st day after the date on which such Security
is originally issued, the Registrar shall register any proposed transfer to
any Non-U.S. Person if the Security to be transferred is a U.S. Physical
Security or a beneficial interest in U.S. Global Securities, upon receipt
of a certificate substantially in the form of Exhibit D hereto from the
proposed transferor; and on or after the 41st day after the date on which
such Security is originally issued, the Registrar shall register any
proposed transfer of a beneficial interest in any Offshore Physical
Security or a Permanent Offshore Global Security without requiring any
certification; and
41
(iii) (a) if the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Securities, upon receipt by the
Registrar of (x) the documents, if any, required by clause (i) or (ii) of
this clause (e) and (y) instructions in accordance with the Depositary's
and the Registrar's procedures, the Registrar shall reflect on its books
and records the date and a decrease in the principal amount of the U.S.
Global Securities in an amount equal to the principal amount of the
beneficial interest in the U.S. Global Securities to be transferred, and
(b) if the proposed transferee is an Agent Member, upon receipt by the
Registrar of instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Offshore
Global Securities in an amount equal to the principal amount of the U.S.
Physical Securities or the U.S. Global Securities, as the case may be, to
be transferred, and the Trustee shall cancel the U.S. Physical Security, if
any, so transferred or decrease the amount of the U.S. Global Security.
(f) Private Placement Legend. Upon the registration of transfer, exchange
or replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the registration of transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i) the transferee
certifies that it is not an Affiliate of the Issuer and the requested transfer
is after the second anniversary of the later of (a) the date on which such
Securities are originally issued and (b) the last date on which the Issuer or an
Affiliate of the Issuer was the owner of such Securities (or any predecessor
Securities) or such shorter period of time as permitted by Rule 144(k) under the
Securities Act or any successor provision thereunder or (ii) the circumstance
contemplated by clause (d) or (e)(ii) of this Section 2.16 exists or (iii) there
is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to
the Issuer 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.
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such Security acknowledges the restrictions on
transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it shall transfer such Security only as
provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.15 or this Section 2.16 in
accordance with its customary procedures. The Issuer shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
42
ARTICLE III
REDEMPTION; OFFER TO PURCHASE
3.1 NOTICES TO TRUSTEE.
If the Issuer elects to redeem Securities pursuant to Section 5 or 6 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
Redemption Price and the principal amount of the applicable Securities to be
redeemed. The Issuer shall give such notice of redemption to the Paying Agent
and Trustee at least 30 days but not more than 60 days before the Redemption
Date, together with an Officers' Certificate stating that such redemption shall
comply with the conditions contained herein and provide the information
specified in Section 3.3.
3.2 SELECTION OF SECURITIES TO BE REDEEMED.
In the event that less than all of the Securities are to be redeemed at any
time, selection of such Securities for redemption shall be made (subject to the
procedures of the Depository) by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which such Securities
are listed or, if such Securities are not then listed on a national securities
exchange, by lot or by such method as the Trustee in its sole discretion shall
deem fair and appropriate; provided, however, that no Securities of a principal
amount of $2,000 or less shall be redeemed in part.
3.3 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date, the
Issuer shall mail a notice of redemption by first class mail, postage prepaid,
to each Holder whose Securities are to be redeemed at its registered address. At
the Issuer's request at least 30 days before a Redemption Date (unless a shorter
period shall be acceptable to the Trustee), the Trustee shall give the notice of
redemption in the Issuer's name and at the Issuer's expense. Each notice of
redemption shall identify the Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if any, to be
paid;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(e) that, unless the Issuer defaults in making the redemption payment,
interest on Securities called for redemption ceases to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such Securities
is to receive payment of the Redemption Price and accrued interest, if any, upon
surrender to the Paying Agent of the Securities redeemed;
43
(f) if any Security is being redeemed in part, the portion of the principal
amount of such Security to be redeemed and that, after the Redemption Date, and
upon surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof shall be issued;
(g) if fewer than all the Securities are to be redeemed, the identification
of the particular Securities (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities to be outstanding after such partial redemption;
(h) the section of the Securities pursuant to which the Securities are to
be redeemed; and
(i) the CUSIP or ISIN number, if any, printed on the Securities being
redeemed and a statement that no representation is made as to the correctness or
accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed
on the Securities.
In addition, if such redemption is subject to satisfaction of one or more
conditions precedent, such notice of redemption shall describe each such
condition and shall state that such redemption may not occur and such notice may
be rescinded in the event that any or all such conditions shall not have been
satisfied by the Redemption Date as stated in such notice.
The notice, if mailed in a manner herein provided, shall be conclusively
presumed to have been given, whether or not the 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 Security designated for redemption in whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security.
3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any, subject to the
satisfaction of any conditions precedent provided in such notice. Upon surrender
to the Trustee or Paying Agent, such Securities called for redemption shall be
paid at the Redemption Price (which shall include accrued interest thereon to
the Redemption Date), but installments of interest, the maturity of which is on
or prior to the Redemption Date, shall be payable to Holders of record at the
close of business on the relevant Record Dates.
3.5 DEPOSIT OF REDEMPTION PRICE.
On or before 11:00 a.m. New York time on the Redemption Date, the Issuer
shall deposit with the Paying Agent U.S. Legal Tender in immediately available
funds sufficient to pay the Redemption Price plus accrued interest, if any, of
all Securities to be redeemed on that date.
If the Issuer complies with the preceding paragraph, then, unless the
Issuer defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Securities to be
44
redeemed shall cease to accrue on and after the applicable Redemption Date,
whether or not such Securities are presented for payment.
3.6 SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part only, the
Trustee shall upon written instruction from the Issuer accompanied by an
Officers' Certificate authenticate for the Holder a new Security or Securities
in a principal amount equal to the unredeemed portion of the Security
surrendered.
3.7 OFFER TO PURCHASE.
In the event that, pursuant to Section 4.16, 4.17, 4.20 or 4.21, the Issuer
shall be required to commence an offer to purchase Securities from the Holders
in accordance with the procedures specified in the following provisions of this
Section 3.7 (an "Offer to Purchase"), the Issuer shall commence an Offer to
Purchase by mailing a notice to the Trustee, each Holder and, in the event of a
Special Offer to Purchase, the Escrow Agent stating:
(1) the provision of this Indenture pursuant to which the offer is being
made and that all Securities validly tendered shall be accepted for payment on a
pro rata basis;
(2) the purchase price and the date of purchase, which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such notice is
mailed (except in the case of a Special Offer to Purchase or an Event of Loss
Offer to Purchase, in either which case the date of purchase shall be a Business
Day no later than five Business Days from such mailing date) (the "Payment
Date");
(3) that any Security not tendered shall continue to accrue interest
pursuant to its terms;
(4) that, unless the Issuer defaults in the payment of the purchase price,
any Security accepted for payment pursuant to the Offer to Purchase shall cease
to accrue interest on and after the Payment Date;
(5) that Holders electing to have a Security purchased pursuant to the
Offer to Purchase shall be required to surrender the Security, together with the
form entitled "Option of the Holder to Elect Purchase" on the reverse side of
the Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day immediately preceding
the Payment Date;
(6) that Holders shall be entitled to withdraw their election if the Paying
Agent receives, not later than the close of business on the third Business Day
immediately preceding the Payment Date, a telegram, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of Securities
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Securities purchased; and
(7) that Holders whose Securities are being purchased only in part shall be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities
45
surrendered; provided that each Security purchased and each new Security issued
shall be in a principal amount of $2,000 or integral multiples of $1,000 in
excess thereof.
On the Payment Date, the Issuer shall (a) accept for payment on a pro rata
basis Securities and Parity Lien Indebtedness, if applicable (other than with
respect to a Special Offer to Purchase, in which case only Securities shall be
purchased) or portions thereof tendered pursuant to an Offer to Purchase; (b)
deposit, or cause to be deposited, with the Paying Agent money sufficient to pay
the purchase price of all Securities and with the Parity Lien Representative
money sufficient to pay all Parity Lien Indebtedness, if applicable, or portions
thereof so accepted; and (c) deliver, or cause to be delivered, to the Trustee
all Securities or portions thereof so accepted together with an Officers'
Certificate specifying the Securities or portions thereof accepted for payment
by the Issuer. The Paying Agent shall promptly mail to the Holders so accepted
payment in an amount equal to the purchase price, and the Trustee shall promptly
authenticate and mail to such Holders a new Security equal in principal amount
to any unpurchased portion of the Security surrendered; provided that each
Security purchased and each new Security issued shall be in a principal amount
of $2,000 or integral multiples of $1,000 in excess thereof. The Issuer shall
publicly announce the results of an Offer to Purchase as soon as practicable
after the Payment Date. The Trustee shall act as the Paying Agent for an Offer
to Purchase. The Issuer shall comply with Rule 14e-l 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 the Issuer is required to
repurchase Securities pursuant to an Offer to Purchase. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Indenture relating to an Offer to Purchase, the Issuer shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under such provisions of this Indenture by virtue of
such conflict.
ARTICLE IV
COVENANTS
4.1 PAYMENT OF SECURITIES.
The Issuer shall pay the principal of, premium, if any, and interest on the
Securities in the manner provided in the Securities. An installment of principal
of, premium, if any, or interest on the Securities shall be considered paid on
the date it is due if the Trustee or Paying Agent holds on that date U.S. Legal
Tender in immediately available funds designated for and sufficient to pay the
installment. If the Issuer or any Subsidiary acts as Paying Agent, an
installment of principal, premium, if any, or interest shall be considered paid
on the date it is due if the entity acting as Paying Agent complies with the
second sentence of Section 2.4. Upon any bankruptcy or reorganization procedure
relative to the Issuer, the Trustee shall serve as Paying Agent, if any, for the
Securities.
4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Issuer shall maintain the office or agency required under Section 2.3.
The Issuer shall give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Issuer
shall fail to maintain any such required office or
46
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 14.2.
The Issuer may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations. The Issuer
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Issuer hereby initially designates the Trustee at its Corporate Trust
Office, as such office of the Issuer in accordance with Section 2.3.
4.3 LIMITATION ON RESTRICTED PAYMENTS.
The Issuer shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, (1) declare or pay any dividend or make any distribution
on or with respect to its Capital Stock (other than (x) dividends or
distributions payable solely in shares of its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to acquire shares of
such Capital Stock and (y) pro rata dividends or distributions on Capital Stock
of Restricted Subsidiaries) held by Persons other than the Issuer or any of its
Restricted Subsidiaries, (2) purchase, call for redemption or redeem, retire or
otherwise acquire for value any shares of Capital Stock of (A) the Issuer
(including options, warrants or other rights to acquire such shares of Capital
Stock) held by any Person or (B) a Restricted Subsidiary (including options,
warrants or other rights to acquire such shares of Capital Stock) held by any
Affiliate of the Issuer (other than a Restricted Subsidiary) or any holder (or
any Affiliate of such holder) of 10% or more of the Capital Stock of the Issuer,
(3) make any voluntary or optional principal payment, or voluntary or optional
redemption, repurchase, defeasance, or other acquisition or retirement for
value, of Indebtedness of the Issuer that is subordinated in right of payment to
the Securities or any Indebtedness of a Subsidiary Guarantor that is
subordinated in right of payment to a Note Guarantee or (4) make any Investment,
other than a Permitted Investment, in any Person (such payments or any other
actions described in clauses (1) through (4) above being collectively
"Restricted Payments") if, at the time of, and after giving effect to, the
proposed Restricted Payment:
(a) a Default or an Event of Default shall have occurred and be continuing
or would occur as a consequence of such Restricted Payment,
(b) the Issuer is not able to Incur at least $1.00 of Indebtedness under
the first sentence of clause (a) of Section 4.4, or
(c) the aggregate amount of all Restricted Payments made after the Issue
Date shall exceed the sum of:
(i) 50% of the aggregate amount of the Adjusted Consolidated Net
Income (or, if the Adjusted Consolidated Net Income is a loss, minus 100%
of the amount of such loss) accrued on a cumulative basis during the period
(taken as one accounting period) beginning on the first day of the fiscal
quarter during which the Issue Date occurs and
47
ending on the last day of the last fiscal quarter preceding the Transaction
Date for which internal financial statements are available; plus
(ii) 100% of the aggregate Qualified Proceeds received by the Issuer
after the Issue Date as a capital contribution or from the issuance and
sale of its Capital Stock (other than Disqualified Stock) to a Person which
is not a Subsidiary of the Issuer, including an issuance or sale permitted
by this Indenture of Indebtedness of the Issuer for cash subsequent to the
Issue Date upon the conversion of such Indebtedness into Capital Stock
(other than Disqualified Stock) of the Issuer, or from the issuance to a
Person which is not a Subsidiary of the Issuer of any options, warrants or
other rights to acquire Capital Stock of the Issuer (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 Securities); plus
(iii) an amount equal to the net reduction in Investments (other than
reductions in Permitted Investments) in any Person resulting from payments
of interest on Indebtedness, dividends, repayments of loans or advances, or
other transfers of assets, in each case, to the Issuer or any Restricted
Subsidiary or from the Qualified Proceeds from the sale of any such
Investment (except, in each case, to the extent any such payment or
proceeds are included in the calculation of Adjusted Consolidated Net
Income), from the release of any Guarantee or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case
as provided in the definition of "Investments"), not to exceed, in each
case, the amount of Investments previously made by the Issuer or any
Restricted Subsidiary in such Person or Unrestricted Subsidiary.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit:
(1) (x) the payment of any dividend or redemption of any Capital Stock or
(y) the redemption of any Indebtedness that is subordinate in right of payment
to the Securities, in each case, within 60 days after the related date of
declaration or call for redemption if, at said date of declaration or call for
redemption, such payment or redemption would comply with the preceding
paragraph;
(2) the making of any principal payment or the repurchase, redemption,
retirement, defeasance or other acquisition or retirement for value of
Indebtedness that is subordinated in right of payment to the Securities or any
Note Guarantee including premium, if any, and accrued interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under clause (a)(3) of
Section 4.4;
(3) the repurchase, redemption or other acquisition or retirement of
Capital Stock of the Issuer or a Subsidiary Guarantor (or options, warrants or
other rights to acquire such Capital Stock) in exchange for, or out of the
proceeds of a capital contribution or a substantially concurrent offering of,
shares of Capital Stock (other than Disqualified Stock) of the Issuer (or
options, warrants or other rights to acquire such Capital Stock); provided that
such options, warrants or other rights are not redeemable at the option of the
holder, or required to be redeemed, prior to the Stated Maturity of the
Securities;
48
(4) the making of any principal payment or the repurchase, redemption,
retirement, defeasance or other acquisition or retirement for value of
Indebtedness (including premium, if any, and accrued interest) which is
subordinated in right of payment to the Securities or any Note Guarantee in
exchange for, or out of the proceeds of a capital contribution or a
substantially concurrent offering of, shares of the Capital Stock (other than
Disqualified Stock) of the Issuer (or options, warrants or other rights to
acquire such Capital Stock); provided that such options, warrants or other
rights are not redeemable at the option of the holder, or required to be
redeemed, prior to the Stated Maturity of the Securities;
(5) payments or distributions, to dissenting shareholders pursuant to
applicable law, pursuant to or in connection with a consolidation, merger or
transfer of assets of the Issuer that complies with the provisions of Article V;
(6) Investments acquired as a capital contribution to, or in exchange for,
or out of the proceeds of a substantially concurrent offering of, Capital Stock
(other than Disqualified Stock) of the Issuer;
(7) the repurchase of Capital Stock deemed to occur upon the exercise of
options or warrants if such Capital Stock represents all or a portion of the
exercise price thereof;
(8) the repurchase or other acquisition of Capital Stock of the Issuer or
any of its Subsidiaries from employees, former employees, directors or former
directors of the Issuer or any of its Subsidiaries (or permitted transferees of
such employees, former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors under which such
individuals purchase or sell, or are granted the option to purchase or sell,
such Capital Stock; provided, however, that the aggregate amount of such
repurchases and other acquisitions shall not exceed $3,000,000 in any calendar
year;
(9) dividends paid in respect of Disqualified Stock or preferred stock of
the Issuer or any Restricted Subsidiary of the Issuer which is permitted to be
issued pursuant to Section 4.4; provided, however, that the aggregate amount of
dividends paid in respect of preferred stock of the Issuer (other than
Disqualified Stock of the Issuer) pursuant to this clause (9) shall not exceed
the amount of Net Cash Proceeds from the issuance of such preferred stock;
(10) the pledge by the Issuer or any Restricted Subsidiary of the Capital
Stock of an Unrestricted Subsidiary to secure Non-Recourse Debt of that
Unrestricted Subsidiary;
(11) any payments made in connection with the consummation of this
offering, the entering into of the Credit Agreement, the consummation of the
Equity Offering and the application of the net proceeds therefrom (in each case
as described in the Offering Memorandum);
(12) repayment of intercompany debt that was permitted to be outstanding
pursuant to the terms of this Indenture; and
(13) Restricted Payments in an amount which, when taken together with all
Restricted Payments made pursuant to this clause (13), does not exceed
$5,000,000;
49
provided that, except in the case of clauses (1) and (3) above, no Default or
Event of Default shall have occurred and be continuing or occur as a consequence
of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payments referred to in clauses (2), (7) and (9)
through (13) above or an exchange of Capital Stock for Capital Stock or
Indebtedness referred to in clause (3) or (4) above and an Investment acquired
as a capital contribution or in exchange for Capital Stock referred to in clause
(6) above) shall be included in calculating whether the conditions of clause (c)
of the first paragraph of this Section 4.3 have been met with respect to any
subsequent Restricted Payments, and the Net Cash Proceeds from any issuance of
Capital Stock to the extent used to make Restricted Payments referred to in
clause (3), (4) or (6) above shall not be included in such calculation.
For purposes of determining compliance with this Section 4.3, (x) the
amount, if other than in cash, of any Restricted Payment shall be determined in
good faith by the Board of Directors, whose determination shall be conclusive
and evidenced by a Board Resolution and (y) in the event that a Restricted
Payment meets the criteria of more than one of the types of Restricted Payments
described in the above clauses, including the first paragraph of this Section
4.3, the Issuer, in its sole discretion, may divide and classify, and from time
to time may classify, re-divide or reclassify, such Restricted Payment if it
would have been permitted at the time such Restricted Payment was made and at
the time of such reclassification.
Not later than the date of making any Restricted Payment, the Issuer shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment complies with this Indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which calculations may
be based upon the latest available internal quarterly financial statements.
4.4 LIMITATION ON INDEBTEDNESS.
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (other than the Initial Notes, the Note
Guarantees and other Indebtedness existing on the Issue Date); provided,
however, that the Issuer may Incur Indebtedness (including, without limitation,
Acquired Indebtedness) and any Subsidiary Guarantor may Incur Indebtedness
(including, without limitation, Acquired Indebtedness) if, after giving effect
to the Incurrence of such Indebtedness and the receipt and application of the
proceeds therefrom, the Fixed Charge Coverage Ratio of the Issuer would be
greater than 2.0:1.0. Notwithstanding the foregoing, the Issuer and any
Restricted Subsidiary (except as specified below) may Incur each and all of the
following:
(1) the incurrence by the Issuer and any Restricted Subsidiary of
additional Indebtedness and letters of credit under Credit Facilities in an
aggregate principal amount at any one time outstanding under this clause
(1) (with letters of credit being deemed to have a principal amount equal
to the maximum potential liability of the Issuer and its Restricted
Subsidiaries thereunder) not to exceed a maximum of the greater of (a)
$50,000,000 and (b) the Borrowing Base;
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(2) Indebtedness owed to the Issuer or any other Restricted
Subsidiary; provided that (x) any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Indebtedness (other than to the Issuer or
another Restricted Subsidiary) shall be deemed, in each case, to constitute
an Incurrence of such Indebtedness not permitted by this clause (2) and (y)
if the Issuer or any Subsidiary Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated in right of
payment to the Securities, in the case of the Issuer, or the Note
Guarantee, in the case of a Subsidiary Guarantor;
(3) Indebtedness issued in exchange for, or the net proceeds of which
are used to refinance or refund, then outstanding Indebtedness (other than
Indebtedness outstanding under clause (1), (2) or (10) of this Section
4.4(a) and under this clause (3)) in an amount not to exceed the amount so
refinanced or refunded (plus premiums, accrued interest, fees and
expenses); provided that (a) Indebtedness the proceeds of which are used to
refinance or refund the Securities or Indebtedness that is pari passu with,
or subordinated in right of payment to, the Securities or a Note Guarantee
shall only be permitted under this clause (3) if (x) in case the Securities
are refinanced in part or the Indebtedness to be refinanced is pari passu
with the Securities or a Note Guarantee, such new Indebtedness, by its
terms or by the terms of any agreement or instrument pursuant to which such
new Indebtedness is outstanding, is expressly made pari passu with, or
subordinate in right of payment to, the remaining Securities or the Note
Guarantee, or (y) in case the Indebtedness to be refinanced is subordinated
in right of payment to the Securities or a Note Guarantee, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is issued or remains outstanding,
is expressly made subordinate in right of payment to the Securities or the
Note Guarantee at least to the extent that the Indebtedness to be
refinanced is subordinated to the Securities or the Note Guarantee, (b)
such new Indebtedness, determined as of the date of Incurrence of such new
Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded, and the Average Life of such new
Indebtedness is at least equal to the remaining Average Life of the
Indebtedness to be refinanced or refunded and (c) such new Indebtedness is
Incurred by the Issuer or the Restricted Subsidiary who is the obligor on
the Indebtedness to be refinanced or refunded;
(4) Indebtedness of the Issuer, to the extent the net proceeds thereof
are promptly (A) used to purchase Securities tendered in an Offer to
Purchase made as a result of a Change in Control or (B) deposited to
defease the Securities pursuant to Article VIII;
(5) Guarantees by the Issuer or any Restricted Subsidiary of
Indebtedness of the Issuer or any Restricted Subsidiary that is otherwise
permitted to be incurred pursuant to this Section 4.4; provided that the
Guarantee of such Indebtedness is permitted by and made in accordance with
Section 4.14;
(6) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of daylight overdrafts) drawn against insufficient
funds in the ordinary course of business;
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provided, however, that such Indebtedness is extinguished within five
Business Days of incurrence;
(7) Indebtedness in respect of performance bonds, bankers'
acceptances, workers' compensation claims, surety or appeal bonds and
payment obligations in connection with self-insurance or similar
obligations;
(8) Indebtedness Incurred to finance the cost (including the cost of
improvement or construction) to acquire real or personal property
(including acquisitions by way of Capitalized Lease Obligations, purchase
money obligations and acquisitions of the Capital Stock of a Person that
becomes a Restricted Subsidiary, to the extent of the fair market value of
the real or personal property so acquired, plus goodwill associated
therewith) by the Issuer or a Restricted Subsidiary after the Issue Date;
provided, however, that the aggregate principal amount of such Indebtedness
at any one time outstanding may not exceed the greater of (a) $15,000,000
and (b) 2.5% of Total Assets;
(9) Acquired Indebtedness; provided that the Fixed Charge Coverage
Ratio immediately after giving pro forma effect to such incurrence would be
greater than the Fixed Charge Coverage Ratio immediately prior to such
incurrence; and
(10) additional Indebtedness of the Issuer or Indebtedness of any
Restricted Subsidiary (in addition to Indebtedness permitted under clauses
(1) through (9) above) in an aggregate principal amount outstanding at any
one time not to exceed the greater of (a) $10,000,000 and (b) 2.5% of Total
Assets.
(b) The accrual of interest or dividends, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms, the reclassification of
preferred stock as Indebtedness due to a change in accounting principles, and
the payment of dividends on preferred equity in the form of additional shares of
the same class of preferred equity shall not be deemed to be an incurrence of
Indebtedness or an issuance of preferred equity for purposes of this Section
4.4; provided, in each such case, that the amount of any such accrual, accretion
or payment is included in Fixed Charges of the Issuer as accrued.
(c) Notwithstanding any other provision of this Section 4.4, the maximum
amount of Indebtedness that may be Incurred pursuant to this Section 4.4 shall
not be deemed to be exceeded with respect to any outstanding Indebtedness due
solely to the result of fluctuations in the exchange rates of currencies.
(d) For purposes of determining any particular amount of Indebtedness under
this Section 4.4, Guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of such
particular amount shall not be included. For purposes of determining compliance
with this Section 4.4, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in clause (a)
of this Section 4.4 (including under the first paragraph of such clause (a)),
the Issuer, in its sole discretion, may divide and classify, and from time to
time may re-divide or
52
reclassify, all or a portion of such item of Indebtedness in any manner that
complies with this covenant.
(e) The Obligors shall not Incur any Indebtedness if such Indebtedness is
subordinate in right of payment to any other Indebtedness unless such
Indebtedness is also subordinate in right of payment to the Securities (in the
case of the Issuer) or the Note Guarantees (in the case of any Subsidiary
Guarantor), in each case, to the same extent.
4.5 CORPORATE EXISTENCE.
Except as otherwise permitted by Article V, the Issuer shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each of
its Restricted Subsidiaries in accordance with the respective organizational
documents of each such Restricted Subsidiary and the rights (charter and
statutory) and material franchises of the Issuer and each of its Restricted
Subsidiaries; provided, however, that neither the Issuer nor any Restricted
Subsidiary shall be required to preserve any such right or franchise or in the
case of any Restricted Subsidiary, its existence, if (in each case) the Board of
Directors of the Issuer shall determine that the loss thereof is not, and shall
not be, adverse in any material respect to the Holders.
4.6 PAYMENT OF TAXES AND OTHER CLAIMS.
The Issuer shall pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of its Restricted
Subsidiaries or upon the income, profits or property of it or any of its
Restricted Subsidiaries and (b) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability or Lien upon the property of it or any of its Restricted Subsidiaries;
provided, however, that the Issuer shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, (i) the applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made or
(ii) where the failure to effect such payment or discharge is not adverse in any
material respect to the Holders.
4.7 MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Issuer shall cause all material properties owned or leased by it or
any of its Restricted Subsidiaries used or useful to the conduct of its business
or the business of any of its Restricted Subsidiaries, taken as a whole, to be
maintained and kept in normal condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all repairs, renewals,
replacements, and betterments thereof, all as in its judgment may be necessary,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that, subject to
Section 4.19 nothing in this Section 4.7 shall prevent the Issuer or any of its
Restricted Subsidiaries from discontinuing the use, operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of the Issuer or any such
Restricted Subsidiary desirable in the conduct of the business of the Issuer or
any such Restricted Subsidiary, and if such discontinuance or disposal is not
adverse in any material respect to the
53
Holders; provided further that nothing in this Section 4.7 shall prevent the
Issuer or any of its Restricted Subsidiaries from discontinuing or disposing of
any properties to the extent otherwise permitted by this Indenture.
(b) The Issuer shall maintain, and shall cause its Restricted Subsidiaries
to maintain, insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are, in the reasonable judgment, customarily carried
by similar businesses of similar size, including property and casualty loss,
workers' compensation and interruption of business insurance.
4.8 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Issuer shall deliver to the Trustee, within 90 days after the close
of each fiscal year of the Issuer, an Officers' Certificate stating that a
review of the activities of the Issuer and its Restricted Subsidiaries has been
made under the supervision of the signing Officers with a view to determining
whether they have kept, observed, performed and fulfilled their obligations
under this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge, the Issuer and its
Restricted Subsidiaries during such preceding fiscal year have kept, observed,
performed and fulfilled each and every such covenant and no Default or Event of
Default occurred during such year and at the date of such certificate there is
no Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe its status with particularity. The applicable Officers' Certificate
shall also notify the Trustee should the Issuer or any of its Restricted
Subsidiaries elect to change the manner in which it fixes its fiscal year end.
(b) The Issuer shall deliver promptly to the Trustee, in the event that any
Officer becomes aware of any Default or Event of Default in the performance of
any covenant, agreement or condition contained in this Indenture, an Officers'
Certificate specifying the Default or Event of Default and describing its status
with particularity.
4.9 COMPLIANCE WITH LAWS.
The Issuer shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Issuer and its
Subsidiaries taken as a whole.
4.10 COMMISSION REPORTS AND REPORTS TO HOLDERS.
At all times from and after the earlier of (1) the date of the commencement
of an Exchange Offer or the effectiveness of the Shelf Registration Statement
(collectively, the "Registration") and (2) 365 days after the Issue Date, in
either case, whether or not the Issuer is then required to file reports with the
Commission, the Issuer shall file with the Commission, unless the Commission
shall not accept such filing (x) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on Forms
10-Q
54
and 10-K if the Issuer were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report on the
annual financial statements by the Issuer's certified independent accountants
and (y) all current reports that would be required to be filed with the
Commission on Form 8-K if the Issuer were required to file such reports. The
Issuer (a) shall supply to the Trustee and to each Holder or any beneficial
owner of the Notes who provides its email address to the Company and certifies
that it is a beneficial owner of the Notes or (b) shall supply to the Trustee
for forwarding to each such Holder or such beneficial owner who so requests,
without cost to such Holder, copies of such reports and other information. In
addition, the Issuer and the Subsidiary Guarantors, at all times prior to the
date of the first filing of a Registration, upon the request of any Holder or
any prospective purchaser of the Securities designated by a Holder, shall supply
to such Holder or such prospective purchaser the information required under Rule
144A.
4.11 WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Issuer and each Subsidiary Guarantor covenants (to the extent
enforceable by law) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive such
Issuer or such Subsidiary Guarantor from paying all or any portion of the
principal of, premium, if any, and/or interest on the Securities or the Note
Guarantee of any such Subsidiary Guarantor as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture, and (to the extent enforceable
by law) each hereby expressly waives all benefit or advantage of any such law,
and covenants to the extent enforceable by law that it shall not hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
4.12 LIMITATION ON TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
(a) The Issuer shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew, amend or extend any
understanding, loan, advance, guarantee, transaction, contract, agreement
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with, or for the benefit of
any holder (or any Affiliate of such holder) of 10% or more of any class of
Capital Stock of the Issuer or with any Affiliate of the Issuer, except upon
fair and reasonable terms no less favorable to the Issuer or such Restricted
Subsidiary than could be obtained, at the time of such transaction or, if such
transaction is pursuant to a written agreement, at the time of the execution of
the agreement providing therefor, in a comparable arm's-length transaction with
a Person that is not such a holder or an Affiliate.
(b) The restrictions set forth in clause (a) above shall not apply to:
(i) transactions (A) approved by a majority of the disinterested
members of the Board of Directors or (B) for which the Issuer or a
Restricted Subsidiary delivers to the Trustee a written opinion of a
nationally recognized investment banking, accounting,
55
valuation or appraisal firm stating that the transaction is fair to the
Issuer or such Restricted Subsidiary from a financial point of view;
(ii) any transaction solely between the Issuer and any of its
Restricted Subsidiaries or solely among Restricted Subsidiaries; provided
that any transaction between Biodiesel and the Issuer or any other
Restricted Subsidiary shall be on fair and reasonable terms no less
favorable to the Issuer and its Restricted Subsidiaries than could be
obtained in a comparable arm's length transaction;
(iii) the payment of reasonable and customary regular fees to
directors of the Issuer who are not employees of the Issuer and customary
indemnification arrangements entered into by the Issuer;
(iv) any sale of shares of Capital Stock (other than Disqualified
Stock) of the Issuer;
(v) any Permitted Investments or any Restricted Payments not
prohibited by Section 4.3;
(vi) any written agreement as in effect or entered into as of the
Issue Date or any amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) in any replacement agreement
thereto so long as any such amendment or replacement agreement is not more
disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Issue Date;
(vii) the issuance of securities or other payments, awards or grants
in cash, securities or otherwise pursuant to or the funding of, employment
arrangements, stock options and stock ownership plans or similar employee
benefit plans approved by the Board of Directors in good faith and loans to
employees of the Issuer and its Subsidiaries which are approved by the
Board of Directors in good faith;
(viii) transactions with customers, clients, suppliers, or purchasers
or sellers of goods or services, in each case on ordinary business terms
and otherwise in compliance with the terms of this Indenture, which are
fair to the Issuer or its Restricted Subsidiaries, in the reasonable
determination of the Board of Directors of the Issuer or the senior
management thereof, or are on terms at least as favorable as could
reasonably have been obtained at such time from an unaffiliated party;
(ix) any transaction with a Joint Venture or similar entity which
would be subject to this Section 4.12 solely because the Issuer or a
Restricted Subsidiary of the Issuer owns an equity interest in or otherwise
controls such Joint Venture or similar entity; or
(x) loans or advances to officers, directors, employees or consultants
in the ordinary course of business or consistent with past practice not to
exceed $2,000,000 in the aggregate at any one time outstanding.
56
Notwithstanding the foregoing, any transaction or series of related transactions
covered by the clause (a) of this Section 4.12 and not covered by clauses (ii)
through (x) of this clause (b), (x) the aggregate amount of which exceeds
$15,000,000 in value, must be approved or determined to be fair in the manner
provided for in clause (b)(i)(A) or (B) and (y) the aggregate amount of which
exceeds $20,000,000 in value, must be determined to be fair in the manner
provided for in clause (b)(i)(B).
4.13 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
(a) The Issuer shall not, and shall not permit any Restricted Subsidiary
to, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary to (1) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of such Restricted Subsidiary
owned by the Issuer or any other Restricted Subsidiary, (2) pay any Indebtedness
owed to the Issuer or any other Restricted Subsidiary, (3) make loans or
advances to the Issuer or any other Restricted Subsidiary or (4) transfer any of
its property or assets to the Issuer or any other Restricted Subsidiary.
(b) The restrictions set forth in clause (a) above shall not apply to any
encumbrances or restrictions:
(i) existing on the Issue Date in the Credit Agreement, this
Indenture, the Securities, the Note Guarantees or otherwise, and any
amendments, modifications, extensions, refinancings, renewals or
replacements thereof; provided that the encumbrances and restrictions in
any such amendments, modifications, extensions, refinancings, renewals or
replacements taken as a whole are, in the good faith judgment of the Board
of Directors, no less favorable in any material respect to the Holders than
those encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law, rule, regulation,
order, approval, license, permit or similar restriction;
(iii) existing with respect to any Person or the property or assets of
such Person acquired by the Issuer or any Restricted Subsidiary, which
encumbrances or restrictions are not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets of such Person so acquired and any extensions, refinancings,
renewals or replacements thereof; provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements
taken as a whole are, in the good faith judgment of the Issuer's Board of
Directors, no less favorable in any material respect to the Holders than
those encumbrances or restrictions that are then in effect and that are
being extended, refinanced, renewed or replaced;
(iv) in the case of clause (a)(4) of this Section 4.13:
(A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset,
57
(B) existing by virtue of any transfer of, agreement to transfer,
option or right with respect to, or Lien on, any property or assets of
the Issuer or any Restricted Subsidiary not otherwise prohibited by
this Indenture,
(C) 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 Issuer
or any Restricted Subsidiary in any manner material to the Issuer or
any Restricted Subsidiary, or
(D) arising under purchase money obligations for property
acquired in the ordinary course of business or Capitalized Lease
Obligations;
(v) with respect to a Restricted Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary;
(vi) arising from customary provisions in Joint Venture agreements and
other similar agreements entered into in the ordinary course of business;
(vii) on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;
(viii) arising in connection with any Indebtedness or Disqualified
Stock of the Issuer or any Restricted Subsidiary of the Issuer permitted to
be incurred subsequent to the Issue Date pursuant to Section 4.4; and
(ix) existing with respect to Commodity Agreements, Currency
Agreements and Interest Rate Agreements incurred from time to time in the
ordinary course of business and not for speculative purposes.
Nothing contained in this Section 4.13 shall prevent the Issuer or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted under Section 4.15 or (2) restricting the
sale or other disposition of property or assets of the Issuer or any of its
Restricted Subsidiaries that secure Indebtedness of the Issuer or any of its
Restricted Subsidiaries.
4.14 ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.
The Issuer shall cause each Restricted Subsidiary that Guarantees any
Indebtedness of the Issuer or any Subsidiary Guarantor to execute and deliver a
supplemental indenture to this Indenture providing for a Guarantee of payment of
the Securities by such Restricted Subsidiary. In addition, in the event that any
Subsidiary of the Issuer becomes a Subsidiary Guarantor pursuant to the terms of
this Indenture, the Issuer and such Subsidiary shall execute such collateral
documents and other instruments and take such other measures as are reasonably
necessary to cause the property and assets of such Subsidiary that constitute
Collateral to be subject to the Note Liens and to perfect such Liens in respect
of such property and assets, in each case, in the manner and to the extent
required under the Security Documents.
58
Notwithstanding the foregoing, any Note Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged (and any and all Note Liens granted by
such Subsidiary Guarantor shall also be released and discharged) upon (1) any
sale, exchange or transfer, to any Person not an Affiliate of the Issuer, of all
of the Capital Stock of such Subsidiary Guarantor owned directly or indirectly
by the Issuer (which sale, exchange or transfer is not prohibited by this
Indenture), (2) the designation of such Subsidiary Guarantor as an Unrestricted
Subsidiary in accordance with the terms of this Indenture or (3) any defeasance
or discharge of the Securities pursuant to the provisions of Article VIII.
4.15 LIMITATION ON LIENS.
The Issuer shall not, and shall not permit any Restricted Subsidiary to,
create, incur, assume or suffer to exist any Lien on any of its assets or
properties of any character (including any shares of Capital Stock or
Indebtedness of any Restricted Subsidiary).
The foregoing limitation does not apply to:
(i) Liens existing on the Issue Date;
(ii) Liens granted on or after the Issue Date on any assets or Capital
Stock of the Issuer or its Restricted Subsidiaries created in favor of the
Holders;
(iii) Liens securing Indebtedness which is Incurred to refinance secured
Indebtedness which is permitted to be Incurred under clause (a)(3) of Section
4.4; provided that such Liens do not extend to or cover any property or assets
of the Issuer or any Restricted Subsidiary other than the property or assets
securing the Indebtedness being refinanced;
(iv) Liens on accounts receivable, inventory and the cash proceeds of any
of the foregoing securing Indebtedness of the Issuer or any Restricted
Subsidiary under any Credit Facility, which Indebtedness is permitted to be
Incurred under clause (a)(1) of Section 4.4, and Liens on commodities accounts
and the cash proceeds therefrom;
(v) Parity Liens securing Parity Lien Obligations incurred in accordance
with the terms of this Indenture; provided that either:
(a) the Issuer causes such Lien (1) to be granted to the Joint
Collateral Agent and (2) to be extended to and secure the Note Obligations
upon substantially the same terms but subject to the provisions of this
Indenture and causes such Lien to be duly perfected; or
(b) the indenture or agreement governing such Parity Lien Obligations
(1) provides (for the enforceable benefit of the Trustee and Holders) that
(x) the holder of such Parity Lien Obligations is bound by the terms of the
Security Documents and (y) all obligations in respect of the Securities are
Equally and Ratably secured by all Liens, guarantees, supporting
obligations and loss sharing rights at any time granted by the Issuer or
any Restricted Subsidiary or any other Person as security for such debt,
whether
59
or not otherwise constituting Collateral, and (2) authorizes the Joint
Collateral Agent to perform its obligations set forth in this Indenture and
the Security Documents;
and provided further that the aggregate principal amount of Indebtedness secured
by the Collateral pursuant to Note Liens and Parity Liens shall not exceed
$500,000,000 at any one time outstanding;
(vi) Liens (including extensions and renewals thereof) upon real or
personal property acquired after the Issue Date; provided that (a) such Lien is
created solely for the purpose of securing Indebtedness Incurred, in accordance
with clause (a)(8) of Section 4.4, to finance the cost (including the cost of
improvement or construction) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after the
later of the acquisition, the completion of construction or the commencement of
full operation of such property, (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost, and (c) any such Lien
shall not extend to or cover any property or assets other than such item of
property or assets and any improvements on such item;
(vii) Liens on cash set aside at the time of the Incurrence of any
Indebtedness, or government securities purchased with such cash, in either case,
to the extent that such cash or government securities pre-fund the payment of
interest on such Indebtedness and are held in a collateral or escrow account or
similar arrangement to be applied for such purpose;
(viii) Liens on assets, property or Capital Stock of any Restricted
Subsidiary that is not an Obligor securing Indebtedness permitted under this
Indenture; or
(ix) Permitted Liens.
4.16 REPURCHASE OF NOTES UPON CHANGE OF CONTROL.
(a) The Issuer shall commence, within 30 days of the occurrence of a Change
of Control, and consummate an Offer to Purchase for all Securities then
outstanding, at a purchase price equal to 101% of their principal amount, plus
accrued interest (if any) to, but not including, the Payment Date.
(b) Notwithstanding the provisions of clause (a) above, the Issuer shall
not be required to make an Offer to Purchase upon the occurrence of a Change of
Control if a third party makes an offer to purchase the Securities in the
manner, at the times and price and otherwise in compliance with the requirements
of this Indenture applicable to an Offer to Purchase for a Change of Control and
purchases all Securities validly tendered and not withdrawn in such Offer to
Purchase.
(c) Any Offer to Purchase required pursuant to this Section 4.16, may be
made in advance of a Change of Control, and conditioned upon the occurrence of
such Change of Control, if a definitive agreement is in place for the Change of
Control at the time of making the Offer to Purchase. Securities repurchased by
the Issuer pursuant to an Offer to Purchase shall have the status of Securities
issued but not outstanding or shall be retired and canceled, at the option of
the Issuer. Securities purchased by a third party pursuant to clause (b) above
shall have the status of Securities issued and outstanding.
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4.17 LIMITATION ON ASSET SALES.
(a) The Issuer shall not, and shall not permit any Restricted Subsidiary
to, consummate any Asset Sale, unless (1) the consideration received by the
Issuer or such Restricted Subsidiary is at least equal to the fair market value
of the assets sold or disposed of, (2) at least 75% of the consideration
received consists of (a) cash or Temporary Cash Investments, (b) the assumption
of unsubordinated Indebtedness of the Issuer or any Subsidiary Guarantor or
Indebtedness of any other Restricted Subsidiary (in each case, other than
Indebtedness owed to the Issuer or any Affiliate of the Issuer) by a transferee,
provided that the Issuer, such Subsidiary Guarantor or such other Restricted
Subsidiary is irrevocably and unconditionally released from all liability under
such Indebtedness, or (c) Replacement Assets, and (3) in the event of a
Collateral Asset Sale, the Net Cash Proceeds corresponding to the Collateral
sold shall be paid directly to the Joint Collateral Agent for deposit into the
Collateral Account which shall become part of the Collateral and be subject to
the Note Lien in favor of the Holders and, to the extent applicable, the Parity
Lien in favor of the holders of any Parity Lien Indebtedness.
For the purposes of this provision, any securities, notes or other
obligations received by the Issuer or any of its Restricted Subsidiaries from
the transferee that are converted by the Issuer or any of its Restricted
Subsidiaries into cash or Temporary Cash Investments within 180 days of their
receipt by the Issuer or any of its Restricted Subsidiaries shall be deemed to
be cash, but only to the extent of the cash or Temporary Cash Investments
received.
(b) The Issuer shall, or shall cause the relevant Restricted Subsidiary to,
within twelve months after the date of receipt of any Net Cash Proceeds from an
Asset Sale,
(i) solely in the case of Net Cash Proceeds from any Asset Sale other
than a Collateral Asset Sale, apply an amount equal to such Net Cash
Proceeds to repay or reduce outstanding (1) Securities, Parity Lien
Indebtedness or other Indebtedness of the Issuer that is pari passu in
right of payment with the Securities, provided that any repayment of the
Securities or Parity Lien Indebtedness shall be applied as set forth in
clause (c) of this Section 4.17, (2) Indebtedness of any Subsidiary
Guarantor that is pari passu in right of payment with the relevant Note
Guarantee or (3) Indebtedness of any other Restricted Subsidiary, or
(ii) invest an equal amount, or the amount not so applied pursuant to
clause (a)(1) above (or enter into a definitive agreement committing to so
invest within 12 months after the date of such agreement), in Replacement
Assets.
The amount of such excess Net Cash Proceeds required to be applied (or to
be committed to be applied) during such 12-month period as set forth in the
preceding sentence and not applied as so required by the end of such period
shall constitute "Excess Proceeds."
(c) If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.17 totals at least $15,000,000, the Issuer shall commence, not later
than the last Business Day of such month, and consummate an Offer to Purchase
from the Holders and, if required by the terms of any
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Parity Lien Indebtedness, from the holders of such Parity Lien Indebtedness, on
a pro rata basis an aggregate principal amount of Securities (and Parity Lien
Indebtedness) equal to the Excess Proceeds on such date, at a purchase price
equal to 100% of their principal amount, plus, in each case, accrued interest
(if any) to, but not including, the Payment Date. To the extent that any Excess
Proceeds remain after consummation of an Offer to Purchase pursuant to this
Section 4.17, the Issuer may use those Excess Proceeds for any purpose not
otherwise prohibited by this Indenture and the amount of Excess Proceeds shall
be reset to zero.
4.18 LIMITATION ON BUSINESS ACTIVITIES.
The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than a Permitted Business.
4.19 LIMITATION ON IMPAIRMENT OF SECURITY INTEREST.
Neither the Issuer nor any of its Subsidiaries shall take or omit to take
any action which action or omission could reasonably be expected to have the
result of adversely affecting or impairing the Note Liens, other than as
expressly contemplated by this Indenture or the Security Documents; provided,
however, that the taking of any action with respect to the Collateral that is
required by the terms of this Indenture shall be deemed not to impair such
security interest.
4.20 EVENTS OF LOSS.
(a) In the event of an Event of Loss with respect to any Collateral, the
Issuer shall apply the Net Loss Proceeds from such Event of Loss, at its option,
to (1) the rebuilding, repair, replacement or construction of improvements to
the affected property within two years after receipt of such Net Loss Proceeds,
(2) the acquisition of or investment in Replacement Assets within one year after
receipt of such Net Loss Proceeds or (3) a redemption of the Securities and any
Parity Lien Indebtedness on a pro rata basis pursuant to an Offer to Purchase on
the terms described in clause (b) below. Pending the final application of any
Net Loss Proceeds, the Issuer shall deposit such Net Loss Proceeds in the
Collateral Account.
(b) Any Net Loss Proceeds from an Event of Loss that are not applied or
invested as provided in clause (a) above shall be deemed to constitute "Excess
Loss Proceeds." If, as of the first day of any calendar month, the aggregate
amount of Excess Loss Proceeds not theretofore subject to an Offer to Purchase
pursuant to this Section 4.20 totals at least $15,000,000, the Issuer shall
commence, not later than the last Business Day of such month, and consummate an
Offer to Purchase from the Holders and holders of any Parity Lien Indebtedness
outstanding at such time, on a pro rata basis an aggregate principal amount of
Securities and Parity Lien Indebtedness outstanding at such time, equal to the
Excess Loss Proceeds on such date, at a purchase price equal to 100% of the
principal amount thereof plus accrued interest thereon (if any) to, but not
including, the Payment Date. Any Offer to Purchase commenced pursuant to this
Section 4.20 shall be referred to as an "Event of Loss Offer to Purchase." To
the extent that any Excess Loss Proceeds remain after consummation of an Event
of Loss Offer to Purchase, the Issuer may use those Excess Loss Proceeds for any
purpose not otherwise prohibited by this Indenture and the amount of Excess Loss
Proceeds shall be reset to zero.
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4.21 ESCROW OF PROCEEDS TO BE USED FOR XXXXXXX CITY FACILITY.
On the Issue Date, the Issuer shall deposit $125,000,000 of the net
proceeds from the offering of the Initial Notes in the Escrow Account pending
application of such funds to the construction and start up costs of the Xxxxxxx
City Facility.
In the event that any of the following occurs:
(1) if (a) the Issuer or one of its Restricted Subsidiaries has not
obtained all requisite consents, approvals, licenses and permits required to
construct the Xxxxxxx City Facility in the manner contemplated in the Offering
Memorandum or (b) construction of the Xxxxxxx City Facility has not commenced,
in each case, on or prior to 180 days after the Issue Date; or
(2) if the Issuer shall have provided written notice to the Trustee and the
Escrow Agent at any time of its decision not to proceed with or complete the
construction of the Xxxxxxx City Facility,
the Issuer shall commence, not later than the fifth Business Day following the
date specified in clause (1) above or the date on which the notice specified in
clause (2) above is sent, as applicable, and consummate an Offer to Purchase (a
"Special Offer to Purchase") from the Holders on a pro rata basis an aggregate
principal amount of Securities equal to the lesser of (i) $125,000,000 and (ii)
the aggregate amount held in the Escrow Account at such time at a purchase price
equal to 100% of their principal amount, plus accrued and unpaid interest to,
but not including, the date of redemption.
ARTICLE V
SUCCESSOR CORPORATION
5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS.
(a) The Issuer shall not consolidate with, merge with or into, or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person or permit any
Person to merge with or into it unless:
(i) it shall be the continuing Person, or the Person (if other than
it) formed by such consolidation or into which it is merged or that
acquired or leased such property and assets (the "Surviving Person") shall
be organized and validly existing under the laws of the United States of
America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
Issuer's obligations under this Indenture, the Securities, the Registration
Rights Agreement and the Security Documents;
(ii) each of the conditions specified in clause (c) below is
satisfied; and
(iii) each Subsidiary Guarantor, unless such Subsidiary Guarantor is
the Person with which the Issuer has entered into a transaction under this
Section 5.1, shall have by
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amendment to its Note Guarantee confirmed that its Note Guarantee shall
apply to the obligations of the Issuer or the Surviving Person in
accordance with the Securities and this Indenture.
(b) No Subsidiary Guarantor shall consolidate with or merge with or into
any Person or permit any Person to merge with or into it unless:
(i) it shall be the continuing Person, or the Person (if other than
it) formed by such consolidation or into which it is merged (the
"Subsidiary Guarantor Surviving Person") shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of such
Subsidiary Guarantor obligations under its Note Guarantee, the Registration
Rights Agreement and the Security Documents; and
(ii) each of the conditions specified in clause (c) below is
satisfied.
The foregoing requirements of this clause (b) shall not apply to (x) a
consolidation or merger of any Subsidiary Guarantor with and into the Issuer or
any other Subsidiary Guarantor, so long as the Issuer or such Subsidiary
Guarantor survives such consolidation or merger or (y) a sale or other
disposition of all of the assets of a Subsidiary Guarantor, by way of merger,
consolidation or otherwise, if the Issuer or a Restricted Subsidiary applies the
Net Cash Proceeds of that sale or other disposition in accordance with Section
4.17.
(c) The following additional conditions shall apply to each transaction
described in clause (a) or (b) above, except that clause (ii) below shall not
apply to a transaction described in clause (b) above:
(i) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(ii) immediately after giving effect to such transaction on a pro
forma basis the Issuer (or the Surviving Person, if applicable) (x) could
Incur at least $1.00 of Indebtedness under the first sentence of clause (a)
of Section 4.4 or (y) would, together with its Restricted Subsidiaries,
have a greater Fixed Charge Coverage Ratio immediately after that
transaction (after giving pro forma effect thereto as if that transaction
had occurred at the beginning of the applicable four-quarter period) than
the Fixed Charge Coverage Ratio of the Issuer and its Restricted
Subsidiaries immediately prior to that transaction;
(iii) the Issuer or such Subsidiary Guarantor or the relevant
surviving entity, as applicable, shall cause such amendments, supplements
or other instruments to be filed, executed and/or recorded in such
jurisdictions as may be required by applicable law to preserve and protect
the Note Liens and, if applicable, the Parity Liens on the Collateral owned
by or sold, conveyed, transferred, leased or otherwise disposed of to such
Person, together with such financing statements as may be required to
perfect any security interests in such Collateral which may be perfected by
the filing of a financing statement under the UCC of the relevant states;
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(iv) the Collateral owned by or sold, conveyed, transferred, leased or
otherwise disposed of to the Issuer or such Subsidiary Guarantor or the
relevant surviving entity, as applicable, shall (a) continue to constitute
Collateral under this Indenture and the Security Documents, and (b) be
subject to the Note Liens, as applicable, in favor of the Joint Collateral
Agent for the benefit of the Trustee and the Holders, subject to Liens in
favor of and for the benefit of the holders of any Parity Lien Indebtedness
and the Parity Lien Representative;
(v) the assets of the Person which is merged or consolidated with or
into the relevant surviving entity, to the extent that they are assets of
the types which would constitute Collateral under this Indenture and the
Security Documents, shall be treated as after acquired property and such
surviving entity shall take such action as may be reasonably necessary to
cause such assets to be made subject to the Note Liens and, if applicable,
the Parity Liens and to perfect such Liens in respect of such assets, in
each case, in the manner and to the extent required under the Security
Documents; and
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate
compliance with clause (c)(ii) above unless compliance therewith is not
required) and an opinion of counsel, each stating that such transaction
and, if a supplemental indenture or supplemental Security Documents are
required in connection with such transaction, such supplemental indenture
and Security Documents comply with the applicable provisions of this
Indenture, that all conditions precedent in this Indenture relating to such
transaction have been satisfied and that supplemental indenture and
Security Documents are enforceable;
provided, however, that clause (c)(ii) above does not apply if, in the good
faith determination of the Board of Directors, whose determination shall be
evidenced by a Board Resolution, the principal purpose of such transaction is to
change the state of incorporation of the Issuer and any such transaction shall
not have as one of its purposes the evasion of the foregoing limitations.
5.2 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Issuer or any Subsidiary Guarantor in
accordance with Section 5.1 in which the Issuer or such Subsidiary Guarantor, as
applicable, is not the continuing corporation, the successor Person formed by
such consolidation or into which the Issuer or such Subsidiary Guarantor is
merged or to which such conveyance, lease or transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Issuer or
such Subsidiary Guarantor under this Indenture and the Securities or any Note
Guarantee, as applicable, with the same effect as if such Surviving Entity had
been named as such.
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ARTICLE VI
DEFAULT AND REMEDIES
6.1 EVENTS OF DEFAULT.
Each of the following shall be an "Event of Default":
(1) default in the payment of principal of (or premium, if any, on) any
Security when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise;
(2) default in the payment of interest on any Security when the same
becomes due and payable, and such default continues for a period of 30 days;
(3) default in the performance or breach of the provisions of Article V by
the Issuer or any Subsidiary Guarantor or the failure by the Issuer to make or
consummate an Offer to Purchase in accordance with Sections 4.16, 4.17, 4.20 and
4.21 and such default or breach continues for a period of 30 consecutive days
after written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Securities;
(4) the Issuer or any Subsidiary Guarantor defaults in the performance of
or breaches any other covenant or agreement in this Indenture or under the
Securities (other than a default specified in clause (1), (2) or (3) above) and
such default or breach continues for a period of 60 consecutive days after
written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Securities;
(5) there occurs with respect to: (i) any issue or issues of Parity Lien
Indebtedness, or (ii) any other issue or issues of Indebtedness of the Issuer,
any Subsidiary Guarantor or any Restricted Subsidiary having an outstanding
principal amount of $20,000,000 or more in the aggregate for all such issues of
all such Persons, and in the case of each of clause (i) or (ii) of this Clause
(5), such Indebtedness now exists or shall hereafter be created, (I) an event of
default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but not any interim) fixed maturity (after giving effect
to any applicable grace period provided in such Indebtedness) and such defaulted
payment shall not have been made, waived or extended within 30 days of such
payment default;
(6) any final judgment or order (not covered by insurance or a third party
indemnity pursuant to an executed written agreement) for the payment of money in
excess of $20,000,000 in the aggregate for all such final judgments or orders
against all such Persons (treating any deductibles, self-insurance or retention
as not so covered) shall be rendered against the Issuer, any Subsidiary
Guarantor, any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary and shall not be paid or
discharged, and there shall be any period of 30 consecutive days following entry
of the final judgment or order that causes the aggregate amount for all such
final judgments or orders outstanding and not paid or discharged against all
such Persons to exceed $20,000,000 during which a stay of enforcement of such
final judgment or order, by reason of a pending appeal or otherwise, shall not
be in effect;
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(7) a court having jurisdiction in the premises enters a decree or order
for (A) relief in respect of the Issuer, any Subsidiary Guarantor, any
Significant Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (B)
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer, any Subsidiary Guarantor, any
Significant Subsidiary or any group of Subsidiaries that, taken together would
constitute a Significant Subsidiary or for all or substantially all of the
property and assets of the Issuer, any Subsidiary Guarantor, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary or (C) the winding up or liquidation of the affairs of
the Issuer, any Subsidiary Guarantor, any Significant Subsidiary or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary
and, in each case, such decree or order shall remain unstayed and in effect for
a period of 30 consecutive days;
(8) the Issuer, any Subsidiary Guarantor, any Significant Subsidiary or any
group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary (A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to the
entry of an order for relief in an involuntary case under any such law, (B)
consents to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer,
any Subsidiary Guarantor, any Significant Subsidiary or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary or
for all or substantially all of the property and assets of the Issuer, any
Subsidiary Guarantor, any Significant Subsidiary or any group of Subsidiaries
that, taken together would constitute a Significant Subsidiary or (C) effects
any general assignment for the benefit of creditors;
(9) the Issuer or any Subsidiary Guarantor repudiates its obligations under
its Security or Note Guarantee or, except as permitted by this Indenture, any
Note Guarantee is determined to be unenforceable or invalid or shall for any
reason cease to be in full force and effect; or
(10) (A) default by the Issuer or any Restricted Subsidiary in the
performance of the Security Documents which adversely affects the
enforceability, validity, perfection or priority of any Note Liens or which
adversely affects the condition or value of the Collateral, in each case, taken
as a whole, in any material respect, (B) repudiation or disaffirmation by the
Issuer or any such Restricted Subsidiary of its obligations under any of the
Security Documents or (C) the determination in a judicial proceeding that all or
any material portion of the Security Documents, taken as a whole, are
unenforceable or invalid, for any reason, against the Issuer or any such
Restricted Subsidiary (which default, repudiation, disaffirmation or
determination is not rescinded, stayed, or waived by the Persons having such
authority pursuant to the Security Documents or otherwise cured within 60 days
after the Issuer receives written notice thereof specifying such occurrence from
the Trustee or the Holders of 25% or more in aggregate principal amount of the
Securities).
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6.2 ACCELERATION.
If an Event of Default (other than an Event of Default specified in clause
(7) or (8) of Section 6.1 that occurs with respect to the Issuer) shall occur
and be continuing under this Indenture, the Trustee or the Holders of at least
25% in aggregate principal amount of the Securities then outstanding, by written
notice to the Issuer (and to the Trustee if such notice is given by the
Holders), may, and the Trustee at the request of such Holders shall, declare the
principal of, premium, if any, and accrued interest on the Securities to be
immediately due and payable. Upon a declaration of acceleration, such principal
of, premium, if any, and accrued interest shall be immediately due and payable.
In the event of a declaration of acceleration because an Event of Default
set forth in clause (5) of Section 6.1 has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to clause (5) of
Section 6.1 shall be remedied or cured by the Issuer, the relevant Subsidiary
Guarantor or the relevant Restricted Subsidiary or waived by the holders of the
relevant Indebtedness within 60 days after the declaration of acceleration with
respect thereto. If an Event of Default specified in clause (7) or (8) of
Section 6.1 shall occur with respect to the Issuer, any Subsidiary Guarantor or
any group of Subsidiaries that taken together would constitute a Significant
Subsidiary, the principal of, premium, if any, and accrued interest on the
Securities then outstanding shall automatically become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder. In addition to acceleration of maturity of the Securities, if an
Event of Default occurs and is continuing, the holders of a majority of the
aggregate outstanding principal amount of the Securities and the Parity Lien
Indebtedness voting as a single class shall have the right to direct the Joint
Collateral Agent to exercise remedies with respect to the Collateral.
6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, and interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
6.4 WAIVER OF PAST DEFAULTS; RESCISSION OF ACCELERATION.
Subject to Sections 2.9, 6.2, 6.7 and 9.2, the Holders of at least a
majority in principal amount of the outstanding Securities by written notice to
the Issuer and to the Trustee, may waive all past defaults and rescind and annul
a declaration of acceleration and its consequences if (x) all existing Events of
Default, other than the nonpayment of the principal of, premium, if any,
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and accrued interest on the Securities that have become due solely by such
declaration of acceleration, have been cured or waived and (y) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction.
6.5 CONTROL BY MAJORITY.
The Holders of at least a majority in aggregate principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith may
be unduly prejudicial to the rights of Holders not joining in the giving of such
direction and may take any other action it deems proper that is not inconsistent
with any such direction received from Holders.
6.6 LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives the Trustee written notice of a continuing Event of
Default;
(2) the Holder or Holders of at least 25% in aggregate principal amount of
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer the Trustee indemnity satisfactory to the
Trustee against any costs, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period, the Holders of at least a majority in
aggregate principal amount of the outstanding Securities do not give the Trustee
a direction that is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of the principal of or premium, if any, or interest on
a Security or to bring suit for the enforcement of any such payment, on or after
the due date expressed in the Securities, shall not be impaired or affected
without the consent of the Holder.
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6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal, premium, if any, or
interest specified in clause (1) or (2) of Section 6.1 occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Issuer or any other obligor on the Securities for the whole
amount of principal, premium, if any, and accrued interest and fees remaining
unpaid, together with interest on overdue principal and premium, if any, and, to
the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due to the Trustee under Section 7.7.
6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
to the Trustee under Section 7.7) and the Holders allowed in any judicial
proceedings relating to the Issuer, its creditors or its property and shall be
entitled and empowered to participate as a member, voting or otherwise, of any
official committee appointed for such matter, to collect and receive any monies
or other securities or property payable or deliverable upon the conversion or
exchange of the Securities or upon any such claims and to distribute the same,
and any Custodian in any such judicial proceedings 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 to
the Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 7.7. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
6.10 PRIORITIES.
Subject to Section 10.3 hereof and Section 5.2 of the Security Agreement,
if the Trustee collects any money or property pursuant to this Article VI, it
shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: to Holders for interest accrued on the Securities, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Securities for interest;
Third: to Holders for principal amounts and premium, if any, due and
unpaid on the Securities, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal; and
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Fourth: to the Issuer or, if applicable, the Subsidiary Guarantors as
their respective interests may appear.
The Trustee, upon prior notice to the Issuer, may fix a record date and
payment date for any payment to Holders pursuant to this Section 6.10.
6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.7, or a suit by a Holder or Holders of more than 10% in principal amount of
the outstanding Securities.
6.12 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture 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, subject to any determination in
such proceeding, the Issuer, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Issuer, Trustee and the Holders shall continue as
though no such proceeding had been instituted.
6.13 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or wrongfully taken Securities in Section 2.7, 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.
ARTICLE VII
TRUSTEE
7.1 DUTIES OF TRUSTEE.
(a) If 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 person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
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(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties as are specifically set
forth herein or in the TIA and no duties, covenants, responsibilities or
obligations shall be implied in this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates (including Officers'
Certificates) or opinions (including Opinions of Counsel) furnished to the
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture, but need not verify
the contents thereof.
(c) Notwithstanding anything to the contrary herein, the Trustee may not be
relieved from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b) of this
Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, 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 6.5.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or 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.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 7.1.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Issuer. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) The Trustee shall not be responsible for the application of any money
by any Paying Agent other than the Trustee.
(h) If the Trustee shall receive conflicting or inconsistent requests from
two or more groups of Holders, each representing less than a majority of the
aggregate principal amount of Securities then outstanding, the Trustee in its
sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provision of this Indenture.
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7.2 RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and an Opinion of Counsel, which shall conform to the
provisions of Section 14.5. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such certificate or
opinion.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent (other than an
agent who is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization
and protection from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate (including any
Officers' Certificate), statement, instrument, opinion (including any
Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Issuer, to examine the books, records, and premises of the Issuer,
personally or by agent or attorney.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as duties.
(j) The Trustee shall not be charged with knowledge of any Default or
Event of Default, of the identity of any Restricted Subsidiary or the
existence of any Change of
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Control, Asset Sale, Event of Loss or event giving rise to a Special Offer
to Purchase unless either (i) a Responsible Officer shall have Actual
Knowledge thereof or (ii) the Trustee shall have received written notice
thereof from either of the Issuer or any Holder.
(k) Delivery of reports, information and documents to the Trustee
under Section 4.10 is for informational purposes only and the Trustee's
receipt of the foregoing shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Issuer's compliance with any of the covenants
hereunder.
(l) The Trustee shall not be responsible for the computation of any
interest payments or redemption amounts payable with respect to the
Securities.
(m) The Trustee shall not be responsible for the filing of original or
continuation financing statements or the recordation, amendment, or other
filing of any security interests, liens, financing statements, or other
similar documents, nor of the contents thereof.
(n) In no event shall the Trustee be liable for any failure or delay
in the performance of its obligations hereunder because of circumstances
beyond the Trustee's control, including, but not limited to, acts of God,
flood, war (whether declared or undeclared), terrorism, fire, riot,
embargo, government action, including any laws, ordinances, regulations,
governmental action or the like which delay, restrict or prohibit the
providing of the services contemplated by this Indenture.
7.3 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Issuer, its Subsidiaries
(including any Subsidiary Guarantors) or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee shall comply with Sections 7.10 and 7.11.
7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture, any Note Guarantee, the Security
Documents, the Collateral, or the Securities, it shall not be accountable for
the Issuer's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Issuer in this Indenture or any document
issued in connection with the sale of Securities or any statement in the
Securities other than the Trustee's certificate of authentication. The Trustee
makes no representations with respect to the effectiveness or adequacy of this
Indenture.
7.5 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and the
Trustee has Actual Knowledge thereof based on receipt of actual notice of such
Default or Event of Default, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90
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days after such Default or Event of Default occurs. Except in the case of a
Default or an Event of Default in payment of principal of, premium, if any, or
interest on, any Security including an accelerated payment and the failure to
make payment on the relevant Payment Date pursuant to an Offer to Purchase
resulting from a Change of Control, a Special Offer to Purchase or an Event of
Loss Offer to Purchase, the Trustee may withhold the notice if and so long as
the Board of Directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Trustee in good faith determines
that withholding the notice is in the interest of the Holders.
7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each January 1, beginning with January 1, 2006, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), 313(c) and
313(d).
A copy of each report at the time of its mailing to Holders shall be mailed
to the Issuer and filed with the Commission and each securities exchange, if
any, on which the Securities are listed.
The Issuer shall notify the Trustee if the Securities become listed on any
securities exchange or of any delisting thereof and the Trustee shall comply
with TIA Section 313(d).
7.7 COMPENSATION AND INDEMNITY.
The Issuer shall pay to the Trustee, from time to time, reasonable
compensation for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances (including reasonable fees and expenses of counsel)
incurred or made by it in addition to the compensation for its services, except
any such disbursements, expenses and advances as may be attributable to the
Trustee's negligence, bad faith or willful misconduct. Such expenses shall
include the reasonable fees and expenses of the Trustee's agents and counsel.
The Issuer and each of the Subsidiary Guarantors, jointly and severally,
shall indemnify the Trustee and its agents, employees, officers, stockholders
and directors for, and hold them harmless against, any loss, liability or
expense (including reasonable attorneys' fees and expenses) incurred by them
except for such losses, liabilities and expenses to the extent caused by any
negligence, bad faith or willful misconduct on their part, arising out of or in
connection with the acceptance or administration of this trust including the
cost and expense of enforcing this Indenture and the Securities against the
Issuer or the Holders (including this Section 7.7) including the reasonable
costs and expenses of defending themselves against or investigating any claim or
liability in connection with the exercise or performance of any of the Trustee's
rights, powers or duties hereunder. The Trustee shall notify the Issuer and the
Subsidiary Guarantors promptly of any claim asserted against the Trustee or any
of its agents, employees, officers, stockholders and directors for which it may
seek indemnity, provided that any failure to so notify the Issuer or any of the
Subsidiary Guarantors shall not relieve the Issuer of its indemnity
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obligations hereunder. The Issuer and the Subsidiary Guarantors may, subject to
the approval of the Trustee, defend the claim and the Trustee shall cooperate in
the defense. The Trustee and its agents, employees, officers, stockholders and
directors subject to the claim may have separate counsel and the Issuer and the
Subsidiary Guarantors shall pay the reasonable fees and expenses of such
counsel; provided, however, that neither the Issuer nor any the Subsidiary
Guarantors shall be required to pay such fees and expenses if, subject to the
approval of the Trustee, they assume the Trustee's defense and there is no
conflict of interest between the Issuer, the Subsidiary Guarantors and the
Trustee and its agents, employees, officers, stockholders and directors subject
to the claim in connection with such defense as reasonably determined by the
Trustee. The Issuer and the Subsidiary Guarantors need not pay for any
settlement made without its written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. The Issuer and the Subsidiary
Guarantors need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Issuer's and the Subsidiary Guarantors' payment obligations
in this Section 7.7, the Trustee shall have a senior claim and Lien prior to the
Securities and any other Obligations under the Security Documents against all
money or property held or collected by the Trustee, in its capacity as Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (7) or (8) of Section 6.1 occurs, such expenses and
the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law and shall be paid to the extent allowed
under any Bankruptcy Law.
Notwithstanding any other provision in this Indenture, the foregoing
provisions of this Section 7.7 shall survive the satisfaction and discharge of
this Indenture or the appointment of a successor Trustee.
7.8 REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Issuer in writing.
The Holders of at least a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Issuer and the Trustee and
may appoint a successor Trustee. The Issuer may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Issuer shall notify each Holder of such event and
shall promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in
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principal amount of the Securities may appoint a successor Trustee to replace
the successor Trustee appointed by the Issuer.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Issuer. Immediately after that, the retiring
Trustee shall transfer, after payment of all sums then owing to the Trustee
pursuant to Section 7.7, all property held by it as Trustee to the successor
Trustee, subject to the Lien provided in Section 7.7, the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Issuer's obligations under Section 7.7 shall continue for the benefit of the
retiring Trustee.
7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee; provided that such corporation
shall be otherwise qualified and eligible under this Article VII.
7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the requirement of
TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. In addition, if the Trustee is a
corporation included in a bank holding company system, the Trustee,
independently of the bank holding company, shall meet the capital requirements
of TIA Section 310(a)(2). The Trustee shall comply with TIA Section 310(b);
provided, however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Issuer are
outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Issuer
and any other obligor of the Securities.
7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER.
The Trustee, in its capacity as Trustee hereunder, shall comply with TIA
Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated.
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7.12 DIRECTION TO TRUSTEE.
The Trustee is directed to execute, deliver and perform its obligations
under the Security Documents.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
8.1 TERMINATION OF THE ISSUER'S OBLIGATIONS.
The Issuer may terminate its and each other Obligor's obligations under the
Securities and this Indenture, except those obligations referred to in the
penultimate paragraph of this Section 8.1, if all Securities previously
authenticated and delivered (except lost, stolen or destroyed Securities which
have been replaced or paid and Securities for whose payment U.S. Legal Tender in
immediately available funds has theretofore been deposited with the Trustee or
the Paying Agent in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from the trust as provided in
Section 8.5) have been delivered to the Trustee for cancellation and the Issuer
have paid all sums payable by them hereunder, or if:
(i) either (i) pursuant to Article III, the Issuer shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of
the redemption of all of the Securities in accordance with the provisions
hereof or (ii) all Securities have otherwise become due and payable
hereunder or shall become due and payable hereunder within one year;
(ii) the Issuer shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the benefit
of the Holders for that purpose, U.S. Legal Tender in immediately available
funds in such amount as is sufficient without consideration of reinvestment
of such interest, to pay principal of, premium, if any, and interest on any
Securities not previously delivered to the Trustee for cancellation to
maturity or redemption; provided that the Trustee shall have been
irrevocably instructed to apply such U.S. Legal Tender to the payment of
said principal, premium, if any, and interest with respect to the
Securities;
(iii) the Issuer shall have paid all other sums payable by it
hereunder; and
(iv) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of the Issuer's
obligations under the Securities and this Indenture have been complied with
and a certificate of the Issuer's independent accountants (who shall be a
firm of established national reputation) stating that the amount deposited
with the Trustee is sufficient to pay principal of, premium, if any, and
interest on the outstanding Securities to maturity or redemption.
Subject to the next sentence and notwithstanding the foregoing paragraph,
the Issuer's obligations in Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2, 4.5, 7.7, 8.5
and 8.6 shall survive until the
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Securities are no longer outstanding pursuant to the last paragraph of Section
2.8. After the Securities are no longer outstanding, the Issuer's obligations in
Sections 7.7, 8.5 and 8.6 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request, on
demand of and at the expense of the Issuer, shall acknowledge in writing the
discharge of the Issuer's obligations under the Securities and this Indenture
except for those surviving obligations specified above.
8.2 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) The Issuer may, at its option by Board Resolutions of the Board of
Directors of the Issuer, at any time, elect to have either clause (b) or
(c) of this Section 8.2 applied to all outstanding Securities upon
compliance with the conditions set forth in Section 8.3.
(b) Upon the Issuer's exercise under clause (a) above of the option
applicable to this clause (b), the Issuer and each other Obligor (or in the
case of the Security Documents, the Restricted Subsidiaries) shall, subject
to the satisfaction of the conditions set forth in Section 8.3 and the
conditions set forth in this Section 8.2, be deemed to have been discharged
from their respective Note Obligations with respect to all outstanding
Securities and the corresponding Note Guarantees on the date that is 123
days after the date of the deposit referred to in Section 8.3(i)
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Issuer shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section
8.4 and the other Sections of this Indenture referred to in (i) and (ii)
below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the
expense of the Issuer, shall execute proper instruments acknowledging the
same), and Holders of the Securities and any amounts deposited under
Section 8.3 shall cease to be subject to any obligations to, or the rights
of, any holder of Note Lien Obligations under Article X or otherwise,
except for the following provisions, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
Section 8.4, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such
Securities when such payments are due, (ii) the obligations with respect to
such Securities under Article II and Section 4.2, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the obligations
in connection therewith and (iv) this Article VIII. Subject to compliance
with this Article VIII, the Issuer may exercise its option under this
clause (b) notwithstanding the prior exercise of its option under clause
(c) below.
(c) Upon the Issuer's exercise under clause (a) above of the option
applicable to this clause (c), the Issuer and each Subsidiary Guarantor
shall, subject to the satisfaction of the conditions set forth in Section
8.3 and the conditions set forth in this Section 8.2, be released from
their obligations, if any, under the covenants contained in Sections 4.3
and 4.4 and Sections 4.12 through 4.21 and clause (ii) of Section 5.1(c)
with respect to the outstanding Securities and the corresponding Note
Guarantee on and after
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the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Securities shall thereafter be deemed not
"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 (it being understood that
such Securities shall not be deemed outstanding for accounting purposes)
and Holders of the Securities and any amounts deposited under Section 8.3
shall cease to be subject to any obligations to, or the rights of, any
holder of Note Lien Obligations under Article X or otherwise. For this
purpose, such Covenant Defeasance means that, with respect to the
outstanding Securities, the Issuer may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1(iii) (to the extent pertaining to
a default under or breach of the provisions of clause (ii) of Section
5.1(c)), 6.1(4), 6.1(5) or 6.1(6), but, except as specified above, the
remainder of this Indenture and such Securities shall be unaffected
thereby.
8.3 CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.2(b) or 8.2(c) to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Issuer shall have
(A) deposited with the Trustee, in trust, money and/or U.S.
Government Obligations that through the payment of interest and
principal (in respect of such U.S. Government Obligations) in
accordance with their terms will provide money in an amount
sufficient to pay the principal of, premium, if any, and accrued
interest on the Securities on the Stated Maturity of such
payments in accordance with the terms of this Indenture and the
Securities; and
(B) delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent
providing for or relating to the termination of the Issuer's
obligations under the Securities and this Indenture have been
complied with and a certificate of the Issuer's independent
accountants (who shall be a firm of established national
reputation) stating that the amount deposited with the Trustee is
sufficient to pay principal of, premium, if any, and interest on
the outstanding Securities to maturity or redemption.
(ii) in the case of an election under Section 8.2(b), the Issuer shall
have delivered to the Trustee:
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(A) either (x) an Opinion of Counsel to the effect that
Holders will not recognize income, gain or loss for federal
income tax purposes as a result of the Issuer's exercise of its
option under Section 8.2(b) and will be subject to federal income
tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit, defeasance and
discharge had not occurred, which Opinion of Counsel must be
based upon (and accompanied by a copy of) a ruling of the
Internal Revenue Service to the same effect unless there has been
a change in applicable federal income tax law after the Issue
Date such that a ruling is no longer required or (y) a ruling
directed to the Trustee received from the Internal Revenue
Service to the same effect as the aforementioned Opinion of
Counsel; and
(B) an Opinion of Counsel to the effect that, subject to
customary assumptions and exclusions, the creation of the
defeasance trust does not violate the Investment Company Act of
1940 and after the passage of 123 days following the deposit, the
trust fund will not be subject to the effect of Section 547 of
the Bankruptcy Law or Section 15 of the New York Debtor and
Creditor Law;
(iii) in the case of an election under Section 8.2(c), the Issuer
shall have delivered to the Trustee (A) an Opinion of Counsel to the effect
that, subject to customary assumptions and exclusions, the creation of the
defeasance trust does not violate the Investment Company Act of 1940 and
after the passage of 123 days following the deposit, the trust fund will
not be subject to the effect of Section 547 of the Bankruptcy Law or
Section 15 of the New York Debtor and Creditor Law, and (B) an Opinion of
Counsel to the effect that, among other things, the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of the Issuer's exercise of its option under Section 8.2(c) and will be
subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit and
defeasance had not occurred;
(iv) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have occurred
and be continuing on the date of such deposit or during the period ending
on the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Issuer or any of its
Subsidiaries is a party or by which the Issuer or any of its Subsidiaries
is bound;
(v) if at such time the Securities are listed on a national securities
exchange, the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Securities will not be delisted as a result
of such deposit, defeasance and discharge;
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuer with the
intent of preferring the
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Holders over any other creditors of the Issuer or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the
Issuer or others; and
(vii) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent hereunder provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Notwithstanding the foregoing, the Opinions of Counsel required by clause
(ii) above of this Section 8.3 need not be delivered if all Securities not
theretofore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) will become due and payable on the Maturity Date within one year
or (iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Issuer.
8.4 APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to this Article VIII, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of,
premium, if any, and interest on the Securities.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.3 hereof 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 outstanding Securities.
Anything in this Article VIII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuer from time to time upon the Issuer's request
any U.S. Legal Tender or U.S. Government Obligations held by it as provided in
Section 8.3 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
8.5 REPAYMENT TO THE ISSUER.
The Trustee and the Paying Agent shall pay to the Issuer upon request any
money held by them for the payment of principal, premium, if any, or interest
that remains unclaimed for two years; provided that the Trustee or such Paying
Agent, before being required to make any payment, may at the expense of the
Issuer mail to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein which shall be at least 30
days from the date of such publication or mailing any unclaimed balance of such
money then remaining shall be repaid to the Issuer. After payment to the Issuer,
Holders entitled to such money must look to the Issuer for payment as general
creditors unless an applicable law designates another Person.
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8.6 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with this Article VIII by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Issuer's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article VIII until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with this Article VIII; provided that if the Issuer has made any payment of
interest on, premium, if any, or principal of any Securities because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.1 WITHOUT CONSENT OF HOLDERS.
The Issuer, the Subsidiary Guarantors and the Trustee, together, may amend
or supplement this Indenture, the Securities, any Note Guarantee or the Security
Documents, without notice to or consent of any Holder, to:
(1) cure any ambiguity, defect or inconsistency in this Indenture;
(2) comply with the provisions described under Article V or Section 4.14;
(3) comply with any requirements of the Commission in connection with the
qualification of this Indenture under the TIA;
(4) evidence and provide for the acceptance of appointment by a successor
Trustee;
(5) add a Subsidiary Guarantor;
(6) add any additional asset as Collateral;
(7) release any Collateral from the Note Liens when permitted or required
under this Indenture or the Security Documents;
(8) permit the creation and perfection of Liens on the Collateral (other
than the Escrow Account and the escrowed funds held therein) for the benefit of
holders of Parity Lien Indebtedness, to the extent such indebtedness and the
Parity Lien securing such indebtedness is permitted by the terms of this
Indenture and the Security Documents;
(9) provide for the issuance of Additional Notes in accordance with the
terms of the Indenture; or
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(10) conform this Indenture or the Security Documents to the "Description
of Notes" contained in the Offering Memorandum to the extent that such provision
in the "Description of Notes" contained in the Offering Memorandum was intended
to be a verbatim recitation of a provision of this Indenture or the Security
Documents;
provided that the Issuer has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.1.
9.2 WITH CONSENT OF HOLDERS.
Subject to Section 6.7, modifications and amendments of this Indenture, the
Securities, any Note Guarantee and the Security Documents may be made by the
Issuer, the Subsidiary Guarantors (or, in the case of the Security Documents,
the Restricted Subsidiaries) and the Trustee with the consent of the Holders of
not less than a majority in aggregate principal amount of the outstanding
Securities; provided, however, that no such modification or amendment may,
without the consent of each Holder affected thereby, to:
(1) change the Stated Maturity of the principal of, or any installment of
interest on, any Security;
(2) reduce the principal amount of, or premium, if any, or interest on, any
Security;
(3) change the optional redemption dates or optional redemption prices of
the Securities from that stated in Section 5 of the Securities or waive or
modify any of the provisions set forth under Section 4.20 or Section 4.21 or, to
the extent that it relates to the disposition of any Collateral, Section 4.17;
(4) change the place or currency of payment of principal of, or premium, if
any, or interest on, any Security;
(5) impair the right to institute suit for the enforcement of any payment
on or after the Stated Maturity (or, in the case of a redemption, on or after
the Redemption Date) of any Security;
(6) waive a default in the payment of principal of, premium, if any, or
interest on the Securities;
(7) release any Subsidiary Guarantor from its Note Guarantee, except as
provided in this Indenture;
(8) amend or modify any of the provisions of this Indenture in any manner
which subordinates the Securities issued thereunder in right of payment to any
other Indebtedness of the Issuer or which subordinates any Note Guarantee in
right of payment to any other Indebtedness of the Subsidiary Guarantor issuing
any such Note Guarantee;
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(9) reduce the percentage or aggregate principal amount of outstanding
Securities the consent of whose Holders is necessary for waiver of compliance
with certain provisions of this Indenture or the Security Documents or for
waiver of certain defaults;
(10) reduce the percentage of aggregate principal amount of Securities
outstanding necessary to amend this Indenture; or
(11) modify the provisions with respect to modification and waiver.
Without the consent of the holders of at least 66 2/3% in aggregate
principal amount of the Securities then outstanding, no amendment may release
from the Lien of the Security Documents any Collateral or modify any provisions
of the Security Documents otherwise than in accordance with the terms of this
Indenture or the Security Documents.
No amendment or supplement to the provisions of this Indenture or the
Security Documents governing the sharing of Collateral with Parity Liens may be
made unless such amendment or supplement is permitted under Section 11.4.
9.3 [INTENTIONALLY OMITTED].
9.4 COMPLIANCE WITH TIA.
From the date on which this Indenture is qualified under the TIA, every
amendment, waiver or supplement of this Indenture or the Securities or any Note
Guarantee shall comply with the TIA as then in effect.
9.5 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of his Security by notice to the Trustee or the
Issuer received before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Issuer 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 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; provided that any such waiver shall not impair or affect the right
of any Holder to receive payment of principal of, premium, if any, and interest
on a Security, on or after the respective
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due dates expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates without the consent of such
Holder.
9.6 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security, the
Issuer may require the Holder of the Security to deliver it to the Trustee. The
Issuer may provide the Trustee with an appropriate notation on the Security
about the changed terms and cause the Trustee to return it to the Holder at the
Issuer's expense. Alternatively, if the Issuer or the Trustee so determines, the
Issuer in exchange for the Security may issue and the Trustee shall authenticate
a new Security that reflects the changed terms. Failure to make the appropriate
notation or issue a new Security shall not affect the validity and effect of
such amendment, supplement or waiver.
9.7 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article IX; provided that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each complying with Sections
14.4 and 14.5 and stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article IX is authorized or permitted by this
Indenture and constitutes the legal, valid and binding obligations of the Issuer
and the Subsidiary Guarantors, if applicable, enforceable in accordance with its
terms. Such Opinion of Counsel shall be at the expense of the Issuer.
ARTICLE X
COLLATERAL
10.1 RIGHTS OF THE TRUSTEE.
(a) The Trustee shall initially act as Joint Collateral Agent and, as Joint
Collateral Agent, shall be entitled to the protections, immunities and
indemnities afforded the Trustee.
(b) Neither the Trustee nor the Joint Collateral Agent nor any of their
respective officers, directors, employees, attorneys or agents shall be
responsible for the existence, genuineness, value or protection of any
Collateral, for the legality, enforceability, effectiveness or sufficiency of
the Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Note Lien, or for any failure to demand, collect, foreclose or
realize upon or otherwise enforce any of the Note Liens or the Security
Documents or for any delay in doing so.
(c) Each successor Trustee shall become the successor Joint Collateral
Agent as and when the successor Trustee becomes the Trustee.
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10.2 COLLATERAL AND SECURITY DOCUMENTS.
(a) In order to secure the due and punctual payment of the Securities, the
Issuer has entered into the Security Documents to create the Note Liens and, to
the extent applicable, the Parity Liens on the Collateral (other than the Escrow
Account and the escrowed funds held therein) in accordance with the terms
thereof. In the event of a conflict between the terms of this Indenture and the
Security Documents, the Security Documents shall control.
(b) Each Holder of a Security, by accepting such Security, (i) agrees to
all of the terms and provisions of the Security Documents, (ii) acknowledges
that all Note Lien Obligations including, without limitation, any interest that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganization or similar proceeding of the
Issuer or any of its Subsidiaries at the contractual rate of interest provided
for in the respective documentation for such Note Lien Obligations, whether or
not a claim for such post-petition interest is allowed in any such proceeding or
under applicable law, and (iii) directs the Trustee and the Joint Collateral
Agent to enter into the Security Documents and, unless violative of the
provisions hereof and thereof, to execute any and all documents, amendments,
waivers, consents, releases or other instruments required (or authorized) to be
executed by it pursuant to the terms thereof.
(c) In the event that the Issuer shall issue Additional Notes pursuant to
Section 2.2, the net proceeds from any such issuance shall be immediately
deposited into an escrow account (other than the Escrow Account) pending their
investment in property or assets of a nature or type or that are used in a
Permitted Business. Such escrow account (and all cash, Treasury Securities and
other Collateral Investments therein) and such property or assets (collectively,
the "Additional Notes Collateral") shall immediately become part of the
Collateral, and the Issuer shall, or shall cause the relevant Subsidiaries to,
execute such collateral documents and other instruments and take such other
measures as shall be reasonably necessary to cause such escrow account and such
property or assets to become subject to the Note Liens securing the Note
Obligations and to perfect such Liens in respect of such escrow account and
property or assets, in each case, in the manner and to the extent required under
the Security Documents.
10.3 APPLICATION OF PROCEEDS OF COLLATERAL.
(a) Proceeds realized by the Joint Collateral Agent from the Collateral
shall be applied:
First, to amounts owing to the Joint Collateral Agent and the Escrow
Agent in their respective capacities as Joint Collateral Agent and Escrow
Agent;
Second, to amounts owing to the Trustee in its capacity as such in
accordance with the terms of this Indenture;
Third, to the extent escrowed funds remain in the Escrow Account, to
the Holders ratably in accordance with the principal of, and interest and
premium, if any, outstanding on the Securities;
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Fourth, Equally and Ratably to the Holders and any holders of Parity
Lien Indebtedness in accordance with the terms of this Indenture; and
Fifth, to the Issuer and/or other Persons entitled thereto.
10.4 POSSESSION, USE AND RELEASE OF COLLATERAL.
(a) Subject to the terms of the Security Documents, the Issuer and its
Restricted Subsidiaries shall have the right to remain in possession and retain
exclusive control of the Collateral securing the Note Obligations and the Parity
Lien Obligations (other than any cash, securities, obligations, Collateral
Investments, Temporary Cash Investments and other cash equivalents constituting
part of the Collateral and deposited with the Joint Collateral Agent, the Escrow
Agent or the Trustee in accordance with the provisions of the Security Documents
or this Indenture and other than as set forth in the Security Documents) to
freely operate the Collateral and to collect, invest and dispose of any income
therefrom.
(b) In the event of the consummation of any sale, transfer or other
disposition of any property or assets that are subject to any Note Liens or
Parity Liens, which sale, transfer or other disposition meets the requirements
of Section 4.17, the Note Liens and Parity Liens on such property or assets (but
not the Net Cash Proceeds from such sale, transfer or other disposition) shall
be released. In addition, in the event that any real or personal property
becomes subject to a Lien created in accordance with clause (vi) of the second
paragraph of Section 4.15, and the Issuer so certifies to the Trustee and the
Joint Collateral Agent, the Note Liens and the Parity Liens on such property
shall be released.
(c) Each Holder of a Security, by accepting such Security, acknowledges
that, notwithstanding the provisions set forth in this Section 10.4, the Issuer
and its Restricted Subsidiaries may, without any release or consent by the Joint
Collateral Agent or the Trustee, perform a number of activities in the ordinary
course in respect of the Collateral to the extent permitted pursuant to the
Security Documents and this Indenture.
10.5 OPINION OF COUNSEL.
So long as the Security Documents have not been terminated in accordance
with the terms thereof, the Issuer shall deliver to the Trustee, so long as such
delivery is required by Section 314(b) of the TIA, promptly after the Issue Date
and thereafter, at least annually, within 30 days of January 1 of each year
(commencing with January 1, 2006), an Opinion of Counsel either stating that in
the opinion of such counsel, such action has been taken with respect to the
recording, filing, recording and refiling of this Indenture or any Security
Documents as is necessary to maintain the Note Liens, and reciting the details
of such action, or stating that in the opinion of such counsel, no such action
is necessary to maintain such Note Liens.
10.6 FURTHER ASSURANCES.
The Issuer shall, and shall cause each of its Restricted Subsidiaries to,
do or cause to be done all acts and things which may be required, or which the
Joint Collateral Agent from time to time may reasonably request, to assure and
confirm that the Joint Collateral Agent holds, for the benefit of the holders of
Note Obligations and Parity Lien Obligations, duly created, enforceable
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and perfected Liens upon the Collateral as contemplated by this Indenture and
the Security Documents, so as to render the same available for the security and
benefit of this Indenture and of Note Obligations and Parity Lien Obligations,
according to the intent and purposes herein expressed.
Upon the request of the Joint Collateral Agent at any time and from time to
time, the Issuer shall, and shall cause each of its Restricted Subsidiaries to,
promptly execute, acknowledge and deliver such security agreements, instruments,
certificates, notices and other documents and take such other actions as the
Joint Collateral Agent may reasonably request to create, perfect, protect,
assure or enforce the Liens and benefits intended to be conferred as
contemplated by this Indenture and the Security Documents for the benefit of the
holders of Note Obligations and the holders of Parity Lien Obligations. If the
Issuer or such Restricted Subsidiary fails to do so, the Joint Collateral Agent
shall, pursuant to the terms of the Security Documents, be irrevocably
authorized and empowered, with full power of substitution, to execute,
acknowledge and deliver such security agreements, instruments, certificates,
notices and other documents and, subject to the terms of this Indenture and the
Security Documents, take such other actions in the name, place and stead of the
Issuer or such Restricted Subsidiary, but the Joint Collateral Agent shall have
no obligation to do so and no liability for any action taken or omitted by it in
good faith in connection therewith.
10.7 TRUST INDENTURE ACT REQUIREMENTS.
The release of any Collateral from the Note Liens created by any of the
Security Documents or the release of, in whole or in part, the Note Liens
created by any of the Security Documents, shall not be deemed to impair the Note
Liens in contravention of the provisions hereof if and to the extent the
Collateral or Note Liens are released pursuant to the applicable Security
Documents and pursuant to the terms hereof. Each of the Holders acknowledge that
a release of Collateral or Note Liens strictly in accordance with the terms of
the Security Documents or the terms hereof shall not be deemed for any purpose
to be an impairment of the Security Documents or otherwise contrary to the terms
of this Indenture. The Issuer and the Restricted Subsidiaries shall comply with
TIA Section 314(d) relating to the release of property or securities from the
Note Liens but only to the extent required by the TIA.
10.8 SUITS TO PROTECT THE COLLATERAL.
Subject to the provisions of the Security Documents, the Trustee or the
Parity Lien Representative shall have the authority to direct the Joint
Collateral Agent to institute and to maintain such suits and proceedings as the
Trustee or the Parity Lien Representative may deem expedient to prevent any
impairment of the Collateral by any acts which may be unlawful or in violation
of any of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee or the Parity Lien Representative may deem expedient
to preserve or protect its interests and the interests of any holder of Note
Obligations and Parity Lien Obligations in the Collateral (including suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the Note Liens or be prejudicial to the interests of
the Holders).
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10.9 PURCHASER PROTECTED.
In no event shall any purchaser in good faith or other transferee of any
property purported to be released hereunder be bound to ascertain the authority
of the Trustee or the Parity Lien Representative to direct the Joint Collateral
Agent to execute the release or to inquire as to the satisfaction of any
conditions required by the provisions hereof for the exercise of such authority
or to see to the application of any consideration given by such purchaser or
other transferee; nor shall any purchaser or other transferee of any property or
rights permitted to be sold by this Article X, be under obligation to ascertain
or inquire into the authority of the Issuer or any Restricted Subsidiary, as
applicable, to make any such sale or other transfer.
10.10 POWERS EXERCISABLE BY RECEIVER OR TRUSTEE.
In case the Collateral shall be in the possession of a receiver or trustee,
lawfully appointed, the powers conferred in this Article X upon the Issuer or
any Restricted Subsidiary, as applicable, with respect to the release, sale or
other disposition of such property may be exercised by such receiver or trustee,
and an instrument signed by such receiver or trustee shall be deemed the
equivalent of any similar instrument of the Issuer or any Restricted Subsidiary,
as applicable, or of any Officer or Officers thereof required by the provisions
of this Article X.
10.11 RELEASE UPON TERMINATION OF OBLIGATIONS.
In the event that the Issuer delivers an Officers' Certificate and Opinion
of Counsel certifying that its Note Obligations under this Indenture have been
defeased or discharged by complying with the provisions of Article VIII, the
Note Lien shall be released, and the Trustee shall (i) execute and deliver such
releases, termination statements and other instruments (in recordable form,
where appropriate) as the Issuer or any Restricted Subsidiary, as applicable,
may reasonably request to evidence the termination of the Note Liens created by
the Security Documents and (ii) not be deemed to hold the Note Liens for its
benefit and the benefit of the Holders.
10.12 COLLATERAL MONIES.
(a) All Collateral Monies, including without limitation all Net Cash
Proceeds received in connection with a Collateral Asset Sale, as well as Net
Loss Proceeds required to be deposited with the Joint Collateral Agent, shall be
held by the Joint Collateral Agent as part of the Collateral securing the Note
Obligations, and to the extent applicable, the Parity Lien Obligations. So long
as no Default or Event of Default under this Indenture shall have occurred and
be continuing, Collateral Monies may:
(i) with respect to the Net Cash Proceeds of Collateral Asset Sales, be
released as contemplated by Section 4.17,
(ii) with respect to Net Loss Proceeds, be released to repair or replace
the relevant Collateral, subject to conditions set forth in this
Indenture,
(iii) at the Issuer's direction be applied by the Joint Collateral Agent
Equally and Ratably from time to time to (x) the payment of the
principal of, premium, if any,
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and interest on any Securities and any Parity Lien Indebtedness at
maturity or upon redemption or retirement, or (y) the purchase of
Securities and any Parity Lien Indebtedness upon tender or in the open
market or otherwise, in each case, in compliance with this Indenture,
or
(iv) continue to be held by the Joint Collateral Agent as part of the
Collateral securing the Note Obligations and, to the extent
applicable, the Parity Lien Obligations.
(b) The Joint Collateral Agent shall be entitled to apply any Collateral
Monies to cure any Event of Default under this Indenture. Collateral Monies
deposited with the Joint Collateral Agent shall be invested in cash or Temporary
Cash Investments pursuant to the Issuer's direction and, so long as no Default
or Event of Default shall have occurred and be continuing, the Issuer shall be
entitled to any interest or dividends accrued, earned or paid on such Temporary
Cash Investments.
(c) All Collateral Monies held by the Joint Collateral Agent shall be
invested at the instruction of the Issuer in Treasury Securities and other
Collateral Investments, and, so long as no Default or Event of Default shall
have occurred and be continuing, the Issuer shall be entitled to any interest or
dividends accrued, earned or paid on such Treasury Securities and other
Collateral Investments.
ARTICLE XI
COLLATERAL SHARING WITH PARITY LIENS
11.1 PREREQUISITES TO INCURRING PARITY LIEN INDEBTEDNESS.
(1) Prior to incurring any Parity Lien Indebtedness, the Issuer shall
deliver to the Trustee and the Joint Collateral Agent an Officers' Certificate
stating that:
(a) the Issuer and the Subsidiary Guarantors intend to incur, on a
date stated therein, Indebtedness that will constitute Parity Lien
Indebtedness;
(b) the Securities and the Parity Lien Indebtedness, collectively,
shall not exceed $500,000,000 immediately after the incurrence of such
Parity Line Indebtedness;
(c) no Default or Event of Default exists on the date of such
Officers' Certificate or will exist after giving effect to the incurrence
of such Parity Lien Indebtedness;
(d) the Issuer and its Restricted Subsidiaries have appointed the
Joint Collateral Agent to hold the security interest on behalf of such
Parity Lien Indebtedness in accordance with the Collateral Agency Agreement
and have taken all steps necessary to make such Collateral Agency Agreement
applicable to the Parity Lien Indebtedness;
(e) the Issuer and its Restricted Subsidiaries shall, on the date of
such incurrence, execute and deliver such additional Security Documents and
take all such action as may be necessary to grant or confirm the grant of
Collateral (other than the
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Escrow Account and the escrowed funds held therein) to the Joint Collateral
Agent as security for all present and future Note Obligations and Parity
Lien Obligations, and shall take such action to perfect such security
interest such that after giving effect thereto the Joint Collateral Agent
shall hold as security for all present and future Note Obligations and
Parity Lien Obligations, a valid and perfected security interest upon all
or substantially all of the Collateral (other than the Escrow Account and
the escrowed funds held therein) that, immediately prior to giving effect
thereto, was subject to the Note Liens;
(f) the Liens securing such proposed Parity Lien Indebtedness shall
not be subject or subordinate to any Lien except to the extent that the
Note Lien is also subject or subordinate to such Lien immediately prior to
the incurrence of such Parity Lien Indebtedness in accordance with the
terms of this Indenture and the Security Documents; and
(g) the Issuer and its Restricted Subsidiaries shall, on such date,
enter into all amendments to the Security Documents then in effect that are
necessary to add Parity Lien Obligations to the obligations secured
thereby, pursuant to amendments delivered to the Joint Collateral Agent
therewith, to be executed on such date by the Joint Collateral Agent and
the Issuer or the Restricted Subsidiary party to such Security Documents;
(2) the holders of any Parity Lien Obligations, or a representative on
their behalf, shall execute and deliver a contractual undertaking in
substantially the form of the Joinder Agreement attached as an exhibit to the
Collateral Agency Agreement dated the Issue Date among the Issuer, the
Restricted Subsidiaries and the Joint Collateral Agent whereby such persons
agree to be bound by the Lien sharing provisions of this Indenture;
(3) prior to or simultaneously with incurring any Parity Lien Indebtedness,
the Issuer and its Restricted Subsidiaries shall deliver to the Trustee and
Joint Collateral Agent, Opinions of Counsel confirming on customary terms:
(a) the validity and enforceability of the Collateral Agency Agreement
and all additional and amended Security Documents delivered to the Joint
Collateral Agent;
(b) the validity, enforceability and perfection of the Liens granted
by such Security Documents;
(c) that the Note Obligations and Parity Lien Obligations (i) are
secured by equal and ratable security interests in the Collateral (other
than the Escrow Account and the escrowed funds held therein) and (ii) that
the holders of any such Parity Lien Obligations or the Parity Lien
Representative have duly executed and delivered a contractual undertaking
in substantially the form of the Joinder Agreement attached as an exhibit
to the Collateral Agency Agreement dated the Issue Date among the Issuer,
the Restricted Subsidiaries and the Joint Collateral Agent whereby such
persons agree to be bound by the Lien sharing provisions of this Indenture
and the Collateral Agency Agreement and that such contractual undertaking
is legally binding and enforceable on such holders of Parity Lien
Indebtedness; and
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(d) the continued perfection of the Note Liens, without loss of
priority as against any Lien other than Parity Liens, upon giving effect to
the inclusion of such Note Lien assignment and any such amendments of the
Security Documents,
then, subject to the terms of the Collateral Agency Agreement, the Trustee shall
direct the Joint Collateral Agent to execute and deliver such amendments to the
Security Documents, if any, as the Issuer shall indicate to the Trustee, in an
Officers' Certificate, are necessary to accomplish the foregoing, upon written
confirmation from such Joint Collateral Agent that it shall hold the Note Liens
and all such Security Documents and the Liens granted thereby for the benefit of
the holders of the Note Obligations and Parity Lien Obligations on the terms of
such Collateral Agency Agreement.
11.2 EQUAL AND RATABLE LIEN SHARING BY HOLDERS OF SECURITIES AND HOLDERS OF
PARITY LIEN INDEBTEDNESS.
Notwithstanding (i) anything to the contrary contained in the Securities,
the Note Guarantees, this Indenture or the Security Documents or in any
indenture, agreement or instrument governing, evidencing or relating to any
Parity Lien Obligations, (ii) the time, order or method of attachment of the
Note Liens or the Parity Liens, (iii) the time or order of filing or recording
of financing statements or other documents filed or recorded to perfect any Lien
upon any Collateral, (iv) the time of taking possession or control over any
Collateral or (v) the rules for determining priority under the UCC or any other
law governing relative priorities of secured creditors:
(1) except as otherwise provided in this Indenture, the Note Liens shall
rank pari passu with all valid, enforceable and perfected Parity Liens, whenever
granted upon any present or future Collateral (other than the Escrow Account and
the escrowed funds held therein), but only to the extent such Parity Liens
secure Parity Lien Obligations; and
(2) all proceeds of the Note Liens (other than the Note Liens on the Escrow
Account and the escrowed funds held therein and, to the extent applicable, other
than as provided in clause (7) of the definition of Parity Lien Indebtedness)
and Parity Liens shall be allocated and distributed Equally and Ratably on
account of the Note Obligations and Parity Lien Obligations.
11.3 ENFORCEMENT.
The provisions of clause (2) of Section 11.1 and Section 11.2 are binding
upon and intended for the benefit of the Joint Collateral Agent and each present
and future holder of Note Obligations and Parity Lien Obligations, each of whom
shall be entitled to enforce such provisions as a third party beneficiary
hereof.
11.4 AMENDMENT.
(1) No amendment or supplement to the provisions of this Article XI or the
provisions of the Security Documents governing the sharing of Collateral with
Parity Liens shall:
(A) be effective unless set forth in a writing signed by the Trustee
with the consent of the Holders of at least a majority in principal amount
of the Securities
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(including, without limitation, Additional Notes) then outstanding voting
as a single class, except that any such amendment which increases the
obligations or adversely affects the rights of the Holders of Securities
shall be effective only with the consent of the Holders of at least 66 2/3%
in principal amount of the Securities (including, without limitation,
Additional Notes) then outstanding, voting as a single class; and
(B) be effective without the written consent of the Issuer and, if any
Parity Lien Indebtedness is then outstanding, the holders of at least a
majority in principal amount of all Parity Lien Indebtedness then
outstanding voting as a single class, except that any such amendment which
increases the obligations or adversely affects the rights of the holders of
Parity Lien Indebtedness shall be effective only with the consent of the
holders of at least 66 2/3% in principal amount of all Parity Lien
Indebtedness then outstanding, voting as a single class;
provided that the Trustee and the Joint Collateral Agent shall be permitted and
authorized, without the consent of any Holder, to enter into any amendments to
the Security Documents (other than the Escrow Agreement) or this Indenture to
permit, and take any other necessary action to permit, the creation and
perfection of Liens on the Collateral (other than the Escrow Account and the
escrowed funds held therein) for the benefit of holders of Parity Lien
Indebtedness to the extent such indebtedness and the Parity Liens securing such
indebtedness is permitted by the terms of this Indenture and the Security
Documents.
Any such amendment or supplement that imposes any obligation upon the Joint
Collateral Agent or adversely affects the rights of the Joint Collateral Agent
in its individual capacity at any time when the Trustee is not the Joint
Collateral Agent shall become effective only with the consent of the Joint
Collateral Agent.
(2) No waiver of any of the provisions of this Article XI shall in any
event be effective unless set forth in a writing signed and consented to, as
required for an amendment under this Section 11.4, by the party to be bound
thereby.
ARTICLE XII
GUARANTEE OF SECURITIES
12.1 UNCONDITIONAL NOTE GUARANTEE.
Subject to the provisions of this Article XII, each of the Subsidiary
Guarantors shall hereby, jointly and severally, unconditionally and irrevocably
guarantee, on an unsubordinated basis to each Holder of a Security authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the Note Obligations of the Issuer or any other Subsidiary
Guarantors to the Holders or the Trustee hereunder or thereunder, that: (a) the
principal of, premium, if any, and interest on the Securities shall be duly and
punctually paid in full when due, whether at maturity, upon redemption at the
option of Holders pursuant to the provisions of the Securities relating thereto,
by acceleration or otherwise, and interest on the overdue principal and (to the
extent permitted by law) interest, if any, on the Securities and all other Note
Obligations of the Issuer or
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the Subsidiary Guarantors to the Holders or the Trustee hereunder or thereunder
(including amounts due the Trustee under Section 7.7) and all other Note
Obligations shall be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Securities or any of such other Note Obligations, the
same shall be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed, or failing
performance of any other Note Obligation of the Issuer to the Holders under this
Indenture or under the Securities, for whatever reason, each Subsidiary
Guarantor shall be obligated to pay, or to perform or cause the performance of,
the same immediately. An Event of Default under this Indenture or the Securities
shall constitute an event of default under the Note Guarantees, and shall
entitle the Holders, or the Trustee on behalf of the Holders, to accelerate the
Note Obligations of the Subsidiary Guarantors hereunder in the same manner and
to the same extent as the Note Obligations of the Issuer.
Each of the Subsidiary Guarantors shall hereby agree that its Note
Obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, any release of any
other Subsidiary Guarantor, the recovery of any judgment against the Issuer, any
action to enforce the same, whether or not a Note Guarantee is affixed to any
particular Security, or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a Subsidiary Guarantor. Each of the
Subsidiary Guarantors shall hereby waive the benefit of diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuer, any right to require a proceeding first against the
Issuer, protest, notice and all demands whatsoever and covenants that, except as
provided in this Indenture, the Securities or its Note Guarantee, its Note
Guarantee shall not be discharged except by complete performance of the
obligations contained in the Securities, this Indenture and the Note Guarantees.
Each Note Guarantee is a guarantee of payment and not of collection. If any
Holder or the Trustee is required by any court or otherwise to return to the
Issuer or to any Subsidiary Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Issuer or such Subsidiary
Guarantor, any amount paid by the Issuer or such Subsidiary Guarantor to the
Trustee or such Holder, each Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Subsidiary
Guarantor shall hereby further agree that, as between it, on the one hand, and
the Holders of Securities and the Trustee, on the other hand, (a) subject to
this Article XII, the maturity of the Note Obligations guaranteed hereby may be
accelerated as provided in Article VI for the purposes of the Note Guarantees,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Note Obligations guaranteed hereby, and (b) in
the event of any acceleration of such Note Obligations as provided in Article
VI, such Note Obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantors for the purpose of the Note
Guarantees.
No Affiliate, stockholder, officer, director, limited liability company
member or employee, past, present or future, of any Subsidiary Guarantor, as
such, shall have any personal liability under such Subsidiary Guarantor's Note
Guarantee by reason of his, her or its status as such Affiliate, stockholder,
officer, director, limited liability company member or employee.
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12.2 LIMITATIONS ON NOTE GUARANTEES.
The Note Obligations of any Subsidiary Guarantor under its Note Guarantee
shall be limited to the maximum amount which, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (including all
Note Lien Obligations of such Subsidiary Guarantor) and after giving effect to
any collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the Note Obligations of such other Subsidiary Guarantor
under its Note Guarantee or pursuant to its contribution obligations under this
Indenture, shall result in the obligations of such Subsidiary Guarantor under
the Note Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law. Each Subsidiary Guarantor that makes a
payment or distribution under a Note Guarantee shall be entitled to a
contribution from each other Subsidiary Guarantor in an amount pro rata, based
on the net assets of each Subsidiary Guarantor, determined in accordance with
GAAP.
12.3 EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To further evidence the Note Guarantees set forth in Section 12.1, each
Subsidiary Guarantor hereby agrees that a notation of its Note Guarantee,
substantially in the form of Exhibit E hereto, shall be endorsed on each
Security authenticated and delivered by the Trustee. The Note Guarantee of any
Subsidiary Guarantor shall be executed on behalf of such Subsidiary Guarantor by
either manual or facsimile signature of two Officers of such Subsidiary
Guarantor, each of whom, in each case, shall have been duly authorized to so
execute by all requisite corporate action. The validity and enforceability of
any Note Guarantee shall not be affected by the fact that it is not affixed to
any particular Security.
Each of the Subsidiary Guarantors hereby agrees that its Note Guarantee set
forth in Section 12.1 shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Note Guarantee.
If an Officer of a Subsidiary Guarantor whose signature is on this
Indenture or a Note Guarantee no longer holds that office at the time the
Trustee authenticates the Security on which such Note Guarantee is endorsed or
at any time thereafter, such Subsidiary Guarantor's Note Guarantee of such
Security shall nevertheless be valid.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Note Guarantee set forth
in this Indenture on behalf of each Subsidiary Guarantor.
12.4 RELEASE OF A SUBSIDIARY GUARANTOR.
(a) Upon (i) the sale, exchange or transfer to any Person (other than an
Affiliate of the Issuer) of all of the Capital Stock of a Subsidiary Guarantor
owned directly or indirectly by the Issuer or any Restricted Subsidiary of the
Issuer, (ii) the designation of a Subsidiary Guarantor as an Unrestricted
Subsidiary in accordance with the terms of this Indenture or (iii) the
defeasance or discharge of the Securities in accordance with the terms of this
Indenture, such Subsidiary Guarantor's (or, in the case of clause (iii), each
Subsidiary Guarantor's) Note Guarantee shall be automatically and
unconditionally discharged and such Subsidiary Guarantor shall be released from
all obligations under this Article XII without any further action required on
the part of the
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Subsidiary Guarantor, the Issuer, the Trustee or any Holder. Any Subsidiary
Guarantor not so released or the entity surviving such Subsidiary Guarantor, as
applicable, shall remain or be liable under its Note Guarantee as provided in
this Article XII.
(b) The Trustee shall deliver an appropriate instrument evidencing the
release of a Subsidiary Guarantor upon receipt of a request by the Issuer or
such Subsidiary Guarantor accompanied by an Officers' Certificate and an Opinion
of Counsel certifying as to the compliance with this Section 12.4; provided,
however, that the legal counsel delivering such Opinion of Counsel may rely as
to matters of fact on one or more Officers' Certificates of the Issuer.
The Trustee shall execute any documents reasonably requested by the Issuer
or a Subsidiary Guarantor in order to evidence the release of such Subsidiary
Guarantor from its obligations under its Note Guarantee endorsed on the
Securities and under this Article XII.
12.5 WAIVER OF SUBROGATION.
Until this Indenture is discharged and all of the Securities are discharged
and paid in full, each Subsidiary Guarantor shall hereby irrevocably waive and
agree not to exercise any claim or other rights which it may now or hereafter
acquire against the Issuer that arise from the existence, payment, performance
or enforcement of the Note Obligations under the Securities or this Indenture
and under its Note Guarantee, in any such instance, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, and any right to participate in any claim or remedy of the
Holders against the Issuer, 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 Issuer, 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
Subsidiary Guarantor in violation of the preceding sentence and any amounts
owing to the Trustee or the Holders of Securities under the Securities, this
Indenture, or any other document or instrument delivered under or in connection
with such agreements or instruments, shall not have been paid in full, such
amount shall have been deemed to have been paid to such Subsidiary Guarantor for
the benefit of, and held in trust for the benefit of, the Trustee or the Holders
and shall forthwith be paid to the Trustee for the benefit of itself or such
Holders to be credited and applied to the obligations in favor of the Trustee or
the Holders, as the case may be, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Subsidiary 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
12.5 is knowingly made in contemplation of such benefits.
12.6 IMMEDIATE PAYMENT.
Each Subsidiary Guarantor, upon the execution and delivery of a Note
Guarantee pursuant to Section 4.14, shall hereby agree to make immediate payment
to the Trustee, on behalf of the Holders or itself, of all Note Obligations due
and owing or payable to the respective Holders or the Trustee upon receipt of a
demand for payment therefor by the Trustee to such Subsidiary Guarantor in
writing.
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12.7 NO SET-OFF.
Each payment to be made by a Subsidiary Guarantor hereunder in respect of
the Note Obligations shall be payable in the currency or currencies in which
such Note Obligations are denominated, and shall be made without set-off,
counterclaim, reduction or diminution of any kind or nature.
12.8 NOTE OBLIGATIONS ABSOLUTE.
The Note Obligations of each Subsidiary Guarantor hereunder are and shall
be absolute and unconditional and any monies or amounts expressed to be owing or
payable by each Subsidiary Guarantor hereunder which may not be recoverable from
such Subsidiary Guarantor on the basis of a Note Guarantee shall be recoverable
from such Subsidiary Guarantor as a primary obligor and principal debtor in
respect thereof.
12.9 NOTE OBLIGATIONS CONTINUING.
The Note Obligations of each Subsidiary Guarantor hereunder shall be
continuing and shall remain in full force and effect until either all the
obligations have been discharged or defeased pursuant to Article VIII or
terminated pursuant to Section 12.4. Each Subsidiary Guarantor shall hereby
agree with the Trustee that it shall from time to time deliver to the Trustee
suitable acknowledgments of its continued liability hereunder and under any
other instrument or instruments in such form as counsel to the Trustee may
advise and as shall prevent any action brought against it in respect of any
default hereunder being barred by any statute of limitations now or hereafter in
force and, in the event of the failure of a Subsidiary Guarantor so to do, it
hereby irrevocably appoints the Trustee the attorney and agent of such
Subsidiary Guarantor to make, execute and deliver such written acknowledgment or
acknowledgments or other instruments as may from time to time become necessary
or advisable, in the judgment of the Trustee on the advice of counsel, to fully
maintain and keep in force the liability of such Subsidiary Guarantor hereunder
and under its Note Guarantee.
12.10 NOTE OBLIGATIONS NOT DISCHARGED.
Except as provided herein, the Note Obligations of each Subsidiary
Guarantor hereunder shall not be satisfied or discharged solely by the payment
of such principal, premium, if any, interest, fees and other monies or amounts
as may at any time prior to discharge of this Indenture pursuant to Article VIII
hereof be or become owing or payable under or by virtue of or otherwise in
connection with the Securities or this Indenture.
12.11 NOTE OBLIGATIONS REINSTATED.
The Note Obligations of each Subsidiary Guarantor hereunder shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
payment which would otherwise have reduced the Note Obligations of any
Subsidiary Guarantor hereunder (whether such payment shall have been made by or
on behalf of the Issuer or by or on behalf of a Subsidiary Guarantor) is
rescinded or reclaimed from any of the Holders upon the insolvency, bankruptcy,
liquidation or reorganization of the Issuer or any Subsidiary Guarantor or
otherwise, all as though such payment had not been made. If demand for, or
acceleration of the time for,
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payment by the Issuer is stayed upon the insolvency, bankruptcy, liquidation or
reorganization of the Issuer, all such Indebtedness otherwise subject to demand
for payment or acceleration shall nonetheless be payable by each Subsidiary
Guarantor as provided herein.
12.12 NOTE OBLIGATIONS NOT AFFECTED.
The Note Obligations of each Subsidiary Guarantor hereunder shall, to the
extent permitted by law, not be affected, impaired or diminished in any way by
any act, omission, matter or thing whatsoever, occurring before, upon or after
any demand for payment hereunder (and whether or not known or consented to by
any Subsidiary Guarantor or any of the Holders) which, but for this provision,
might constitute a whole or partial defense to a claim against any Subsidiary
Guarantor hereunder or might operate to release or otherwise exonerate any
Subsidiary Guarantor from any of its Note Obligations hereunder or otherwise
affect such Note Obligations, whether occasioned by default of any of the
Holders or otherwise, including, without limitation:
(i) any limitation of status or power, disability, incapacity or other
circumstance relating to the Issuer or any other Person, including any
insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, winding-up or other proceeding involving or
affecting the Issuer or any other Person;
(ii) any irregularity, defect, unenforceability or invalidity in
respect of any indebtedness or other obligation of the Issuer or any other
Person under this Indenture, the Securities or any other document or
instrument;
(iii) any failure of the Issuer, whether or not without fault on its
part, to perform or comply with any of the provisions of this Indenture or
the Securities, or to give notice thereof to a Subsidiary Guarantor;
(iv) the taking or enforcing or exercising or the refusal or neglect
to take or enforce or exercise any right or remedy from or against the
Issuer or any other Person or their respective assets or the release or
discharge of any such right or remedy;
(v) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Issuer or any other Person;
(vi) any change in the time, manner or place of payment of, or in any
other term of, any of the Securities, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from, any
of the Securities or this Indenture, including, without limitation, any
increase or decrease in the principal amount of or premium, if any, or
interest on any of the Securities;
(vii) any change in the ownership, control, name, objects, businesses,
assets, capital structure or constitution of the Issuer or a Subsidiary
Guarantor;
(viii) any merger or amalgamation of the Issuer or a Subsidiary
Guarantor with any Person or Persons;
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(ix) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of
the Note Obligations or the obligations of a Subsidiary Guarantor under its
Note Guarantee; and
(x) any other circumstance, including release of any other Subsidiary
Guarantor pursuant to Section 12.4 (other than by complete, irrevocable
payment) that might otherwise constitute a legal or equitable discharge or
defense of the Issuer under this Indenture or the Securities or of another
Subsidiary Guarantor in respect of its Note Guarantee hereunder;
provided that the provisions of this Section 12.12 are not intended to affect in
any way any release of a Subsidiary Guarantor in accordance with the provisions
of Section 12.4.
12.13 WAIVER.
Without in any way limiting the provisions of Section 12.1, each Subsidiary
Guarantor shall hereby waive notice of acceptance hereof, notice of any
liability of any Subsidiary Guarantor hereunder, notice or proof of reliance by
the Holders upon the Note Obligations of any Subsidiary Guarantor hereunder, and
diligence, presentment, demand for payment on the Issuer, protest, notice of
dishonor or non-payment of any of the Note Obligations, or other notice or
formalities to the Issuer or any Subsidiary Guarantor of any kind whatsoever.
12.14 NO OBLIGATION TO TAKE ACTION AGAINST THE ISSUER.
Neither the Trustee nor any other Person shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Note Obligations or against the Issuer or any other Person or
any property of the Issuer or any other Person before the Trustee is entitled to
demand payment and performance by any or all Subsidiary Guarantors of their
liabilities and the Note Obligations under their Note Guarantees or under this
Indenture.
12.15 DEALING WITH THE ISSUER AND OTHERS.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the Note Obligations and liabilities of any
Subsidiary Guarantor and without the consent of or notice to any Subsidiary
Guarantor, may
(i) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Issuer or any
other Person;
(ii) take or abstain from taking security or collateral from the
Issuer or from perfecting security or collateral of the Issuer;
(iii) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by
the Issuer or any third party with respect to the obligations or matters
contemplated by this Indenture or the Securities;
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(iv) accept compromises or arrangements from the Issuer;
(v) apply all monies at any time received from the Issuer or from any
security upon such part of the Note Obligations as the Holders may see fit
or change any such application in whole or in part from time to time as the
Holders may see fit; and
(vi) otherwise deal with, or waive or modify their right to deal with,
the Issuer and all other Persons and any security as the Holders or the
Trustee may see fit.
12.16 DEFAULT AND ENFORCEMENT.
If any Subsidiary Guarantor fails to pay in accordance with Section 12.6,
the Trustee may proceed in its name as trustee hereunder in the enforcement of
the Note Guarantee of any such Subsidiary Guarantor and such Subsidiary
Guarantor's obligations thereunder and hereunder by any remedy provided by law,
whether by legal proceedings or otherwise, and to recover from such Subsidiary
Guarantor the Note Obligations.
12.17 [INTENTIONALLY OMITTED].
12.18 ACKNOWLEDGMENT.
Each Subsidiary Guarantor shall hereby acknowledge communication of the
terms of this Indenture and the Securities and shall hereby consent to and
approves of the same.
12.19 COSTS AND EXPENSES.
Each Subsidiary Guarantor shall pay on demand by the Trustee any and all
costs, fees and expenses (including, without limitation, legal fees on a
solicitor and client basis) incurred by the Trustee, its agents, advisors and
counsel or any of the Holders in enforcing any of their rights under any Note
Guarantee.
12.20 NO MERGER OR WAIVER; CUMULATIVE REMEDIES.
No Note Guarantee shall operate by way of merger of any of the obligations
of a Subsidiary Guarantor under any other agreement, including, without
limitation, this Indenture. No failure to exercise and no delay in exercising,
on the part of the Trustee or the Holders, any right, remedy, power or privilege
hereunder or under this Indenture or the Securities, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or under this Indenture or the Securities preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges in the Note Guarantee and
under this Indenture, the Securities and any other document or instrument
between a Subsidiary Guarantor and/or either Issuer and the Trustee are
cumulative and not exclusive of any rights, remedies, powers and privilege
provided by law.
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12.21 SURVIVAL OF OBLIGATIONS.
Without prejudice to the survival of any of the other obligations of any
Subsidiary Guarantor hereunder, the obligations of each Subsidiary Guarantor
under Section 12.1 shall survive the payment in full of the Note Obligations
under the Securities, but only if and to the extent such payment is avoided, and
in such case shall be enforceable against such Subsidiary Guarantor to the same
extent as prior to any such payment and without regard to and without giving
effect to any defense, right of offset or counterclaim available to or which may
be asserted by the Issuer or any Subsidiary Guarantor.
12.22 NOTE GUARANTEE IN ADDITION TO OTHER OBLIGATIONS.
The Note Obligations of each Subsidiary Guarantor under its Note Guarantee
and this Indenture are in addition to and not in substitution for any other Note
Obligations to the Trustee or to any of the Holders in relation to this
Indenture or the Securities and any guarantees or security at any time held by
or for the benefit of any of them.
ARTICLE XIII
[INTENTIONALLY OMITTED]
ARTICLE XIV
MISCELLANEOUS
14.1 TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
14.2 NOTICES.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed (a) in the case of parties to this Indenture on the
date hereof, as follows, (b) in the case of any Escrow Agent, as specified in
the related Escrow Agreement and (c) in the case of the Joint Collateral Agent,
as specified in the Collateral Agency Agreement.
If to the Issuer or a Subsidiary Guarantor, if any:
VeraSun Energy Corporation
000 00xx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: President
Telephone: (000) 000-0000
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Telecopy: (000) 000-0000
with a copy to:
Stoel Rives LLP
Standard Insurance Center
000 XX 0xx Xxxxxx #0000
Xxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Trustee:
Xxxxx Fargo Bank, N.A.
Corporate Trust Services
Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: VeraSun Administrator
The Issuer and the Trustee by written notice to each other such Person may
designate additional or different addresses for notices to such Person. Any
notice or communication to the Issuer and the Trustee, shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
answered back, if telecopied; and five (5) calendar days after mailing if sent
by registered or certified mail, postage prepaid (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee), except that, with respect to any mailing, notices to the Trustee
shall be deemed effective only upon receipt.
Any notice or communication mailed to a Holder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
14.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The Issuer,
the Trustee, the Registrar and any other Person shall have the protection of TIA
Section 312(c).
14.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuer to the Trustee to take any
action under this Indenture, the Issuer shall furnish to the Trustee at the
request of the Trustee:
103
(i) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed or effected by the Issuer, if any, provided for
in this Indenture relating to the proposed action have been complied with;
and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, any and all such conditions precedent have been complied with.
14.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.8, shall include:
(i) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) 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
(iv) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
14.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee, Paying Agent or Registrar may make reasonable rules for its
functions.
14.7 LEGAL HOLIDAYS.
If a payment date is not a Business Day, payment may be made on the next
succeeding day that is a Business Day.
14.8 GOVERNING LAW.
THIS INDENTURE, THE SECURITIES AND ANY NOTE GUARANTEES WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. Each of the parties hereto
agrees to submit to the non-exclusive jurisdiction of the courts of the State of
New York in any action or proceeding arising out of or relating to this
Indenture, the Securities or any Note Guarantees.
104
14.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of any of the Issuer or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
14.10 NO RECOURSE AGAINST OTHERS.
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Securities or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of any Obligor in this Indenture, or in any of the Securities or Note
Guarantees or because of the creation of any Indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer, director, employee
or controlling person of the Issuer or any Restricted Subsidiary or of any
successor Person thereof. Each Holder, by accepting the Securities, waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities. Such waiver may not be
effective to waive liabilities under the federal securities laws.
14.11 SUCCESSORS.
All agreements of the Issuer and the Subsidiary Guarantors, if any, in this
Indenture and the Securities and the Note Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successor.
14.12 DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each signed
copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
14.13 SEVERABILITY.
In case any one or more of the provisions in this Indenture, the Securities
or the Note Guarantees shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
105
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the date first written above.
VERASUN ENERGY CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
VERASUN AURORA CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
VERASUN FORT DODGE, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
VERASUN XXXXXXX CITY, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
VERASUN MARKETING, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
S-1
XXXXX FARGO BANK, N.A.
as Trustee
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
----------------------------------
Title: Vice President
---------------------------------
S-2
Exhibit A
[FORM OF INITIAL NOTE]*
[FACE OF SECURITY]
VERASUN ENERGY CORPORATION
9 7/8% Senior Secured Note due 2012
CUSIP No.
ISIN No.
No. Principal Amount $______________
VERASUN ENERGY CORPORATION, a South Dakota corporation (the "Issuer"), for
value received promises to pay to CEDE & CO. or registered assigns, the
principal sum of Dollars ($________) on December 15, 2012.
Interest Payment Dates: June 15 and December 15; commencing June 15, 2006.
Record Dates: June 1 and December 1.
Reference is made to the further provisions of this Security contained
herein, which shall for all purposes have the same effect as if set forth at
this place.
----------
* Add Private Placement Legend and, if appropriate, Global Security Legend.
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IN WITNESS WHEREOF, the Issuer has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated:
------------------------------
VERASUN ENERGY CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 7/8% Senior Secured Notes due 2012 described in the
within-mentioned Indenture.
XXXXX FARGO BANK, N.A., as Trustee
By:
------------------------------------
Authorized Signatory
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[REVERSE OF SECURITY]
VERASUN ENERGY CORPORATION
9 7/8% Senior Secured Note due 2012
1. Interest.
VERASUN ENERGY CORPORATION, a South Dakota corporation (the "Issuer"),
promises to pay interest on the principal amount of this Security at a rate per
annum equal to 9 7/8%. Interest on the Securities shall be payable semi-annually
in arrears on June 15 and December 15 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). The Issuer shall make each interest payment to the Holders of record on
the immediately preceding June 1 and December 1. Interest on the Securities
shall accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from and including the Issue Date; provided that if
there is no existing Default in the payment of interest, and if this Security is
authenticated between a Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be June 15, 2006. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Issuer shall pay interest ("defaulted interest") on overdue principal
and premium, if any, and interest on overdue installments of interest, to the
extent lawful, at a rate per annum that is 2.0% in excess of the rate otherwise
payable.
2. Method of Payment.
The Issuer shall pay interest on the Securities (except defaulted interest)
to the Persons who are the registered Holders at the close of business on the
Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
(including pursuant to an Exchange Offer (as defined in the Indenture)) after
such Record Date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer shall pay principal, premium, if any and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuer
may pay principal, premium, if any, and interest by wire transfer of federal
funds, or interest by check payable in such U.S. Legal Tender. The Issuer may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
3. Paying Agent and Registrar.
Initially, Xxxxx Fargo Bank, N.A. (the "Trustee") shall act as Paying Agent
and Registrar. The Issuer may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. The Issuer or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar or co-Registrar.
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4. Indenture.
The Issuer issued the Securities under an Indenture, dated as of December
21, 2005 (the "Indenture"), among the Issuer, the Subsidiary Guarantors and the
Trustee. This Security is one of a duly authorized issue of Securities of the
Issuer designated as its 9 7/8% Senior Secured Notes due 2012 (the "Initial
Notes"). Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter the TIA as then in effect as amended
from time to time. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Securities are general
obligations of the Issuer unlimited in amount, of which an aggregate principal
amount of $210,000,000 are being issued on the Issue Date. Additional Notes may
be issued pursuant to the Indenture and will be part of the same series as the
Securities; provided that any such Additional Notes, together with the Initial
Notes and the Parity Lien Indebtedness, collectively, will not exceed
$500,000,000 at any one time outstanding.
5. Optional Redemption.
Except as set forth in the next succeeding paragraph and Section 6 below,
the Securities shall not be redeemable at the Issuer's option prior to December
15, 2009. At any time on or after December 15, 2009, the Securities shall be
subject to redemption at the option of the Issuer, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as a percentage of principal amount) set forth below, plus accrued and unpaid
interest to, but not including, the Redemption Date, if redeemed during the
12-month period commencing on December 15 of any year set forth below, subject
to the rights of Holders on the relevant Record Date to receive interest on the
relevant interest payment date:
Year Percentage
---- ----------
2009 104.938%
2010 102.469%
2011 and thereafter 100.000%
In addition, at any time prior to December 15, 2009, the Issuer may also
redeem, in whole or in part, the Securities, upon not less than 30 nor more than
60 days prior notice, at a redemption price equal to 100% of the principal
amount of Securities to be redeemed, plus the Applicable Premium (as defined
below) as of, and accrued and unpaid interest to, but not including, the
Redemption Date, subject to the rights of the Holders on the relevant Record
Date to receive interest due on the relevant interest payment date.
"Applicable Premium" means, with respect to any Security on any Redemption
Date, the excess of:
(1) the present value at such Redemption Date of (i) the redemption price
of the Security on December 15, 2009 (such redemption price being set forth in
the table above), plus
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(ii) all required interest payments due on the Security through December 15,
2009 (excluding accrued but unpaid interest to, but not including, the
Redemption Date), computed using a discount rate equal to the Treasury Rate as
of such Redemption Date plus 50 basis points; over
(2) the principal amount of the Security.
"Treasury Rate" means, as of any Redemption Date, the yield to maturity
(calculated on a semi-annual bond equivalent basis) as of such Redemption Date
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.I5 (519) (the
"Statistical Release") that has become publicly available at least two business
days prior to the Redemption Date (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the Redemption Date to December 15, 2009; provided,
however, that if the period from the Redemption Date to December 15, 2009, is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
6 Optional Redemption with the Proceeds of Certain Equity Issuances.
At any time prior to December 15, 2008, the Issuer may on one or more
occasions redeem up to 35% of the principal amount of the Securities then
outstanding with the Net Cash Proceeds of one or more sales of Capital Stock
(other than Disqualified Stock) of the Issuer at a redemption price of 109.875%
of the principal amount of such Securities, together with accrued and unpaid
interest to, but not including, the Redemption Date; provided that at least 65%
of the aggregate principal amount of the Securities outstanding immediately
prior to each such redemption remains outstanding immediately after each such
redemption and provided, further, that such redemption shall occur within 120
days of the date of the closing of the related sale of Capital Stock.
7. Notice of Redemption.
Notice of redemption shall be mailed by first-class mail at least 30 days
but not more than 60 days before the Redemption Date to each Holder to be
redeemed at such Holder's registered address. Securities in denominations of
$2,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $2,000 and any integral multiples of $1,000) of the principal
of Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of redemption
that relates to such Security shall state the portion of the principal amount
thereof to be redeemed. A new Security in a principal amount equal to the
unredeemed portion thereof shall be issued in the name of the Holder thereof
upon cancellation of the original Security. Unless the Issuer defaults in the
payment of the redemption price, on and after the Redemption Date, interest
shall cease to accrue on Securities or portions thereof called for redemption,
subject to the provisions of the Indenture.
Any redemption and notice thereof may at the Issuer's discretion be subject
to one or more conditions precedent.
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8. Security and Lien Sharing.
The Issuer's obligations under the Securities are secured by Note Liens on
the Collateral pursuant to the terms of the Security Documents, subject to Lien
sharing in favor of holders of future Parity Lien Indebtedness. If the Issuer
incurs any Parity Lien Indebtedness, the Note Liens (other than Liens on the
Escrow Account and the escrowed funds held therein) shall rank Equally and
Ratably with certain Parity Liens as set forth in Article XI of the Indenture.
9. Change of Control Offer.
Upon the occurrence of a Change of Control, the Issuer shall be required,
as and to the extent set forth in the Indenture, to Offer to Purchase all of the
outstanding Securities at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the date of
repurchase (subject to the right of Holders of record on the relevant Record
Date to receive interest due on the relevant interest payment date).
10. Limitation on Asset Sales.
The Issuer is, subject to certain conditions, obligated to make an Offer to
Purchase Securities at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of repurchase with certain Net Cash
Proceeds of certain sales or other dispositions of assets in accordance with the
Indenture.
11. Escrow of Proceeds; Special Offer to Purchase.
The Issuer is required to make an Offer to Purchase, using funds in the
Escrow Account, up to $125,000,000 (or such lesser amount as is equal to the
amount then held in the Escrow Account) in aggregate principal amount of the
Securities on a pro rata basis if either (a) (1) the Issuer or one of its
Restricted Subsidiaries has not obtained all requisite consents, approvals,
licenses and permits required to construct the Xxxxxxx City Facility in the
manner contemplated in the Offering Memorandum or (2) construction of the
Xxxxxxx City Facility has not commenced, in each case, on or prior to 180 days
after the Issue Date; or (b) the Issuer shall have provided written notice to
the Trustee and the Escrow Agent at any time of its decision not to proceed with
or complete the construction of the Xxxxxxx City Facility. The purchase price
shall be 100% of the principal amount of the Securities outstanding, plus
accrued and unpaid interest, if any, thereon to the date of repurchase.
12. Events of Loss.
The Issuer is, subject to certain conditions, obligated to make an Offer to
Purchase Securities at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of repurchase with certain Net Loss
Proceeds received by the Issuer in connection with an Event of Loss.
A-7
13. Registration Rights.
The Holders of the Initial Notes issued on the Issue Date shall have the
rights set forth in the Registration Rights Agreement dated as of December 21,
2005 among the Issuer, the Subsidiary Guarantors and the initial purchasers
named therein.*
14. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in denominations of
$2,000 of principal amount and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
15. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it for
all purposes.
16. Unclaimed Funds.
If funds for the payment of principal, premium, if any, or interest remain
unclaimed for two years, the Trustee and the Paying Agent shall repay the funds
to the Issuer at its request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
17. Discharge Prior to Redemption or Maturity.
The Issuer and the Subsidiary Guarantors may be discharged from their
obligations under the Indenture or the Securities and any Note Guarantee except
for certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture and the Securities and any
Note Guarantee, in each case upon satisfaction of certain conditions specified
in the Indenture.
18. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities, any Note
Guarantee and the Security Documents may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture, the Securities, the Note
Guarantees and the Security Documents to,
----------
* This paragraph to be modified with respect to Securities issued after the
Issue Date.
A-8
among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities and any Note Guarantee in addition to or in place of
Physical Securities or comply with any requirements of the Commission in
connection with the qualification of the Indenture under the TIA, or make any
other change that does not materially and adversely affect the rights of any
Holder of a Security.
In addition, the Trustee and the Joint Collateral Agent shall be permitted
and authorized, without the consent of any Holder, to enter into any amendments
to the Security Documents (other than the Escrow Agreement) or the Indenture to
permit, and take any other necessary action to permit, the creation and
perfection of Liens on the Collateral (other than the Escrow Account and the
escrowed funds held therein) for the benefit of holders of Parity Lien
Indebtedness to the extent such indebtedness and the Parity Liens securing such
indebtedness is permitted by the terms of the Indenture and the Security
Documents; provided, however that no amendment or supplement to the provisions
of the Indenture or the Security Documents governing the sharing of Collateral
with Parity Liens may be made unless such amendment or supplement is permitted
under Section 11.4 of the Indenture.
19. Restrictive Covenants.
The Indenture contains certain covenants that, among other things, limit
the ability of the Issuer and its Restricted Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Issuer to the Issuer, to consolidate, merge or sell all or substantially all of
its assets or to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Issuer must
annually report to the Trustee on compliance with such limitations.
20. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture, the Securities or any Note Guarantee except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture, the Securities
or the Note Guarantees, if any, unless it has received indemnity satisfactory to
it. The Indenture permits, subject to certain limitations therein provided,
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding to direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of Securities notice of certain continuing
Defaults or Events of Default if it determines that withholding notice is in
their interest.
21. Trustee Dealings with Issuers.
The Trustee under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the
Issuer, its Subsidiaries or their respective Affiliates as if it were not the
Trustee.
A-9
22. No Recourse Against Others.
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Securities or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of any Obligor in the Indenture, or in any of the Securities or Note
Guarantees or because of the creation of any Indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer, director, employee
or controlling person of the Issuer or any Subsidiary Guarantor or of any
successor Person thereof. Each Holder, by accepting the Securities, waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities. Such waiver may not be
effective to waive liabilities under the federal securities laws.
23. Authentication.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on this Security.
24. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
25. Governing Law.
This Security shall be governed by, and construed in accordance with, the
laws of the State of New York.
26. CUSIP and ISIN Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
27. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture and the Security Documents, as each may be
amended from time to time.
The Issuer shall furnish to any Holder of a Security upon written request
and without charge a copy of the Indenture which has the text of this Security
in larger type. Requests may be made to: VeraSun Energy Corporation, 000 00xx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx 00000, Attention: President.
A-10
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Issuer. The agent may substitute
another to act for him.
Dated: Signed:
------------------------------ --------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:
----------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) the end of the period referred to in Rule 144(k) under
the Securities Act, the undersigned confirms that it has not utilized any
general solicitation or general advertising in connection with the transfer and
that this Security is being transferred:
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[Check One]
(1) __ to either of the Issuer or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished
to the Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the Trustee);
or
(4) __ outside the United States to a Person that is not a U.S. Person in
compliance with Rule 904 of Regulation S under the Securities Act; or
(5) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(6) __ pursuant to an effective registration statement under the Securities
Act; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act;
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Issuer.
Unless one of the items is checked, the Trustee shall refuse to register
any of the Securities 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 Issuer or the Trustee may require, prior to registering any
such transfer of the Securities, in its sole discretion, such legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Issuer have 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.
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If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security 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 2.16 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 Security
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
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 Issuer as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
------------------------------
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuer pursuant
to Section 4.16, Section 4.17, Section 4.20, Section 4.21 of the Indenture,
check the appropriate box:
Section 4.16 [___] Section 4.17 [___] Section 4.20 [___] Section 4.21 [___]
If you want to elect to have only part of this Security purchased by the
Issuer pursuant to Section 4.16, Section 4.17, Section 4.20 or Section 4.21 of
the Indenture, state the amount: $___________
Dated: Signed:
------------------------------ --------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:
----------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
A-14
Exhibit B
[FORM OF EXCHANGE NOTE]*
[FACE OF SECURITY]
VERASUN ENERGY CORPORATION
9 7/8% Senior Secured Exchange Note due 2012
CUSIP No.
ISIN No.
No. $_____________
VERASUN ENERGY CORPORATION, a South Dakota corporation (the "Issuer"), for
value received promise to pay to CEDE & CO. or registered assigns, the principal
sum of Dollars ($___________), on December 15, 2012.
Interest Payment Dates: June 15 and December 15, commencing June 15, 2006.
Record Dates: June 1 and December 1.
Reference is made to the further provisions of this Security contained
herein, which shall for all purposes have the same effect as if set forth at
this place.
----------
* Add Global Security Legend, if appropriate.
B-1
IN WITNESS WHEREOF, the Issuer have caused this Security to be signed
manually or by facsimile by their duly authorized officers.
Dated:
------------------------------
VERASUN ENERGY CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
B-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 7/8% Senior Secured Exchange Notes due 2012 described
in the within-mentioned Indenture.
XXXXX FARGO BANK, N.A.
as Trustee
By:
------------------------------------
Authorized Signatory
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[REVERSE OF SECURITY]
VERASUN ENERGY CORPORATION
9 7/8% Senior Secured Exchange Note due 2012
1. Interest.
VERASUN ENERGY CORPORATION, a South Dakota corporation (the "Issuer"),
promises to pay interest on the principal amount of this Security at a rate per
annum equal to 9 7/8%. Interest on the Securities shall be payable semi-annually
in arrears on June 15 and December 15 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). The Issuer shall make each interest payment to the Holders of record on
the immediately preceding June 1 and December 1. Interest on the Securities
shall accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from and including the Issue Date; provided that if
there is no existing Default in the payment of interest, and if this Security is
authenticated between a Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be June 15, 2006. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The Issuer shall pay interest ("defaulted interest") on overdue principal
and premium, if any, and interest on overdue installments of interest, to the
extent lawful, at a rate per annum that is 2.0% in excess of the rate otherwise
payable.
2. Method of Payment.
The Issuer shall pay interest on the Securities (except defaulted interest)
to the Persons who are the registered Holders at the close of business on the
Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
(including pursuant to an Exchange Offer (as defined in the Indenture)) after
such Record Date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer shall pay principal, premium, if any and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Issuer
may pay principal, premium, if any, and interest by wire transfer of federal
funds, or interest by check payable in such U.S. Legal Tender. The Issuer may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
3. Paying Agent and Registrar.
Initially, Xxxxx Fargo Bank, N.A. (the "Trustee") shall act as Paying Agent
and Registrar. The Issuer may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. The Issuer or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar or co-Registrar.
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4. Indenture.
The Issuer issued the Securities under an Indenture, dated as of December
21, 2005 (the "Indenture"), among the Issuer, the Subsidiary Guarantors and the
Trustee. This Security is one of a duly authorized issue of Securities of the
Issuer designated as its 9 7/8% Senior Secured Notes due 2012 (the "Initial
Notes"). Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in
effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter the TIA as then in effect as amended
from time to time. Notwithstanding anything to the contrary herein, the
Securities are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Securities are general
obligations of the Issuer unlimited in amount, of which an aggregate principal
amount of $210,000,000 are being issued on the Issue Date. Additional Notes may
be issued pursuant to the Indenture and will be part of the same series as the
Initial Notes; provided that any such Additional Notes, together with the
Initial Notes and the Parity Lien Indebtedness, collectively, will not exceed
$500,000,000 at any one time outstanding.
5. Optional Redemption.
Except as set forth in the next succeeding paragraph and Section 6 below,
the Securities shall not be redeemable at the Issuer's option prior to December
15, 2009. At any time on or after December 15, 2009, the Securities shall be
subject to redemption at the option of the Issuer, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as a percentage of principal amount) set forth below, plus accrued and unpaid
interest to, but not including, the Redemption Date, if redeemed during the
12-month period commencing on December 15 of any year set forth below, subject
to the rights of Holders on the relevant Record Date to receive interest on the
relevant interest payment date:
Year Percentage
---- ----------
2009 104.938%
2010 102.469%
2011 and thereafter 100.000%
In addition, at any time prior to December 15, 2009, the Issuer may also
redeem, in whole or in part, the Securities, upon not less than 30 nor more than
60 days prior notice, at a redemption price equal to 100% of the principal
amount of Securities to be redeemed, plus the Applicable Premium (as defined
below) as of, and accrued and unpaid interest to, but not including, the
Redemption Date, subject to the rights of the Holders on the relevant Record
Date to receive interest due on the relevant interest payment date.
"Applicable Premium" means, with respect to any Security on any Redemption
Date, the excess of:
(1) the present value at such Redemption Date of (i) the redemption price
of the Security on December 15, 2009 (such redemption price being set forth in
the table above), plus
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(ii) all required interest payments due on the Security through December 15,
2009 (excluding accrued but unpaid interest to, but not including, the
Redemption Date), computed using a discount rate equal to the Treasury Rate as
of such Redemption Date plus 50 basis points; over
(2) the principal amount of the Security.
"Treasury Rate" means, as of any Redemption Date, the yield to maturity
(calculated on a semi-annual bond equivalent basis) as of such Redemption Date
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.I5 (519) (the
"Statistical Release") that has become publicly available at least two business
days prior to the Redemption Date (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the Redemption Date to December 15, 2009; provided,
however, that if the period from the Redemption Date to December 15, 2009, is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
6. Optional Redemption with the Proceeds of Certain Equity Issuances.
At any time prior to December 15, 2008, the Issuer may on one or more
occasions redeem up to 35% of the principal amount of the Securities then
outstanding with the Net Cash Proceeds of one or more sales of Capital Stock
(other than Disqualified Stock) of the Issuer at a redemption price of 109.875%
of the principal amount of such Securities, together with accrued and unpaid
interest to, but not including, the Redemption Date; provided that at least 65%
of the aggregate principal amount of the Securities outstanding immediately
prior to each such redemption remains outstanding immediately after each such
redemption and provided, further, that such redemption shall occur within 120
days of the date of the closing of the related sale of Capital Stock.
7. Notice of Redemption.
Notice of redemption shall be mailed by first-class mail at least 30 days
but not more than 60 days before the Redemption Date to each Holder to be
redeemed at such Holder's registered address. Securities in denominations of
$2,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $2,000 and any integral multiples of $1,000) of the principal
of Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of redemption
that relates to such Security shall state the portion of the principal amount
thereof to be redeemed. A new Security in a principal amount equal to the
unredeemed portion thereof shall be issued in the name of the Holder thereof
upon cancellation of the original Security. Unless the Issuer defaults in the
payment of the redemption price, on and after the Redemption Date, interest
shall cease to accrue on Securities or portions thereof called for redemption,
subject to the provisions of the Indenture.
Any redemption and notice thereof may at the Issuer's discretion be subject
to one or more conditions precedent.
B-6
8. Security and Lien Sharing.
The Issuer's obligations under the Securities are secured by Note Liens on
the Collateral pursuant to the terms of the Security Documents, subject to Lien
sharing in favor of holders of future Parity Lien Indebtedness. If the Issuer
incurs any Parity Lien Indebtedness, the Note Liens (other than Liens on the
Escrow Account and any escrowed funds held therein) shall rank Equally and
Ratably with certain Parity Liens as set forth in Article XI of the Indenture.
9. Change of Control Offer.
Upon the occurrence of a Change of Control, the Issuer shall be required,
as and to the extent set forth in the Indenture, to Offer to Purchase all of the
outstanding Securities at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the date of
repurchase (subject to the right of Holders of record on the relevant Record
Date to receive interest due on the relevant interest payment date).
10. Limitation on Asset Sales.
The Issuer is, subject to certain conditions, obligated to make an Offer to
Purchase Securities at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of repurchase with certain Net Cash
Proceeds of certain sales or other dispositions of assets in accordance with the
Indenture.
11. Escrow of Proceeds; Special Offer to Purchase.
The Issuer is required to make an Offer to Purchase, using funds in the
Escrow Account, up to $125,000,000 (or such lesser amount as is equal to the
amount then held in the Escrow Account) in aggregate principal amount of the
Securities on a pro rata basis if either (a) (1) the Issuer or one of its
Restricted Subsidiaries has not obtained all requisite consents, approvals,
licenses and permits required to construct the Xxxxxxx City Facility in the
manner contemplated in the Offering Memorandum or (2) construction of the
Xxxxxxx City Facility has not commenced, in each case, on or prior to 180 days
after the Issue Date; or (b) the Issuer shall have provided written notice to
the Trustee and the Escrow Agent at any time of its decision not to proceed with
or complete the construction of the Xxxxxxx City Facility. The purchase price
shall be 100% of the principal amount of the Securities outstanding, plus
accrued and unpaid interest, if any, thereon to the date of repurchase.
12. Events of Loss.
The Issuer is, subject to certain conditions, obligated to make an Offer to
Purchase Securities at 100% of their principal amount, plus accrued and unpaid
interest, if any, thereon to the date of repurchase with certain Net Loss
Proceeds received by the Issuer in connection with an Event of Loss.
13. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in denominations of
$2,000 of principal amount and integral multiples of $1,000. A Holder shall
register the transfer of or
B-7
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities or portions thereof
selected for redemption, except the unredeemed portion of any security being
redeemed in part.
14. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it for
all purposes.
15. Unclaimed Funds.
If funds for the payment of principal, premium, if any, or interest remain
unclaimed for two years, the Trustee and the Paying Agent shall repay the funds
to the Issuer at its request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
16. Discharge Prior to Redemption or Maturity.
The Issuer and the Subsidiary Guarantors may be discharged from their
obligations under the Indenture or the Securities and any Note Guarantee except
for certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture and the Securities and any
Note Guarantee, in each case upon satisfaction of certain conditions specified
in the Indenture.
17. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities, any Note
Guarantee and the Security Documents may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture, the Securities, the Note
Guarantees and the Security Documents to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Securities and
any Note Guarantee in addition to or in place of Physical Securities or comply
with any requirements of the Commission in connection with the qualification of
the Indenture under the TIA, or make any other change that does not materially
and adversely affect the rights of any Holder of a Security.
In addition, the Trustee and the Joint Collateral Agent shall be permitted
and authorized, without the consent of any Holder, to enter into any amendments
to the Security Documents (other than the Escrow Agreement) or the Indenture to
permit, and take any other necessary action to permit, the creation and
perfection of Liens on the Collateral (other than the Escrow Account and the
escrowed funds held therein) for the benefit of holders of Parity Lien
Indebtedness to the extent such indebtedness and the Parity Liens securing such
indebtedness is permitted by the terms of the Indenture and the Security
Documents; provided, however that no
B-8
amendment or supplement to the provisions of the Indenture or the Security
Documents governing the sharing of Collateral with Parity Liens may be made
unless such amendment or supplement is permitted under Section 11.4 of the
Indenture.
18. Restrictive Covenants.
The Indenture contains certain covenants that, among other things, limit
the ability of the Issuer and its Restricted Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Issuer to the Issuer, to consolidate, merge or sell all or substantially all of
its assets or to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Issuer must
annually report to the Trustee on compliance with such limitations.
19. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture, the Securities or any Note Guarantee except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture, the Securities
or the Note Guarantees, if any, unless it has received indemnity satisfactory to
it. The Indenture permits, subject to certain limitations therein provided,
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding to direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of Securities notice of certain continuing
Defaults or Events of Default if it determines that withholding notice is in
their interest.
20. Trustee Dealings with Issuers.
The Trustee under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the
Issuer, its Subsidiaries or their respective Affiliates as if it were not the
Trustee.
21. No Recourse Against Others.
No recourse for the payment of the principal of, premium, if any, or
interest on any of the Securities or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of any Obligor in the Indenture, or in any of the Securities or Note
Guarantees or because of the creation of any Indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer, director, employee
or controlling person of the Issuer or any Subsidiary Guarantor or of any
successor Person thereof. Each Holder, by accepting the Securities, waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities. Such waiver may not be
effective to waive liabilities under the federal securities laws.
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22. Authentication.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on this Security.
23. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
24. Governing Law.
This Security shall be governed by, and construed in accordance with, the
laws of the State of New York.
25. CUSIP and ISIN Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
26. Indenture.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture and the Security Documents, as each may be
amended from time to time.
The Issuer shall furnish to any Holder of a Security upon written request
and without charge a copy of the Indenture which has the text of this Security
in larger type. Requests may be made to: VeraSun Energy Corporation, 000 00xx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxx 00000, Attention: President.
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ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Issuer. The agent may substitute
another to act for him.
Dated: Signed:
-------------------- --------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee: ----------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
B-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuer pursuant
to Section 4.16, Section 4.17, Section 4.20 or Section 4.21 of the Indenture,
check the appropriate box:
Section 4.16 [___] Section 4.17 [___] Section 4.20 [___] Section 4.21 [___]
If you want to elect to have only part of this Security purchased by the
Issuer pursuant to Section 4.16, Section 4.17, Section 4.20 or Section 4.21 of
the Indenture, state the amount: $___________
Dated: Signed:
-------------------- --------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee: ----------------------------------------
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
B-12
Exhibit E
NOTE GUARANTEE
For value received, the undersigned hereby unconditionally guarantees, as
principal obligor and not only as a surety, to the Holder of this Security the
cash payments in United States dollars of principal of, premium, if any, and
interest on this Security in the amounts and at the times when due and interest
on the overdue principal, premium, if any, and interest, if any, of this
Security, if lawful, and the payment or performance of all other Note
Obligations of the Issuer under the Indenture (as defined below) or the
Securities, to the Holder of this Security and the Trustee, all in accordance
with and subject to the terms and limitations of this Security, Article XII of
the Indenture and this Note Guarantee. This Note Guarantee shall become
effective in accordance with Article XII of the Indenture and its terms shall be
evidenced therein. The validity and enforceability of any Note Guarantee shall
not be affected by the fact that it is not affixed to any particular Security.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of December 21, 2005, among VeraSun
Energy Corporation, a South Dakota corporation (the "Issuer"), the Subsidiary
Guarantors named therein and Xxxxx Fargo Bank, N.A., as trustee (the "Trustee").
The obligations of the undersigned to the Holders of Securities and to the
Trustee pursuant to this Note Guarantee and the Indenture are expressly set
forth in Article XII of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Note Guarantee and all of the other
provisions of the Indenture to which this Note Guarantee relates.
THIS NOTE GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK. The undersigned Subsidiary Guarantor hereby
agrees to submit to the jurisdiction of the courts of the State of New York in
any action or proceeding arising out of or relating to this Note Guarantee.
This Note Guarantee is subject to release upon the terms set forth in the
Indenture.
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IN WITNESS WHEREOF, the undersigned has caused this Note Guarantee to be
duly executed.
SUBSIDIARY GUARANTOR
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2
Exhibit F
Form of Escrow Agreement
F-1
Exhibit F
================================================================================
SECURITY AND ESCROW AGREEMENT
dated as of December 21, 2005
among
VERASUN ENERGY CORPORATION
as Pledgor,
XXXXX FARGO BANK, N.A.,
as Trustee and Collateral Agent,
and
XXXXX FARGO BANK, N.A.,
as Escrow Agent and as Securities Intermediary
================================================================================
SECURITY AND ESCROW AGREEMENT
This SECURITY AND ESCROW AGREEMENT (this "AGREEMENT") is made and
entered into as of December 21, 2005 by VERASUN ENERGY CORPORATION, a South
Dakota corporation ("VERASUN"), having an office at 000 00xx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxx 00000, XXXXX FARGO BANK, N.A., as trustee (in such capacity, the
"TRUSTEE") and collateral agent (in such capacity, the "COLLATERAL AGENT") under
the Indenture referred to below, and XXXXX FARGO BANK, N.A., a national banking
association, as securities intermediary (in such capacity, the "SECURITIES
INTERMEDIARY") and escrow agent (in such capacity, the "ESCROW AGENT") with
respect to the Escrow Account (as hereinafter defined).
WITNESSETH
WHEREAS, VeraSun and certain guarantors named therein, and Xxxxxx
Brothers Inc. and Xxxxxx Xxxxxxx & Co. Incorporated, each acting as an Initial
Purchaser (collectively, the "INITIAL PURCHASERS"), are parties to a Purchase
Agreement dated December 21, 2005 (the "PURCHASE AGREEMENT"), pursuant to which
VeraSun is issuing and selling to the Initial Purchasers $210,000,000 aggregate
principal amount of Senior Secured Notes due 2012 (the "NOTES"); and
WHEREAS, VeraSun, the subsidiary guarantors named therein and the
Trustee have entered into that certain indenture, dated as of the date hereof
(as amended, restated, supplemented or otherwise modified from time to time, the
"INDENTURE"), pursuant to which VeraSun is issuing the Notes on the date hereof;
WHEREAS, pursuant to the Purchase Agreement and the Indenture, VeraSun
is required to deposit into the Escrow Account (as defined below) on December
21, 2005 (the "CLOSING DATE") $125.0 million (the "DEPOSIT AMOUNT") of the net
proceeds from the offering of the Notes to be held by the Escrow Agent pending
application of the funds therein to the construction and start up of VeraSun
Xxxxxxx City, LLC's Xxxxxxx City, Iowa facility, and to provide a security
interest therein for the benefit of the Secured Parties, to secure the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration, or otherwise) of the Notes, the Note Guarantees, the Indenture
and the Security Documents (such obligations being the "OBLIGATIONS"); and
WHEREAS, VeraSun has opened a collateral account, Account No. 00000000
(the "ESCROW ACCOUNT") with Xxxxx Fargo Bank, N.A. at its office at Xxxxx Xxxxxx
& Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, in the name of VeraSun; and
WHEREAS, it is a condition precedent to the initial purchase of the
Notes by the Initial Purchasers pursuant to the Purchase Agreement that VeraSun
shall have granted the security interest and made the pledge contemplated by
this Agreement; and
WHEREAS, unless otherwise defined herein or in the Indenture, terms
defined in Articles 8 or 9 of the Uniform Commercial Code as in effect in the
State of New York ("UCC") are used in this Agreement as such terms are defined
in such Article 8 or 9.
NOW, THEREFORE, in consideration of the mutual promises herein
contained, and in order to induce the Holders of the Notes to purchase the
Notes, VeraSun hereby agrees with the Escrow Agent, the Securities Intermediary,
and the Collateral Agent, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. Certain Definitions; Appointment of the Escrow Agent;
Pledge and Grant of Security Interest; Deposit of Deposit Amount.
1.1 Certain Definitions. Capitalized terms used herein will have
the respective meanings described to them below:
"BUSINESS DAY" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York, New York or
Minneapolis, Minnesota are required or authorized by law or other
governmental action to be closed.
"XXXXXXX CITY CONSTRUCTION" means the construction by VeraSun Xxxxxxx
City, LLC of an ethanol production facility in Xxxxxxx City, Iowa, expected
to produce 110.0 million gallons per year of ethanol per annum.
"CLOSING DATE" has the meaning given to it in the third Whereas clause
hereof.
"COLLATERAL" has the meaning specified in Section 1.3.
"COLLATERAL AGENT" has the specified in the introductory paragraph
hereof.
"COLLATERAL INVESTMENTS" means (1) Treasury Securities, (2)
investments in time deposit accounts, certificates of deposit and money
market deposits maturing not later than one year, in each case, entitled to
U.S. Federal deposit insurance for the full amount thereof or issued by a
bank or trust company (including the Escrow Agent or the Collateral Agent
or an Affiliate of the Escrow Agent or the Collateral Agent) that is
organized under the laws of the United States of America or any State
thereof having capital, surplus and undivided profits aggregating in excess
of $500.0 million, and (3) investments in commercial paper maturing not
later than 270 days and having, at the date of acquisition, a rating no
lower than A-1 from Standard & Poor's Ratings Service, P-1 from Xxxxx'x
Investors Service, Inc. or F-1 from Fitch Ratings Ltd.
"COMPLETION CERTIFICATE" has the meaning specified in Section 6.
"DEFAULT" means a Default as defined in the Indenture.
"DEPOSIT AMOUNT" has the meaning specified in the third Whereas clause
hereof.
"DISBURSEMENT REQUEST CERTIFICATE" has the meaning specified in
Section 6.
"ENTITLEMENT ORDER" has the meaning specified in Section 5.
"ESCROW ACCOUNT" has the meaning specified in the fourth Whereas
clause hereof.
"ESCROW AGENT" has the meaning specified in the introductory paragraph
hereof.
"EVENTS OF DEFAULT" means an Event of Default as defined in the
Indenture.
"FEDERAL BOOK-ENTRY REGULATIONS" means 31 C.F.R. Section 357 (Treasury
bills, notes and bonds; 12 C.F.R. Section 615 (book-entry securities of the
Farm Credit Administration); 12 C.F.R. Sections 910 and 912 (book-entry
securities of the Federal Home Loan Bank); 24 C.F.R. Section 81 (book-entry
securities of the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation); 12 C.F.R. Section 1511 (book-entry
securities of the Resolution Funding Corporation; and 31 C.F.R. Section 354
(book-entry securities of the Student Loan Marketing Association).
"HOLDERS" means the registered holders of the Notes.
"INDENTURE" has the meaning specified in the second Whereas clause
hereof.
"INITIAL PURCHASERS" has the meaning specified in the first Whereas
clause hereof.
"LIEN" means any mortgage, lien, pledge, claim, charge, security
interest or encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on VeraSun
and its subsidiaries, taken as a whole.
"NOTES" has the meaning specified in the first Whereas clause hereof.
"OBLIGATIONS" has the meaning specified in the third Whereas clause
hereof.
"OFFERING MEMORANDUM" means the Offering Memorandum, dated December
14, 2005, relating to the offering of the Notes issued on the Closing Date.
"OFFICER" means, with respect to any Person, the chairman of the
board, the principal executive officer, the president, any vice president,
the chief financial officer, the controller, the treasurer or the secretary
of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers, at
least one of whom shall be the principal executive officer, principal
accounting officer, a vice president, the treasurer or the principal
financial officer of the Issuer and delivered to the Trustee.
"PLEDGED FINANCIAL ASSETS" has the meaning specified in Section 1.3.
"PLEDGED SECURITY ENTITLEMENTS" has the meaning specified in Section
1.3.
"PURCHASE AGREEMENT" has the meaning specified in the first Whereas
clause hereof.
"SECURED PARTIES" has the meaning specified in Section 1.3.
"SECURITIES INTERMEDIARY" has the meaning specified in the
introductory paragraph hereof.
"SPECIAL OFFER TO PURCHASE NOTICE" means a written notice provided by
VeraSun or the Trustee to the Escrow Agent that VeraSun will consummate a
Special Offer to Purchase (as defined in the Indenture) on the Payment Date
(as defined in the Indenture), which notice shall expressly set forth the
calendar date of the Payment Date, the name, address and wiring
instructions for the Paying Agent and the amount required to be paid.
"TREASURY SECURITIES" means any investment in obligations issued or
guaranteed by the United States government or agency thereof, in each case,
maturing not later than one year.
"TRUSTEE" has the meaning specified in the introductory paragraph
hereof.
"UCC" has the meaning specified in the sixth Whereas clause hereof.
"VERASUN" has the meaning given to it in the introductory paragraph
hereof.
Capitalized terms used but not defined herein shall have the meanings assigned
thereto in the Indenture.
1.2 Appointment of the Escrow Agent. The Trustee and VeraSun
hereby appoint Xxxxx Fargo Bank, N.A., as Escrow Agent in accordance with the
terms and conditions set forth herein and the Escrow Agent hereby accepts such
appointment.
1.3 Grant of Security Interest. VeraSun hereby assigns and
transfers to the Collateral Agent and hereby grants to the Collateral Agent for
the benefit of the Trustee and the Holders (the Holders, Trustee and Collateral
Agent, collectively the "SECURED PARTIES") a continuing security interest in and
to all of VeraSun's right, title and interest in, to and under the following
(collectively, the "COLLATERAL") as collateral security for the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations:
(a) the Escrow Account, all funds and financial assets (collectively,
the "PLEDGED FINANCIAL ASSETS") credited to the Escrow Account from time to
time (including any Collateral Investments) and all security entitlements
of VeraSun with respect to the Pledged Financial Assets (all such security
entitlements collectively the "PLEDGED SECURITY ENTITLEMENTS"), including,
without limitation, all dividends, if any, interest, cash, instruments, if
any, and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Pledged
Security Entitlements or such Pledged Financial Assets; and
(b) all proceeds of the property and assets described in clause (a) of
this Section 1.3 and cash proceeds).
1.4 Deposit of Deposit Amount. On the Closing Date, VeraSun shall
deposit the Deposit Amount into the Escrow Account.
SECTION 2. Delivery of Security Collateral. All securities, financial
assets or other property credited to the Escrow Account shall be registered in
the name of the Securities Intermediary, indorsed to the Securities Intermediary
or in blank. In no case will any financial asset credited to the Escrow Account
be registered in the name of VeraSun, payable to the order of VeraSun or
specially indorsed to VeraSun unless the foregoing have been specially indorsed
to the Securities Intermediary or in blank. All financial assets delivered to
the Securities Intermediary pursuant to this Agreement will be promptly credited
to the Escrow Account.
SECTION 3. Creation and Maintenance of the Escrow Account. (a)
Concurrently with or prior to the Closing Date, VeraSun shall have established
(and at all times until the Obligations shall have been paid in full and this
Agreement shall have been terminated, or the escrow terminates pursuant to
Section 13.7, the Securities Intermediary shall maintain and administer in
accordance with this Agreement), the Escrow Account with Xxxxx Fargo Bank, N.A.
at its office at Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000,
Attn.: [______].
(b) The Securities Intermediary shall cause the Escrow Account to be,
and the Escrow Account shall be, separate from all other accounts (including any
other escrow account).
(c) The Securities Intermediary shall deposit all other property,
assets and items in, and credit such other assets, property and items, in each
case forming part of the Collateral and belonging to VeraSun, to, the Escrow
Account.
SECTION 4. Investing of Amounts in the Escrow Account. As long as the
Collateral is deposited in the Escrow Account, the Collateral will be invested
by the Escrow Agent at the instruction of VeraSun in Treasury Securities and
other Collateral Investments. If no such instructions are provided by VeraSun,
the Escrow Agent shall not invest the Collateral. The Escrow Agent or any of its
Affiliates may receive reasonable compensation with respect to any investment
directed hereunder.
SECTION 5. Securities Intermediary. The Securities Intermediary, and
with respect to subsection (d) below, VeraSun, represent and warrant to, and
agree with each of the other parties hereto as follows:
(a) Collateral held by the Securities Intermediary for the account of
VeraSun is, and will continue to be, credited to the Escrow Account.
(b) The Escrow Account is a "securities account" as defined in Section
8-501 of the UCC. The Securities Intermediary is acting as a "securities
intermediary" as defined in Section 8-102 of the UCC with respect to the
Escrow Account. VeraSun is the entitlement holder with respect to the
property credited from time to time to the Escrow Account.
(c) The Securities Intermediary has credited and will continue to
credit such assets, property and items to the Escrow Account in accordance
with instructions given in accordance with the terms and conditions of this
Agreement.
(d) For the purposes of Section 8-102(a)(9)(iii) of the UCC, all
assets, property and items from time to time carried in the Escrow Account
shall constitute "financial assets" under Article 8 of the UCC, and the
Securities Intermediary and VeraSun agree to treat all such assets,
property and items as financial assets.
(e) The Securities Intermediary's jurisdiction with respect to the
Escrow Account for purposes of Section 8-110(e) of the UCC is, and will
continue to be for so long as the security interest hereunder shall be in
effect, the State of Minnesota.
(f) The Securities Intermediary will comply with all notifications it
receives directing it to transfer or redeem any property in the Escrow
Account (each an "ENTITLEMENT ORDER") or other directions concerning the
Escrow Account (including, without limitation, Entitlement Orders,
directions to distribute to the Escrow Agent proceeds of any such transfer
or redemption or interest or dividends on property in the Escrow Account)
originated by the Collateral Agent without further consent by VeraSun or
any other Person. The Collateral Agent hereby instructs the Securities
Intermediary to follow instructions of (i) the Escrow Agent pursuant to
Section 6, and (ii) subject to Section 5(g), VeraSun pursuant to Section 4,
until such time as the Collateral Agent has delivered a written notice of
exclusive control (a "NOTICE OF EXCLUSIVE CONTROL") to the Securities
Intermediary, with a copy to the Escrow Agent, at which time the Collateral
Agent will be deemed to have the exclusive ability to direct the
Collateral. The Collateral Agent hereby agrees with VeraSun that it will
not deliver a Notice of Exclusive Control unless an Event of Default (as
defined in the Indenture) has occurred and is continuing, and shall rescind
any such notice if any such Event of Default is cured or waived.
(g) If the Securities Intermediary receives conflicting Entitlement
Orders or directions from the Collateral Agent and VeraSun, it will follow
the Entitlement Orders and directions from the Collateral Agent and not
from VeraSun.
(h) The Securities Intermediary has not entered into and will not
enter into any agreement with any other Person relating to the Escrow
Account and/or any financial assets credited thereto pursuant to which it
has agreed to comply with Entitlement Orders of such Person. The Securities
Intermediary has not entered into any other agreement with VeraSun or any
other Person purporting to limit or condition the obligation of the
Securities Intermediary to comply with Entitlement Orders originated by the
Collateral Agent as set forth in paragraph (f) above.
(i) The Securities Intermediary hereby waives and releases any Lien,
right of set-off or other right it may have against the Escrow Account or
any financial asset carried in the Escrow Account or any credit balance in
the Escrow Account and agrees that it will not assert any such Lien or
right against the Escrow Account or any financial asset carried in the
Escrow Account or any credit balance in the Escrow Account.
(j) Anything herein to the contrary notwithstanding, the Securities
Intermediary will not be required to follow any instruction that would
violate any applicable law, decree, regulation or order of any government
or governmental body (including any court or tribunal).
(k) The Securities Intermediary does not know of any claim to or
interest in the Escrow Account or any property credited to the Escrow
Account, except for claims and interests of the parties referred to in this
Agreement.
(l) When the Securities Intermediary has received any written notice
of any claim or interest in the Escrow Account or any property credited to
the Escrow Account other than the claims and interests of the parties
referred to in this Agreement, the Securities Intermediary will promptly
notify the Escrow Agent, the Collateral Agent, the Trustee and VeraSun of
such claim or interest.
SECTION 6. Disbursements. Prior to the receipt of a Notice of
Exclusive Control, the Escrow Agent shall instruct the Securities Intermediary
to hold the assets in the Escrow Account and release the same, or a portion
thereof, as follows:
(a) If the Escrow Agent receives, prior to 12:00 p.m., New York City
time, on any Business Day, or if after 12:00 p.m., New York City time, the
next preceding Business Day, a resolution from the Board of Directors of
VeraSun set forth in an Officers' Certificate substantially in the form of
Exhibit A (a "COMPLETION CERTIFICATE") certifying that, as of the date of
such certificate, (i) it has received a certificate from Xxxxx, Inc.
stating that the Xxxxxxx City Construction has been completed, (ii) such
construction has resulted in production capacity of at least 110.0 million
gallons of ethanol annually, (iii) all material consents, approvals,
licenses and permits necessary for the commercial operation of the Xxxxxxx
City Facility have been obtained from the relevant governmental authorities
and (iv) no Default or Event of Default has occurred and is continuing,
with a copy sent to the Trustee, the Escrow Agent shall instruct the
Securities Intermediary to use reasonable best efforts to liquidate, on
such date (but in any event such liquidation and distribution shall occur
not later than the following Business Day), all funds and/or Cash
Equivalents and/or Collateral Investments from the Escrow Account and to
cause the disbursement of such funds and/or Collateral Investments as
directed by VeraSun.
(b) If at any time prior to the presentation by VeraSun of a
Completion Certificate the Escrow Agent receives, prior to 12:00 p.m., New
York City time, on any Business Day, or if after 12:00 p.m., New York City
time, the next preceding Business Day, a request by VeraSun for the
disbursement of funds from the Escrow Account set forth in an Officers'
Certificate substantially in the form of Exhibit B (a "DISBURSEMENT REQUEST
CERTIFICATE") (i) indicating in reasonable detail the purpose or purposes
to which such funds will be applied and (ii) certifying that (x) the funds
will be used in connection with the Xxxxxxx City Construction in a manner
consistent with the terms hereof and of the Indenture, (y) the use of such
funds for such purpose or purposes will not violate the terms of the
Indenture, and (z) such funds will be applied as set forth in clause (i)
within no more than ten Business Days after their release from the Escrow
Account, with a copy
sent to the Trustee, the Escrow Agent shall instruct the Securities
Intermediary to use reasonable best efforts to liquidate, on such date (but
in any event such liquidation and distribution shall occur not later than
the following Business Day), the funds and/or Collateral Investments from
the Escrow Account in an amount equal to the amount specified in the
Disbursement Request Certificate and to cause the disbursement of such
amount of funds and/or Collateral Investments as directed by VeraSun;
provided, however, that in the event that the amount requested by VeraSun
under a Disbursement Request Certificate is equal to or greater than $15
million or such requested amount is less than $15 million but, when added
to all other amounts released pursuant to this Section 6(b) during the
preceding 30 days, would aggregate to $35 million or more, the Escrow Agent
shall not honor such Disbursement Request Certificate unless such
Certificate is accompanied by a resolution of the Board of Directors of
VeraSun approving such disbursement request.
(c) In the event that the Escrow Agent receives a Special Offer to
Purchase Notice, the Escrow Agent shall instruct the Securities
Intermediary to liquidate and release to the Paying Agent (as defined in
the Special Offer to Purchase Notice), not later than the last Business Day
prior to the Payment Date (as set forth in the Special Offer to Purchase
Notice), the funds and/or Collateral Investments from the Escrow Account in
an amount equal to the lesser of (I) the amount required to pay the
purchase price, plus accrued and unpaid interest to the date of purchase,
for all notes tendered pursuant to a Special Offer to Purchase Notice and
(II) the amount of funds and/or Collateral Investments then in the Escrow
Account. Concurrently with the release of funds to the Paying Agent, the
Escrow Agent will release any excess of escrowed funds over the purchase
price to VeraSun, and VeraSun will be permitted to use the excess funds for
any purpose not otherwise prohibited by the Indenture.
(d) Upon the release of any Collateral from the Escrow Account in
accordance with the terms of this Agreement, the security interest
evidenced by this Agreement in such released Collateral and all Proceeds
arising from such Collateral will automatically terminate and be of no
further force and effect.
(e) The Escrow Agent shall not be required to instruct the Securities
Intermediary to liquidate any Collateral Investment in order to make any
payment hereunder except as required under Section 6(a), (b) or (c).
(f) VeraSun acknowledges, confirms and agrees that the Collateral
Agent holds the Pledged Security Entitlements to the Collateral Investments
solely as Collateral Agent for the Trustee and the Holders of the Notes and
not as a securities intermediary or financial intermediary.
(g) Nothing in this Section 6 shall affect the Escrow Agent's rights,
upon instruction from the Collateral Agent, to instruct the Securities
Intermediary to release Collateral for application thereof to payment of
amounts due on the Notes upon acceleration thereof.
SECTION 7. Representations and Warranties. To induce the Secured
Parties to purchase the Notes and to induce the Escrow Agent and the Securities
Intermediary to enter into this Agreement, VeraSun hereby represents and
warrants that:
(a) The execution and delivery by VeraSun and the performance by
VeraSun of its obligations under this Agreement will not contravene (i) any
provision of applicable law or the certificate of incorporation or by-laws
of VeraSun, (ii) any material agreement or other material instrument
binding upon VeraSun or any of its subsidiaries or (iii) any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over VeraSun or any of its subsidiaries, or result in the
creation or imposition of any Lien on any assets of VeraSun, except for the
security interests granted under this Agreement and except, in the case of
the foregoing clauses (ii) and (iii), such contraventions as would not,
singly or in the aggregate, have a Material Adverse Effect.
(b) No consent of any other Person and no approval, authorization,
order of, declaration or qualification with, any governmental body or
agency or other third party is required (i) for the execution, delivery or
performance by VeraSun of its obligations under this Agreement or (ii) for
the pledge by VeraSun of the Collateral pursuant to this Agreement or for
the perfection and maintenance of such pledge, except for (1) those already
obtained which are in full force and effect, (2) any such consents,
approvals, authorizations or orders as may be required to be obtained by
the Collateral Agent (or the Holders) for the exercise by the Collateral
Agent of the rights provided for in this Agreement or the remedies in
respect of the Collateral pursuant to this Agreement and (3) as would not,
singly or in the aggregate, have a material adverse effect on the financial
condition or results of operations of the Company and its Subsidiaries
taken as a whole.
(c) VeraSun is the legal and beneficial owner of the Collateral, free
and clear of any Lien or claims of any Person (except for the security
interests created by this Agreement). No financing statement or instrument
similar in effect covering all or any part of VeraSun's interest in the
Collateral is on file in any public or recording office.
(d) This Agreement has been duly authorized, validly executed and
delivered by VeraSun and constitutes a valid and binding agreement of
VeraSun, enforceable against VeraSun in accordance with its terms, except
as the enforceability hereof may be limited by (i) applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally, or (ii)
general principles of equity, whether considered at law or at equity,
including, without limitation, concepts or materiality, reasonableness,
good faith and fair dealing.
(e) Upon the filing of all necessary Uniform Commercial Code financing
statements in the proper filing offices and all other actions necessary or
desirable to perfect a security interest in the Escrow Account, the
security interests in the Escrow Account granted to the Collateral Agent,
for the ratable benefit of the Secured Parties, will constitute a valid and
perfected first priority security interest in the Escrow Account, securing
the Obligations, subject only to Permitted Liens and other Liens expressly
permitted under the Indenture. As of the Closing Date, except for the
filing of all
necessary Uniform Commercial Code financing statements in the proper filing
offices and the other filings and actions contemplated hereby and by the
Indenture, all other filings and other actions necessary or desirable to
perfect the security interest in the Escrow Account will have been duly
made or taken and will be in full force and effect.
(f) There are no legal or governmental proceedings pending or, to the
best of VeraSun's knowledge, threatened to which VeraSun or any of its
subsidiaries is a party or to which any of the properties of VeraSun or any
such subsidiary is subject that would materially adversely affect the power
or ability of VeraSun to perform its obligations under this Agreement or to
consummate the transactions contemplated hereby.
(g) The pledge of the Collateral pursuant to this Agreement is not
prohibited by law or governmental regulation (including, without
limitation, Regulations T, U and X of the Board of Governors of the Federal
Reserve System) applicable to VeraSun.
(h) No Event of Default exists.
(i) VeraSun's exact legal name, as defined in Section 9-503(a) of the
UCC, is "VeraSun Energy Corporation". The chief place of business and chief
executive office of VeraSun are located at 000 00xx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxx 00000, and VeraSun keeps its records concerning the Collateral
at such location.
(j) VeraSun is the sole account holder of the Escrow Account and
VeraSun has not consented to, and is not otherwise aware of any Person
(other than the Collateral Agent) having "control" (within the meaning of
Section 9-104 of the UCC) over the Escrow Account or any money or other
property deposited therein.
SECTION 8. Power of Attorney; Collateral Agent May Perform. Subject to
the terms of this Agreement, VeraSun hereby appoints and constitutes the
Collateral Agent as VeraSun's attorney-in-fact (with full power of
substitution), with full authority in the place and stead of VeraSun and in the
name of VeraSun or otherwise, from time to time to take any action and to
execute any instrument that is necessary or advisable or that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:
(a) to ask for, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or
in respect of any of the Collateral,
(b) to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above,
(c) to file any claims or take any action or institute any proceedings
that are necessary or desirable or that the Collateral Agent may deem
necessary or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Trustee with respect to any of the
Collateral,
(d) to pay or discharge taxes or Liens levied or placed upon the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent, and such
payments made by the Collateral Agent to become part of the Obligations of
VeraSun to the Trustee, due and payable immediately upon demand, and
(e) to convey any item of Collateral to any purchaser thereof and give
any notices or recordings of any Liens under Section 11 hereof;
provided, however, that the Collateral Agent shall have no duty or obligation to
perform any of the foregoing actions. The Collateral Agent's authority under
this Section 8 shall include, without limitation, the authority to execute or
endorse (a) any checks or instruments representing proceeds of Collateral in the
name of VeraSun, (b) any receipts for any certificate of ownership or any
document constituting Collateral or transferring title to any item of
Collateral, (c) any financing statements (to the extent permitted by applicable
law) or (d) any other documents deemed necessary or appropriate by the
Collateral Agent or otherwise to preserve, protect or perfect the security
interest in the Collateral and to file the same, prepare, file and sign
VeraSun's name on any notice of Lien, and to take any other actions arising from
or incident to the powers granted to the Collateral Agent in this Agreement.
This power of attorney, which will terminate upon the termination of this
Agreement, is coupled with an interest and is irrevocable by VeraSun.
SECTION 9. No Assumption of Duties; Reasonable Care. The rights and
powers conferred on the Collateral Agent hereunder are solely to preserve and
protect the security interest of the Secured Parties in and to the Collateral
granted hereby and shall not be interpreted to, and shall not impose any duties
or obligations on the Collateral Agent in connection therewith other than those
expressly provided herein or imposed under applicable law. Except as provided by
applicable law or by the Indenture, the Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which the Collateral Agent accords similar property held by the Collateral
Agent for its own account, it being understood that the Collateral Agent in its
capacity as such shall not have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities or other
matters relative to any Collateral, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, (b) taking any necessary steps to
preserve rights against any parties with respect to any Collateral or (c)
investing or reinvesting any of the Collateral or any loss on any investment.
SECTION 10. Indemnity; Escrow Agent's Limitation of Liability to
VeraSun. (a) VeraSun shall indemnify, reimburse, hold harmless and defend the
Escrow Agent, the Collateral Agent and the Securities Intermediary and their
affiliates and their directors, officers, agents and employees, from and against
any and all claims, actions, obligations, liabilities and expenses, including
reasonable defense costs, reasonable investigative fees and costs, and
reasonable legal fees and damages arising from the Escrow Agent's or Securities
Intermediary's or Collateral Agent's performance or lack of performance as
Escrow Agent or Securities Intermediary or Collateral Agent, respectively, under
this Agreement, except to the extent that such claim, action, obligation,
liability or expense is directly caused by the bad faith, gross negligence or
willful misconduct of such indemnified person; provided, however, that the
Securities Intermediary (a) shall not be excused from, and shall not be excused
from liability for, acting or refraining from acting and (b) shall not be
indemnified or held harmless under this Section 10 for the taking or the failure
to take any action, in each case, hereunder in its capacity as Securities
Intermediary to the extent the taking or the failure to take any such action
violates the duties and obligations expressly imposed upon the Securities
Intermediary under the Federal Book-Entry Regulations or Article 8, Part 5 of
the UCC. This indemnity shall be a continuing obligation of VeraSun, its
respective successors and assigns, notwithstanding the termination of this
Agreement and the resignation or removal of the Escrow Agent or the Securities
Intermediary or the Collateral Agent.
(b) If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects Collateral (including, but not
limited to, orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of Collateral), the Escrow Agent
is authorized to comply therewith in any manner as it or its legal counsel of
its own choosing deems appropriate and if the Escrow Agent complies with any
such judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Escrow Agent shall not be liable to
VeraSun even though such order, judgment, decree, writ or process may be
subsequently modified or vacated or otherwise determined to have been without
legal force or effect.
(c) Should any controversy arise involving the parties hereto or any
of them or any other person, firm or entity with respect to this Agreement or
the Collateral, or should a substitute escrow agent fail to be designated as
provided in Section 13.14 hereof, or if Escrow Agent should be in doubt as to
what action to take, Escrow Agent shall have the right, but not the obligation,
either to (a) withhold delivery of the Collateral until the controversy is
resolved, the conflicting demands are withdrawn or its doubt is resolved or (b)
institute a petition for interpleader in any court of competent jurisdiction to
determine the rights of the parties hereto. In the event Escrow Agent is a party
to any dispute, Escrow Agent shall have the additional right to refer such
controversy to binding arbitration. Should a petition for interpleader be
instituted, or should Escrow Agent be threatened with litigation or become
involved in litigation or binding arbitration in any manner whatsoever in
connection with this Escrow Agreement or the Collateral, VeraSun agrees to
reimburse Escrow Agent for its reasonable attorneys' fees and any and all other
reasonable expenses, losses, costs and damages incurred by Escrow Agent in
connection with or resulting from such threatened or actual litigation or
arbitration prior to any disbursement hereunder.
(d) The Escrow Agent, the Securities Intermediary and the Collateral
Agent shall not incur any liability to VeraSun for not performing any act or
fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of the Escrow Agent or the Collateral Agent
(including, but not limited to, any act or provision or any present or future
law or regulation or governmental authority, any act of God or war, or the
unavailability of the Federal Reserve Bank wire or telex or other wire or
communication facility).
(e) The Escrow Agent, the Securities Intermediary and the Collateral
Agent shall not be responsible in any respect for the form, execution, validity,
value or genuineness of
documents or securities deposited hereunder, or for any description therein, or
for the identity, authority or rights of persons executing or delivering or
purporting to execute or deliver any such document, security or endorsement. In
no event shall the Escrow Agent, the Securities Intermediary or the Collateral
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Escrow
Agent, the Securities Intermediary or the Collateral Agent have been advised of
the likelihood of such loss or damage and regardless of the form of action.
SECTION 11. Remedies upon Events of Default. If any Event of Default
shall have occurred and be continuing:
(a) The Collateral Agent may exercise, in addition to all other rights
given by law or by this Agreement or the Indenture, all of the rights and
remedies with respect to the Collateral of a secured party under the UCC at
that time and also may without notice, sell the Collateral or any part
thereof in one or more parcels at any broker's board or at public or
private sale, in one or more sales or lots, at any of the Collateral
Agent's offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Collateral Agent may deem commercially
reasonable. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. The purchaser of any or all Collateral so sold shall thereafter
hold the same absolutely, free from any claim, encumbrance or right of any
kind whatsoever created by or through VeraSun. Any sale of the Collateral
conducted in conformity with reasonable commercial practices of banks,
insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Collateral shall be
deemed to be commercially reasonable. The Trustee, the Collateral Agent or
any Holder of Notes may, in its own name or in the name of a designee or
nominee, buy any of the Collateral at any public sale and, if permitted by
applicable law, at any private sale. All reasonable expenses (including
court costs and reasonable attorneys' fees, expenses and disbursements) of,
or incident to, the enforcement of any of the provisions hereof shall be
recoverable from the proceeds of the sale or other disposition of the
Collateral.
(b) All cash proceeds received by the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of the Collateral Agent, be held by
the Collateral Agent as collateral for, and/or then or at any time
thereafter applied to, all or any part of the Obligations in such order as
the Collateral Agent shall elect consistent with Section 6.10 of the
Indenture and the Security Agreement. Any surplus of such cash or cash
proceeds held by the Collateral Agent and remaining after payment in full
of all the Obligations shall be paid over to VeraSun.
(c) VeraSun further agrees to use its reasonable best efforts to do or
cause to be done all such other acts as may be necessary to ensure that
such sale or sales of all or any portion of the Collateral pursuant to this
Section 11 are valid and binding and in compliance with any and all other
applicable requirements of law. VeraSun further
agrees that a breach of any of the covenants contained in this Section 11
will cause irreparable injury to the Trustee and the Holders of the Notes,
that the Trustee and the Holders of the Notes have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 11 shall be specifically enforceable
against VeraSun, and VeraSun hereby waives and agrees not to assert any
defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred.
(d) The Collateral Agent may but is not obligated to exercise any and
all rights and remedies of VeraSun in respect of the Collateral.
(e) Subject to and in accordance with the terms of this Agreement, all
payments received by VeraSun in respect of the Collateral shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from
other funds of VeraSun and shall be forthwith paid over to the Collateral
Agent in the same form as so received (with any necessary endorsement).
SECTION 12. Expenses. VeraSun agrees to pay to the Escrow Agent the
reasonable fees as may be agreed upon from time to time in accordance with the
Escrow Agent's fee schedule attached hereto as Schedule I, as such Schedule I
may be amended from time to time in the ordinary course of the Escrow Agent's
business. VeraSun will pay to the Trustee, the Collateral Agent and the Escrow
Agent the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees, expenses and disbursements of its counsel,
experts and agents retained by the Trustee, the Escrow Agent and the Collateral
Agent, that the Trustee, the Escrow Agent and the Collateral Agent may incur in
connection with (a) the review, negotiation and administration of this
Agreement, (b) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (c) the exercise or
enforcement of any of the rights of the Trustee, the Escrow Agent, the
Collateral Agent or the Secured Parties hereunder or (d) the failure by VeraSun
to perform or observe any of the provisions hereof. VeraSun will pay all such
fees and expenses within thirty (30) days of receipt of an invoice therefor.
SECTION 13. Miscellaneous Provisions.
13.1 Notices. Any notice, direction or communication given
hereunder and any deliveries made hereunder shall be sufficiently given if in
writing and delivered in person or mailed by first class mail, commercial
courier service or telecopier communication, addressed as follows:
if to VeraSun:
VeraSun Energy Corporation
000 00xx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Stoel Rives LLP
Standard Insurance Center
000 XX 0xx Xxxxxx #0000
Xxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Trustee or the Collateral Agent:
Xxxxx Fargo Bank, N.A.
Corporate Trust Services
Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: VeraSun Administrator
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Escrow Agent or the Securities Intermediary:
Xxxxx Fargo Bank, N.A.
Corporate Trust Services
Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: VeraSun Administrator
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or, as to any such party, at such other address as shall be designated by such
party in a written notice to each other party complying as to delivery with the
terms of this Section 13.1. All such notices and other communications shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; three Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt is confirmed, if telecopied; and on the next
Business Day if timely delivered to an air courier guaranteeing overnight
delivery.
13.2 Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
13.3 Headings. The headings in this Agreement have been inserted
for convenience of reference only, are not to be considered a part hereof and
shall in no way modify or restrict any of the terms or provisions hereof.
13.4 Counterpart Originals. This Agreement may be signed in
separate counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement. All signatures of
the parties to this agreement may be transmitted by facsimile, and such
facsimile will, for all purposes, be deemed to be the original signature of such
party whose signature it reproduces, and will be binding upon such party.
13.5 Benefits of Agreement. Nothing in this Agreement, express or
implied, shall give to any person, other than the parties hereto and their
successors hereunder, and the Holders of the Notes, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
13.6 Amendments, Waivers and Consents. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Article 9 of the Indenture and pursuant to a
written instrument executed by all the parties hereto. None of the Trustee, the
Escrow Agent, the Securities Intermediary, the Collateral Agent or any Holder of
Notes shall be deemed, by any act, delay, indulgence, omission or otherwise, to
have waived any right or remedy hereunder or to have acquiesced in any default
or Event of Default or in any breach of any of the terms and conditions hereof.
Failure of the Trustee, the Escrow Agent, the Securities Intermediary, the
Collateral Agent or any Holder of Notes to exercise, or delay in exercising, any
right, power or privilege hereunder shall not preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Trustee, the Escrow Agent, the Collateral Agent, the Securities
Intermediary or any Holder of Notes of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that the
Trustee, the Escrow Agent, the Securities Intermediary, the Collateral Agent or
such Holder of Notes would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any rights or remedies provided by law.
13.7 Continuing Security Interest; Termination. (a) This
Agreement shall create a continuing security interest in and to the Collateral
and shall, unless otherwise provided in this Agreement, remain in full force and
effect until the earlier of (i) the discharge or defeasance of all obligations
of VeraSun under the Indenture pursuant to Article 8 of the Indenture or (ii)
disbursement of all of the Collateral pursuant to Section 6. This Agreement
shall be binding upon VeraSun and its transferees, successors and assigns, and
shall inure, together with the rights and remedies of the Trustee and the
Collateral Agent hereunder, to the
benefit of the Trustee, the Collateral Agent, the Holders of the Notes and their
respective successors, transferees and assigns.
(b) This Agreement (other than VeraSun's obligations under
Sections 10 and 12) shall terminate upon the earlier of (i) the discharge or
defeasance of all obligations of VeraSun under the Indenture pursuant to Article
8 of the Indenture or (ii) disbursement of all of the Collateral pursuant to
Section 6.
(c) At such time as set forth in (a) or (b) above, the Collateral
Agent shall, pursuant to a written order of VeraSun, reassign and redeliver to
VeraSun all of the Collateral hereunder that has not been sold, disposed of,
retained or applied by the Collateral Agent in accordance with the terms of this
Agreement and the Indenture and take all actions requested by VeraSun that are
necessary to release the security interest created by this Agreement in and to
the Collateral, including the filing of all termination statements provided to
it necessary to terminate any financing or continuation statements filed with
respect to the Collateral. Such reassignment and redelivery shall be without
warranty by or recourse to the Collateral Agent or the Trustee in its capacity
as such and shall be at the reasonable expense of VeraSun.
13.8 Survival of Representations and Covenants. All
representations, warranties and covenants of VeraSun contained herein shall
survive the execution and delivery of this Agreement, and shall terminate only
upon the termination of this Agreement. The obligations of VeraSun under
Sections 10 and 12 hereof shall survive the termination of this Agreement.
13.9 Waivers. VeraSun waives presentment and demand for payment
of any of the Obligations, protest and notice of dishonor or default with
respect to any of the Obligations, and all other notices to which VeraSun might
otherwise be entitled, except as otherwise expressly provided herein or in the
Indenture.
13.10 Authority of the Collateral Agent and the Escrow Agent. The
Collateral Agent shall have and be entitled to exercise all powers hereunder
that are specifically granted to the Collateral Agent by the terms hereof,
together with such powers as are reasonably incident thereto but no duties,
obligations or powers shall be inferred or implied. The Collateral Agent may
perform any of its duties hereunder or in connection with the Collateral by or
through agents, attorneys, experts, accountants, advisors or employees and the
exculpatory provisions provided herein shall be equally applicable to such
Persons. The Collateral Agent shall be entitled to retain counsel and to act in
reliance upon the advice of counsel concerning any matters arising hereunder.
Except as otherwise expressly provided in this Agreement or the Indenture,
neither the Collateral Agent nor any director, officer, employee, attorney or
agent of the Collateral Agent shall be liable to VeraSun for any action taken or
omitted to be taken by the Collateral Agent, in its capacity as Collateral
Agent, hereunder, except for its own bad faith, gross negligence or willful
misconduct. The Collateral Agent and its directors, officers, employees,
attorneys and agents shall be entitled to conclusively rely on any
communication, instrument or document (whether in its original or facsimile
form)
believed by it or them to be genuine and correct and to have been signed or sent
by the proper person or persons.
(b) VeraSun acknowledges that the rights and responsibilities of
the Collateral Agent under this Agreement with respect to any action taken
by the Collateral Agent or the exercise or non-exercise by the Collateral
Agent of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Collateral Agent and the Holders of the Notes, be governed by
the Indenture and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Collateral Agent
and VeraSun, the Collateral Agent shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to
act or refrain from acting, and VeraSun shall not be obligated or entitled
to make any inquiry respecting such authority.
(c) The Escrow Agent shall have and be entitled to exercise all
powers hereunder that are specifically granted to the Escrow Agent by the
terms hereof, together with such powers as are reasonably incident thereto
but no duties, obligations or powers shall be inferred or implied. The
Escrow Agent may perform any of its duties hereunder or in connection with
the Collateral by or through agents, attorneys, experts, accountants,
advisors or employees and the exculpatory provisions provided herein shall
be equally applicable to such Persons. The Escrow Agent shall be entitled
to retain counsel and to act in reliance upon the advice of counsel
concerning any matters arising hereunder. Except as otherwise expressly
provided in this Agreement or the Indenture, neither the Escrow Agent nor
any director, officer, employee, attorney or agent of the Escrow Agent
shall be liable to VeraSun for any action taken or omitted to be taken by
the Escrow Agent, in its capacity as Escrow Agent, hereunder, except for
its own bad faith, gross negligence or willful misconduct. The Escrow Agent
and its directors, officers, employees, attorneys and agents shall be
entitled to conclusively rely on any communication, instrument or document
(whether in its original or facsimile form) believed by it or them to be
genuine and correct and to have been signed or sent by the proper person or
persons.
(d) The Escrow Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and VeraSun shall not be obligated or entitled to make
any inquiry respecting such authority.
13.11 Removal of Escrow Agent and Securities Intermediary;
Successor Escrow Agent and Securities Intermediary by Merger, etc. (a) VeraSun
and the Trustee may remove both the Escrow Agent and the Securities Intermediary
at any time by giving to the Escrow Agent and the Securities Intermediary thirty
calendar days' prior notice in writing signed by both VeraSun and the Trustee.
(b) Within twenty calendar days after giving the foregoing notice
of removal to the Escrow Agent and the Securities Intermediary, VeraSun and
the Trustee shall jointly agree on and appoint a successor Escrow Agent and
Securities Intermediary. If a successor Escrow Agent has not accepted such
appointment by the end of such
twenty-day period, the Escrow Agent and Securities Intermediary may, in
their sole discretion, apply to a court of competent jurisdiction for the
appointment of a successor Escrow Agent and Securities Intermediary or for
other appropriate relief.
(c) Upon receipt of the notice of identity of the successor
Escrow Agent, the Escrow Agent shall deliver the Collateral then held
hereunder to the successor Escrow Agent.
(d) If the Escrow Agent consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act
shall be the successor Escrow Agent.
13.12 Resignation. The Escrow Agent may resign hereunder upon
sixty (60) days' prior notice to the VeraSun and Trustee. Upon the effective
date of such resignation, the Escrow Agent shall deliver the Collateral to any
substitute escrow agent designated by VeraSun and Trustee in writing. If VeraSun
and Trustee fail to designate a substitute escrow agent within sixty (60) days
after the giving of such notice, the Escrow Agent may institute a petition for
interpleader. The Escrow Agent's sole responsibility after such 60-day notice
period expires shall be to hold the Deposit (without any obligation to reinvest
the same) and to deliver the same to a designated substitute escrow agent, if
any, or in accordance with the directions of a final order or judgment of a
court of competent jurisdiction, at which time of delivery the Escrow Agent's
obligations hereunder shall cease and terminate.
13.13 Tax Matters. Each of VeraSun and the Trustee and the
Collateral Agent shall provide the Escrow Agent with its taxpayer identification
number documented on the signature page hereto. Failure so to provide such forms
may prevent or delay disbursements from the Collateral and may also result in
the assessment of a penalty and Escrow Agent's being required to withhold tax on
any interest or other income earned on the Collateral. Any payments of income
shall be subject to applicable withholding regulations then in force in the
United States or any other jurisdiction, as applicable.
13.14 Funds Transfer. (a) In the event funds transfer
instructions are given (other than in writing at the time of execution of the
Escrow Agreement), whether in writing, by telefax, or otherwise, the Escrow
Agent is authorized to seek confirmation of such instructions by telephone
call-back to the person or person designated on Schedule II hereto, and the
Escrow Agent may rely upon the confirmations of anyone purporting to be the
person or persons so designated. If the Escrow Agent is unable to contact any of
the authorized representatives identified in Schedule II, the Escrow Agent is
hereby authorized to seek confirmation of such instructions by telephone
call-back to any one or more of your Officers, as the Escrow Agent may select.
Such Officer shall deliver to the Escrow Agent a fully executed Incumbency
Certificate, and the Escrow Agent may rely upon the confirmation of anyone
purporting to be any such Officer. The persons and telephone numbers for
call-backs may be changed only in writing actually received and acknowledged by
the Escrow Agent. The parties to this Escrow Agreement acknowledge that such
security procedure is commercially reasonable.
(b) It is understood that the Escrow Agent and the beneficiary's
bank in any funds transfer may rely solely upon any account numbers or
similar identifying
number provided by either of the other parties hereto to identify (i) the
beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank.
The Escrow Agent may apply any of the escrowed funds for any payment order
it executes using any such identifying number, even where its use may
result in a person other than the beneficiary being paid, or the transfer
of funds to a bank other than the beneficiary's bank or an intermediary
bank, designated.
13.15 Final Expression. This Agreement, together with the
Indenture and any other agreement executed in connection herewith, is intended
by the parties as a final expression of this Agreement and is intended as a
complete and exclusive statement of the terms and conditions thereof.
13.16 Rights of Holders of the Notes. No Holder of Notes shall
have any independent rights hereunder other than those rights granted to
individual Holders of the Notes pursuant to Article 6 of the Indenture; provided
that nothing in this subsection shall limit any rights granted to the Trustee
under the Notes or the Indenture.
13.17 Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Damages. (a) This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York, and any
dispute arising out of, connected with, related to, or incidental to the
relationship established between VeraSun, the Trustee, the Escrow Agent, the
Collateral Agent, the Securities Intermediary, and the Holders of the Notes in
connection with this Agreement, and whether arising in contract, tort, equity or
otherwise, shall be resolved in accordance with the laws of the State of New
York.
(b) VeraSun hereby waives personal service of process in any
suit, action or proceeding with respect to this Agreement and for actions
brought under the U.S. Federal or state securities laws brought in any
Federal or state court located in the City of New York (each a "NEW YORK
COURT") and consents that all service of process in any such suit, action
or proceeding shall be made by registered mail, return receipt requested,
directed to VeraSun at the address indicated in Section 13.1. Each of the
parties hereto submits to the jurisdiction of any New York Court and to the
courts of its corporate domicile with respect to any actions brought
against it as defendant in any suit, action or proceeding arising out of,
connected with, related to, or incidental to the relationship established
among VeraSun, the Trustee, the Collateral Agent, the Securities
Intermediary, the Escrow Agent and the Holders in connection with this
Agreement, and each of the parties hereto waives any objection that it may
have to the laying of venue, including any pleading of forum non
conveniens, with respect to any such action and waives any right to which
it may be entitled on account of place of residence or domicile.
(c) VeraSun agrees that neither any Holder of Notes nor (except
as otherwise provided in this Agreement or the Indenture) the Escrow Agent
in its capacity as Escrow Agent nor the Securities Intermediary nor the
Collateral Agent shall have any liability to VeraSun (whether arising in
tort, contract or otherwise) for losses suffered by VeraSun in connection
with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by this Agreement, or any
act, omission or event occurring in connection therewith, unless such
losses were the result of acts or
omissions on the part of the Escrow Agent, the Securities Intermediary, or
the Collateral Agent or such Holders of Notes, as the case may be,
constituting bad faith, gross negligence or willful misconduct.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed and delivered as of the date first above written.
TAX CERTIFICATION: Taxpayer ID#: _______________________________________
NOTE: The following certification shall be used by and for a U.S. resident only.
Non-residents must use and provide Form W8-BEN
Customer is a (check one):
[ ] Corporation [ ] Municipality [ ] Partnership [ ] Non-profit or Charitable Org
[ ] Individual [ ] REMIC [ ] Trust [ ] Other _____________
Under the penalties of perjury, the undersigned certifies that:
(1) the entity is organized under the laws of the United States
(2) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(3) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
Note: The IRS does not require your consent to any provision of this
document other than the certifications required to avoid backup withholding.
VeraSun:
VERASUN ENERGY CORPORATION
By:
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
TAX CERTIFICATION: Taxpayer ID#: ____________________________________
NOTE: The following certification shall be used by and for a U.S. resident only.
Non-residents must use and provide Form W8-BEN
Customer is a (check one):
[ ] Corporation [ ] Municipality [ ] Partnership [ ] Non-profit or Charitable Org
[ ] Individual [ ] REMIC [ ] Trust [ ] Other _____________
Under the penalties of perjury, the undersigned certifies that:
(4) the entity is organized under the laws of the United States
(5) the number shown above is its correct Taxpayer Identification Number (or it
is waiting for a number to be issued to it); and
(6) it is not subject to backup withholding because: (a) it is exempt from
backup withholding or (b) it has not been notified by the Internal Revenue
Service (IRS) that it is subject to backup withholding as a result of
failure to report all interest or dividends, or (c) the IRS has notified it
that it is no longer subject to backup withholding.
(If the entity is subject to backup withholding, cross out the words after the
(3) above.)
Investors who do not supply a tax identification number will be subject to
backup withholding in accordance with IRS regulations.
Note: The IRS does not require your consent to any provision of this document
other than the certifications required to avoid backup withholding.
Trustee and Collateral Agent:
XXXXX FARGO BANK, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Securities Intermediary and Escrow
Agent:
XXXXX FARGO BANK, N.A.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Schedule I
Fee Schedule
ANNUAL ESCROW AGENT FEE $3,000
All out-of-pocket expenses will be billed in addition to the above, such as fees
of counsel, settlement charges for delivery of physical securities, outside
accounting firms, rebate calculation agent expenses, travel expenses of bank
officers attending closing, etc.
Schedule II
TELEPHONE NUMBER(S) FOR CALL-BACKS AND PERSON(S)
DESIGNATED TO CONFIRM FUNDS TRANSFER INSTRUCTIONS
If to VeraSun:
Name Telephone Number
---- ----------------
Xxxxx X. Xxxxxxxx
President and Chief Financial Officer 000-000-0000
Ginja X. Xxxxxxx
Treasurer and Secretary Telephone Number 000-000-0000
If to Trustee:
Name Telephone Number
---- ----------------
Telephone call-backs shall be made to either VeraSun or Trustee if joint
instructions are required pursuant to the Escrow Agreement.
EXHIBIT A
VERASUN ENERGY CORPORATION
Completion Certificate pursuant to
Section 6(a) of the Escrow Agreement
[________], 2005
Pursuant to Section 6(a) of the Security and Escrow Agreement dated as
of December 21, 2005 (the "ESCROW AGREEMENT", capitalized terms used herein and
not otherwise defined are used herein as defined in the Escrow Agreement), by
and among VeraSun Energy Corporation, a South Dakota corporation (the
"COMPANY"), Xxxxx Fargo Bank, N.A., as Trustee and Collateral Agent and Xxxxx
Fargo Bank, N.A., as Escrow Agent and Securities Intermediary, I, ________,
Chief Executive Officer of the Company, and I, _______, President and Chief
Financial Officer of the Company, each do hereby certify on behalf of the
Company to the best of my knowledge after reasonable investigation as follows:
1. The Company has received a certificate from Xxxxx, Inc, stating that
the Xxxxxxx City Construction has been completed, which certificate is
attached hereto as Exhibit A.
2. The Xxxxxxx City Construction has resulted in a production capacity of
at least 110.0 million gallons of ethanol annually.
3. All material consents, approvals, licenses and permits necessary for
the commercial operation of the Xxxxxxx City Construction have been
obtained from the relevant governmental authorities.
4. No Default or Event of Default has occurred and is continuing.
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first
written above.
VERASUN ENERGY CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT B
VERASUN ENERGY CORPORATION
Disbursement Certificate pursuant to
Section 6(b) of the Escrow Agreement
[________], 2005
Pursuant to Section 6(b) of the Security and Escrow Agreement dated as
of December 21, 2005 (the "ESCROW AGREEMENT", capitalized terms used herein and
not otherwise defined are used herein as defined in the Escrow Agreement), by
and among VeraSun Energy Corporation, a South Dakota corporation (the
"COMPANY"), Xxxxx Fargo Bank, N.A., as Trustee and Collateral Agent and Xxxxx
Fargo Bank, N.A., as Escrow Agent and Securities Intermediary, I, _________,
Chief Executive Officer of the Company, and I, _________, President and Chief
Financial Officer of the Company, each do hereby certify on behalf of the
Company to the best of my knowledge after reasonable investigation as follows:
1. The amount requested to be disbursed from the Escrow Account is
$_____________. Such funds will be applied ____________________.
2. Such funds will be used in connection with the Xxxxxxx City
Construction in a manner consistent with the terms hereof and of the
Indenture.
3. The use of such funds for the purpose or purposes set forth in
paragraph (1) will not violate the terms of the Indenture.
4. Such funds will be applied as set forth in paragraph (1) within no
more than ten Business Days after their release from the Escrow
Account
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first
written above.
VERASUN ENERGY CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit G
Form of Mortgage
G-1
Exhibit G
This Mortgage was prepared by and
when recorded should be mailed to:
Xxxxx K Del Duca, Esq.
Milbank, Tweed, Xxxxxx & XxXxxx, LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
This MORTGAGE, ASSIGNMENT, ASSIGNMENT OF RENTS, SECURITY AGREEMENT,
FIXTURE FILING AND FINANCING STATEMENT (as the same may from time to time be
extended, spread, split, consolidated, modified, restated or renewed, this
"MORTGAGE") is made as of December ___, 2005 by and from [VERASUN AURORA
CORPORATION][VERASUN FORT DODGE, LLC], a [South Dakota][Delaware]
[corporation][limited liability company] ("GRANTOR"), to XXXXX FARGO BANK, N.A.,
as collateral agent (together with its successors and assigns, "AGENT") for the
benefit of Trustee (hereinafter defined) and Holders (as such term is defined in
the Indenture defined below) ("MORTGAGEE").
WITNESSETH:
WHEREAS, VeraSun Energy Corporation, a South Dakota corporation
("VERASUN ENERGY" or "BORROWER"), has entered into that certain Indenture, dated
as of the date hereof, with, inter alia, the Guarantors as defined therein and
the Trustee defined therein (said Indenture, as it may be amended, amended and
restated, supplemented or otherwise modified from time to time, the
"INDENTURE"); and
WHEREAS, pursuant to the Indenture, VeraSun Energy will issue the
Securities (as defined therein); and
WHEREAS, Grantor is a Guarantor (as defined in the Indenture) and will
guaranty certain obligations of VeraSun Energy pursuant to the Note Guarantee
(as defined in the Indenture) as described therein; and
WHEREAS, this Mortgage is to be executed and delivered to Mortgagee in
order to secure the payment and performance of the Secured Obligations (as
defined herein), including, without limitation, the obligations of Grantor under
the Note Guarantee.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure the punctual payment and performance by Grantor and
Borrower when due, whether at stated maturity, by acceleration or otherwise, of
the Secured Obligations, Grantor does hereby grant,
1
bargain, sell, mortgage, warrant, convey, alien, remise, release, assign,
transfer, set over, deliver, confirm and convey unto Mortgagee, upon the terms
and conditions of this Mortgage, with power of sale and right of entry as
provided hereinbelow, each and all of the real properties described in the
Granting Clauses herein (which, together with all other property described in
the Granting Clauses herein, is hereinafter collectively called the "MORTGAGED
PROPERTY").
GRANTING CLAUSES
All the estate, right, title and interest of Grantor in, to and under,
or derived from, the plots, pieces and parcels of land more particularly
described in Exhibit A hereto (the "LAND");
TOGETHER with all of Grantor's right, title and interest in and to the
tenements, hereditaments, appurtenances and all the estates and rights of
Grantor in and to the Land;
TOGETHER with all of Grantor's right, title and interest in and to any
and all buildings and improvements now or hereafter located on the Land
(hereinafter collectively referred to as the "IMPROVEMENTS") and all right,
title and interest, if any, of Grantor in and to the streets, roads, sidewalks
and alleys abutting the Land, and strips and gores within or adjoining the Land,
the air space and right to use said air space above the Land and any
transferable development or similar rights appurtenant thereto, all rights of
ingress and egress by motor vehicles to parking facilities on or within the
Land, all easements now or hereafter affecting the Land, royalties and all
rights appertaining to the use and enjoyment of the Land, including alley,
drainage, mineral, water, oil and gas rights (less and except any oil, gas and
other minerals and any other rights previously reserved or conveyed of record);
TOGETHER with all of Grantor's right, title and interest in and to any
and all property, and all additions thereto and substitutions or replacements
thereof now or hereinafter contained or attached to and used in connection with
the Premises to the extent the same constitutes real property or fixtures in the
state in which the Land is located (all of the foregoing, including the items
hereinafter enumerated, are herein collectively referred to as the "FIXTURE
PROPERTY"), including all removable window and floor coverings, furniture and
furnishings, heating, lighting, plumbing, ventilating, air conditioning,
refrigerating, incinerating and elevator plants, cooking facilities, vacuum
cleaning systems, call systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, motors, machinery, pipes, appliances,
equipment, fittings and fixtures, to the extent the same constitutes real
property or fixtures in the state in which the Land is located (the Land, the
Improvements and the Fixture Property are hereinafter collectively referred to
as the "PREMISES");
TOGETHER with all of Grantor's right, title and interest in and to any
and all leases, subleases, lettings and licenses of the Premises or any part
thereof now or hereafter entered into, and all amendments, modifications,
supplements, additions, extensions and renewals thereof (all of the foregoing
are hereinafter collectively referred to as the "LEASES"), including cash and
securities deposited thereunder (as down payments, security deposits or
otherwise), the right to receive and collect the rents, security deposits,
income, proceeds, earnings, royalties, revenues, issues and profits payable
thereunder and the rights to enforce, whether at law or in equity or by any
other means, all provisions and options thereof or
2
thereunder (all of the foregoing are hereinafter collectively referred to as the
"RENTS") and the right during the continuance of an Event of Default to apply
the same to the payment and performance of the Secured Obligations;
TOGETHER with all of Grantor's right, title and interest in and to any
and all rights, dividends and/or claims of any kind whatsoever relating to the
Premises (including damage, secured, unsecured, lien, priority and
administration claims); together with the right to take any action or file any
papers or process in any court of competent jurisdiction, which may in the
opinion of Mortgagee be necessary to preserve, protect or enforce such rights or
claims, including the filing of any proof of claim in any insolvency proceeding
under any state, federal or other laws and any rights, claims or awards accruing
to or to be paid to Grantor in its capacity as landlord under any Lease;
TOGETHER with all of Grantor's right, title and interest in and to any
and all other agreements, rights, written materials and intangible personal
property (whether now or in the future existing) arising in connection with,
derived from or otherwise relating to the Mortgaged Property or any portion
thereof or the ownership, development, construction, use, operation, occupancy,
lease, sale or financing of the Mortgaged Property or any portion thereof
(excluding the extent to which same relate to the conduct of Grantor's
business), including: (i) permits, approvals, consents and other authorizations;
(ii) improvement plans and specifications and architectural drawings; (iii)
agreements with contractors, subcontractors and suppliers; (iv) warranties and
guaranties; and (v) escrow proceeds, reserves, deposits, bonds, deferred
payments, refunds, rebates, discounts, cost savings and leases (in each case
subject to Section 7.15(a));
TOGETHER with all of Grantor's right, title and interest in and to any
and all unearned premiums, accrued, accruing or to accrue under insurance
policies now or hereafter obtained by Grantor and relating to the Premises and
all proceeds of the conversion, voluntary or involuntary, of the Premises into
cash or liquidated claims, including proceeds of hazard and title insurance and
all awards and compensation heretofore and hereafter made to the present and all
subsequent owners of the Premises by any governmental or other lawful
authorities for the taking by eminent domain, condemnation or otherwise, of all
or any part of the Premises or any easement therein, including awards for any
change of grade of streets (all of the foregoing are hereinafter collectively
referred to as the "AWARDS"); and
TOGETHER with all right, title and interest of Grantor in and to all
extensions, improvements, betterments, renewals, substitutes and replacements
of, and all additions and appurtenances to, any of the foregoing hereafter
acquired by, or released to, Grantor or constructed, assembled or placed by
Grantor on the Premises and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assemblage, placement
or conversion, as the case may be, and in each such case, without any further
mortgage, conveyance, assignment or other act by Grantor, shall become subject
to the lien of this Mortgage as fully and completely, and with the same effect,
as though now owned by Grantor and specifically described herein.
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee and its
successors and assigns, forever, subject to the terms and conditions of this
Mortgage for the
3
ratable benefit of the Mortgagee, Trustee, the holders of the Notes and the
Party Lien Holders (as defined in the Security Agreement) (collectively, the
"SECURED PARTIES"), subject to the terms of the Security Agreement.
ARTICLE I
Certain Definitions
SECTION 1.01. Certain Definitions.
(a) Capitalized terms used herein and not defined herein shall have the
meanings given them in the Indenture.
(b) As used herein, the following terms shall have the meanings set forth
opposite them below:
"ACTION" has the meaning set forth in Section 7.10.
"AGENT" has the meaning set forth in the Recitals.
"VERASUN ENERGY" has the meaning set forth in the Recitals.
"AWARDS" has the meaning set forth in the Granting Clauses.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as amended
from time to time.
"BORROWER" has the meaning set forth in the Recitals.
"DEFAULT RATE" means, at any time, the rate of interest per annum
equal to the lesser of (i) the maximum non-usurious rate permitted by law and
(ii) 2% in excess of the then interest rate payable on the Securities.
"EASEMENTS" has the meaning set forth in Section 3.05(b)(ii).
"ENVIRONMENTAL LAW" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations, standards, policies and
other government directives or requirements, as well as common law, including
but not limited to the Comprehensive Environmental Response, Compensation and
Liability Act and the Resource Conservation and Recovery Act, that apply to
Grantor or the Mortgaged Property and relate to Hazardous Materials or
protection of human health or the environment, in each case, binding on Grantor
or the Mortgaged Property.
"ENVIRONMENTAL LIENS" means all liens, charges and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission of
Grantor or any other Person.
"EVENT OF DEFAULT" has the meaning set forth in the Indenture.
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"FIXTURE PROPERTY" has the meaning set forth in the Granting Clauses.
"GRANTOR" has the meaning set forth in the Recitals.
"HAZARDOUS MATERIALS" shall mean petroleum and petroleum products and
compounds containing them, including gasoline, diesel fuel and oil; explosives,
flammable materials; radioactive materials; polychlorinated biphenyls ("PCBS")
and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable; any
substance the presence of which on the Mortgaged Property is prohibited by any
federal, state or local governmental authority; any substance that requires
special handling under Environmental Laws; and any other material or substance
now or in the future defined as a "hazardous substance," "hazardous material",
"hazardous waste", "toxic substance", "toxic pollutant", "contaminant", or
"pollutant" within the meaning of any Environmental Law.
"IMPOSITIONS" means all taxes, assessments, vault, water and sewer
rents, rates, charges and assessments, levies, permits, inspection and license
fees and other governmental and quasi-governmental charges and any penalties or
interest for non-payment thereof, heretofore or hereafter imposed upon the
Mortgaged Property.
"IMPROVEMENTS" has the meaning set forth in the Granting Clauses.
"INDEBTEDNESS": All indebtedness of Grantor to Mortgagee or any of the
other Secured Parties under the Loan Documents to which Grantor is a party,
including, without limitation, the sum of all principal, interest and other
amounts owing under or evidenced or secured by the Loan Documents to which
Grantor is a party and obligations and liabilities of any nature now or
hereafter existing under or arising in connection with reimbursement obligations
under the Loan Documents to which Grantor is a party, together with interest and
other amounts payable thereunder with respect thereto. The Indebtedness secured
hereby includes, without limitation, all interest and expenses accruing after
the commencement by or against Grantor of a proceeding under the Bankruptcy Code
or any similar law for the relief of debtors.
"INDEMNIFIED PARTIES" has the meaning set forth in Section 7.20.
"INDENTURE" has the meaning set forth in the Recitals.
"LAND" has the meaning set forth in the Granting Clauses.
"LOAN DOCUMENTS" means the Note Guarantees, the Indenture (including
any supplemental indentures), the Securities, the Security Agreement, the
Security and Escrow Agreement, the Registration Rights Agreement (as defined in
the Purchase Agreement) and this Mortgage, as any of the foregoing may be
amended, restated, modified, extended, split, consolidated, supplemented or
replaced from time to time.
"LOSSES" has the meaning set forth in Section 8.20.
"MORTGAGE" has the meaning set forth in the Recitals.
5
"MORTGAGED PROPERTY" has the meaning set forth in the Recitals.
"MORTGAGEE" has the meaning set forth in the Recitals.
"NOTE GUARANTEES" has the meaning set forth in the Recitals.
"NOTICE" has the meaning set forth in Section 8.03.
"PERMITTED ENCUMBRANCES" means the following matters to which title to
the Premises may be subject and any other title exceptions or objections, if
any, as Mortgagee may approve: (a) the Liens created or permitted by this
Mortgage, (b) Liens, charges and encumbrances of record affecting the Premises
as of the date of this Mortgage as set forth in the mortgagee title insurance
policy insuring Mortgagee's mortgage lien, (c) Liens permitted under clauses
(iii) and (v) of Section 4.15 of the Indenture, (d) Permitted Liens as defined
in clauses (1), (2), (3), (5), (6), (8) (provided the Capitalized Leases and
operating leases referred to therein are entered into in the ordinary course of
Grantor's business), (5) and (7) of the definition of "Permitted Liens" in the
Indenture.
"PERSON" means any individual, sole proprietorship, corporation,
general partnership, limited partnership, limited liability company or
partnership, joint venture, association, joint stock company, bank, trust,
estate, unincorporated organization, any governmental authority, endowment fund
or any other form of entity.
"PREMISES" has the meaning set forth in the Granting Clauses.
"RELEASE" means any release, deposit, discharge, emission, leaking,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping or disposing of Hazardous Materials.
"RENTS" has the meaning set forth in the Granting Clauses.
"SECURED OBLIGATIONS" has the meaning set forth in Section 2.01.
"SECURED PARTIES" has the meaning set forth in the Granting Clauses.
"SECURITY AGREEMENT" means that certain Security Agreement, dated as
of the date hereof, among the Grantor, VeraSun Energy Corporation, and the
Collateral Agent, as amended, supplemented or otherwise modified from time to
time.
"LEASES" has the meaning set forth in the Granting Clauses.
"TRUSTEE" has the meaning set forth in the Indenture.
"UCC" means the Uniform Commercial Code of [South Dakota][Illinois]
or, if the creation, perfection and enforcement of any security interest herein
granted is governed by
6
the laws of a state other than [South Dakota][Illinois], then, as to the matter
in question, the Uniform Commercial Code in effect in that state.
ARTICLE II
Secured Obligations
SECTION 2.01. Secured Obligations. This Mortgage is given for the
purpose of securing the payment and performance of all agreements, covenants,
conditions, warranties, representations and other obligations of Grantor
(including, without limitation, the obligation to repay the Indebtedness) under
the Loan Documents to which Grantor is a party, whether now or hereafter
existing, whether matured or unmatured, contingent or liquidated (collectively,
and as any of the foregoing may be amended, modified, supplemented, renewed,
extended, repledged or replaced, the "SECURED OBLIGATIONS"). The maximum
principal amount that may be secured hereby is Two Hundred Million Dollars
($200,000,000.00).
Representations, Warranties and Covenants of Grantor
SECTION 3.01. Payment of Secured Obligations. Grantor shall punctually
pay when due, and timely perform, the Secured Obligations, and will timely
perform and observe all of its obligations under the Loan Documents.SECTION
3.02. Warranty of Title. Grantor covenants (i) that it has good fee simple title
to the Premises (other than any portion thereof consisting of easements) and a
good easement interest in any portion of the Premises consisting of easements,
in each case free and clear of all liens, charges and encumbrances of every kind
and character, subject only to the Permitted Encumbrances, (ii) that it has and
will continue to have full power and lawful authority to encumber and convey the
Mortgaged Property as provided herein and (iii) that this Mortgage is and will
continue to remain a valid and enforceable first priority mortgage lien on and
security interest in the Mortgaged Property, subject only to the Permitted
Encumbrances. Grantor further covenants that it will preserve such title and
will forever warrant and defend the title to the Mortgaged Property, subject to
Permitted Encumbrances, unto Mortgagee against all lawful claims whatsoever and
will forever warrant and defend the validity, enforceability and first priority
of the mortgage lien of this Mortgage against the claims of all Persons and
parties whomsoever, subject nevertheless to the Permitted Encumbrances. SECTION
3.03. Use; Alterations. (a) Grantor will not use, and will not permit any tenant
of the Premises to use, the Premises for any purpose other than (i)
substantially the same use as in effect as of the date hereof, (ii) any use
permitted under the Indenture and (iii) in the case of a tenant, any lawful use
that does not materially adversely affect the use of the Premises for Grantor's
business or the value of the Premises, unless such other use (if any) is
consented to in writing by Mortgagee, which consent shall not be unreasonably
withheld, delayed or conditioned. (b) Provided that no Event of Default is then
continuing, Grantor may make alterations, additions or other improvements to the
Premises or any part thereof, provided that any alterations, additions or other
improvements (i) shall not reduce the fair market value of the Premises below
its value immediately before the alteration, addition or other improvement, or
materially adversely affect the use of the Premises other than temporarily
during construction, (ii) are effected with due diligence and in a good and
workmanlike manner and in material compliance with all legal requirements and
insurance requirements and on a lien-free basis, subject to Section 3.13 and
(iii) are promptly and fully paid for by Grantor, subject to Section 3.13.
7
SECTION 3.04. Insurance. Grantor shall:(a) Keep, at its sole cost and
expense, the Mortgaged Property insured at all times in such amounts as shall be
customary for similar businesses as Grantor's business and maintain such other
insurance of such types, to such extent and against such risks, as is customary
with companies in the same or similar businesses as Grantor's business and
maintain such other insurance as may be required by law or the terms of the
Indenture. Without limiting the generality of the foregoing Grantor shall
maintain the following insurance coverage:
(1) All Risk Property insurance on the Premises, including contingent
liability from Operation of Building Laws, Demolition Costs and Increased
Cost of Construction endorsements, in each case (i) in an amount equal to
100% of the "Full Replacement Cost" of the Premises, which for purposes of
this Section shall mean actual replacement value (exclusive of costs of
excavations, foundations, underground utilities and footings) with a waiver
of depreciation and with a Replacement Cost Endorsement, subject to
commercially reasonable sub-limits; (ii) containing an agreed amount
endorsement with respect to the Premises waiving all co-insurance
provisions; (iii) providing for no deductible in excess of $1,000,000; and
(iv) containing an "Ordinance or Law Coverage" or "Enforcement" endorsement
if any of the Improvements or the use of the Premises shall constitute
non-conforming structures or uses. The Full Replacement Cost shall be
determined from time to time by an appraiser or contractor designated and
paid by Grantor and approved by Mortgagee, which approval shall not be
unreasonably withheld, delayed or conditioned, or by an engineer or
appraiser in the regular employ of Grantor. Mortgagee shall not require an
appraisal more often than once per year unless Mortgagee in its reasonable
discretion believes that the Full Replacement Cost has increased.
(2) Commercial General Liability insurance against claims for personal
injury, bodily injury, death or property damage occurring upon, in or about
the Property, such insurance (i) to be on the so-called "occurrence" form
with each occurrence and general aggregate limits of not less than
$50,000,000 (may be satisfied in combination with umbrella liability
coverage); (ii) to continue at not less than this limit until required to
be changed by Mortgagee in writing by reason of changed economic conditions
making such protection inadequate; and (iii) to cover at least the
following hazards: (a) premises and operations; (b) products and completed
operations on an "if any" basis; (c) independent contractors; (d) blanket
contractual liability for all written contracts; and (e) contractual
liability covering the indemnities contained in this Mortgage to the extent
available.
(3) Workers' Compensation insurance, subject to the statutory limits
of the State, and employer's liability insurance with a limit of at least
$1,000,000 per accident and per disease per employee, and $1,000,000 for
disease in the aggregate in respect of any work or operations on or about
the Premises, or in connection with the Premises or its operations (if
applicable).
(4) Boiler & Machinery insurance covering the major components of the
central heating, air conditioning and ventilating systems, boilers, other
pressure vessels, high pressure piping and machinery, elevators and
escalators, if any, and other similar equipment installed in the
Improvements, in an amount equal to the lesser of (i) one hundred percent
(100%) of the full replacement cost of all equipment installed in, on or at
8
the Improvements and (ii) a minimum of $100,000,000 in coverage. These
policies shall insure against physical damage to and loss of occupancy and
use of the Improvements arising out of a covered accident or breakdown.
(5) To the extent available at commercially reasonable rates,
terrorism Insurance from and against all losses, damages, costs, expenses,
claims and liabilities relating to or arising from acts of terrorism in an
amount equal to the "Full Replacement Cost" of the Improvements as
determined above.
(6) If Mortgagee determines at any time that any part of the Premises
is located in an area identified on a Flood Hazard Boundary Map or Flood
Insurance Rate Map issued by the Federal Emergency Management Agency as
having special flood hazards and flood insurance has been made available,
Grantor will maintain a flood insurance policy meeting the requirements of
the current guidelines of the Federal Insurance Administration with a
generally acceptable insurance carrier, in an amount not less than the
lesser of (i) the outstanding principal balance of the Indebtedness or (ii)
the maximum amount of insurance which is available under the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Reform Act of 1994, as amended.
(7) During the period of any construction or renovation or alteration
of the Improvements, a so-called "Builder's All Risk" insurance policy in
non-reporting form for any Improvements under construction, renovation or
alteration including, without limitation, for demolition and increased cost
of construction or renovation, in an amount approved by Mortgagee, which
approval shall not be unreasonably withheld, delayed or conditioned,
including an Occupancy endorsement and Worker's Compensation Insurance
covering all Persons engaged in the construction, renovation or alteration
in an amount at least equal to the minimum required by statutory limits of
the State of [South Dakota][Iowa].
(8) Such other insurance as may from time to time be reasonably
required by Mortgagee against other insurable hazards, provided that such
other insurance is customarily maintained by companies in the same or
similar businesses as Grantor's business.
(b) Cause all such property and casualty insurance policies with respect to
the Mortgaged Property to be endorsed or otherwise amended to include a
"standard" or "New York" lender's loss payable endorsement, in form and
substance reasonably satisfactory to the Mortgagee, which endorsement shall
provide that, from and after the date hereof, if the insurance carrier shall
have received written notice from the Mortgagee of the occurrence of an Event of
Default and such Event of Default should be continuing, the insurance carrier
shall pay all proceeds otherwise payable to Grantor under such policies directly
to the Mortgagee; cause all such policies to provide that neither Grantor,
Mortgagee nor any other Person shall be a coinsurer thereunder and to contain a
"Replacement Cost Endorsement," without any deduction for depreciation, and such
other provisions as the Mortgagee may reasonably require from time to time to
protect its interests; deliver original or certified copies of all such policies
or a certificate of an insurance broker to the Mortgagee; cause each such policy
to provide that it shall
9
not be canceled or not renewed upon less than 30 days' prior written notice
thereof by the Mortgagee; deliver to the Mortgagee, prior to the cancellation or
nonrenewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Mortgagee), or insurance certificate with respect thereto, together with
evidence reasonably satisfactory to the Mortgagee of payment of the premium
therefor. Grantor's insurance shall be primary and without contribution from any
insurance procured by Mortgagee. All the insurance companies must be authorized
to do business in the State of [South Dakota][Iowa]. The primary property and
liability insurance companies must have a general policy rating of A or better
and a financial class of X or better by A.M. Best Company, Inc. and a claims
paying ability of BBB or better according to Standard & Poors.
(c) In the event Grantor satisfies the requirements hereunder through the
use of a blanket policy covering properties in addition to the Mortgaged
Property, then (unless such policy is provided in substantially the same manner
as it is as of the date hereof), Grantor shall provide evidence satisfactory to
Mortgagee that the insurance premiums for the Mortgaged Property are separately
allocated under such policy to the Mortgaged Property and that payment of such
allocated amount (i) shall maintain the effectiveness of such policy as to the
Mortgaged Property and (ii) shall otherwise provide the same protection as would
a separate policy that complies with the terms of this Mortgage as to the
Mortgaged Property, notwithstanding the failure of payment of any other portion
of the insurance premiums. If no such allocation is available, Mortgagee may,
upon not less than 30 days' prior written notice to Grantor (unless Grantor or
the insurer furnishes to Mortgagee assurance reasonably satisfactory to
Mortgagee that the failure to have such allocation would not reasonably be
expected to have a material adverse affect on the coverage available with
respect to the Premises as required by this Mortgage or Mortgagee's ability to
provide such insurance should Grantor fail to do so), purchase a non-blanket
policy covering such Mortgaged Property from insurance companies which qualify
under this Mortgage and at Grantor's cost and Grantor shall reimburse Mortgagee
upon demand and such amount shall incur interest at the Default Rate from and
including the date paid by Mortgagee until repaid to Mortgagee in full.
SECTION 3.05. Liens and Liabilities.
(a) Discharge of Liens. Grantor will pay, bond or otherwise discharge, from
time to time when the same shall become due, all claims and demands of
mechanics, materialmen, laborers and others which, if unpaid, might result in,
or permit the creation of, a lien on the Premises except to the extent the same
are not yet delinquent or being contested in accordance with Section 3.13 in
good faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made.
(b) Creation of Liens. (i) Grantor will not, without Mortgagee's consent,
create, place or permit to be created or placed or allow to remain, and (subject
to the right of Mortgagee to contest the same in accordance with Section 3.13 in
good faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made) shall discharge
and release (A) within sixty (60) days of the placing thereof, any deed of
trust, mortgage, trust deed, voluntary lien, security interest or other
encumbrance and (B) within
10
sixty (60) days after receipt of written notice thereof, any involuntary lien,
security interest or other encumbrance (and, in any event, in the case of any
such lien or encumbrance described in Clause (A) and (B) hereof, at such earlier
time as may be required to prevent (1) foreclosure of such lien or encumbrance
and (2) any liability to Mortgagee or Secured Parties in respect thereof)
against or covering the Premises, other than Permitted Encumbrances, whether or
not subordinate hereto.(ii) Grantor shall have the right to grant easements,
rights of way and similar rights ("EASEMENTS") affecting the Premises or any
part thereof for the purpose of providing water, gas, electric, power, sewer,
drainage, telephone, telecommunication and other utilities, facilities and
services to the Premises or any premises adjacent to the Premises or for the
purpose of providing access, ingress, egress, roads, railroad spurs, parking and
similar facilities and rights serving the Premises or any premises adjacent to
the Premises, provided that any such Easement does not materially adversely
affect the use of the Premises or the value of the Premises at such time. Any
such Easements granted by Grantor shall be Permitted Encumbrances. Upon the
request of Grantor, Mortgagee shall (at Grantor's sole cost and expense)
promptly execute and deliver an instrument in form and substance reasonably
satisfactory to Grantor and Mortgagee providing that this Mortgage shall be
subject and subordinate to any such Easement, provided that (x) Grantor shall
deliver to Mortgagee an Officer's Certificate that such Easement does not
materially adversely affect the use of the Premises or the value of the Premises
at the time and (y) if the Grantor receives any cash consideration for such
Easement, Grantor shall deliver to Mortgagee such cash consideration, which
Mortgagee shall deposit in the Collateral Account and hold, apply and pay the
same as provided in the Indenture. Grantor shall also have the right to release
Easements benefiting the Premises and, upon the request of Grantor, Mortgagee
shall (at Grantor's sole cost and expense) promptly execute and deliver an
instrument in form and substance reasonably satisfactory to Grantor and
Mortgagee providing that the relevant Easement shall be and thereby is released
from the lien of this Mortgage, provided that (X) Grantor shall deliver to
Mortgagee an Officer's Certificate that the release of such Easement does not
materially adversely affect the use or value of the Premises at the time and (Y)
if Grantor receives any cash consideration for such release, Grantor shall
deliver to Mortgagee such cash consideration, which Mortgagee shall deposit in
the Collateral Account and hold, apply and pay the same as provided in the
Indenture.
(c) No Consent. Nothing in this Mortgage shall be deemed or construed in
any way as constituting the consent or request by Mortgagee, express or implied,
to any contractor, subcontractor, laborer, mechanic or materialman for the
performance of any labor or the furnishing of any material for any improvement,
construction, alteration or repair of the Premises. Grantor further agrees that
Mortgagee does not stand in any fiduciary relationship to Grantor.
SECTION 3.06. Taxes and Other Charges.
(a) Taxes on the Premises. Grantor will promptly pay when due and before
any penalty or interest may be added thereto, all Impositions. Grantor will also
pay any penalty, interest or cost for non-payment of Impositions which may
become due and payable except to the extent the same are not yet delinquent or
being contested in accordance with Section 3.13 in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for which a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made.
11
Increased Costs. In the event of the enactment after the date hereof of any
law or regulation deducting from the value of the Mortgaged Property for the
purpose of taxation any lien or security interest thereon, or changing in any
way the laws for the taxation of mortgages, deeds of trust or other liens or
debts secured thereby, or the manner of collection of such taxes, so as to
adversely affect (other than to a de minimis extent with respect to non-monetary
obligations only) this Mortgage, the Secured Obligations, Mortgagee or the
Secured Parties, then, and in such event, Grantor shall, on demand, pay to
Mortgagee or such Secured Parties, or reimburse Mortgagee or such Secured
Parties for payment of, all taxes, assessments, charges or liens for which
Mortgagee or such Secured Parties are or may be liable as a result thereof,
provided that if any such payment or reimbursement shall be unlawful or would
constitute usury or render the Secured Obligations wholly or partially usurious
under applicable law, then Mortgagee may, at its option, require Grantor to pay
or reimburse Mortgagee for payment of the lawful and non-usurious portion
thereof.
SECTION 3.07. Damage and Destruction.
(a) Grantor's Obligations. In the event of any damage to or loss or
destruction of the Premises, Grantor shall (i) promptly notify Mortgagee of such
event, if such event would give rise to a claim under the insurance policies
required to be maintained by Grantor pursuant to Section 3.04, (ii) take such
steps as shall be reasonably necessary to preserve any undamaged portion of the
Premises and (iii) take such steps as shall be reasonable necessary to recover
and apply the Net Loss Proceeds in connection with such damage or destruction in
accordance with the terms of the Indenture, including depositing such Net Loss
Proceeds into the Collateral Account.
(b) Mortgagee's Rights; Application of Proceeds. In the event that any
portion of the Premises is so damaged, destroyed or lost, and such damage,
destruction or loss is covered, in whole or in part, by insurance required by
Section 3.04, then (i) Mortgagee may, but shall not be obligated to, make proof
of loss if an Event of Default shall have occurred and be continuing and is
hereby authorized and empowered by Grantor to settle, adjust or compromise any
claims for damage, destruction or loss thereunder if an Event of Default shall
have occurred and be continuing and (ii) each insurance company concerned is
hereby authorized and directed to make payment therefor directly to Mortgagee if
an Event of Default shall have occurred and be continuing. Mortgagee shall
deposit in the Collateral Account any Net Loss Proceeds that it recovers for
application in accordance with the terms of the Indenture.
(c) Repairs and Restoration. Notwithstanding anything to the contrary,
except as provided in the Indenture, Grantor shall have no obligation to restore
the Premises or, if Grantor elects to restore the Premises, to expend any sum in
excess of the Net Loss Proceeds made available to Grantor for such purpose
pursuant to the Indenture.
(d) Effect on the Secured Obligations. Notwithstanding any loss,
damage or destruction referred to in this Section, Grantor shall continue to be
obligated on the Secured Obligations as provided herein, except to the extent
that the Net Loss Proceeds are applied to the Secured Obligations. Any reduction
in the Secured Obligations resulting from such application shall be deemed to
take effect only on the date of receipt by Mortgagee of such insurance proceeds
and application against the Secured Obligations, provided that if prior to the
receipt by
12
Mortgagee of such insurance proceeds the Mortgaged Property shall have been sold
on foreclosure of this Mortgage or by exercise of the power of sale hereunder,
or shall have been transferred by deed in lieu of foreclosure of this Mortgage,
Mortgagee shall have the right to receive the same to the extent of any
deficiency found to be due upon such sale, with legal interest thereon together
with attorneys' fees and disbursements incurred by Mortgagee in connection with
the collection thereof.
SECTION 3.08. Condemnation.
(a) Grantor's Obligations; Proceedings. Grantor, promptly upon
obtaining knowledge of any pending or threatened institution of any proceedings
for the condemnation of the Premises, or of any right of eminent domain which
would materially adversely affect the use and operation of the Premises as
required hereunder, will notify Mortgagee of the threat or pendency thereof. If
an Event of Default shall have occurred and be continuing, Mortgagee may
participate in any such proceedings, and Grantor from time to time will execute
and deliver to Mortgagee all instruments requested by Mortgagee or as may be
required to permit such participation. Grantor shall, at its expense, diligently
prosecute any such proceedings, and, if an Event of Default shall have occurred
and be continuing, (i) shall deliver to Mortgagee copies of all papers served in
connection therewith and shall consult and cooperate with Mortgagee, its
attorneys and agents, in the carrying on and defense of any such proceedings and
(ii) shall not adjust, settle or compromise any such proceedings without
Mortgagee's consent. Grantor shall recover and apply the Net Loss Proceeds in
connection with any condemnation or eminent domain or deed in lieu thereof in
accordance with the terms of the Indenture, including depositing such Net Loss
Proceeds into the Collateral Account.
(b) Mortgagee's Rights; Application of Awards. Mortgagee may, but
shall not be obligated to, adjust, settle or compromise any claim or proceeding
in connection with a condemnation or eminent domain if an Event of Default shall
have occurred and be continuing and Mortgagee is hereby authorized and empowered
by Grantor to settle, adjust or compromise any such claim or proceeding if an
Event of Default shall have occurred and be continuing. Mortgagee shall deposit
in the Collateral Account any Net Loss Proceeds that it recovers for application
in accordance with the terms of the Indenture.
(c) Repairs and Restoration. Notwithstanding anything to the contrary,
except as provided in the Indenture, Grantor shall have no obligation to restore
the Premises or, if Grantor elects to restore the Premises, to expend any sum in
excess of the Net Loss Proceeds made available to Grantor for such purpose
pursuant to the Indenture.
(d) Effect on the Secured Obligations. Notwithstanding any
condemnation, taking or other proceeding referred to in this Section, Grantor
shall continue to be obligated on the Secured Obligations as provided herein,
except to the extent that the Net Loss Proceeds are applied to the Secured
Obligations. Any reduction in the Secured Obligations resulting from such
application shall be deemed to take effect only on the date of receipt by
Mortgagee of such Awards and application against the Secured Obligations,
provided that if prior to the receipt by Mortgagee of such Awards the Mortgaged
Property shall have been sold on foreclosure of this Mortgage or the exercise of
the power of sale hereunder, or shall have been transferred by deed in lieu of
foreclosure of this Mortgage, Mortgagee shall have the right to receive the same
to the
13
extent of any deficiency found to be due upon such sale, with legal interest
thereon together with attorneys' fees and disbursements incurred by Mortgagee in
connection with the collection thereof.
SECTION 3.09. Notice Limiting Amount. Grantor covenants that it will
not, without the prior written consent of Mortgagee, file of record any notice
limiting the maximum principal amount secured by this Mortgage.
SECTION 3.10. Permits. Grantor has and will maintain all required
certificates, licenses, authorizations, registrations, permits and/or approvals
for the operation, use and occupancy of the Premises, and the conduct of
Grantor's business at the Premises (except where such failure to maintain would
not reasonably be expected to have a material adverse effect on the operation of
Grantor's business or the operation, use or occupancy of the Premises) and,
promptly upon request by Mortgagee, Grantor shall deliver to Mortgagee copies of
all of the same.
SECTION 3.11. Further Assurances. Grantor shall:
(i) at Grantor's sole cost and expense and at the reasonable request
of Mortgagee, (A) promptly correct any defect or error which may be discovered
in the contents of this Mortgage or in its execution, acknowledgment or
recordation and (B) promptly do, execute, acknowledge and deliver any and all
such further acts, deeds, conveyances, mortgages, deeds of trust, trust deeds,
assignments, estoppel certificates, financing statements and continuations
thereof, notices of assignment, transfers, certificates, assurances and other
instruments that may be necessary or that Mortgagee may reasonably request from
time to time in order to carry out more effectively the purposes of this
Mortgage, to subject to the lien and security interest hereby created any of
Grantor's properties, rights or interests covered or now or hereafter intended
to be covered hereby, to perfect and maintain said lien and security interest,
and to better assure, convey, grant, assign, transfer and confirm unto Mortgagee
the rights granted or now or hereafter intended to be granted to Mortgagee
hereunder or under any other instrument executed in connection with this
Mortgage or which Grantor may be or become bound to convey, mortgage or assign
to Mortgagee in order to carry out the intention or facilitate the performance
of the provisions of this Mortgage; and
(ii) at the request of Mortgagee, promptly record and re-record, file
and refile and register and re-register this Mortgage, any financing or
continuation statements and every other instrument in addition or supplemental
to any thereof that shall be required by any present or future law in order to
perfect and maintain the validity, effectiveness and priority of this Mortgage
and the lien and security interest intended to be created hereby, or to subject
after-acquired property of Grantor to such lien and security interest, in such
manner and places and within such times as may be necessary to accomplish such
purposes and to preserve and protect the rights and remedies of Mortgagee. Upon
any failure by Grantor to do so after such request by Mortgagee, Mortgagee may
make, execute, record, file, re-record or refile any and all such mortgages,
instruments, certificates and documents for and in the name of Grantor, and
Grantor hereby irrevocably appoints Mortgagee the agent and attorney-in-fact of
Grantor to do so, which appointment will terminate upon the satisfaction of
record of this Mortgage. Grantor will furnish to Mortgagee evidence reasonably
satisfactory to Mortgagee of every such
14
recording, filing or registration. Mortgagee may, at Grantor's sole expense,
file copies or reproductions of this instrument as financing statements at any
time and from time to time without further authorization from Grantor.
SECTION 3.12. Leases. (a) Assignment. Grantor hereby absolutely and
presently bargains, sells, transfers, assigns and sets over to Mortgagee, as
further security for the payment of the Secured Obligations, all of its right,
title and interest in and to the Leases and the Rents payable thereunder and all
rights of Grantor thereunder and any and all deposits held as security under the
Leases, whether before or after foreclosure or during the full period of
redemption, if any, and shall, upon demand, deliver to Mortgagee an executed
counterpart of each Lease. The assignment of the Leases and Rents, and of the
aforesaid rights with respect thereto, is intended to be and is an absolute
present assignment from Grantor to Mortgagee and not merely the passing of a
security interest. Such assignment and grant shall continue in effect until the
Secured Obligations are paid, the execution of this Mortgage constituting and
evidencing the irrevocable consent of Grantor to the entry upon and taking
possession of the Premises by Mortgagee pursuant to such grant, whether
foreclosure has been instituted or not and without applying for a receiver.
Until an Event of Default shall have occurred and be continuing, Grantor shall
be entitled to collect and receive the Rents and apply the same in the conduct
of its business, provided that such right of Grantor to collect and receive said
Rents shall be revoked upon written notice by Mortgagee to Grantor that an Event
of Default has occurred and is continuing, and thereafter Mortgagee shall have
the right and authority to exercise any of the rights or remedies referred to or
set forth in Article VI. In addition, if such an Event of Default shall have
occurred and be continuing, Grantor shall promptly pay to Mortgagee (i) all rent
prepayments and security or other deposits paid to Grantor pursuant to any Lease
assigned hereunder and (ii) all charges for services or facilities or for
escalation which were paid pursuant to any such Lease to the extent allocable to
any period from and after such Event of Default. Nothing contained in this
subsection (a) shall be construed to bind Mortgagee to the performance of any of
the covenants, conditions or provisions contained in any Lease or otherwise to
impose any obligation on Mortgagee (including any liability under the covenant
of quiet enjoyment contained in any Lease or under any applicable law in the
event that any tenant shall have been joined as a party defendant in any action
to foreclose this Mortgage and shall have been barred and foreclosed thereby of
all right, title and interest and equity of redemption in the Premises), except
that Mortgagee shall be accountable for any money actually received pursuant to
such assignment. Grantor hereby further grants to Mortgagee the right to notify
the tenant under any Lease of the assignment thereof and, if an Event of Default
has occurred and is continuing (i) to demand that the tenant under any Lease pay
all amounts due thereunder directly to Mortgagee, (ii) to enter upon and take
possession of the Premises for the purpose of collecting the Rents, (iii) to
dispossess by the usual summary proceedings any tenant defaulting in the payment
thereof, (iv) to let the Premises, or any part thereof, and (v) to apply the
Rents, after payment of all necessary charges and expenses, on account of the
Secured Obligations.
(b) Grantor's Obligation to Pay Rent. If Grantor is not required to
surrender possession of the Premises hereunder if an Event of Default has
occurred and is continuing, Grantor will pay monthly in advance to Mortgagee, on
its entry into possession pursuant to Article VI, or to any receiver appointed
to collect said Rents, the fair and reasonable rental value for the use and
occupation of the Premises or such part thereof as may be in the possession of
Grantor. Upon a default in any such payment, Grantor will vacate and surrender
such possession
15
to Mortgagee or such receiver, and, in default thereof, may be evicted by
summary or any other available proceedings or actions.
(c) Separate and Distinct Rights. The security pledged in this Section
constitutes primary collateral for the Secured Obligations on a par with all
other collateral and security provided for in this Mortgage and other agreements
executed in connection with this Mortgage. Without limiting any other provision
of this Mortgage, or other documents regarding the exercise of remedies,
Mortgagee may exercise the rights granted to it in this section separate from or
in conjunction with any other remedies provided for in this Mortgage and other
documents in any order and at such time or times as Mortgagee, at its sole and
absolute discretion, may elect.
(d) Subordination, Nondisturbance and Attornment Agreements. Upon the
request of Grantor, Mortgagee shall (at Grantor's sole cost and expense)
promptly execute and deliver a subordination, nondisturbance and attornment
agreement in substantially the form of Exhibit B between Mortgagee and the
tenant under any Lease from Grantor of any part of the Premises, provided that
Grantor shall deliver to Mortgagee an Officer's Certificate to the effect that
that such Lease: (i) is made for a fair market rent and upon other market terms
and conditions and (ii) does not materially adversely affect the use of the
remaining Premises for Grantor's business or materially adversely affect the
value of the Premises at the time.
SECTION 3.13. Permitted Contests by Grantor. Notwithstanding anything
to the contrary herein, Grantor may contest by appropriate legal proceedings
conducted with due diligence, the amount or validity or application, in whole or
in part, of any Impositions or Liens therefor, or any legal requirements or any
insurance requirements, or any Liens of mechanics, suppliers or materialmen or
similar Liens, or any other Liens, affecting the Premises or any part thereof;
provided that (i) no Event of Default is then continuing, (ii) in the case of
any Impositions or Liens therefor, or any Liens of mechanics, suppliers or
materialmen or similar Liens, or any other Liens, such proceedings shall suspend
the collection of any sums payable to satisfy such Impositions or Liens from the
Premises or any part thereof or any interest therein, (iii) such proceeding
shall be permitted under and be conducted in accordance with any applicable
provisions of any other applicable Loan Document to which Grantor is a party and
shall not constitute an Event of Default, (iv) neither the Premises, nor any
part thereof, nor any interest therein would be in imminent danger of being
sold, forfeited or lost by reason of such proceedings, (v) intentionally
omitted, (vi) in the case of an insurance requirement, failure by Grantor to
comply therewith shall not impair the validity of any insurance required to be
maintained by Grantor hereunder or the right to full payment of any claims
thereunder pending the conclusion of such contest, (vii) in the case of any
instrument of record affecting the Premises, the contest or failure to perform
under any such instrument shall not result in the placing of any lien on the
Premises (except if such lien would be removed upon completion of such
proceedings and is contested in accordance with this Section) and (viii)
Mortgagee would not be in danger of any criminal liability, or any civil
liability not contested in accordance with this Section, by reason of such
contest or the failure to pay such Imposition or to comply with such legal
requirement or insurance requirement pending the resolution of such contest. In
the case of any such contest, compliance with the applicable covenant under this
Mortgage shall be suspended until the conclusion of such contest and the
expiration of a reasonable time, but not less than 30 days, to pay the
applicable Imposition or Lien or comply with the applicable legal
16
requirement or insurance requirement; provided that, if compliance cannot be
effected within such 30-day period, such 30-day period shall be extended for
such period of time as is necessary to effect compliance, provided that Grantor,
within such 30-day period (or if stayed from doing so promptly after such stay
is removed) commences and, thereafter, diligently prosecutes such compliance to
conclusion.
ARTICLE IV
Additional Advances; Expenses
SECTION 4.01. Additional Advances and Disbursements. Grantor agrees
that, if an Event of Default shall have occurred and be continuing, then
Mortgagee shall have the right without notice to Grantor to advance all or any
part of amounts owing or to perform any or all required actions not paid or
performed by Grantor. No such advance or performance shall be deemed to have
cured such default. All sums advanced and all expenses incurred by Mortgagee in
connection with such advances or actions, and all other sums advanced or
expenses incurred by Mortgagee hereunder or under applicable law (whether
required or optional and whether indemnified hereunder or not) shall, subject to
Section 2.01, be part of the Secured Obligations, shall bear interest at the
Default Rate from the date advanced by Mortgagee to and including the date paid
by Grantor and shall be secured by this Mortgage. Grantor hereby appoints
Mortgagee its true and lawful attorney-in-fact to make the payments and effect
the performance contemplated by the aforesaid provisions in the name and on
behalf of Grantor. This appointment, being coupled with an interest, shall be
irrevocable until all of the Secured Obligations shall be fully satisfied, paid
and performed and Mortgagee shall have no further Secured Obligations.
SECTION 4.02. Other Expenses. Grantor will pay or, on demand,
reimburse Mortgagee for the payment of any and all costs or expenses (including
reasonable attorneys' fees and disbursements) incurred in connection with (i)
any default or Event of Default by Grantor, (ii) the exercise or enforcement by
or on behalf of Mortgagee of any of its rights or of Grantor's obligations under
this Mortgage or (iii) the granting, administration, enforcement and closing of
the transactions contemplated under this Mortgage.
SECTION 4.03. Interest After Default. If any payment due hereunder is
not paid in full when due, then the same shall bear interest hereunder at the
Default Rate from the date due to and including the date paid and such interest
shall be added to and become a part of the Secured Obligations and shall be
secured hereby.
ARTICLE V
Release of Mortgage Lien
SECTION 5.01. Release of Mortgage Lien. (a) At such time as the
obligations of VeraSun Energy and the Guarantors under the Securities and the
Indenture shall have been defeased or discharged in accordance with Article VIII
of the Indenture, the Mortgaged Property shall be released form the Liens
created by this Mortgage and all rights to the Mortgaged Property shall revert
to Grantor, all without delivery of any instrument or performance of any act
17
by any party. At the request and sole expense of Grantor, at and after such
termination, Mortgagee shall promptly execute and deliver to Grantor such
releases or documents as Grantor shall reasonably request to effectuate and
evidence such termination and release and shall promptly deliver to or at the
direction of Mortgagor any Mortgaged Property then held by Mortgagee hereunder.
(b) If any Mortgaged Property shall be sold, transferred or otherwise
disposed of by Grantor in a transaction permitted under the Indenture, then at
the request and sole expense of Grantor, Mortgagee shall promptly execute and
deliver to Grantor such releases or documents as Grantor shall reasonably
request to effectuate and evidence the release of such Mortgaged Property from
the Liens created by this Mortgage and Mortgagee shall promptly deliver to or at
the direction of Grantor any such Mortgaged Property then held by Mortgagee
hereunder.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default. Upon acceleration of the Notes
pursuant to the Indenture, all Secured Obligations shall immediately become due
and payable without further notice to Grantor, except as provided expressly in
the Loan Documents.
SECTION 6.02. Remedies. During the continuance of any one or more
Events of Default, Mortgagee may, in addition to any rights or remedies
available to it hereunder or under the other Loan Documents and to the extent
permitted by applicable law, take such action personally or by its agents or
attorneys, with or without entry, and without notice, demand, presentment or
protest (each and all of which are hereby waived, except as provided expressly
in this Mortgage and the other Loan Documents), as it deems necessary or
advisable to protect and enforce its rights and remedies against Grantor and in
and to the Mortgaged Property, including the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such order as
Mortgagee may determine, in its sole discretion, without impairing or otherwise
affecting its other rights or remedies:
(a) institute a proceeding or proceedings, judicial or otherwise, for
the complete or partial foreclosure of this Mortgage under any applicable
provision of law; or
(b) sell the Mortgaged Property, and all estate, right, title,
interest, claim and demand of Grantor therein, and all rights of redemption
thereof, at one or more sales, as an entirety or in parcels, with such
elements of real and/or personal property, and at such time and place and
upon such terms as may be permitted by applicable law, and in the event of
a sale, by foreclosure or otherwise, of less than all of the Mortgaged
Property, this Mortgage shall continue as a lien and security interest on
the remaining portion of the Mortgaged Property; or
(c) institute an action, suit or proceeding in equity for the specific
performance of any of the provisions contained in the Loan Documents; or
18
(d) be entitled to the appointment of a receiver, custodian, trustee,
liquidator or conservator of the Mortgaged Property, to be vested with the
fullest powers permitted under applicable law, as a matter of right and
without regard to, or the necessity to disprove, the adequacy of the
security for the Secured Obligations or the solvency of Grantor or Borrower
or any other Person liable for the payment of the Secured Obligations, and
Grantor, Borrower and each such other Person so liable waives or shall be
deemed to have waived such necessity and consents or shall be deemed to
have consented to such appointment; or
(e) enter upon the Premises, and exclude Grantor and its agents and
servants wholly therefrom, without liability for trespass, damages or
otherwise, and take possession of all books, records and accounts relating
thereto and all other portions of the Premises, and Grantor agrees to
surrender possession of the Premises and of such books, records and
accounts to Mortgagee on demand during the continuance of any Event of
Default; and having and holding the same may use, operate, manage,
preserve, control and otherwise deal therewith and conduct the business
thereof, either personally or by its superintendents, managers, agents,
servants, attorneys or receivers, without interference from Grantor
(including, without limitation, (i) entering into such contracts and taking
such other action as Mortgagee deems appropriate to complete any
construction then in progress on the Land, and in connection with any such
action Mortgagee may modify plans and specifications as Mortgagee deems
appropriate; (ii) making, cancelling, enforcing or modifying leases; (iii)
obtaining and evicting tenants; (iv) fixing or modifying Rents; (v)
conducting the business of Grantor on the Premises in its own name or in
the name of Grantor; (vi) using any and all of Grantor's properties and
facilities on the Premises; (vii) dealing with Grantor's creditors,
debtors, tenants, lessees, agents, employees and other Persons with respect
to the Premises, and (viii) altering or amending any contracts between
them, in any manner Mortgagee may determine); and upon each such entry and
from time to time thereafter may, at the expense of Grantor and the
Mortgaged Property, without interference by Grantor and as Mortgagee may
deem advisable, (A) insure or reinsure the Premises, (B) make all necessary
or proper repairs, renewals, replacements, alterations, additions,
betterments and improvements thereto and thereon and (C) in every such case
in connection with the foregoing have the right to exercise all rights and
powers of Grantor with respect to the Premises, either in Grantor's name or
otherwise; or
(f) with or without entrance upon the Premises, collect, receive, xxx
for and recover in its own name all Rents and cash collateral derived from
the Premises, and after deducting therefrom all costs, expenses and
liabilities of every character incurred by Mortgagee in collecting the same
and in using, operating, managing, preserving and controlling the Premises,
and otherwise in exercising Mortgagee's rights under subsection (e) of this
Section, including all amounts necessary to pay Impositions, insurance
premiums and other charges in connection with the Premises, as well as
compensation for the services of Mortgagee and their respective attorneys,
agents and employees, and to apply the remainder as provided in Section
6.05; or
(g) release any portion of the Mortgaged Property for such
consideration as Mortgagee may require without, as to the remainder of the
Mortgaged Property, in any
19
way impairing or affecting the lien or priority of this Mortgage, or
improving the position of any subordinate lienholder with respect thereto,
except to the extent that the Secured Obligations shall have been reduced
by the actual monetary consideration, if any, received by Mortgagee for
such release and applied to the Secured Obligations, and may accept by
assignment, pledge or otherwise any other property in place thereof as
Mortgagee may require without being accountable for so doing to any other
lienholder; or
(h) take all actions permitted under the UCC; or
(i) take any other action, or pursue any other right or remedy, as
Mortgagee may have under applicable law, and Grantor does hereby grant the
same to Mortgagee.
(j) [It is the express intention of the Grantor and Mortgagee that the
rights, remedies, powers and authorities conferred upon the Mortgagee
pursuant to this Mortgage shall include all rights, remedies, powers and
authorities that a mortgagor may confer upon a mortgagee under applicable
law [South Dakota][Iowa] mortgage foreclosure law, as if they were
expressly provided for herein. In the event that any provision in this
Mortgage shall be inconsistent with any provision of [Iowa][South Dakota]
mortgage foreclosure law, the provisions of [Iowa][South Dakota] mortgage
foreclosure law shall take precedence over the provisions of this Mortgage,
but shall not invalidate or render unenforceable any other provision of
this Mortgage that can be construed in a manner consistent with
[Iowa][South Dakota] mortgage foreclosure law.][LOCAL COUNSEL TO CONFIRM
ACCURACY OF PARAGRAPH J]
(k) Without limiting the generality of the foregoing, all expenses,
including reasonable attorneys' fees, incurred by Mortgagee to the extent
reimbursable under Sections [________] and [____________] of the
[Iowa][South Dakota] mortgage foreclosure law, whether incurred before or
after any decree or judgment of foreclosure, and whether provided for in
this Mortgage, shall be added to the Secured Obligations or to the judgment
of foreclosure. [LOCAL COUNSEL TO CONFIRM ACCURACY OF PARAGRAPH K]
In the event that Mortgagee shall exercise any of the rights or
remedies set forth in subsections (e) and (f) of this Section, Mortgagee shall
not be deemed to have entered upon or taken possession of the Premises except
upon the exercise of its option to do so, evidenced by its demand or overt act
for such purpose, nor shall it be deemed a beneficiary or mortgagee in
possession by reason of such entry or taking possession absent such demand or
overt act. Mortgagee shall not be liable to account for any action taken
pursuant to any such exercise other than for Rents actually received by
Mortgagee, nor liable for any loss sustained by Grantor resulting from any
failure to let the Premises, or from any other act or omission of Mortgagee
except to the extent such loss is caused by the gross negligence, willful
misconduct or bad faith of Mortgagee.
SECTION 6.03. Rights Pertaining to Sales. Subject to the provisions or
other requirements of law and except as otherwise provided herein, the following
provisions shall apply to any sale or sales of all or any portion of the
Mortgaged Property under or by virtue of this Article VI, whether made under the
power of sale herein granted or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale:
20
(a) Mortgagee may conduct any number of sales from time to time. The
power of sale set forth in Section 6.02(b) hereof shall not be exhausted by
any one or more such sales as to any part of the Mortgaged Property which
shall not have been sold, nor by any sale which is not completed or is
defective in Mortgagee's opinion, until the Secured Obligations shall have
been paid in full.
(b) Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or for such postponed or
adjourned sale without further notice. Without limiting the foregoing, in
case Mortgagee shall have proceeded to enforce any right or remedy under
this Mortgage by receiver, entry or otherwise, and such proceedings have
been discontinued or abandoned for any such reason or shall have been
determined adversely to Mortgagee, then in every such case Grantor and
Mortgagee shall be restored to their former positions and rights hereunder,
and all rights, powers and remedies of Mortgagee shall continue as if no
such proceeding had been taken.
(c) After each sale, Mortgagee or an officer of any court empowered to
do so shall execute and deliver to the purchaser or purchasers at such sale
a good and sufficient instrument or instruments granting, conveying,
assigning and transferring all right, title and interest of Grantor in and
to the property and rights sold and shall receive the proceeds of said sale
or sales and apply the same as herein provided. Mortgagee is hereby
appointed the true and lawful attorney-in-fact of Grantor, which
appointment is irrevocable and shall be deemed to be coupled with an
interest, in Grantor's name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the property and rights so sold,
and for that purpose Mortgagee may execute all necessary instruments of
conveyance, assignment, transfer and delivery, and may substitute one or
more Persons with like power, Grantor hereby ratifying and confirming all
that said attorney or such substitute or substitutes shall lawfully do by
virtue thereof. Nevertheless, Grantor, if requested by Mortgagee, shall
ratify and confirm any such sale or sales by executing and delivering to
Mortgagee or such purchaser or purchasers all such instruments as may be
advisable, in Mortgagee's judgment, for the purposes as may be designated
in such request.
(d) Any and all statements of fact or other recitals made in any of
the instruments referred to in subsection (c) of this Section given by
Mortgagee as to nonpayment of the Secured Obligations, or as to the
occurrence of any Event of Default, or as to Mortgagee's having declared
all or any of the Secured Obligations to be due and payable, or as to the
request to sell, or as to notice of time, place and terms of sale and of
the property or rights to be sold having been duly given, or as to any
other act or thing having been duly done by Grantor or Mortgagee, shall be
taken as conclusive and binding against all Persons as to evidence of the
truth of the facts so stated and recited to the extent permitted by
applicable law. Mortgagee may appoint or delegate any one or more Persons
as agent to perform any act or acts necessary or incident to any sale so
held, including the posting of notices and the conduct of sale.
(e) The receipt of Mortgagee for the purchase money paid at any such
sale, or the receipt of any other Person authorized to receive the same,
shall be sufficient discharge therefor to any purchaser of any property or
rights sold as aforesaid, and no
21
such purchaser, or its representatives, grantees or assigns, after paying
such purchase price and receiving such receipt, shall be bound to see to
the application of such purchase price or any part thereof upon or for any
trust or purpose of this Mortgage or, in any manner whatsoever, be
answerable for any loss, misapplication or nonapplication of any such
purchase money, or part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
(f) Any such sale or sales shall operate to divest all of the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Grantor in and to the properties and rights so sold, and shall
be a perpetual bar both at law and in equity against Grantor and any and
all Persons claiming or who may claim the same, or any part thereof or any
interest therein, by, through or under Grantor to the fullest extent
permitted by applicable law.
(g) Upon any such sale or sales, Mortgagee may bid for and acquire the
Mortgaged Property so sold and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting against payment of the
Secured Obligations the amount of the bid made therefor, after deducting
therefrom the expenses of the sale, the cost of any enforcement proceeding
hereunder, and any other sums which Mortgagee is authorized to deduct under
the terms hereof, to the extent necessary to satisfy such bid.
(h) In the event that Grantor, or any Person claiming by, through or
under Grantor, shall transfer or refuse or fail to surrender possession of
the Mortgaged Property after any sale thereof, then Grantor, or such
Person, shall be deemed a tenant at sufferance of the purchaser at such
sale, subject to eviction by means of forcible entry and unlawful detainer
proceedings, or subject to any other right or remedy available hereunder or
under applicable law.
(i) Upon any such sale, it shall not be necessary for Mortgagee or any
public officer acting under execution or order of court to have present or
constructive possession of any of the Mortgaged Property.
(j) In the event a foreclosure hereunder shall be commenced by
Mortgagee, Mortgagee may at any time before the sale of the Mortgaged
Property abandon the sale or foreclosure, and may institute suit for the
collection of the Secured Obligations and for the enforcement of this
Mortgage, or in the event that Mortgagee should institute a suit for
collection of the Secured Obligations, and for the enforcement of this
Mortgage, Mortgagee may at any time before the entry of final judgment in
said suit dismiss the same and sell the Mortgaged Property in accordance
with the provisions of this Mortgage.
SECTION 6.04. Expenses. In any proceeding, judicial or otherwise, to
foreclose this Mortgage or enforce any other remedy of Mortgagee under the Loan
Documents, at law or in equity, there shall be allowed and included as an
addition to and a part of the Secured Obligations in the decree for sale or
other judgment or decree, subject to Section 2.01, all expenditures and
expenses, including reasonable attorneys' fees, which may be paid or incurred in
connection with the exercise by Mortgagee of any of its rights and remedies
provided or
22
referred to in Section 6.02, or any comparable provision of any other Loan
Document, together with interest thereon at the Default Rate from the date
advanced to and including the date paid, and the same shall be part of the
Secured Obligations and shall be secured by this Mortgage.
SECTION 6.05. Application of Proceeds. The purchase money, proceeds or
avails of any sale referred to in Section 6.02, together with any other sums
which may be held by Mortgagee hereunder, whether under the provisions of this
Article VI or otherwise, shall, except as herein expressly provided to the
contrary, to the extent permitted by applicable law, be applied as follows:
First: To the payment of the costs and expenses of any such sale and
of any judicial proceeding wherein the same may be made, and of all
expenses, including reasonable attorneys' fees, liabilities and advances
made or incurred by Mortgagee hereunder, together with interest thereon at
the Default Rate from the date advanced to and including the date paid, and
all Impositions and other charges, except any Impositions or other charges
subject to which the Mortgaged Property shall have been sold.
Second: As provided in Section 10.3 of the Indenture.
SECTION 6.06. Additional Provisions as to Remedies. To the extent
permitted by applicable law: (a) No delay or omission by Mortgagee to exercise
any right or remedy hereunder upon any default or Event of Default shall impair
such exercise, or be construed to be a waiver of any such default or Event of
Default.
(b) The failure, refusal or waiver (by consent, waiver or otherwise)
of Mortgagee to assert any right or remedy hereunder upon any default or Event
of Default or other occurrence shall not be construed as waiving such right or
remedy upon any other or subsequent default or Event of Default or other
occurrence.
(c) Mortgagee shall have no obligation to pursue any rights or
remedies it may have under any other agreement prior to pursuing its rights or
remedies hereunder or under the other Loan Documents.
(d) Acceptance of any payment after the occurrence of any default or
Event of Default shall not be deemed a waiver or a cure of such default or Event
of Default, and acceptance of any payment less than any amount then due shall be
deemed an acceptance on account only.
(e) In the event that Mortgagee shall have proceeded to enforce any
right or remedy hereunder by foreclosure, sale, entry or otherwise, and such
proceeding shall be discontinued, abandoned or determined adversely for any
reason, then Grantor and Mortgagee shall be restored to their former positions
and rights hereunder with respect to the Mortgaged Property, subject to the lien
hereof.
(f) Each right of Mortgagee provided for in this Mortgage shall be
cumulative and shall be in addition to every other right provided for in this
Mortgage or now or hereafter existing at law or in equity, by statute or
otherwise, and the exercise by Mortgagee of any one or
23
more of such rights shall not preclude the simultaneous or later exercise by
Mortgagee of any other such right.
SECTION 6.07. Waiver of Rights and Defenses. To the full extent
Grantor may lawfully do so, Grantor agrees with Mortgagee as follows:
(a) Grantor will not, at any time, insist on, plead, claim or take the
benefit or advantage of any statute or rule of law now or hereafter in
force providing for any appraisement, valuation, stay, extension,
moratorium, redemption or reinstatement, or of any statute of limitations,
and Grantor, for itself and its successors and assigns, and for any and all
Persons ever claiming an interest in the Mortgaged Property (other than
Mortgagee), hereby, to the extent permitted by applicable law, waives and
releases all rights of redemption, reinstatement, valuation, appraisement,
and notice of intention to mature or declare due the whole of the Secured
Obligations and all rights to a marshaling of the assets of Grantor,
including the Mortgaged Property, or to a sale in inverse order of
alienation, in the event of foreclosure of the liens and security interests
created hereunder.
(b) Grantor shall not have or assert any right under any statute or
rule of law pertaining to any of the matters set forth in subsection (a) of
this Section, to the administration of estates of decedents or to any other
matters whatsoever to defeat, reduce or affect any of the rights or
remedies of Mortgagee hereunder, including the rights of Mortgagee
hereunder to a sale of the Mortgaged Property for the collection of the
Secured Obligations without any prior or different resort for collection,
or to the payment of the Secured Obligations out of the proceeds of sale of
the Mortgaged Property in preference to any other Person.
(c) If any statute or rule of law referred to in this Section 6.07 and
now in force, of which Grantor or any of its successors or assigns and such
other Persons claiming any interest in the Mortgaged Property might take
advantage despite this Section 6.07, shall hereafter be repealed or cease
to be in force, such statute or rule of law shall not thereafter be deemed
to preclude the application of this Section 6.07.
(d) Neither Borrower nor Grantor shall be relieved of its obligation
to pay or perform the Secured Obligations at the time and in the manner
provided in the Loan Documents, nor shall the lien or priority of this
Mortgage or any other Loan Document be impaired by any of the following
actions, non-actions or indulgences by Mortgagee, each of which actions,
non-actions or indulgences Mortgagee may, in its discretion, take or
refrain from taking:
(i) any failure or refusal by Mortgagee to comply with any
request by Grantor (A) to consent to any action by Grantor or (B) to
take any action to foreclose this Mortgage or otherwise enforce any of
the provisions of the Loan Documents;
(ii) any release, regardless of consideration, of the whole or
any part of the Mortgaged Property or any other security for the
Secured Obligations, or any Person liable for payment of the Secured
Obligations;
24
(iii) any waiver by Mortgagee of compliance by Borrower or
Grantor with any provision of the Loan Documents, or consent by
Mortgagee to the performance by Borrower or Grantor of any action
which would otherwise be prohibited thereunder, or to the failure by
Borrower or Grantor to take any action which would otherwise be
required thereunder; and
(iv) any agreement or stipulation between Mortgagee and Grantor
and/or Borrower, or, with or without Grantor's consent, between
Mortgagee and any subsequent owner or owners of the Mortgaged Property
or any other security for the Secured Obligations, renewing, extending
or modifying the time of payment or the terms of the Loan Documents
(including a modification of any interest rate), and in any such event
Grantor and Borrower, as the case may be, shall continue to be
obligated to pay the Secured Obligations at the time and in the manner
provided in the Loan Documents, as so renewed, extended or modified,
unless expressly released and discharged by Mortgagee.
(e) Regardless of consideration, and without the necessity for any
notice to or consent by the holder of any subordinate lien, encumbrance,
right, title or interest in or to the Mortgaged Property, Mortgagee may
release any Person at any time liable for the payment of the Secured
Obligations or any portion thereof or any part of the security held for the
Secured Obligations and may extend the time of payment or otherwise modify
the terms of the Loan Documents, including a modification of the interest
rates payable on the principal balance of the Indebtedness without in any
manner impairing or affecting this Mortgage or the lien hereof or the
priority of this Mortgage, as so extended and modified, as security for the
Secured Obligations over any such subordinate lien, encumbrance, right,
title or interest. Mortgagee may resort for the payment of the Secured
Obligations to any other security held by Mortgagee in such order and
manner as Mortgagee, in its discretion, may elect. Mortgagee may take or
cause to be taken action to recover the Secured Obligations, or any portion
thereof, or to enforce any provision of the Loan Documents without
prejudice to the right of Mortgagee thereafter to foreclose or enforce or
cause to be foreclosed or enforced this Mortgage. Mortgagee shall not be
limited exclusively to the rights and remedies herein stated but shall be
entitled to every additional right and remedy now or hereafter afforded by
law or equity. The rights of Mortgagee under this Mortgage shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Mortgagee shall be construed as an
election to proceed under any one provision herein to the exclusion of any
other provision.
(f) Grantor hereby waives any defense to the recovery by Mortgagee
hereunder against Grantor or the Mortgaged Property of any deficiency after
a nonjudicial sale.
ARTICLE VII
Additional Provisions
SECTION 7.01. Provisions as to Payments, Advances. To the extent that
any part of the Secured Obligations is used to pay indebtedness secured by any
Permitted
25
Encumbrance or other outstanding lien, security interest, charge or prior
encumbrance against the Mortgaged Property or to pay in whole or in part the
purchase price therefor, Mortgagee shall be subrogated to any and all rights,
security interests and liens held by any owner or holder of the same, whether or
not the same are released. Grantor agrees that, in consideration of such payment
by Mortgagee, effective upon such payment Grantor shall and hereby does waive
and release all demands, defenses and causes of action for offsets and payments
with respect to the same.
SECTION 7.02. Separability. If all or any portion of any provision of
this Mortgage shall be held to be invalid, illegal or unenforceable in any
respect or in any jurisdiction, then such invalidity, illegality or
unenforceability shall not affect any other provision hereof or thereof, and
such provision shall be limited and construed in such jurisdiction as if such
invalid, illegal or unenforceable provision or portion thereof were not
contained herein or therein.
SECTION 7.03. Notices. Any notice, demand, consent, approval,
direction, agreement or other communication (a "NOTICE") required or permitted
hereunder shall be in writing and shall be validly given if delivered in
accordance with Section 14.2 of the Indenture.
SECTION 7.04. Right to Deal. In the event that ownership of the
Mortgaged Property becomes vested in a Person other than Grantor, Mortgagee may,
without notice to Grantor, deal with such successor or successors in interest
with reference to this Mortgage or the Secured Obligations in the same manner as
with Grantor, without in any way vitiating or discharging Grantor's or
Borrower's liability hereunder or for the payment or performance of the Secured
Obligations or being deemed a consent to such vesting.
SECTION 7.05. Continuation of Lease. To the extent permitted by
applicable law, upon the foreclosure of, or exercise of the power of sale under,
this Mortgage, as herein provided, any Leases then existing shall not be
destroyed or terminated as a result of such foreclosure or sale unless Mortgagee
or any purchaser at such foreclosure or sale shall so elect by notice to the
lessee in question.
SECTION 7.06. Applicable Law. The provisions of this Mortgage
regarding the creation, perfection and enforcement of the liens and security
interests herein granted shall be governed by and construed under the laws of
the state in which the Premises are located. All other provisions of this
Mortgage shall be governed by the laws of the State of New York (including,
without limitation, Section 5-1401 of the General Obligations Law of the State
of New York), without regard to conflicts of laws principles.
SECTION 7.07. Sole Discretion of Mortgagee. (a) Except as otherwise
provided herein, whenever Mortgagee's judgment, consent or approval is required
hereunder for any matter, or it shall have an option or election hereunder, such
judgment, the decision whether or not to consent to or approve the same or the
exercise of such option or election shall be in the sole discretion of
Mortgagee.
(b) Notwithstanding anything contained herein to the contrary, in the
event that Mortgagee fails or refuses to grant consent or approval when required
hereunder for any
26
matter, the parties agree that the remedy of specific performance shall be the
sole remedy of Grantor with respect to such actions and Grantor hereby waives
all claims for damages with respect thereto.
SECTION 7.08. Provisions as to Covenants and Agreements. All of
Grantor's covenants and agreements hereunder shall run with the land and time is
of the essence with respect thereto.
SECTION 7.09. Matters to be in Writing. This Mortgage cannot be
altered, amended, modified, or waived except in accordance with the terms and
provisions of the Indenture.
SECTION 7.10. Submission to Jurisdiction. Without limiting the right
of Mortgagee to bring any action or proceeding against Grantor or its property
arising out of or relating to the Secured Obligations (an "ACTION") in the
courts of other jurisdictions, Grantor hereby irrevocably submits to the
jurisdiction of the state court or federal court in each jurisdiction in which
the Land is located, and Grantor hereby irrevocably agrees that any Action may
be heard and determined in such state or federal court. Grantor hereby
irrevocably waives, to the fullest extent that it may effectively do so, the
defense of an inconvenient forum to the maintenance of any Action in the
jurisdiction. Grantor hereby irrevocably agrees that the summons and complaint
or any other process in any Action in any jurisdiction may be served by mailing
to any of the addresses set forth herein or by hand delivery to a Person of
suitable age and discretion at any such address. Such service will be complete
on the date such process is so mailed or delivered.
SECTION 7.11. Construction of Provisions. The following rules of
construction shall be applicable for all purposes of this Mortgage and all
documents or instruments supplemental hereto, unless the context otherwise
requires:
(a) All references herein to numbered Articles or Sections or to
lettered Exhibits are references to the Articles and Sections hereof and
the Exhibits annexed to this Mortgage, unless expressly otherwise
designated in context. All Article, Section and Exhibit captions herein are
used for reference only and in no way limit or describe the scope or intent
of, or in any way affect, this Mortgage.
(b) The terms "include", "including" and similar terms shall be
construed as if followed by the phrase "without being limited to".
(c) The terms "Land", "Improvements", "Fixture Property", "Mortgaged
Property" and "Premises" shall be construed as if followed by the phrase
"or any part thereof".
(d) The term "Secured Obligations" shall be construed as if followed
by the phrase "or any other sums secured hereby, or any part thereof".
(e) Words of masculine, feminine or neuter gender shall mean and
include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa.
27
(f) The term "provisions", when used with respect hereto or to any
other document or instrument, shall be construed as if preceded by the
phrase "terms, covenants, agreements, requirements, conditions and/or".
(g) The cover page of and all Recitals set forth in, and all Exhibits
to, this Mortgage are hereby incorporated in this Mortgage.
(h) All obligations of Grantor hereunder shall be performed and
satisfied by or on behalf of Grantor at Grantor's sole cost and expense.
(i) The term "lease" shall mean "tenancy, subtenancy, lease or
sublease", the term "lessor" shall mean "landlord, sublandlord, lessor and
sublessor" and the term "lessee" shall mean "tenant, subtenant, lessee and
sublessee".
(j) No inference in favor of or against any party shall be drawn from
the fact that such party has drafted any portion hereof.
SECTION 7.12. Successors and Assigns. The provisions hereof shall be
binding upon Grantor and the successors and permitted assigns of Grantor,
including successors in interest of Grantor in and to all or any part of the
Mortgaged Property, and shall inure to the benefit of Mortgagee, the other
Secured Parties and their respective successors, legal representatives,
substitutes and assigns.
SECTION 7.13. Counterparts. This Mortgage may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 7.14. Agency. Mortgagee may deal with the Mortgaged Property
and may issue any release to be given hereunder pursuant to Sections 5.01 or
grant any consent or approval or take any other action required or permitted
hereunder, without reference to or the approval of any of the other Secured
Parties, and any third party (including any title insurance company issuing a
title insurance policy, or a commitment to issue a title insurance policy, in
connection with the Mortgaged Property) may conclusively rely on the due
authority of Mortgagee to do any or all of the foregoing.
SECTION 7.15. The Security Agreement, Indenture and other Loan
Documents. (a) With respect to any portion of the Mortgaged Property which
constitutes fixtures or other property governed by the UCC, this Mortgage also
shall constitute a security agreement between Grantor, as the debtor, and
Mortgagee, as the secured party, and Grantor hereby grants to Mortgagee a
security interest in such portion of the Mortgaged Property. Cumulative of all
other rights of Mortgagee hereunder, Mortgagee shall have all of the rights
conferred upon secured parties by the UCC. Grantor will execute and deliver to
Mortgagee all financing statements that may from time to time be required by
Mortgagee to establish and maintain the validity and priority of the security
interest of Mortgagee, or any modification thereof, and all reasonable costs and
expenses of any searches required by Mortgagee. Mortgagee may exercise any or
all of the remedies of a secured party available to it under the UCC with
respect to such portion of the Mortgaged Property. In the event that a valid and
enforceable security interest has been created in any of the Mortgaged Property
under the terms of the Security Agreement and the
28
terms of the Security Agreement are inconsistent with the terms of this
Mortgage, then with respect to such Mortgaged Property, the terms of the
Security Agreement shall be controlling in the case of collateral described
therein and proceeds of insurance policies and the terms of this Mortgage shall
be controlling in all other cases.
(b) In the event of any inconsistency between the terms of this Mortgage
and the terms of the Indenture, the Note Guarantee or the Notes, the terms of
the Indenture, the Note Guarantee or the Notes, as the case may be, shall
control and govern to the extent of any such inconsistency.
(c) In the event of any inconsistency between the terms of this Mortgage
and the terms of the Security Agreement, the terms of the Security Agreement
shall control and govern to the extent of any such inconsistency.
(d) With respect to any other Loan Document (other than the Indenture, the
Notes, the Security Agreement and Escrow and Security Agreement), in the event
of an inconsistency between the terms of this Mortgage and the provisions of
such other Loan Document (other than the Indenture, the Notes, the Note
Guarantee, the Security Agreement and Escrow and Security Agreement) as they
relate to the Mortgaged Property, the provisions of this Mortgage shall control.
SECTION 7.16. No Merger. The assignments by Grantor in favor of
Mortgagee herein contained and the obligations of Grantor hereunder to (i)
maintain the insurance required to be maintained by Grantor hereunder and to pay
all premiums in respect thereof, (ii) pay all Impositions, (iii) reimburse
Mortgagee for all sums expended by Mortgagee pursuant to this Mortgage to
protect the lien of this Mortgage and to prevent waste to the Mortgaged Property
and (iv) pay interest at the Default Rate on the aforementioned sums from the
date advanced by Mortgagee to and including the date paid in full by the Grantor
shall not be merged into any judgment in respect of the Secured Obligations,
including, without limitation, any judgment of foreclosure and shall survive any
such judgment and any exercise of the power of sale hereunder.
SECTION 7.17. WAIVER OF JURY TRIAL. GRANTOR AND MORTGAGEE DO EACH
HEREBY KNOWINGLY, VOLUNTARILY, UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY
FOREVER WAIVE THE RIGHT TO A TRIAL BY JURY IN EVERY JURISDICTION IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY GRANTOR OR MORTGAGEE AGAINST THE OTHER OR
ITS RESPECTIVE SUCCESSORS OR ASSIGNS IN RESPECT OF ANY MATTER ARISING OUT OF,
UNDER OR CONNECTED WITH (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR
CANCEL THIS MORTGAGE OR THE SECURED OBLIGATIONS, AND ANY CLAIMS ASSERTING THAT
ANY OR ALL OF THE SECURED OBLIGATIONS WERE FRAUDULENTLY INDUCED OR OTHERWISE
VOID OR VOIDABLE) IN ANY MANNER WHATSOEVER THIS MORTGAGE, THE MORTGAGED
PROPERTY, OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PERSON OR
ANY EXERCISE BY ANY PARTY OF ITS RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS.
THIS WAIVER OF THE RIGHT TO A JURY TRIAL IS A MATERIAL INDUCEMENT FOR MORTGAGEE
TO ADVANCE THE SUMS SECURED HEREBY.
29
SECTION 7.18. Maximum Interest. The interest rate(s) charged under
this Mortgage, the other Loan Documents and other evidences of the Secured
Obligations may vary from time to time. For purposes of enforcing this Mortgage,
if any of the terms or provisions of this Mortgage, any other Loan Documents or
other evidences of the Secured Obligations are susceptible of being construed as
binding or obligating Grantor or any other Persons or concerns obligated, either
primarily, secondarily or conditionally, for the payment of any debt, whether or
not secured hereby, under any circumstances or contingencies whatsoever, to pay
interest or loan charges in excess of the maximum amounts permitted by
applicable law from time to time, it is agreed that, for purposes of enforcing
this Mortgage, such terms or provisions are a mistake in calculation or wording
and, notwithstanding the same, it is expressly agreed that, for purposes of
enforcing this Mortgage, neither Grantor, nor any other Person or concern
obligated in any manner on any such indebtedness, shall ever be required or
obligated under the terms of this Mortgage, to pay interest or loan charges in
excess of the maximum amounts permitted by applicable law from time to time, and
if, for any reason whatsoever, the interest or loan charges paid on the
indebtedness secured by this Mortgage shall exceed the maximum amounts permitted
by applicable law from time to time, then, for purposes of enforcing this
Mortgage, the holder(s) of this Mortgage receiving such excess shall either (at
the option of such holder(s)) refund to the payor or credit against the
principal of the indebtedness evidenced thereby such portion of such interest
and loan charges as may be necessary to cause the interest and loan charges paid
on the indebtedness secured hereby to equal the maximum amounts permitted by
applicable law from time to time, and no more.
SECTION 7.19. Attorney In Fact. In any instance in which the Mortgagee
is appointed as attorney-in-fact for Grantor or is otherwise authorized to act
on Grantor's behalf, the appointment or right is coupled with an interest and is
irrevocable without the prior written consent of the Mortgagee.
SECTION 7.20. Indemnification. (a) Grantor shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following: (i) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about the Premises or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (ii) any use,
nonuse or condition in, on or about the Premises or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (iii) performance of any labor or services or the furnishing of any
materials or other property in respect of the Premises or any part thereof; (iv)
any failure of the Premises to be in compliance with any applicable laws; (v)
any and all claims and demands whatsoever which may be asserted against
Mortgagee by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants, or agreements contained in any
Lease; or (f) the payment of any commission, charge or brokerage fee to anyone
which may be payable in connection with the funding of the Indebtedness secured
by this Mortgagee except in each case (x) Losses arising out of a state of facts
that first occurred or otherwise first came into existence after the applicable
Indemnified Party acquired title to the Mortgaged Property through foreclosure,
a deed in lieu thereof or otherwise and (y) Losses arising from the gross
negligence or willful misconduct of the applicable Indemnified Party. Any
amounts payable to Mortgagee by reason of the application of this Section 8.20
shall
30
become immediately due and payable and shall bear interest at the Default Rate
from the date same are paid by Mortgagee until repaid by Grantor. The term
"LOSSES" shall mean any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, fines, penalties, charges, fees, judgments,
awards, amounts paid in settlement of whatever kind or nature (including but not
limited to reasonable legal fees and other out-of-pocket costs of defense). The
term "INDEMNIFIED PARTIES" shall mean (A) Mortgagee and (B) any other Secured
Party and (C) the successors and assigns of any and all of the foregoing in such
capacities.
(b) Grantor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and against
any and all Losses imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any tax on the making and/or recording of any of the Loan Documents.
(c) Grantor shall defend the Indemnified Parties by attorneys and
other professionals selected by Grantor subject to the approval of Mortgagee
(such approval not to be unreasonably withheld, delayed or conditioned). Each
Indemnified Party shall give notice to Grantor of any Loss to be indemnified by
Grantor hereunder promptly after such Indemnified Party receives notice or
becomes aware of such Loss, but a failure to do so shall not affect any
Indemnified Party's rights and benefits set forth in this Section 8.20.
ARTICLE VIII
Fixture Filing
SECTION 8.01. Fixture Filing. A portion of the Mortgaged Property is
or is to become fixtures upon the Premises. To the extent permitted by
applicable law, Grantor covenants and agrees that the filing of this Mortgage in
the real property records of the county in which the Land is located shall also
operate from the time of filing as a fixture filing with respect to all goods
constituting part of the Mortgaged Property which are or are to become Fixture
Property. For such purpose, the following information is set forth:
(a) Name of Debtor: [VeraSun Aurora Corporation]
[VeraSun Fort Dodge, LLC]
State of Organization: [South Dakota][Delaware]
Principal Place of
Business and Location
of Chief Executive
Office: [______________________________]
(b) Name and Address of Secured Party:
Xxxxx Fargo Bank, N.A.
Corporate Trust Services
MAC 000-000
Xxxxx Xxxxxx & Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
31
(c) Federal Employer
Identification Number
of Debtor: [_______________]
ARTICLE IX
Environmental Matters
SECTION 9.01. Environmental Covenants. Grantor shall (1) observe and
comply in all material respects with all Environmental Laws, (2) promptly notify
Mortgagee after receipt of notice of the institution of any action, suit or
proceeding or any governmental investigation or any arbitration before any court
or arbitrator or any governmental or administrative body, agency or official,
against the Mortgaged Property or the Grantor with respect to the Mortgaged
Property and relating to environmental matters, in which (A) the amount involved
is material and is not covered by insurance or an indemnity (B) there is a
reasonable probability of an adverse determination that would reasonably be
expected to have a material adverse effect on the then value or use of the
Mortgaged Property or (C) it is asserted that the Mortgaged Property or the
Grantor with respect to the Mortgaged Property is not in material compliance
with Environmental Laws, (3) subject to Section 3.13, promptly remove any
Environmental Lien placed on the Mortgaged Property and (4) defend (with counsel
reasonably acceptable to Mortgagee), indemnify and hold harmless the Indemnified
Parties from any and all Loss resulting from: (A) any Hazardous Material that
now or hereafter exists on or is discharged from or is Released at the Mortgaged
Property or (B) any failure to comply with Environmental Laws, other than Losses
arising out of a state of facts that first occurred or first came into existence
after an Indemnified Party acquired title to the Mortgaged Property through
foreclosure, a deed in lieu thereof or otherwise.
SECTION 9.02. Rights of Mortgagee. Upon Mortgagee's written request,
at any time an Event of Default has occurred and is continuing, Grantor will
permit any officer, employee or agent of Mortgagee to visit and inspect the
Mortgaged Property (including to perform, at Grantor's cost, environmental
audits, including intrusive investigations) in order to determine the presence
or absence of Hazardous Material at the Mortgaged Property. Mortgagee shall use
its commercially reasonable efforts to cause such visits, inspections and
investigations to be conducted in a manner so as not to unreasonably interfere
with the operations of the Mortgaged Property.
[BALANCE OF PAGE IS INTENTIONALLY BLANK]
32
IN WITNESS WHEREOF, the undersigned is deemed to have executed this
Mortgage as of the day first set forth above although actually executed on the
date set forth in the acknowledgment below.
Signed, sealed and delivered [VeraSun Aurora Corporation]
[VeraSun Fort Dodge, LLC]
a [__________________] [corporation]
[limited liability company]
following witnesses:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[LOCAL COUNSEL TO PROVIDE CORRECT FORM OF NOTARY BLOCK]
State of __________________:
County ____________________:
I, _______________________, a Notary Public in and for said County and
State, DO HEREBY CERTIFY, that _____________, _______________ of
[_______________________________], a [_____________________]
[corporation][limited liability company], whose name is subscribed to the within
instrument, appeared before me this day in person and severally acknowledged
that as such [______________________] she/he signed and delivered the said
instruments as manager of said corporation as her/his free and voluntary act and
as the free and voluntary act and deed of said [corporation][limited liability
company], for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal, this ___ day of December, A.D.
2005.
-------------------------------------
Notary Public
[NOTARIAL SEAL]
My Commission expires: __________
EXHIBIT A
Description of Land
[DESCRIPTION TO BE INSERTED]
Exh. A-1
EXHIBIT B
Form of SNDA
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
AGREEMENT (this "Agreement") dated as of __________,_____ between
____________________, a __________ having an address at __________ ("Tenant")
and ____________________, a __________ having an address ("Mortgagee").
witnesseth
WHEREAS, Tenant is the owner and holder of the tenant's interest under that
certain lease dated as of _________,______ between ____________________
("Landlord") and Tenant [, as heretofore extended, amended or otherwise modified
by _____________] (the "Lease"), relating to certain premises described therein
and in Exhibit A hereto (the "Premises"); and
WHEREAS, Mortgagee is the owner and holder of the Mortgagee's interest
under that mortgage, assignment, assignment of rents, security agreement,
fixture filing and financing statement dated as of __________, 20__ made by
Landlord to Mortgagee recorded on ___________, 20__ in the office of
___________________ as document/instrument no. __________/in book/liber ________
at page ________ [, as heretofore, extended, amended or otherwise modified by
__________] (the "Mortgage"); and
WHEREAS, Tenant and Mortgagee desire to enter into this Agreement;
NOW THEREFORE, in consideration of the sum of ten dollars paid by each
party hereto to the other the receipt and sufficiency of which is hereby
acknowledged, and in consideration of the mutual agreements herein, the parties
hereto agree as follows:
1. Tenant agrees that the Lease, together with all extensions,
amendments and other modifications thereof, is and shall be subject
and subordinate in all respects to the Mortgage, and to all
extensions, amendments, consolidations, replacements and other
modifications thereof, and the lien thereof, and to all obligations
now or hereafter secured thereby.
2. Mortgagee agrees that, as long as Tenant is not in default under
the Lease beyond any applicable grace, cure or notice period provided
in the Lease, in the event Mortgagee commences an action or proceeding
to foreclosure the Mortgage, Mortgagee shall not terminate the Lease
or disturb Tenant's possession under the Lease for the full term
thereof, as the same may hereafter be extended by the exercise of any
options to extend now provided therein.
3. Tenant agrees that it shall attorn to and recognize any transferee
pursuant to a foreclosure of the Mortgage or by transfer in lieu of
foreclosure, and the successors and assigns of any such transferee
(any such transferee and its successors and assigns being a "Successor
Landlord"), as the landlord under the
Exh. B-1
Lease for the balance of the term thereof, as the same may hereafter
be extended by the exercise of any options to extend now provided
therein.
4. In the event that a Successor Landlord succeeds to the interest of
Landlord under the Lease, such Successor Landlord (a) shall not be
liable for any act or omission of Landlord, (b) shall not be liable
for the return of any security deposit held by Landlord, except to the
extent if any that such security deposit shall actually be received by
the Mortgagee or Successor Landlord, (c) shall not be bound by any
rent or additional rent which Tenant may have paid to Landlord for
more than the current month, except to the extent if any that such
rent for more than the current month shall actually be received by the
Mortgagee or Successor Landlord, (d) shall not be bound by any
modification, amendment, termination, cancellation or surrender of the
Lease made without the written consent of Mortgagee (prior to
foreclosure or transfer in lieu of foreclosure) or (thereafter)
Successor Landlord, except any termination, cancellation or surrender
pursuant to any right or option contained in the Lease as in effect on
the date hereof, (e) shall not be subject to any offsets, defenses,
claims or counterclaims that Tenant may have against Landlord except
to the extent of any amounts actually received by the Mortgagee or
Successor Landlord or (f) shall have no obligation or liability beyond
its then interest in the Premises.
5. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, shall
be governed by and construed in accordance with the laws of the
jurisdiction in which the Premises is located, may not be waived or
modified except by an instrument in writing signed by the party
against whom the waiver or modification is to be enforced, and may be
signed in any number of counterparts.
Signatures on next page.
No further text on this page.
Exh. B-2
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
[NAME OF TENANT]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[NAME OF MORTGAGEE]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Add acknowledgments]
[Add Exhibit A - Descriptions of Premises]
Exh. B-3
Exhibit H
Form of Security Agreement
I-1
Exhibit H
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of December 21, 2005, is made by VERASUN
ENERGY CORPORATION, a South Dakota corporation (the "COMPANY"), VERASUN AURORA
CORPORATION, a South Dakota corporation ("VERASUN AURORA"), VERASUN FORT DODGE,
LLC, a Delaware limited liability company ("VERASUN FORT DODGE"), VERASUN
XXXXXXX CITY, LLC, a Delaware limited liability company ("VERASUN XXXXXXX
CITY"), VERASUN MARKETING, LLC, a Delaware limited liability company ("VERASUN
MARKETING"), VERASUN BIODIESEL, LLC, a Delaware limited liability company
("VERASUN BIODIESEL") and, together with VeraSun Aurora, VeraSun Fort Dodge,
VeraSun Xxxxxxx City, VeraSun Marketing and the Company and any other entity
that may become a party hereto, the "GRANTORS" and, each individually, a
"Grantor"), in favor of XXXXX FARGO BANK, N.A., as the Joint Collateral Agent
(in such capacity, the "JOINT COLLATERAL AGENT") for the ratable benefit of each
of the trustee (the "TRUSTEE") under the Indenture, dated as of December 21,
2005 (as amended, supplemented or otherwise modified from time to time, the
"INDENTURE"), among the Company, the subsidiary guarantors named therein, the
Trustee and the holders of the senior secured notes issued thereunder (the
"HOLDERS"), the Holders and the holders of any Parity Lien Indebtedness (as
defined below) that may be outstanding from time to time (the "PARITY LIEN
HOLDERS" and, together with the Holders, the Trustee, and the Joint Collateral
Agent, the "SECURED PARTIES").
WITNESSETH:
WHEREAS, the Company has issued $210 million aggregate principal amount of
Senior Secured Notes due 2012 (the "NOTES"), and may make further issuances of
Notes, under the Indenture. In connection therewith, the Grantors have agreed to
guarantee the payment and performance of the Company's obligations under the
Indenture, the Notes, the Note Guarantees and the Security Documents
(collectively, the "INDENTURE DOCUMENTS");
WHEREAS, as a condition to the effectiveness of the Indenture and to secure
the obligations of the Grantors under and in connection with the Indenture
Documents, the Grantors have executed and delivered this Agreement; and
WHEREAS, the Grantors will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Indenture.
NOW, THEREFORE, in consideration of the premises and to induce the Joint
Collateral Agent and the Trustee to enter into the Indenture and to induce the
Holders to purchase the Notes, each Grantor hereby agrees as follows:
ARTICLE 1
DEFINED TERMS
SECTION 1.1 DEFINITIONS
(a) Unless otherwise defined herein, terms defined in the Indenture
and used herein shall have the meanings given to them in the Indenture, and the
following terms which are
1
defined in the UCC are used herein as so defined: Accounts, Chattel Paper,
Certificated Securities, Commercial Tort Claims, Commodity Accounts, Commodity
Contracts, Commodity Intermediary, Deposit Accounts, Documents, Electronic
Chattel Paper, Equipment, Farm Products, Financial Assets, Fixtures, Goods,
Health Care Insurance Receivable, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Money, Payment Intangibles, Proceeds, Promissory Notes,
Records, Security, Securities Accounts, Security Certificate, Security
Entitlements, Securities Intermediary, Software, Supporting Obligations,
Uncertificated Securities and Tangible Chattel Paper.
(b) The following terms shall have the following meanings:
"AGREEMENT" shall mean this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"BLOCKED ACCOUNT" shall mean Account No. 00000000 established by the
Company with the Joint Collateral Agent and any other account hereafter
established by the Company or any other Grantor which the Company or such
Grantor and the Joint Collateral Agent jointly designate as the "Blocked
Account," into which all cash receipts of the Company or any other Grantor from
the Proceeds of the Collateral shall be deposited.
"COLLATERAL" shall have the meaning provided in Article 2 hereof.
"COPYRIGHT LICENSES" shall mean any and all agreements, whether
written or oral, providing for the grant by or to Grantor of any right under any
Copyright, including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
"COPYRIGHT SECURITY AGREEMENT" means the Copyright Security Agreement
substantially in the form of Annex III hereto, as such agreement may hereafter
be amended, supplemented or otherwise modified from time to time.
"COPYRIGHTS" shall mean (i) any and all other copyrights, in the
United States or any other country, whether registered or unregistered, or
published or unpublished, all registrations and recordings thereof and all
applications in connection therewith, and (ii) the right to obtain all renewals
of the foregoing.
"GENERAL INTANGIBLES" shall mean all "general intangibles" as such
term is defined in the UCC and, in any event, including, without limitation,
with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party
or under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject (to the extent that a grant
of a security interest in such general intangible is not prohibited by
applicable law or by the terms of any contract, agreement, instrument, indenture
or other document creating, evidencing or relating to such general intangibles),
as the same may from time to time be amended, supplemented or otherwise
modified, including, without limitation (but limited as aforesaid), (i) all
rights of such Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of such Grantor to damages arising
thereunder, (iii) all equity that constitutes "general intangibles" and (iv) all
rights of such Grantor to perform and to exercise all remedies
2
thereunder. The exclusion of any general intangible from this definition as a
result of any restrictions on the grant of a security interest in such general
intangible does not restrict the grant of the security interest contemplated
hereby in any Account, Payment Intangible, Chattel Paper or other right to
payment arising under or pursuant to such general intangible.
"INSURANCE" shall mean (i) all insurance policies covering any or all
of the Collateral (regardless of whether the Joint Collateral Agent is the loss
payee thereof) and (ii) any key man life insurance policies.
"INTELLECTUAL PROPERTY" shall mean all rights, priorities and
privileges provided under United States, multinational and foreign law relating
to intellectual property, including without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trade Secrets, the
Trade Secret Licenses, the Trademarks and the Trademark Licenses, and all rights
to xxx at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"ISSUER" shall mean, with reference to any Security, the issuer of
such Security.
"PATENT LICENSE" shall mean any and all agreements, whether written or
oral, providing for the grant by or to any Grantor of any right to manufacture,
use or sell any invention covered in whole or in part by a Patent to the extent
that a grant of a security interest in such patent license is not prohibited by
applicable law or the applicable patent agreement.
"PATENT SECURITY AGREEMENT" means the Patent Security Agreement
substantially in the form of Annex IV hereto, as such agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"PATENTS" shall mean (i) all letters patent of the United States or
any other country and all reissues and extensions thereof, (ii) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, and (iii) all rights to obtain
any reissues or extensions of the foregoing.
"PLEDGED SECURITIES" shall mean the Securities of any Person that may
be issued or granted to, or held by, any Grantor.
"RECEIVABLE" shall mean any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"RESTRICTED COLLATERAL" shall mean Grantors' rights under any
licenses, permits, contracts, leases or other agreements which are subject to
any applicable laws that, or which by their terms, prohibit, restrict, or
require the consent or other approval of any governmental authority or other
Person (other than any Grantor) to, the assignment or transfer of, or the
creation, attachment, perfection or enforcement of any Lien with respect to, any
such licenses, permits, contracts, leases or other agreements or any of
Grantor's interests therein or rights thereunder, provided, however, that the
foregoing limitation shall not affect, limit, restrict or impair the assignment
or transfer of, or the creation, attachment, perfection or enforcement of,
3
any security interest in, any Collateral to the extent that an otherwise
applicable prohibition, restriction, or requirement is rendered ineffective by
the UCC or other applicable laws.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SECURED OBLIGATIONS" shall mean the obligations under the Indenture
and the Notes and any other Parity Lien Obligations.
"SECURED PARTIES" has the meaning specified in the introductory
paragraph hereof.
"TRADE SECRET LICENSES" shall mean any and all agreements, whether
written or oral, providing for the grant by or to any Grantor of any right in or
to Trade Secrets, to the extent that a grant of a security interest in such
Trade Secret License is not prohibited by applicable law or the applicable Trade
Secret License.
"TRADE SECRETS" shall mean all trade secrets and all other
confidential or proprietary information and know-how whether or not such trade
secret has been reduced to a writing or other tangible form, including all
documents and things embodying, incorporating, or referring in any way to such
trade secret, including but not limited to: (i) the right to xxx for past,
present and future misappropriation or other violation of any trade secret, and
(ii) all Proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit.
"TRADEMARK LICENSE" shall mean any and all agreements, whether written
or oral, providing for the grant by or to any Grantor of any right to use any
Trademark, to the extent that a grant of a security interest in such Trademark
License is not prohibited by applicable law or the applicable Trademark License.
"TRADEMARK SECURITY AGREEMENT" means the Trademark Security Agreement
executed and delivered by the Grantors to the Joint Collateral Agent,
substantially in the form of Annex V hereto, as such agreement may hereafter be
amended, supplemented or otherwise modified from time to time.
"TRADEMARKS" shall mean (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, and (ii) the right to obtain all renewals thereof.
"VEHICLES" shall mean all cars, railcars, trucks, trailers,
construction and earth moving equipment and other vehicles covered by a
certificate of title law of any state and, in any event, shall include, without
limitation, all tires and other appurtenances to any of the foregoing.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS
4
(a) The words "hereof," "herein", "hereto" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section and
Schedule references are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein or in the UCC or in the
Indenture shall be equally applicable to both the singular and plural forms of
such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
ARTICLE 2
GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Joint Collateral Agent,
and hereby grants to the Joint Collateral Agent, for the ratable benefit of the
Secured Parties a security interest in, all of the following assets and
Property, tangible and intangible now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the "COLLATERAL"), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the Secured
Obligations:
(a) all books and Records pertaining to the Collateral or otherwise;
(b) all Commercial Tort Claims described on Schedule 6;
(c) all Deposit Accounts;
(d) all Documents;
(e) all Fixtures;
(f) all General Intangibles (but subject to the limitations set forth
in the definition of such term);
(g) all Goods (including, without limitation, all Equipment but
excluding Inventory);
(h) all Instruments (including, without limitation, all promissory
notes);
(i) all Insurance;
(j) all Intellectual Property;
(k) all Investment Property;
(l) all Letter of Credit Rights;
5
(m) all Money;
(n) all Pledged Securities;
(o) all Securities;
(p) all Securities Accounts;
(q) all Securities Entitlements;
(r) all Supporting Obligations;
(s) all Vehicles; and
(t) to the extent not otherwise included, all Proceeds, products,
accessions, rents and profits of or in respect of any and all of the foregoing
and all collateral security and guarantees given by any Person with respect to
any of the foregoing;
provided that the Collateral shall not include (i) Receivables, (ii) Inventory,
(iii) any Commodities Accounts, (iv) any Capital Stock of any Issuer that is a
Foreign Subsidiary in excess of 65% of the aggregate issued and outstanding
voting stock of such Issuer, (v) any Capital Stock of Subsidiaries of any
Grantor if and to the extent that the inclusion of such Capital Stock shall mean
that the par value, book value as carried by such Grantor or market value,
whichever is the greatest (such value, the "Value"), of any such Capital Stock
exceeds 20% of the aggregate principal amount of the Notes outstanding (and, if
the Value of the Capital Stock of any such Subsidiary, on the date of the
Security Agreement, exceeds 20% of the aggregate principal amount of the Notes
outstanding, none of the Capital Stock of such Subsidiary shall be included in
the Collateral), (vi) Restricted Collateral, (vii) any cash Proceeds (including
cash insurance proceeds thereof), rents and profits of or in respect of any and
all of the foregoing items listed in clauses (i) through (vi), and (viii) the
Deposit Account and Securities Account into which the cash Proceeds of the items
listed in clauses (i), (ii) and (vii) are deposited. In the event that Rule 3-16
or Rule 3-10 of Regulation S-X under the Securities Act requires (or is replaced
with another rule or regulation, or any other law, rule or regulation is
adopted, which would require) the filing with the Securities and Exchange
Commission (or any other governmental agency) of separate financial statements
of any Subsidiary of the Company due to the fact that such Subsidiary's capital
stock or other securities of such Subsidiary secure the Secured Obligations or
any guarantees by the Company's Subsidiaries of the Notes, then the capital
stock or other securities of such Subsidiary shall automatically be deemed not
to be part of the "Collateral", but only to the extent necessary to not be
subject to such requirement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
To induce the Joint Collateral Agent and the Trustee to enter into the
Indenture, to induce the Holders to purchase the Notes and to induce the Parity
Lien Holders to purchase the Parity Lien Indebtedness, if any, each Grantor
hereby represents and warrants to each Secured Party that:
6
SECTION 3.1 TITLE; NO OTHER LIENS. Except for the security interest granted
to the Joint Collateral Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement and the Permitted Liens such Grantor owns each item
of the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except (a) such as
have been filed in favor of the Joint Collateral Agent, for the ratable benefit
of the Secured Parties pursuant to this Agreement and (b) such as are expressly
permitted by the Indenture.
SECTION 3.2 PERFECTED PRIORITY LIENS. The security interests granted
pursuant to this Agreement, the Copyright Security Agreement, the Patent
Security Agreement and the Trademark Security Agreement (a) upon (x) execution
of the Patent Security Agreement and the Copyright Security Agreement and (y)
completion of the filings and other actions specified on Schedule 1 hereto
(which, in the case of all filings and other documents referred to on said
Schedule, copies have been delivered to the Joint Collateral Agent in completed
and duly executed form) will constitute valid perfected security interests in
the Collateral to the extent that a security interest therein may be perfected
by filing pursuant to the UCC in favor of the Joint Collateral Agent, for the
ratable benefit of the Secured Parties, as collateral security the Secured
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor subject to (1) bankruptcy, insolvency, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally, and (2) general principles of equity (regardless of
whether considered in a proceeding at law or in equity), and (b) are prior to
all other Liens on the Collateral in existence on the date hereof except for
Permitted Liens. Any reference in this Agreement or the other Indenture
Documents to Permitted Liens is not intended to and should not be interpreted as
subordinating or postponing, or as any agreement to subordinate or postpone, any
Lien created herein or by any of the other Indenture Documents to any Permitted
Lien.
SECTION 3.3 ORGANIZATION. Such Grantor's jurisdiction of incorporation,
formation or organization (as applicable), organizational identification number
and federal tax identification number are specified on Schedule 2 hereto.
SECTION 3.4 EQUIPMENT.
(a) No part of the Equipment of any Grantor constitutes a Fixture or
has otherwise become permanently attached to, affixed to or otherwise
incorporated into any real property or improvements of any Person other than
real property and improvements owned in fee by such Grantor and with respect to
which such Grantor has delivered to the Joint Collateral Agent a Mortgage
granting to the Joint Collateral Agent a first and prior mortgage Lien on such
real property and improvements (subject to Permitted Liens) to secure the
Secured Obligations.
(b) No Equipment of any Grantor is or at any time evidenced by a
negotiable Document.
SECTION 3.5 FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
SECTION 3.6 SECURITIES AND SECURITIES ACCOUNTS
7
(a) All Securities in which a Grantor holds any beneficial or record
interest are accurately listed and described in Schedule 3 hereto.
(b) Each Grantor is the sole entitlement holder of each such
Securities Account, and such Grantor has not consented to, and is not otherwise
aware of, any Person having "control" (within the meanings of Sections 8-106 and
9-106 of the UCC) over, or any other interest in, any such Securities Account or
securities or other property credited thereto.
(c) Except as described in Schedule 3 hereto, the Pledged Securities
represent one hundred percent (100%) of the issued and outstanding Securities of
every class of the applicable Issuer.
(d) The applicable Grantor has delivered to the Joint Collateral Agent
an Acknowledgement and Consent to Pledge substantially in the form of Annex II
hereto duly executed by such Issuer of Pledged Securities.
(e) All of the Pledged Securities have been duly and validly issued
and are fully paid and nonassessable.
(f) Each Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens, restrictions on transfer, voting agreements, options or
claims of, any other Person, other than Permitted Liens.
(g) To the extent any of the Pledged Securities are Certificated
Securities, the applicable Grantor has delivered the Security Certificates
evidencing such Securities, duly endorsed in blank, or accompanied by
appropriate transfer powers executed in blank, to the Joint Collateral Agent.
SECTION 3.7 INTELLECTUAL PROPERTY
(a) All Intellectual Property owned or licensed by each Grantor or in
which any Grantor holds an interest are accurately listed and described in
Schedule 4 hereto.
(b) The Trademarks and Trademark applications listed on Schedule A to
the Trademark Security Agreement executed and delivered in connection with this
Agreement constitute all of the Trademarks and Trademark applications owned and
currently in use by the Company.
(c) All Intellectual Property of each Grantor is valid, subsisting,
unexpired, enforceable, has not been abandoned, and does not infringe the
Intellectual Property rights of a third party.
(d) Except as set forth in Schedule 4 hereto, none of the Intellectual
Property is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor.
8
(e) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property.
(f) No action or proceeding is pending or, to the knowledge of such
Grantor, threatened on the date hereof seeking to limit, cancel or question the
validity, or such Grantor's ownership, of any Intellectual Property.
SECTION 3.8 DEPOSIT ACCOUNTS Each Grantor is the sole account holder of
each such Deposit Account and such Grantor has not consented to, and is not
otherwise aware of, any Person having either sole dominion and control (within
the meaning of common law) or "control" (within the meaning of Section 9-104 of
the UCC) over, or any other interest in, any such Deposit Account or any money
or other property deposited therein.
SECTION 3.9 INSTRUMENTS AND CHATTEL PAPER. Each Grantor has taken all
actions reasonably requested by the Joint Collateral Agent to establish control
(as defined in the UCC) by the Joint Collateral Agent of all electronic Chattel
Paper included in the Collateral and all "transferable records" as defined in
Section 201 of the Federal Electronics Signatures in Global and National
Commerce Act or in Section 16 of Uniform Electronic Transactions Act as in
effect in all relevant jurisdictions. Without limiting the foregoing, each
Grantor represents and warrants that all conditions necessary to establish the
Joint Collateral Agent's control over any electronic chattel paper included in
the Collateral under Section 9.105 of the UCC have been satisfied.
SECTION 3.10 AIRCRAFT. No Grantor owns or holds any interest in aircraft.
SECTION 3.11 COMMERCIAL TORT CLAIMS. All Commercial Tort Claims of each
Grantor or in which any Grantor holds an interest are accurately listed and
described in Schedule 6 hereto.
ARTICLE 4
COVENANTS
Each Grantor covenants and agrees that, from and after the date of this
Agreement until the Notes shall have been paid in full, the Indenture shall have
terminated, the Parity Lien Obligations, if any, shall have been paid in full
and the documents evidencing such Parity Lien Obligations shall have terminated,
such Grantor shall:
SECTION 4.1 COVENANTS IN INDENTURE AND OTHER INDENTURE DOCUMENTS. Take, or
refrain from taking, as the case may be, each action that is necessary to be
taken or not taken, as the case may be, so that each covenant and agreement
applicable to such Grantor contained in the Indenture and the other Indenture
Documents is completed and no Default or Event of Default is caused by the
failure to take such action or to refrain from taking such action by such
Grantor or any of its Subsidiaries.
SECTION 4.2 APPLICATION OF CASH PROCEEDS. Take all action necessary to
cause all cash Proceeds of the Collateral to be remitted to the Blocked Account.
If, notwithstanding the
9
foregoing, any Grantor shall receive any cash Proceeds of the Collateral, such
Grantor shall hold such Proceeds in trust for the benefit of the Joint
Collateral Agent, and not later than the first (1st) Business Day following the
date of receipt, deposit the same directly into the Blocked Account in the exact
form received.
SECTION 4.3 ELECTRONIC CHATTEL PAPER. In the event that such Grantor shall
at any time hold or acquire an interest in any electronic chattel paper or any
"transferable record" (as such term is defined in Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction) which is part of the Collateral, such Grantor shall promptly
notify the Joint Collateral Agent thereof in writing, and such Grantor shall
take, or cause to be taken, such actions as the Joint Collateral Agent may
request to give the Joint Collateral Agent control of such Electronic Chattel
Paper under Section 9-314 of the UCC and control of such transferable record
under Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform Electronic
Transactions Act, as in effect in such jurisdiction.
SECTION 4.4 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
DOCUMENTATION
(a) Maintain the security interest created by this Agreement as a
perfected security interest to the extent and having at least the priority
described in Section 3.2 hereof and shall defend such security interest against
the claims and demands of all Persons whomsoever; provided that the Joint
Collateral Agent shall release liens and security interests in any Collateral
which is sold or otherwise disposed of in accordance with the terms of the
Indenture and the other Indenture Documents.
(b) Furnish to the Joint Collateral Agent and the other Secured
Parties from time to time, at such Grantor's sole cost and expense, statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Joint Collateral Agent may
reasonably request, all in such detail as the Joint Collateral Agent may
reasonably request.
(c) Take all actions necessary to maintain the Joint Collateral
Agent's security interest, including without limitation filing all necessary UCC
continuation statements. At any time and from time to time, upon the written
request of the Joint Collateral Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute (as required by applicable law),
deliver and/or have recorded with appropriate agencies such further instruments
and documents and take such further actions as the Joint Collateral Agent may
request for the purpose of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing or continuation statements under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interests created hereby.
(d) This Section 4.4 and the obligations imposed on each Grantor by
this Section 4.4 shall be interpreted as broadly as possible in favor of the
Joint Collateral Agent and the Secured Parties in order to effectuate the
purpose and intent of this Agreement.
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SECTION 4.5 CHANGES IN LOCATIONS, NAME, ETC. Not, except upon five (5)
Business Days' prior written notice to the Joint Collateral Agent and delivery
to the Joint Collateral Agent of all additional financing statements and other
documents reasonably requested by the Joint Collateral Agent, necessary to
maintain the validity, perfection and priority of the security interests
provided for herein:
(a) change its jurisdiction of incorporation, formation, or
organization, as applicable; or
(b) change its name, identity or organizational structure.
Each notice delivered pursuant to this Section 4.5 shall specify in
reasonable detail any change in the jurisdiction of incorporation, organization,
formation, name, identity or corporate structure as applicable.
SECTION 4.6 NOTICES. Advise the Joint Collateral Agent promptly, in
reasonable detail, of any Lien (other than Permitted Liens) on any of the
Collateral.
SECTION 4.7 PLEDGED SECURITIES; SECURITIES ACCOUNTS
(a) Notify the Joint Collateral Agent promptly in writing upon the
acquisition by any Grantor of any Pledged Securities, which notice shall (i) set
forth all information with respect to such Pledged Securities as is set forth on
Schedule 3 hereto with respect to the Pledged Securities owned by the Grantors
on the date hereof, and (ii) be accompanied by an Acknowledgment and Consent to
Pledge duly executed by the Issuer of such Securities (unless such Issuer is
also a Grantor). Nothing contained in this Section 4.7 shall permit any Grantor
to invest in or hold any Security to the extent such investment is prohibited
pursuant to the Indenture.
(b) If any Grantor shall become entitled to receive or shall receive
any Security Certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the
Securities of any Issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for, any Pledged Securities, or otherwise in
respect thereof, such Grantor shall accept the same as the agent of the Joint
Collateral Agent, the Secured Parties, hold the same in trust for the Joint
Collateral Agent, the Secured Parties and deliver the same forthwith to the
Joint Collateral Agent in the exact form received, duly indorsed by such Grantor
in blank or accompanied by an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Joint Collateral Agent so
requests, signature guaranteed, to be held by the Joint Collateral Agent,
subject to the terms hereof, as additional Pledged Securities.
(c) Any sums paid upon or in respect of the Pledged Securities
including any dividend or distribution or any amount paid upon the liquidation
or dissolution of any Issuer shall be deposited directly into the Blocked
Account in accordance with Section 4.2 hereof. In case any distribution of
property upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, such non-cash Proceeds so distributed shall, unless
otherwise subject to a perfected
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security interest in favor of the Joint Collateral Agent for the ratable benefit
of the Secured Parties, be delivered to the Joint Collateral Agent to be held by
it hereunder as additional collateral security for the Secured Obligations.
(d) Without the prior written consent of the Joint Collateral Agent,
such Grantor will not (i) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Pledged Securities or Proceeds
thereof (except pursuant to a transaction expressly permitted by the Indenture),
(ii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Pledged Securities or Proceeds
thereof, or any interest therein, except for Permitted Liens, or (iii) enter
into any agreement or undertaking restricting the right or ability of such
Grantor or the Joint Collateral Agent to dispose of any of the Pledged
Securities or Proceeds thereof.
(e) If such Grantor is an Issuer, such Issuer agrees that (i) it will
be bound by the terms of this Agreement relating to the Pledged Securities
issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Joint Collateral Agent promptly in
writing of the occurrence of any of the events described in Section 4.7(a)
hereof with respect to the Pledged Securities issued by it, and (iii) the terms
of Section 5.1 hereof shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.1 hereof with respect
to the Pledged Securities issued by it.
SECTION 4.8 INTELLECTUAL PROPERTY
(a) Notify the Joint Collateral Agent promptly, in writing upon the
acquisition by Grantor of any Intellectual Property which notice shall set forth
(i) all information with respect to such Intellectual Property as is set forth
on Schedule 4 hereto with respect to Intellectual Property owned by the Grantors
on the date hereof, and (ii) shall be accompanied by a Copyright Security
Agreement, Patent Security Agreement and/or Trademark Security Agreement, as
applicable, duly executed and completed by the applicable Grantor.
(b) Grantor (either itself or through licensees) will, with respect to
each Trademark which is material to the operation of its business, (i) continue
to use such Trademark on each and every trademark class of goods applicable to
its current line as reflected in its then-current catalogs, brochures and price
lists in order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain the quality of products and services
offered under such Trademark, (iii) use such Trademark with all notices and
legends required by applicable law or regulations, and (iv) not (and not permit
any licensee or sublicensee thereof to) do any act or knowingly omit to do any
act whereby such Trademark may become invalidated or impaired in any way.
(c) No Grantor will, and no Grantor will permit any licensee to do any
act, whereby any Patent which is material to the operation of its business may
become forfeited, abandoned or dedicated to the public.
(d) No Grantor will, and no Grantor will permit any licensee to do any
act or omit to do any act whereby any portion of any Copyright which is material
to the operation of its
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business may become invalidated or otherwise impaired. Such Grantor will not
(either itself or through licensees) do any act whereby any of the Copyrights
may fall into the public domain.
(e) No Grantor will, and no Grantor will permit any licensee to do any
act that results in any Intellectual Property held by such Grantor infringing on
the Intellectual Property rights of a third party.
(f) Such Grantor will promptly notify the Joint Collateral Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any Patent, Copyright or Trademark may become abandoned
or dedicated to the public, or of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court or tribunal in any country)
regarding Grantor's ownership of, or the validity of, any Intellectual Property
or such Grantor's right to register the same or to own and maintain the same.
(g) To the extent any Grantor, either by itself or through an
authorized agent, employee, licensee or designee, shall file an application for
any Patent or Trademark with the United States Patent and Trademark Office or
any Copyright in the U.S. Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, such Grantor shall
report such filing to the Joint Collateral Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Such Grantor
shall execute and deliver, and have recorded, a Copyright Security Agreement, a
Patent Security Agreement, a Trademark Security Agreement and any and all other
agreements, instruments, documents, and papers as the Joint Collateral Agent may
request to evidence the Joint Collateral Agent's security interest in any
Copyright, Patent or Trademark and the goodwill and General Intangibles of such
Grantor relating thereto or represented thereby.
(h) Grantor will take all commercially reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the U.S. Copyright Office or any similar office or agency
in any other country or any political subdivision thereof, to maintain each
registration of Patents, Trademarks and Copyrights held by, including, without
limitation, filing of applications for renewal, affidavits of use and affidavits
of incontestability, to the extent such Patents, Trademarks or Copyrights are
material to the operation of its business.
(i) In the event that any Intellectual Property of any Grantor which
is material to the operation of its business is infringed, misappropriated or
diluted by a third party, such Grantor shall take such actions as such Grantor
shall reasonably deem appropriate under the circumstances, or as otherwise
requested by the Joint Collateral Agent, to protect such Intellectual Property.
(j) Take all steps reasonably necessary to protect the secrecy of all
Trade Secrets, including, without limitation, entering into confidentiality
agreements with employees with access to such Trade Secrets and labeling and
restricting access to secret information and documents.
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SECTION 4.9 COMMERCIAL TORT CLAIMS. Notify the Joint Collateral Agent
promptly, in writing in the event that any Grantor shall at any time after the
date hereof hold any Commercial Tort Claims which notice shall set forth (i) all
information with respect to such Commercial Tort Claims as is set forth on
Schedule 6 hereto with respect to Commercial Tort Claims held by the Grantors on
the date hereof, and (ii) shall include the express grant by such Grantor to the
Joint Collateral Agent of a security interest in such Commercial Tort Claim (and
the proceeds thereof). In the event that such notice does not include such grant
of a security interest, the sending thereof by such Grantor to the Joint
Collateral Agent shall be deemed to constitute such grant to the Joint
Collateral Agent. Upon the sending of such notice, any Commercial Tort Claim
described therein shall constitute part of the Collateral and shall be deemed
included therein. Without limiting the authorization of the Joint Collateral
Agent provided in the Indenture or otherwise arising by such Grantor's execution
of this Agreement or any of the other Indenture Documents, the Joint Collateral
Agent is hereby irrevocably authorized from time to time and at any time to file
such financing statements naming the Joint Collateral Agent or its designee as
secured party and such Grantor as debtor, or any amendments to any financing
statements, covering any such Commercial Tort Claim as Collateral. In addition,
such Grantor shall promptly upon the Joint Collateral Agent's request, execute
and deliver, or cause to be executed and delivered, to the Joint Collateral
Agent such other agreements, documents and instruments as the Joint Collateral
Agent may require in connection with such Commercial Tort Claim.
SECTION 4.10 EQUIPMENT.
(a) Take all actions necessary or advisable to maintain the continuous
validity, perfection and the same or better priority of the Joint Collateral
Agent's security interest in such Equipment intended to be granted and agreed to
hereby, or to enable the Joint Collateral Agent to exercise and enforce its
rights and remedies hereunder with respect to such Equipment.
(b) Not deliver any Document evidencing any Equipment to any Person
other than to the issuer of such Document to claim the Goods evidenced
therefore.
(c) Take commercially reasonable measures to preserve each item of
Equipment in good operating condition, ordinary wear and tear and immaterial
impairments of value and damage by the elements excepted, and provide all
maintenance, service and repairs necessary for such purpose.
(d) Prevent any Equipment from becoming attached to real estate in
such a manner that the same may become a Fixture or otherwise becomes
permanently attached to, affixed to or otherwise incorporated into any real
property or improvements of any Person other than real property and improvements
owned in fee by such Grantor and with respect to which such Grantor has
delivered to the Joint Collateral Agent a Mortgage granting to the Joint
Collateral Agent a first and prior mortgage Lien on such real property and
improvements (subject to Permitted Liens) to secure the Secured Obligations.
SECTION 4.11 AMOUNTS IN BLOCKED ACCOUNT.
(a) All Collateral Monies, including without limitation all Net Cash
Proceeds received in connection with a Collateral Asset Sale, as well as Net
Loss Proceeds required to be
14
deposited with the Joint Collateral Agent, shall be held by the Joint Collateral
Agent in the Blocked Account as part of the Collateral securing the Note
Obligations, and to the extent applicable, the Parity Lien Obligations. So long
as no Default or Event of Default under the Indenture shall have occurred and be
continuing, Collateral Monies may:
(1) with respect to the Net Cash Proceeds of Collateral Asset
Sales, be released as contemplated by Section 4.17 of the Indenture,
(2) with respect to Net Loss Proceeds, be released to repair or
replace the relevant Collateral, subject to conditions set forth in the
Indenture,
(3) at the Company's direction be applied by the Joint Collateral
Agent Equally and Ratably from time to time to (x) the payment of the
principal of, premium, if any, and interest on the Notes and any Parity
Lien Indebtedness at maturity or upon redemption or retirement, or (y) the
purchase of the Notes and any Parity Lien Indebtedness upon tender or in
the open market or otherwise, in each case, in compliance with the
Indenture, or
(4) continue to be held by the Joint Collateral Agent in the
Blocked Account as part of the Collateral securing the Note Obligations
and, to the extent applicable, the Parity Lien Obligations.
(b) The Joint Collateral Agent shall be entitled to apply any
Collateral Monies to cure any Event of Default under this Indenture. Collateral
Monies deposited with the Joint Collateral Agent shall be invested in cash or
Temporary Cash Investments pursuant to the Issuer's direction and, so long as no
Default or Event of Default shall have occurred and be continuing, the Issuer
shall be entitled to any interest or dividends accrued, earned or paid on such
Temporary Cash Investments.
(c) All Collateral Monies held by the Joint Collateral Agent shall be
invested at the instruction of the Issuer in Treasury Securities and other
Collateral Investments, and, so long as no Default or Event of Default shall
have occurred and be continuing, the Issuer shall be entitled to any interest or
dividends accrued, earned or paid on such Treasury Securities and other
Collateral Investments.
ARTICLE 5
REMEDIAL PROVISIONS
SECTION 5.1 PLEDGED SECURITIES
(a) Unless an Event of Default shall have occurred and be continuing,
each Grantor shall be permitted to exercise all voting and corporate rights with
respect to the Pledged Securities; provided, however, that no vote shall be cast
or corporate right exercised or other action taken which, in the Joint
Collateral Agent's reasonable judgment, would be inconsistent with or result in
any violation of any provision of the Indenture, this Agreement or any other
Indenture Document.
15
(b) If an Event of Default shall occur and be continuing and upon the
written request of the Joint Collateral Agent, any or all of the Pledged
Securities shall be registered in the name of the Joint Collateral Agent or its
nominee, and the Joint Collateral Agent or its nominee may thereafter exercise
(x) all voting, corporate and other rights pertaining to such Pledged Securities
at any meeting of shareholders or members of the relevant Issuer or Issuers or
otherwise and (y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Pledged
Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by the applicable Grantor or the Joint Collateral Agent of any right,
privilege or option pertaining to such Pledged Securities, and in connection
therewith, the right to deposit and deliver any and all of the Pledged
Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Joint Collateral Agent
may determine), all without liability except to account for property actually
received by it, but the Joint Collateral Agent and the other Secured Parties
shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by such Issuer from the Joint Collateral Agent in writing,
without any other or further instructions from such Grantor, and such Grantor
agrees that each Issuer shall be fully protected in so complying, and (ii) pay
any dividends or other payments with respect to the Pledged Securities directly
to the Joint Collateral Agent.
(d) The Joint Collateral Agent agrees that it shall not give any
instruction described in Section 5.1(c) unless (1) an Event of Default under and
as defined in the Indenture has occurred and is continuing and (2) such
instructions are otherwise in accordance with the terms of the Indenture and
Security Agreement.
SECTION 5.2 APPLICATION OF PROCEEDS. At any time after the occurrence and
during the continuance of an Event of Default, at the Joint Collateral Agent's
election, the Joint Collateral Agent may apply all or any part of Proceeds,
including, without limitation, any such Proceeds held in the Blocked Account as
set forth below:
(a) first, to amounts owing to the Joint Collateral Agent and the
Escrow Agent in their respective capacities as Joint Collateral Agent and Escrow
Agent;
(b) second, to amounts owing to the Trustee in its capacity as such in
accordance with the terms of the Indenture;
(c) third, all escrowed funds in the Escrow Account to Holders ratably
in accordance with the principal of, and interest and premium, if any,
outstanding on the Notes;
(d) fourth, Equally and Ratably in accordance with the terms of the
Indenture; and
16
(e) fifth, to the Company and/or other persons entitled thereto.
SECTION 5.3 UCC AND OTHER REMEDIES. If an Event of Default shall occur and
be continuing, the Joint Collateral Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Notes, all rights and remedies of a secured party under the UCC
or any other applicable law. Without limiting the generality of the foregoing,
the Joint Collateral Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind, including, without
limitation, notice of intent to accelerate or notice of acceleration, (except
any notice required by law as referred to below) to or upon the Grantor or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Joint Collateral Agent
or elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Joint Collateral Agent shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Joint Collateral Agent's request, to assemble the Collateral and
make it available to the Joint Collateral Agent at places which the Joint
Collateral Agent shall reasonably select, whether at such Grantor's premises or
elsewhere. The Joint Collateral Agent shall apply the net proceeds of any action
taken by it pursuant to this Section 5.3, after deducting all reasonable costs
and expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Joint Collateral Agent hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Notes and to any other Person legally entitled
thereto in accordance with the terms of the Indenture. To the extent permitted
by applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Joint Collateral Agent or any other Secured Party arising
out of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least ten days before such
sale or other disposition.
SECTION 5.4 REGISTRATION RIGHTS.
(a) If the Joint Collateral Agent shall determine to exercise its
right to sell any or all of the Pledged Securities pursuant to Section 5.3
hereof, and if in the opinion of the Joint Collateral Agent it is necessary or
advisable to have the Pledged Securities, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause any Issuer thereof to: (i) execute and deliver, and cause the directors,
members, managers and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Joint Collateral Agent, necessary or advisable to
register the Pledged Securities, or that portion thereof to be sold, under
17
the provisions of the Securities Act, (ii) cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Securities, or
that portion thereof to be sold, and (iii) make all amendments thereto and/or to
the related prospectus which, in the opinion of the Joint Collateral Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Each Grantor agrees to cause any Issuer to comply
with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Joint Collateral Agent shall designate and to make
available to its security holders, as soon as practicable, an earnings statement
(which need not be audited) which will satisfy the provisions of Section 11(a)
of the Securities Act.
(b) Each Grantor recognizes that the Joint Collateral Agent may be
unable to effect a public sale of any or all the Pledged Securities, by reason
of certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Joint
Collateral Agent shall be under no obligation to delay a sale of any of the
Pledged Securities for the period of time necessary to permit the Issuer thereof
to register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Securities pursuant to this Section 5.4 valid and
binding and in compliance with any and all other applicable Governmental
Requirements. Each Grantor further agrees that a breach of any of the covenants
contained in this Section 5.4 will cause irreparable injury to the Joint
Collateral Agent and the other Secured Parties, that the Joint Collateral Agent
and the other Secured Parties have no adequate remedy at law in respect of such
breach and as a consequence, that each and every covenant contained in this
Section 5.4 shall be specifically enforceable against such Grantor, and such
Grantor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of
Default has occurred under the Indenture.
SECTION 5.5 WAIVER; DEFICIENCY. Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay the Secured Obligations and the reasonable fees and
disbursements of any attorneys employed by the Joint Collateral Agent or any
other Secured Party to collect such deficiency.
ARTICLE 6
THE JOINT COLLATERAL AGENT
SECTION 6.1 THE JOINT COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT
ETC.
18
(a) Each Grantor hereby irrevocably constitutes and appoints the Joint
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, such Grantor hereby gives the Joint Collateral Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following:
(1) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due with respect
to any other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by
the Joint Collateral Agent for the purpose of collecting any and all such
moneys due with respect to any other Collateral whenever payable;
(2) in the case of any Copyright, Patent or Trademark, execute,
deliver and have recorded, any and all agreements, instruments, documents
and papers as the Joint Collateral Agent may request to evidence the Joint
Collateral Agent's security interest in such Copyright, Patent or Trademark
and the goodwill and General Intangibles of such Grantor relating thereto
or represented thereby;
(3) pay or discharge Taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(4) execute, in connection with any sale provided for in Section
5.3 or 5.4 hereof, any endorsements, assignments or other instruments or
documents of conveyance or transfer with respect to the Collateral; and
(5) (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Joint Collateral Agent or as the Joint
Collateral Agent shall direct; (B) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts
due or to become due at any time in respect of or arising out of any
Collateral; (C) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents (including, without
limitation, any negotiable Documents) in connection with any of the
Collateral; (D) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral; (E) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (F) settle, compromise
or adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Joint Collateral Agent may deem
appropriate; (G) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the
19
world for such term or terms, on such conditions, and in such manner, as
the Joint Collateral Agent shall in its sole discretion determine; and (H)
generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
the Joint Collateral Agent were the absolute owner thereof for all
purposes, and do, at the Joint Collateral Agent's option and such Grantor's
expense, at any time, or from time to time, all acts and things which the
Joint Collateral Agent deems necessary to protect, preserve or realize upon
the Collateral and the Joint Collateral Agent's security interests therein
and to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the Joint
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 6.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) The Joint Collateral Agent may (but without any obligation to do
so) (i) perform or satisfy any of the Grantor's and any other Obligated Party's
obligations under or pursuant to this Agreement, the other Indenture Documents
and any documents evidencing the Parity Lien Obligations, if any, which in each
case remain unsatisfied (after providing any notice and opportunity to cure to
which such Grantor or other Obligated Party is entitled under any other
provision of any Indenture Document or document evidencing Parity Lien
Obligations, if any), and (ii) take all other actions and pay such amounts and
claims as Joint Collateral Agent determines in its sole but reasonable
discretion, is necessary or appropriate to protect the rights and interests of
the Joint Collateral Agent and the other Secured Parties under this Agreement,
the other Indenture Documents and any documents evidencing Parity Lien
Obligations and otherwise with respect to the Notes or to preserve and protect
the Collateral or any part thereof from loss.
(c) The expenses of the Joint Collateral Agent incurred in connection
with actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable under the Indenture on past due amounts, from the date of
payment by the Joint Collateral Agent to the date reimbursed by any Grantor,
shall be payable by such Grantor to the Joint Collateral Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the powers granted in this Section
6.1. All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
SECTION 6.2 DUTY OF THE JOINT COLLATERAL AGENT. The Joint Collateral
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under the UCC or otherwise,
shall be to deal with it in the same manner as the Joint Collateral Agent deals
with similar property for its own account. None of the Joint Collateral Agent,
any other Secured Party, nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the Joint
20
Collateral Agent hereunder are solely to protect the Joint Collateral Agent's
interests in the Collateral and shall not impose any duty upon the Joint
Collateral Agent or any other Secured Party to exercise any such powers. The
Joint Collateral Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible to any Grantor
or any other Credit Party for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
SECTION 6.3 FINANCING STATEMENTS. Pursuant to the UCC and any other
applicable laws, each Grantor authorizes the Joint Collateral Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral in such form and in such offices as
the Joint Collateral Agent reasonably determines appropriate to perfect the
security interests of the Joint Collateral Agent under this Agreement. A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.
SECTION 6.4 AUTHORITY OF THE JOINT COLLATERAL AGENT. Each Grantor
acknowledges that the rights and responsibilities of the Joint Collateral Agent
under this Agreement with respect to any action taken by the Joint Collateral
Agent or the exercise or non-exercise by the Joint Collateral Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the Joint
Collateral Agent and the other Secured Parties, be governed by the Indenture,
and by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Joint Collateral Agent and such Grantor, the
Joint Collateral Agent shall be conclusively presumed to be acting as Joint
Collateral Agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and such Grantor shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Article IX of the Indenture.
SECTION 7.2 NOTICES. All notices, requests and demands to or upon the Joint
Collateral Agent, any other Secured Party, or any Grantor hereunder shall be
effected in the manner provided for in Section 14.2 of the Indenture.
SECTION 7.3 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of any Grantor or the Joint Collateral Agent in exercising any right or remedy
under this Agreement or any other Indenture Document and no course of dealing
between such Grantor and the Joint Collateral Agent or any Secured Party shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right or remedy under this Agreement or any other Indenture Document preclude
any other or further exercise thereof or the exercise of any other right or
remedy under this Agreement or any other Indenture Document. The rights and
remedies herein expressly
21
provided are cumulative and not exclusive of any rights or remedies which any
Grantor, the Joint Collateral Agent or any Secured Party would otherwise have.
No notice to or demand on any Grantor not required under this Agreement or any
other Indenture Document in any case shall entitle such Grantor or any other
Grantor to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Joint Collateral Agent
or the Secured Parties to any other or further action in any circumstances
without notice or demand.
SECTION 7.4 ENFORCEMENT EXPENSES; INDEMNIFICATION.
(a) Each Grantor agrees to pay or reimburse the Joint Collateral Agent
for all of its costs and expenses incurred in enforcing or preserving any rights
under this Agreement and the other Indenture Documents to which such Grantor is
a party, including, without limitation, the reasonable fees and disbursements of
counsel to the Joint Collateral Agent.
(b) Each Grantor agrees to pay, and to save the Joint Collateral Agent
and the Secured Parties harmless from, any and all liabilities with respect to,
or resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Grantor agrees to pay, and to save the Joint Collateral Agent
and the Secured Parties harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, to the
same extent each Grantor would be required to do so pursuant to Sections 7.7 and
10.1(a) of the Indenture, as if each Parity Lien Holder were a "Holder" under
the Indenture.
(d) The agreements in this Section 7.4 shall survive repayment of the
Notes and all other amounts payable under the Indenture, the other Indenture
Documents and any documents evidencing Parity Lien Obligations.
SECTION 7.5 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Grantor may
assign or otherwise transfer any of its rights or obligations hereunder except
in accordance with the terms of the Indenture (and any attempted assignment or
transfer by such Grantor without such consent shall be null and void).
SECTION 7.6 SET-OFF. In addition to and not in limitation of all rights of
offset that the Joint Collateral Agent, the Trustee, any Holder or any Parity
Lien Holder may have under applicable law, the Trustee, each Holder and each
Parity Lien Holder shall, upon the occurrence of any Event of Default and at any
time during the continuance thereof and whether or not such Holder, such Parity
Lien Holder or the Trustee has made any demand or the Notes are matured, have
the right at any time and from time to time, without notice to any Grantor (any
such notice being expressly waived by each Grantor) to set-off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by any Holder, any Parity
Lien Holder or the Trustee to or for the credit or the account of
22
any Grantor against any and all of the Notes owing to such Holder, such Parity
Lien Holder or the Trustee.
SECTION 7.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original but all of which
shall together constitute one and the same instrument.
SECTION 7.8 SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held invalid,
illegal or unenforceable in any respect, (a) each Grantor agrees that such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement and (b) each Grantor and the Joint Collateral Agent (acting on
behalf and at the direction of the Trustee, the Parity Lien Holders and the
Holders) will negotiate in good faith to amend such provision so as to be legal,
valid, and enforceable.
SECTION 7.9 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER INDENTURE
DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE JOINT
COLLATERAL AGENT, THE TRUSTEE, THE PARITY LIEN HOLDERS, THE OTHER HOLDERS, THE
GRANTORS AND THE OTHER RESPECTIVE PARTIES HERETO AND THERETO AND SUPERSEDE ALL
PRIOR AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
SECTION 7.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT CONTROLLING, LAWS OF THE
UNITED STATES OF AMERICA, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER STATE
IN WHICH ANY OF THE COLLATERAL IS LOCATED NECESSARILY GOVERN THE VALIDITY,
PERFECTION, PRIORITY AND ENFORCEABILITY OF, OR THE EXERCISE OF ANY REMEDIES WITH
RESPECT TO, ANY LIEN OR SECURITY INTEREST INTENDED TO BE CREATED OR GRANTED
HEREBY ON COLLATERAL LOCATED IN SUCH STATE, IN WHICH CASE THE LAWS OF SUCH OTHER
STATE SHALL GOVERN SUCH VALIDITY, PERFECTION, PRIORITY AND ENFORCEABILITY AND
SUCH EXERCISE OF REMEDIES.
(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT, THE NOTES, THE OTHER INDENTURE DOCUMENTS OR ANY
DOCUMENTS EVIDENCING PARITY LIEN OBLIGATIONS MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR
HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
23
GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS. EACH GRANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, BUT NOT
LIMITED TO, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) WAIVER OF JURY TRIAL & CONSEQUENTIAL DAMAGES. TO THE MAXIMUM
EXTENT ALLOWED BY APPLICABLE LAW, EACH OF THE GRANTORS, THE JOINT COLLATERAL
AGENT, THE TRUSTEE, THE PARITY LIEN HOLDERS AND THE OTHER HOLDERS: (1)
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY INDENTURE DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN; (2) IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (3) CERTIFIES
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; AND (IV)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
INDENTURE DOCUMENTS, ANY DOCUMENTS EVIDENCING PARITY LIEN OBLIGATIONS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
(d) SERVICE OF PROCESS. Each party hereto irrevocably consents to
service of process by notice delivered in accordance with Section 7.2 hereof.
Nothing herein, in any other Indenture Document or in any document evidencing
Parity Lien Obligations shall affect the right of the Joint Collateral Agent,
the Trustee, any Parity Lien Holder or any other Holder to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Grantor in any other jurisdiction.
SECTION 7.11 ACKNOWLEDGMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, the other Indenture Documents and any documents
evidencing Parity Lien Obligations;
(b) neither the Joint Collateral Agent nor the Trustee nor any Parity
Lien Holder nor any other Holder has any fiduciary relationship with or duty to
such Grantor arising out of or in connection with this Agreement, any of the
other Indenture Documents or any documents evidencing Parity Lien Obligations,
and the relationship between the Joint Collateral Agent, the Trustee, the Parity
Lien Holders and the other Holders, on one hand, and such Grantor, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and
24
(c) no joint venture is created hereby or by the other Indenture
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Holders, the Parity Lien Holders, the Holders and the Parity Lien
Holders, the Grantor and the Holders, the Grantor and the Parity Lien Holders or
among the Grantor, the Parity Lien Holders and the Holders.
SECTION 7.12 SECTION HEADINGS. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
SECTION 7.13 ADDITIONAL GRANTORS. Each Subsidiary of the Parent that is
required to become a party to this Agreement pursuant to Section 4.14 of the
Indenture shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex I hereto.
SECTION 7.14 RELEASES
(a) At such time as the obligations of the Company and the Guarantors
shall have been defeased or discharged in accordance with the provisions of
Article VIII of the Indenture and the Parity Lien Obligations shall have been
paid in full, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Joint Collateral Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
applicable Grantor. At the request and joint and several expense of the Grantors
following any such termination, the Joint Collateral Agent shall promptly
deliver to the appropriate Grantor any Collateral held by the Joint Collateral
Agent hereunder, and promptly execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Indenture or, if
any Pledged Securities become subject to clause (v) of the proviso at the end of
Section 2.1, then the Joint Collateral Agent, at the request and sole expense of
such Grantor, shall promptly execute and deliver to such Grantor all releases or
other documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral.
SECTION 7.15 REINSTATEMENT. The provisions of this Agreement shall remain
in full force and effect and continue to be effective should any petition be
filed by or against any Grantor for liquidation or reorganization, should such
Grantor become insolvent or make an assignment for the benefit of creditors or
should a receiver or trustee be appointed for all or any part of such Grantor's
assets or should any other financial impairment occur, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment or
performance of the Notes, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned to any
obligee of the Notes, whether as a "voidable preference", "fraudulent
conveyance", 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 be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
25
[signature page to follow]
26
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered as of the date first above written.
GRANTORS: VERASUN ENERGY CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
VERASUN AURORA CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
VERASUN FORT DODGE, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
VERASUN XXXXXXX CITY, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
VERASUN MARKETING, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature Page
VERASUN BIODIESEL, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature Page
JOINT COLLATERAL AGENT: XXXXX FARGO BANK, N.A., as Joint
Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature Page
ANNEX I
TO SECURITY AGREEMENT
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT, dated as of ________________, 200_, by
_________________________________________, a ____________________________ (the
"ADDITIONAL GRANTOR"), in favor of XXXXX FARGO BANK, N.A., as the Joint
Collateral Agent (in such capacity, the "JOINT COLLATERAL AGENT") for the
Trustee and Holders party to the Indenture referred to below and the Parity Lien
Holders. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Indenture.
WITNESSETH:
WHEREAS, certain subsidiary guarantors (the "GUARANTORS"), the Trustee and
the Holders, have entered into a Indenture, dated as of December 21, 2005, (as
amended, supplemented or otherwise modified from time to time, the "INDENTURE");
WHEREAS, the Additional Grantor has executed an Addendum to the Indenture
pursuant to which it has become a Grantor under the Indenture;
WHEREAS, in connection with the Indenture and the Parity Lien Indebtedness,
the Company, the Guarantors and VeraSun Biodiesel, LLC have entered into the
Security Agreement, dated as of December 21, 2005 (as amended, supplemented or
otherwise modified from time to time, the "SECURITY AGREEMENT") in favor of the
Joint Collateral Agent for the ratable benefit of the Trustee, the Holders and
the Parity Lien Holders;
WHEREAS, Section 4.14 of the Indenture requires the Additional Grantor to
become a party to the Security Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Security Agreement.
NOW, THEREFORE, IT IS AGREED:
1. SECURITY AGREEMENT. By executing and delivering this Assumption
Agreement, the Additional Grantor, as provided in Section 7.13 of the Security
Agreement, hereby becomes a party to the Security Agreement as a Grantor
thereunder with the same force and effect as if originally named therein as a
Grantor and, without limiting the generality of the foregoing, hereby expressly
assumes all obligations and liabilities of a Grantor thereunder and hereby
assigns and transfers to the Joint Collateral Agent, and hereby grants to the
Joint Collateral Agent, for the ratable benefit of the Secured Parties, a
security interest in the Collateral now owned or hereafter acquired by the
Additional Grantor. The information set forth in Annex I-A hereto is hereby
added to the information set forth in Schedules _____________* to the Security
Agreement. The Additional Grantor hereby represents and warrants that each of
the representations and warranties contained in Section 3 of the Security
Agreement is true and correct on and as the date hereof (after giving effect to
this Assumption Agreement) as if made on and as of such date.
Annex I-1
2. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT CONTROLLING, LAWS OF THE UNITED
STATES OF AMERICA, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER STATE IN
WHICH ANY OF THE COLLATERAL IS LOCATED NECESSARILY GOVERN THE VALIDITY,
PERFECTION, PRIORITY AND ENFORCEABILITY OF, AND THE EXERCISE OF ANY REMEDIES
WITH RESPECT TO, ANY LIEN OR SECURITY INTEREST INTENDED TO BE CREATED OR GRANTED
HEREBY ON COLLATERAL LOCATED IN SUCH STATE, IN WHICH CASE THE LAWS OF SUCH OTHER
STATE SHALL GOVERN SUCH VALIDITY, PERFECTION, PRIORITY AND ENFORCEABILITY AND
SUCH EXERCISE OF REMEDIES.
----------
* Refer to each Schedule which needs to be supplemented.
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to
be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACKNOWLEDGMENT BY [GRANTOR]:
By execution of this Assumption Agreement in the space provided below,
[INSERT RELEVANT GRANTOR] hereby acknowledges and agrees that the Securities
described on Annex I-A hereto have been issued by the Additional Grantor
identified herein and is held by [RELEVANT GRANTOR] and constitute "Pledged
Securities" comprising part of the Pledged Securities under the Security
Agreement.
Dated:
------------------------------
[RELEVANT GRANTOR]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Annex I-2
ANNEX II TO
SECURITY AGREEMENT
ACKNOWLEDGMENT AND CONSENT TO PLEDGE
[date]
[NAME OF ISSUER]
[ADDRESS OF ISSUER]
Attention:
Re: Pledge of _________ [describe the equity interest] (the "PLEDGED
SECURITIES") in _______________________, a ________ ___________ (the
"ISSUER"), held by [Grantor's Name], a _______ ___________ ("GRANTOR")
Ladies and Gentlemen:
Reference is made herein to that certain Security Agreement dated as of
December 21, 2005 (as amended, supplemented or otherwise modified from time to
time, the "SECURITY AGREEMENT"), by VeraSun Energy Corporation, a South Dakota
corporation (the "COMPANY"), VeraSun Aurora Corporation, a South Dakota
corporation, VeraSun Fort Dodge, LLC, a Delaware limited liability company,
VeraSun Xxxxxxx City, LLC, a Delaware limited liability company, VeraSun
Marketing, LLC, a Delaware limited liability company, VeraSun Biodiesel, LLC, a
Delaware limited liability company (together with any other entity that may
become a party thereto), in favor of Xxxxx Fargo Bank, N.A., as the Joint
Collateral Agent (in such capacity, the "JOINT COLLATERAL AGENT") for the
ratable benefit of Trustee and the Holders party to the Indenture dated as of
December 21, 2005 (as amended, supplemented or otherwise modified from time to
time, the "INDENTURE"), among the Company, the subsidiary guarantors party
thereto and the Trustee, and the Parity Lien Holders (as defined in the Security
Agreement).
Pursuant to the terms of the Security Agreement and/or the terms of the
Indenture, the Trustee and the Holders have required that Grantor grant to the
Joint Collateral Agent, for the benefit of the Trustee and the Holders, a
security interest in the Pledged Securities to secure the Secured Obligations.
By executing this letter (this "LETTER AGREEMENT"), the Issuer and each
shareholder/member, as may be required under the applicable organization
documents hereby (a) acknowledges and confirms that the Pledged Securities
represents all of Grantor's Securities (as defined in the Security Agreement) in
the Issuer, (b) agrees to enter a notation in the stock transfer register or
other appropriate records of the Issuer reflecting the pledge of the Pledged
Securities pursuant to the Security Agreement, (c) consents to the pledge by
Grantor of the Pledged Securities to secure the Secured Obligations, consents to
the transfer of the Pledged Securities pursuant to the exercise of the remedies
provided for in the Security Agreement (or any transfer in lieu thereof), (d)
waives any breach or violation of the terms or provisions of the Issuer's
organizational documents caused by such pledge or transfer, (e) agrees that it
will be bound by the terms of the Security Agreement relating to the Pledged
Securities issued by it and
Annex II-1
will comply with such terms insofar as such terms are applicable to it, (f)
agrees that it will notify the Joint Collateral Agent promptly in writing upon
the acquisition by Grantor of any Securities (as defined in the Uniform
Commercial Code as from time to time in effect in the State of New York or,
where applicable as to specific Collateral, any other relevant state) issued by
the Issuer, which notice shall set forth in reasonable detail all information
with respect to such Securities, (g) agrees to comply with any instruction
received from the Joint Collateral Agent in writing without any other or further
instructions from Grantor, and (h) agrees that any sums paid upon or in respect
of the Pledged Securities, including, without limitation any dividend or
distribution or any amount paid upon the liquidation or dissolution of the
Issuer shall be paid deposited directly into Account No. 00000000 established by
the Company with the Joint Collateral Agent or such other account hereafter
established by the Company or any other Grantor with the Joint Collateral Agent
which the Company or such Grantor and the Joint Collateral Agent jointly
designate as the "Blocked Account."
This Letter Agreement may be executed in counterparts, and all parties need
not execute the same counterpart. This Letter Agreement shall be binding on,
enforceable against and inure to the benefit of the Joint Collateral Agent, the
Trustee, the Holders and the Parity Lien Holders. Facsimiles shall be effective
as originals.
Evidence your agreement to each of the terms and conditions set forth above
by executing this Letter Agreement in the space indicated below.
Very truly yours,
[NAME OF GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Acknowledged and Agreed
As of this ___ day of ____, 20__
[NAME OF THE ISSUER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Annex II-2
ANNEX III TO
SECURITY AGREEMENT
COPYRIGHT SECURITY AGREEMENT
THIS COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of
December [_____], 2005 is entered into by [NAME OF GRANTOR], a [_____] (the
"Grantor") and certain of its affiliates (collectively, the "Grantors") and
Xxxxx Fargo Bank, N.A., as the Joint Collateral Agent (the "Joint Collateral
Agent") for the Trustee, the Holders and the Parity Lien Holders. Capitalized
terms not otherwise defined herein have the meanings set forth in the Security
Agreement dated as of December 21, 2005 among the Grantors and the Joint
Collateral Agent (the "Security Agreement").
WHEREAS, pursuant to the Security Agreement, Grantors are granting a
security interest to the Trustee, the Holders and the Parity Lien Holders in
certain Copyrights whether now owned or existing or hereafter acquired or
arising and wherever located, including the Copyrights listed on Schedule A
hereto ("Secured Copyrights").
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Grantors and the Joint Collateral Agent hereby agree as follows:
1. Grant of Security Interest.
(a) Each Grantor hereby grants to the Joint Collateral Agent, a
security interest in and continuing lien on all of such Grantor's right,
title and interest in, to and under all the Secured Copyrights, subject to
the terms and conditions of the Security Agreement.
(b) The security interest granted hereby is granted in conjunction
with the security interest granted to the Joint Collateral Agent under the
Security Agreement. In the event of any conflict between the terms of this
Agreement and the terms of the Security Agreement, the terms of the
Security Agreement shall control.
2. Modification of Agreement.
This Agreement or any provision hereof may not be changed, waived, or
terminated except in accordance with the amendment provisions of the Security
Agreement pursuant to which the Joint Collateral Agent may modify this
Agreement, after obtaining Grantor's approval of or signature to such
modification, by amending Schedule A hereto to include reference to any right,
title or interest in any existing Copyrights or any Copyrights acquired or
developed by Grantor after the execution hereof or to delete any reference to
any right, title or interest in any Copyrights in which Grantor no longer has or
claims any right, title or interest.
Annex III-1
3. Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK AND, TO THE EXTENT CONTROLLING, LAWS OF THE UNITED STATES OF
AMERICA, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY STATE IN WHICH ANY OF THE
COLLATERAL IS LOCATED NECESSARILY GOVERNS THE VALIDITY, PERFECTION, PRIORITY AND
ENFORCEABILITY, AND THE EXERCISE OF ANY REMEDIES WITH RESPECT TO ANY LIEN OR
SECURITY INTEREST INTENDED TO BE CREATED OR GRANTED HEREBY ON COLLATERAL LOCATED
IN SUCH STATE.
4. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
Joint Collateral Agent and Grantors and their respective successors and assigns.
Grantor shall not, without the prior written consent of the Joint Collateral
Agent given in accordance with the Indenture, assign any right, duty or
obligation hereunder.
5. Counterparts.
This Agreement may be executed in any number of counterparts and by
the parties hereto on separate counterparts, each of which when so executed,
shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. Facsimiles shall be effective as
originals.
Annex III-2
IN WITNESS WHEREOF, the Grantor and the Joint Collateral Agent have
caused this Agreement to be duly executed and delivered as of the date first
above written.
[GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A.,
as the Joint Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Annex III-3
SCHEDULE A
COPYRIGHT SECURITY AGREEMENT
I. REGISTERED COPYRIGHTS
REG. NO. REG. DATE RECORD STATUS/
COPYRIGHT COUNTRY (APP. NO.) (APP. DATE) OWNER/LIENS COMMENT
--------- ------- ---------- ----------- ----------- -------
II. COPYRIGHT APPLICATIONS
Annex III-4
STATE OF ________)
) ss:
COUNTY OF _______)
On [_____], before me, the undersigned, a notary public in and for
said state and county, personally appeared __________________, personally known
to me (or proved to me on the basis of satisfactory evidence), to be the person
who executed the within instrument as the ___________________, on behalf of
[GRANTOR], a [_____] corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND/OR OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
----------------------------------------
Notary Public
My Commission Expires: _____________
Annex III-5
ANNEX IV TO
SECURITY AGREEMENT
PATENT SECURITY AGREEMENT
THIS PATENT SECURITY AGREEMENT (this "Agreement"), dated as of
December [_____], 2005 is entered into by [NAME OF GRANTOR], a [_____] (the
"Grantor") and certain of its affiliates (collectively, the "Grantors") and
XXXXX FARGO BANK, N.A., as the Joint Collateral Agent (the "Joint Collateral
Agent") for the Trustee, the Holders and the Parity Lien Holders. Capitalized
terms not otherwise defined herein have the meanings set forth in the Security
Agreement dated as of December 21, 2005 among the Grantors and the Joint
Collateral Agent (the "Security Agreement").
WHEREAS, pursuant to the Security Agreement, Grantors are granting a
security interest to the Trustee, the Holders and the Parity Lien Holders in
certain Patents whether now owned or existing or hereafter acquired or arising
and wherever located, including the Patents listed on Schedule A hereto
("Secured Patents").
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Grantors and the Joint Collateral Agent hereby agree as follows:
1. Grant of Security Interest.
(a) Each Grantor hereby grants to the Joint Collateral Agent, a
security interest in and continuing lien on all of such Grantor's right,
title and interest in, to and under the Secured Patents, subject to the
terms and conditions of the Security Agreement.
(b) The security interest granted hereby is granted in
conjunction with the security interest granted to the Joint Collateral
Agent under the Security Agreement. In the event of any conflict between
the terms of this Agreement and the terms of the Security Agreement, the
terms of the Security Agreement shall control.
2. Modification of Agreement.
This Agreement or any provision hereof may not be changed, waived, or
terminated except in accordance with the amendment provisions of the Security
Agreement pursuant to which the Joint Collateral Agent may modify this
Agreement, after obtaining Grantor's approval of or signature to such
modification, by amending Schedule A hereto to include reference to any right,
title or interest in any existing Patents or any Patents acquired or developed
by Grantor after the execution hereof or to delete any reference to any right,
title or interest in any Copyrights in which Grantor no longer has or claims any
right, title or interest.
3. Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
Annex IV-1
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND, TO THE EXTENT CONTROLLING,
LAWS OF THE UNITED STATES OF AMERICA, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY
STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED NECESSARILY GOVERNS THE
VALIDITY, PERFECTION, PRIORITY AND ENFORCEABILITY, AND THE EXERCISE OF ANY
REMEDIES WITH RESPECT TO ANY LIEN OR SECURITY INTEREST INTENDED TO BE CREATED OR
GRANTED HEREBY ON COLLATERAL LOCATED IN SUCH STATE.
4. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
Joint Collateral Agent and Grantor and their respective successors and assigns.
Grantor shall not, without the prior written consent of the Joint Collateral
Agent given in accordance with the Indenture, assign any right, duty or
obligation hereunder.
5. Counterparts.
This Agreement may be executed in any number of counterparts and by
the parties hereto on separate counterparts, each of which when so executed,
shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.
Annex IV-2
IN WITNESS WHEREOF, the Grantor and the Joint Collateral Agent have
caused this Agreement to be duly executed and delivered as of the date first
above written.
[NAME OF GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A., as the Joint
Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Annex IV-3
SCHEDULE A
PATENT SECURITY AGREEMENT
I. REGISTERED PATENTS
REG. NO. REG. DATE RECORD STATUS/
PATENT COUNTRY (APP. NO.) (APP. DATE) OWNER/LIENS COMMENT
------ ------- ---------- ----------- ----------- -------
II. PATENT APPLICATIONS
Annex IV-4
STATE OF _______ )
) ss:
COUNTY OF ______ )
On [_____], before me, the undersigned, a notary public in and for
said state and county, personally appeared __________________, personally known
to me (or proved to me on the basis of satisfactory evidence), to be the person
who executed the within instrument as the ___________________, on behalf of
[GRANTOR], a [_____] corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND/OR OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
----------------------------------------
Notary Public
My Commission Expires:
-------------------------------------
Annex IV-5
ANNEX V TO
SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT
THIS TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of
December [_____], 2005 is entered into by [NAME OF GRANTOR], a [_____] (the
"Grantor") and certain of its affiliates (collectively, the "Grantors") and
XXXXX FARGO BANK, N.A., as the Joint Collateral Agent (the "Joint Collateral
Agent") for the Trustee, the Holders and the Parity Lien Holders. Capitalized
terms not otherwise defined herein have the meanings set forth in the Security
Agreement dated as of December 21, 2005 among the Grantor and the Joint
Collateral Agent (the "Security Agreement").
WHEREAS, pursuant to the Security Agreement, Grantors are granting a
security interest to the Trustee, the Holders and the Parity Lien Holders in
certain Trademarks whether now owned or existing or hereafter acquired or
arising and wherever located, including the Trademarks listed on Schedule A
("Secured Trademarks").
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Grantors and the Joint Collateral Agent hereby agree as follows:
1. Grant of Security Interest.
Section 1.1 Each Grantor hereby grants to the Joint Collateral Agent, a
security interest in and continuing lien on all of such Grantor's right, title
and interest in, to and under all the Secured Trademarks, subject to the terms
and conditions of the Security Agreement.
Section 1.2 The security interest granted hereby is granted in conjunction
with the security interest granted to the Joint Collateral Agent under the
Security Agreement. The rights and remedies of the Trustee, the Holders and the
Parity Lien Holders with respect to the security interest granted hereby are in
addition to those set forth in the Security Agreement. In the event of any
conflict between the terms of this Agreement and the terms of the Security
Agreement, the terms of the Security Agreement shall control.
2. Modification of Agreement.
This Agreement or any provision hereof may not be changed, waived, or
terminated except in accordance with the amendment provisions of the Security
Agreement pursuant to which the Joint Collateral Agent may modify this
Agreement, after obtaining Grantor's approval of or signature to such
modification, by amending Schedule A to include reference to any right, title or
interest in any existing Trademarks or any Trademarks acquired or developed by
Grantor after the execution hereof or to delete any reference to any right,
title or interest in any Trademarks in which Grantor no longer has or claims any
right, title or interest.
3. Governing Law.
Annnex V-1
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK AND, TO THE EXTENT CONTROLLING, LAWS OF THE UNITED STATES OF
AMERICA, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY STATE IN WHICH ANY OF THE
COLLATERAL IS LOCATED NECESSARILY GOVERNS THE VALIDITY, PERFECTION, PRIORITY AND
ENFORCEABILITY, AND THE EXERCISE OF ANY REMEDIES WITH RESPECT TO ANY LIEN OR
SECURITY INTEREST INTENDED TO BE CREATED OR GRANTED HEREBY ON COLLATERAL LOCATED
IN SUCH STATE.
4. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
Joint Collateral Agent and Grantor and their respective successors and assigns.
Grantor shall not, without the prior written consent of the Joint Collateral
Agent given in accordance with the Indenture, assign any right, duty or
obligation hereunder.
5. Counterparts.
This Agreement may be executed in any number of counterparts and by
the parties hereto on separate counterparts, each of which when so executed,
shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument. Facsimiles shall be effective as
originals.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
Annex V-2
IN WITNESS WHEREOF, the Grantor and the Joint Collateral Agent have
caused this Agreement to be duly executed and delivered as of the date first
above written.
[NAME OF GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A., as the Joint
Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Annex V-3
SCHEDULE A
TRADEMARK SECURITY AGREEMENT
I. REGISTERED TRADEMARKS
REG. NO. REG. DATE RECORD STATUS/
TRADEMARK COUNTRY (APP. NO.) (APP. DATE) OWNER/LIENS COMMENT
--------- ------- ---------- ----------- ----------- -------
II. TRADEMARK APPLICATIONS
Annex V-4
STATE OF ________)
) ss:
COUNTY OF _______)
On [_____], before me, the undersigned, a notary public in and for
said state and county, personally appeared __________________, personally known
to me (or proved to me on the basis of satisfactory evidence), to be the person
who executed the within instrument as the ___________________, on behalf of
[GRANTOR], a [_____] corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND/OR OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
----------------------------------------
Notary Public
My Commission Expires:
-------------------------------------
Annex V-5
SCHEDULE 1
PERFECTION INFORMATION
VeraSun Energy Corporation Filing of UCC-1 Financing Statement with Secretary
of State of the State of South Dakota
VeraSun Aurora Corporation Filing of UCC-1 Financing Statement with Secretary
of State of the State of South Dakota
VeraSun Fort Dodge, LLC Filing of UCC-1 Financing Statement with Secretary
of State of the State of Delaware
VeraSun Xxxxxxx City, LLC Filing of UCC-1 Financing Statement with Secretary
of State of the State of Delaware
VeraSun Marketing, LLC Filing of UCC-1 Financing Statement with Secretary
of State of the State of Delaware
VeraSun Biodiesel, LLC Filing of UCC-1 Financing Statement with Secretary
of State of the State of Delaware
Schedule 1-1
SCHEDULE 2
ORGANIZATIONAL INFORMATION
Jurisdiction of
Name of Entity Type of Entity Organization Organizational ID Tax ID
-------------- ----------------- --------------- ----------------- ----------
VeraSun Energy corporation South Dakota SD DB050019 00-0000000
Corporation
VeraSun Aurora corporation South Dakota SD DB044362 00-0000000
Corporation
VeraSun Fort Dodge, limited liability Xxxxxxxx XX 0000000 00-0000000
LLC company
VeraSun Xxxxxxx limited liability Xxxxxxxx XX 0000000 00-0000000
City, LLC company
VeraSun Marketing, limited liability Xxxxxxxx XX 0000000 00-0000000
LLC company
VeraSun Biodiesel, limited liability Xxxxxxxx XX 0000000 00-0000000
LLC company
Schedule 2-1
SCHEDULE 3
SECURITIES
VeraSun Marketing, LLC 100% of LLC membership interests
VeraSun Xxxxxxx City, LLC 100% of LLC membership interests
VeraSun Biodiesel, LLC 100% of LLC membership interests
Schedule 3-1
SCHEDULE 4
INTELLECTUAL PROPERTY
I. REGISTERED TRADEMARKS - N/A
II. TRADEMARK APPLICATIONS
TRADEMARK COUNTRY SERIAL NO. APPLN. DATE RECORD OWNER/LIENS STATUS
--------- ------- ---------- ----------- ------------------ ------
VERASUN USA 78/533,552 12/16/04 VeraSun Energy Corporation Pending
VERASUN USA 78/533,540 12/16/04 VeraSun Energy Corporation Pending
Sun Design USA 78/533,554 12/16/04 VeraSun Energy Corporation Pending
Sun Design USA 78/533,546 12/16/04 VeraSun Energy Corporation Pending
AMERICA'S SOURCE FOR USA 78/533,561 12/16/04 VeraSun Energy Corporation Pending
RENEWABLE ENERGY
VE85 USA 78/617,204 04/26/05 VeraSun Aurora Corporation Pending
V E85& Design USA 78/617201 04/26/05 VeraSun Aurora Corporation Pending
RENEWABLE REVOLUTION USA 78/743,992 10/31/05 VeraSun Aurora Corporation Pending
Schedule 4-1
SCHEDULE 5
INSTRUMENTS AND CHATTEL PAPER
None.
Schedule 5-1
SCHEDULE 6
COMMERCIAL TORT CLAIMS
On October 26, 2005, VeraSun Fort Dodge, LLC (VFD) sent a letter to Xxxxx, Inc,
Xxxx Xxxx Company LLC and Industrial Air Technology notifying them of a property
loss that VFD sustained on September 10, 2005 when the induced draft fan on
thermal oxidizer #2 suffered catastrophic damage. As a result of this event, VFD
incurred damage to its structures and equipment, as well as loss of income and
other damages. VFD has not yet completed its investigation of the causes of the
event or determined the exact amount of damages it incurred. No suit has been
filed against these parties or VFD's insurers.
Schedule 6-1
