1
Exhibit 4.1.1
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HOME PRODUCTS INTERNATIONAL, INC.,
THE SUBSIDIARY GUARANTORS (as defined herein),
and
LASALLE NATIONAL BANK,
as Trustee
9 5/8% Senior Subordinated Notes due 2008
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INDENTURE
Dated as of May 14, 1998
====================
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2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions and Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.3. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 1.4. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE II
The Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.1. Form, Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.2. Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.3. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.4. Paying Agent To Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.5. Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.6. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.10. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.11. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.12. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.13. Payment of Interest; Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.14. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.15. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE III
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.1. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.2. SEC Reports and Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.3. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.4. Limitation on Layering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 3.5. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3
SECTION 3.6. Limitation on Restrictions on Distributions from
Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.8. Limitation on Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.9. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 3.10. Limitation on Capital Stock of Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . 47
SECTION 3.11. Future Subsidiary Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.12. Limitation on Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 3.13. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.14. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.15. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 3.16. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3.17. Further Instruments and Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IV
Successor Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 4.1. Merger and Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE V
Redemption of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.1. Optional Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.2. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.3. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.5. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5.6. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5.7. Notes Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 5.8. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VI
Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 6.2. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.3. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.4. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.5. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.6. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.7. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.8. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ii
4
SECTION 6.9. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VII
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.1. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.2. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.3. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.4. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.5. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.6. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.7. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 7.8. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 7.9. Successor Trustee by Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.11. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE VIII
Discharge of Indenture; Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.1. Discharge of Liability on Securities; Defeasance . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.2. Conditions to Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.3. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.4. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.5. Indemnity for U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.6. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE IX
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 9.1. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 9.2. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 9.3. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.4. Revocation and Effect of Consents and Waivers . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.5. Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.6. Trustee To Sign Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
iii
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ARTICLE X
Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.1. Agreement To Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.2. Liquidation, Dissolution, Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 10.3. Default on Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 10.4. Acceleration of Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 10.5. When Distribution Must Be Paid Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.7. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.8. Subordination May Not Be Impaired by Company . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.9. Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 10.10. Distribution or Notice to Representative . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.11. Article X Not To Prevent Events of Default or
Limit Right To Accelerate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.12. Trust Moneys Not Subordinated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.13. Trustee Entitled To Rely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.14. Trustee To Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . 73
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE XI
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.1. Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.2. Limitation on Liability; Termination, Release and Discharge . . . . . . . . . . . . . . . . 75
SECTION 11.3. Right of Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 11.4. No Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE XII
Subordination of Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.1. Agreement To Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.2. Liquidation, Dissolution, Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.3. Default on Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.4. Acceleration of Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 12.5. When Distribution Must Be Paid Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 12.6. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 12.7. Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.8. Subordination May Not Be Impaired by Subsidiary Guarantor . . . . . . . . . . . . . . . . . 79
iv
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SECTION 12.9. Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.10. Distribution or Notice to Representative . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.11. Article XII Not To Prevent Events of Default or
Limit Right To Accelerate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.12. Trust Moneys Not Subordinated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.13. Trustee Entitled To Rely . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.14. Trustee To Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.15. Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . 80
SECTION 12.16. Reliance on Subordination Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE XIII
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 13.1. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 13.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 13.3. Communication by Holders with other Holders . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 13.4. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 82
SECTION 13.5. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 13.6. When Securities Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.8. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.9. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.10. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 13.11. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 13.12. Multiple Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 13.13. Variable Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 13.14. Qualification of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 13.15. Table of Contents; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
v
7
EXHIBIT A Form of the Initial Security
EXHIBIT B Form of the Exchange Security
EXHIBIT C Form of Subsidiary Guarantee
vi
8
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- ---------
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.8; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.3
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2; 3.10; 13.2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5; 13.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.6
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.8
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1
N.A. means Not Applicable.
--------------------
Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
vii
9
INDENTURE dated as of May 14, 1998, among HOME PRODUCTS
INTERNATIONAL, INC., a Delaware corporation (the "Company"), THE SUBSIDIARY
GUARANTORS (as defined) and LASALLE NATIONAL BANK (the "Trustee").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's 9
5/8% Senior Subordinated Notes due 2008 (the "Initial Securities") and, if and
when issued in exchange for Initial Securities as provided in the Exchange and
Registration Rights Agreement (as hereinafter defined), the Company's 9 5/8%
Senior Subordinated Notes due 2008 (the "Exchange Securities" and, together
with the Initial Securities, the "Securities"):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
"Additional Assets" means (i) any property or assets (other
than Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary of the Company; or (iii)
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary of the Company; provided, however, that, in the case
of clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a
Related Business.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Asset Disposition" means any sale, lease, transfer, issuance
or other disposition (or series of related sales, leases, transfers, issuances
or dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) the
sale of Cash Equivalents in the ordinary course of business, (iii) a
disposition of inventory in the ordinary course of business, (iv) a disposition
of obsolete or worn out equipment or equipment that is no longer useful in the
conduct of the business of the Company and its Restricted Subsidiaries and that
is disposed of in each case in the ordinary course of business, (v) the sale,
discount or factoring (with or without recourse on commercially reasonable
terms) of accounts receivable arising in the ordinary course of business, (vi)
transactions permitted under Section 4.1 of this Indenture and (vii) for
purposes
10
2
of Section 3.7 of this Indenture only, a disposition that constitutes a
Restricted Payment permitted under Section 3.5 of this Indenture.
"Attributable Indebtedness" in respect of a sale/leaseback
transaction means, as of the time of determination, the present value
(discounted at the interest rate assumed in making calculations in accordance
with GAAP) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such sale/leaseback transaction
(including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Indebtedness or Preferred Stock multiplied by the amount of such payment by
(ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether
outstanding on the Issue Date or thereafter Incurred, payable by the Company or
any Subsidiary under or in respect of the Senior Credit Agreement and any
related notes, collateral documents, letters of credit and guarantees or any
Interest Rate Agreement entered into with a Lender or an Affiliate of a Lender
(as defined in the Senior Credit Agreement) in connection with the Senior
Credit Agreement, including principal, premium, if any, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company at the rate specified therein whether or
not a claim for post filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all other amounts
payable thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof.
"Borrowing Base" means, as of any date, an amount equal to the
sum of (i) 40% of the aggregate book value of inventory and (ii) 75% of the
aggregate book value of all accounts receivable of the Company and its
Restricted Subsidiaries on a consolidated basis, as determined in accordance
with GAAP consistently applied. To the extent that information is not available
as to the amount of inventory or accounts receivable as of a specific date, the
Company shall use the most recent available information for purposes of
calculating the Borrowing Base.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banking institutions are authorized or required
by law to close in New York City.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
11
3
"Capitalized Lease Obligation" means an obligation that is
required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized amount of
such obligation determined in accordance with GAAP, and the Stated Maturity
thereof shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date such lease may be terminated without
penalty.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances
having maturities of not more than one year from the date of acquisition
thereof issued by any commercial bank the long-term debt of which is rated at
the time of acquisition thereof at least "A" or the equivalent thereof by
Standard & Poor's Rating Group, or "A" or the equivalent thereof by Xxxxx'x
Investors Service, Inc., and having capital and surplus in excess of $250
million (or foreign currency equivalent thereof); (iv) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clauses (i), (ii) and (iii) entered into with any bank meeting the
qualifications specified in clause (iii) above; (v) commercial paper rated at
the time of acquisition thereof at least "A-2" or the equivalent thereof by
Standard & Poor's Rating Group or "P-2" or the equivalent thereof by Xxxxx'x
Investors Service, Inc., or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of investments, and in either case maturing within 270 days
after the date of acquisition thereof; and (vi) interests in any investment
company which invests solely in instruments of the type specified in clauses
(i) through (v) above.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Home Products International, Inc. or a
successor.
"Consolidated Coverage Ratio" as of any date of determination
means, with respect to any Person, the ratio of (i) the aggregate amount of
Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters for which financial statements are available ending
prior to the date of such determination to (ii) Consolidated Interest Expense
for such four fiscal quarters; provided, however, that (A) If the Company or
any Restricted Subsidiary (1) has Incurred any Indebtedness since the beginning
of such period that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such Indebtedness as if such Indebtedness had been Incurred
on the first day of such period (except that in making such computation, the
amount of Indebtedness under any revolving credit facility outstanding on the
date of such calculation
12
4
shall be computed based on (a) the average daily balance of such Indebtedness
during such four fiscal quarters or such shorter period for which such facility
was outstanding or (b) if such facility was created after the end of such four
fiscal quarters, the average daily balance of such Indebtedness during the
period from the date of creation of such facility to the date of such
calculation) and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, or (2) has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of the period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case
other than Indebtedness incurred under any revolving credit facility unless
such Indebtedness has been permanently repaid), Consolidated EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such discharge of such Indebtedness, including
with the proceeds of such new Indebtedness, as if such discharge had occurred
on the first day of such period, (B) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Asset Disposition, the Consolidated EBITDA for such period
shall be reduced by an amount equal to the Consolidated EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period or increased by an amount equal to the Consolidated
EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (C) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in
any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary)
or an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business,
Consolidated EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the Incurrence of
any Indebtedness) as if such Investment or acquisition occurred on the first
day of such period and (D) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or into
the Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition or any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (B) or (C)
above if made by the Company or a Restricted Subsidiary during such period,
Consolidated EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition
or Investment or acquisition occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and
the amount of Consolidated Interest
13
5
Expense associated with any Indebtedness Incurred in connection therewith, the
pro forma calculations shall be determined in good faith by a responsible
financial or accounting officer of the Company. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the Consolidated
Interest Expense on such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (any Interest Rate Agreement applicable to such Indebtedness for a
period (not in excess of 12 months) corresponding to the remaining term of such
Interest Rate Agreement as of the date of determination).
"Consolidated EBITDA" for any period means the Consolidated
Net Income for such period, plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) income tax expense, (ii)
Consolidated Interest Expense, (iii) depreciation expense, (iv) amortization of
intangibles and (v) other non-cash charges reducing Consolidated Net Income
(excluding any such non-cash charge to the extent it represents an accrual of
or reserve for cash charges in any future period or amortization of a prepaid
cash expense that was paid in a prior period not included in the calculation).
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the interest, depreciation and amortization of, a Restricted
Subsidiary of a Person shall be added to Consolidated Net Income to compute
Consolidated EBITDA of such Person only to the extent (and in the same
proportion) that the net income of such Subsidiary was included in calculating
the Consolidated Net Income of such Person.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its Consolidated Subsidiaries, plus,
to the extent not included in such interest expense, (i) interest expense
attributable to Capitalized Lease Obligations and the interest portion of rent
expense associated with Attributable Indebtedness in respect of the relevant
lease giving rise thereto, determined as if such lease were a capitalized lease
in accordance with GAAP, (ii) amortization of debt discount and debt issuance
cost (other than costs incurred in connection with the Refinancing), (iii)
capitalized interest and accrued interest, (iv) non-cash interest expense, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) interest actually paid by the
Company or any such Subsidiary under any Guarantee of Indebtedness or other
obligation of any other Person, (vii) net costs associated with Hedging
Obligations (including amortization of fees), (viii) dividends in respect of
all Disqualified Stock of the Company and all Preferred Stock of Subsidiaries,
in each case, held by Persons other than the Company or a Wholly-Owned
Subsidiary and (ix) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust; provided, however,
that there shall be excluded therefrom any such interest expense of any
Unrestricted Subsidiary to the extent the related Indebtedness is not
Guaranteed or paid by the Company or any Restricted Subsidiary. For purposes of
the foregoing, total interest expense shall be determined after giving effect
to any net payments made or received by the Company and its Subsidiaries with
respect to Interest Rate Agreements. Notwithstanding the foregoing, the
Consolidated Interest Expense with respect to any Restricted Subsidiary of the
Company that was not a Wholly-Owned Subsidiary shall be
14
6
included only to the extent (and in the same proportion) that the net income of
such Restricted Subsidiary was included in calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its Consolidated Subsidiaries; provided,
however, that there shall not be included in such Consolidated Net Income: (i)
any net income (loss) of any Person if such Person is not a Restricted
Subsidiary, except that (A) subject to the limitations contained in (iv) below,
the Company's equity in the net income of any such Person for such period shall
be included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (B) the Company's equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income to the
extent such loss has been funded with cash from the Company or a Restricted
Subsidiary; (ii) any net income (loss) of any Person acquired by the Company or
a Subsidiary in a pooling of interests transaction for any period prior to the
date of such acquisition; (iii) any net income (loss) of any Restricted
Subsidiary if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that (A)
subject to the limitations contained in (iv) below the Company's equity in the
net income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution that could have been
made to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period will be included in determining such Consolidated
Net Income; (iv) any gain (loss) realized upon the sale or other disposition of
any property, plant, equipment or other asset of the Company or its
consolidated Subsidiaries which is not sold or otherwise disposed of in the
ordinary course of business and any gain (loss) realized upon the sale or other
disposition of any Capital Stock of any Person; (v) any extraordinary gain or
loss and (vi) the cumulative effect of a change in accounting principles.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in
Section 2.13.
"DTC" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
15
7
"Designated Senior Indebtedness" means (i) the Bank
Indebtedness in the case of the Company and (ii) any other Senior Indebtedness
which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $25 million and is specifically
designated in the instrument evidencing or governing such Senior Indebtedness
as "Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock of such Person which by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event (i) matures or is mandatorily redeemable pursuant to
a sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or Disqualified Stock (excluding capital stock which is
convertible or exchangeable solely at the option of the Company or a Restricted
Subsidiary) or (iii) is redeemable at the option of the holder thereof, in
whole or in part, in each case on or prior to the Stated Maturity of the
Securities, provided, that only the portion of Capital Stock which so matures
or is mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such Stated Maturity
shall be deemed to be Disqualified Stock.
"Equity Offering" means an offering for cash by the Company of
its common stock, or options, warrants or rights with respect to its common
stock.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange and Registration Rights Agreement" means the
Exchange and Registration Rights Agreement, dated May 14, 1998, among the
Company, the Subsidiary Guarantors, Chase Securities Inc. and NationsBanc
Xxxxxxxxxx Securities LLC.
"Exchange Securities" means, if and when issued in exchange
for the Initial Securities as provided in the Exchange and Registration Rights
Agreement, the Company's 9 5/8% Senior Subordinated Notes due 2008.
"Fiscal Year" means a 52 or 53 week period ending on the last
Saturday in December.
"Foreign Subsidiary" means any Subsidiary that is not
organized under the laws of the United States of America or any state thereof
or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of this Indenture,
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP.
16
8
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) 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, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, however, 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.
"Guarantor Senior Indebtedness" means, with respect to a
Subsidiary Guarantor, the following obligations, whether outstanding on the
date of this Indenture or thereafter issued, without duplication: (i) any
Subsidiary Guarantee of the Bank Indebtedness by such Subsidiary Guarantor and
all other Subsidiary Guarantees by such Subsidiary Guarantor of Senior
Indebtedness of the Company or Guarantor Senior Indebtedness for any other
Subsidiary Guarantor; and (ii) all obligations consisting of the principal of
and premium, if any, and accrued and unpaid interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Subsidiary Guarantor regardless of whether post
filing interest is allowed in such proceeding) on, and fees and other amounts
owing in respect of, all other Indebtedness of the Subsidiary Guarantor,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is expressly provided that the obligations in
respect of such Indebtedness are not senior in right of payment to the
obligations of such Subsidiary Guarantor under the Subsidiary Guarantee;
provided, however, that Guarantor Senior Indebtedness shall not include (A) any
obligations of such Subsidiary Guarantor to another Subsidiary Guarantor or any
other Subsidiary of the Subsidiary Guarantor, (B) any liability for Federal,
state, local, foreign or other taxes owed or owing by such Subsidiary
Guarantor, (C) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (D) any Indebtedness of such
Subsidiary Guarantor that is expressly subordinate in right of payment to any
of the Indebtedness of such Subsidiary Guarantor, including any Guarantor
Senior Subordinated Indebtedness and Guarantor Subordinated Obligations of such
Subsidiary Guarantor or (E) any obligation with respect to Capital Stock.
"Guarantor Senior Subordinated Indebtedness" means with
respect to a Subsidiary Guarantor, the obligations of such Subsidiary Guarantor
under the Subsidiary Guarantee and any other Indebtedness of such Subsidiary
Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that
specifically provides that such Indebtedness is to rank pari passu in right of
payment with the obligations of such Subsidiary Guarantor under the Subsidiary
Guarantee and is not expressly subordinated by its terms in right of payment to
any Indebtedness of such Subsidiary Guarantor which is not Guarantor Senior
Indebtedness of such Subsidiary Guarantor.
17
9
"Guarantor Subordinated Obligation" means, with respect to a
Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether
outstanding on the Issue Date or thereafter Incurred) which is expressly
subordinate in right of payment to the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee pursuant to a written agreement.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication), (i) the principal of and premium, if
any, in respect of indebtedness of such Person for borrowed money; (ii) the
principal of and premium, if any, in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto); (iv)
all obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except trade payables), 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; (v) all
Capitalized Lease Obligations and all Attributable Indebtedness of such Person;
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or, with
respect to any Subsidiary, any Preferred Stock (but excluding, in each case,
any accrued dividends); (vii) 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, however, 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 of such other Persons;
(viii) all Indebtedness of other Persons to the extent Guaranteed by such
Person; and (ix) to the extent not otherwise included in this definition, net
obligations of such Person under Currency Agreements and Interest Rate
Agreements (the amount of any such obligations to be equal at any time to the
net termination value of such agreement or arrangement giving rise to such
obligation that would be payable by such Person at such time). The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Initial Securities" means the Company's 9 5/8% Senior
Subordinated Notes due 2008 issued under this Indenture.
18
10
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business) or other extension of credit (including by way of Guarantee or
similar arrangement, but excluding any debt or extension of credit represented
by a bank deposit other than a time deposit) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by, such Person. For purposes of Section 3.5, (i) "Investment" shall include
the portion (proportionate to the Company's equity interest in a Restricted
Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market
value of the net assets of such Restricted Subsidiary of the Company at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(A) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (B) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors of
the Company.
"Issue Date" means the date on which the Initial Securities
are originally issued.
"Legal Holiday" has the meaning ascribed to it in Section
13.8.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement or lease in the nature thereof).
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received
in the form of assumption by the acquiring person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other noncash form) therefrom, in each
case net of (i) all legal, accounting, investment banking, title and recording
tax expenses, commissions and other fees and expenses Incurred, and all
Federal, state, provincial, foreign and local taxes required to be paid or
accrued as a liability under GAAP, as a consequence of such Asset Disposition,
(ii) all payments made on any Indebtedness which is secured by any assets
subject to such Asset Disposition, in accordance with the terms of any Lien
upon, or other
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security agreement of any kind with respect to, such assets, or which must by
its terms, or in order to obtain a necessary consent to such Asset Disposition,
or by applicable law be repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (iv) the deduction of appropriate amounts to be provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and retained
by the Company or any Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
Incurred in connection with such issuance or sale and net of taxes paid or
payable as a result of such issuance or sale.
"Non-U.S. Person" means a person who is not a U.S person, as
defined in Regulation S.
"Note Register" means the register of Securities, maintained
by the Trustee, pursuant to Section 2.3.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holders" means (i) directors and officers of the
Company on the Issue Date and (ii) Chase Venture Capital Associates, L.P. and
any Affiliate thereof.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which
shall, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is a
Related Business; (ii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or conveys
all or substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) cash and Cash Equivalents; (iv) receivables owing to the Company or any
Restricted Subsidiary created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary trade
terms as the Company or any such Restricted Subsidiary deems reasonable under
the circumstances; (v) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for
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accounting purposes and that are made in the ordinary course of business; (vi)
loans or advances to employees made in the ordinary course of business
consistent with past practices of the Company or such Restricted Subsidiary;
(vii) any Investment in an entity conducting a Related Business that is not a
Restricted Subsidiary; provided that the aggregate fair market value of all
Investments made pursuant to this clause (vii) (valued on the date each such
Investment was made and without giving effect to subsequent changes in value)
may not at any one time exceed $5 million; (viii) Investments in Selfix Europe,
L.L.C. or its Successors; provided that the aggregate fair market value of all
Investments made pursuant to this clause (viii) (valued on the date each such
Investment was made and without giving effect to subsequent changes in value)
may not at any one time exceed $3 million; (ix) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments; (x) any Investment in securities or other assets
received in connection with Asset Dispositions made in accordance with the
provisions of Section 3.7; and (xi) Currency Agreements, Interest Rate
Agreements and related Hedging Obligations entered into in compliance with
Section 3.3 and hedging arrangements with respect to the purchase of raw
materials entered into in the ordinary course of business on customary terms
for bona fide hedging purposes.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Private Exchange Securities" shall have the meaning set forth
in the Exchange and Registration Rights Agreement.
A "Public Market" exists at any time with respect to the
common stock of the Company if (i) the common stock of the Company is then
registered with the Commission pursuant to Section 12(b) or 12(g) of the
Exchange Act and traded either on a national securities exchange or in the
National Association of Securities Dealers Automated Quotation System and (ii)
at least 15% of the total issued and outstanding common stock of the Company
has been distributed prior to such time by means of an effective registration
statement under the Securities Act.
"Purchase Money Indebtedness" of any Person means any
Indebtedness of such person to any seller or other person incurred to finance
the acquisition or construction of any asset (or, in each case, any interest
therein) acquired or constructed after the Issue Date which is related to a
Related Business of the Company and which is incurred concurrently with, or
within 180 days of, such acquisition or the completion of such construction
and, if secured, is secured only by the assets so financed.
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"QIB" means any "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act).
"Refinancing Indebtedness" means Indebtedness that is Incurred
to refund, refinance, replace, renew, repay, redeem, retire or extend
(including pursuant to any defeasance or discharge mechanism) (collectively,
"refinance", "refinances," and "refinanced" shall have a correlative meaning)
any Indebtedness existing on the date of this Indenture or Incurred in
compliance with this Indenture (including Indebtedness of the Company that
refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any
Restricted Subsidiary that refinances Indebtedness of another Restricted
Subsidiary) including Indebtedness that refinances Refinancing Indebtedness,
provided, however, that (i) the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being refinanced, (ii)
the Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced, and (iii) such Refinancing Indebtedness is
Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the sum of
the aggregate principal amount (or if issued with original issue discount, the
aggregate accreted value) then outstanding (plus fees and expenses, including
any premium and defeasance costs) of the Indebtedness being refinanced.
"Registered Exchange Offer" shall have the meaning set forth
in the Exchange and Registration Rights Agreement.
"Related Business" means any business which is the same as or
related, ancillary or complementary to any of the businesses of the Company and
its Restricted Subsidiaries on the date of this Indenture.
"Representative" means any trustee, agent or representative
(if any) of an issue of Senior Indebtedness.
"Restricted Period" means the 40 consecutive days beginning on
and including the later of (A) the day on which the Initial Securities are
offered to persons other than distributors (as defined in Regulation S under
the Securities Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement
Legend set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set
forth in clause (B) of Section 2.1(c), as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
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"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by DTC), or any successor Person thereto and
shall initially be the Trustee.
"Senior Credit Agreement" means (i) the Credit Agreement dated
as of May 14, 1998 among the Company, The Chase Manhattan Bank, as
Administrative Agent, and the lenders parties thereto from time to time, as the
same may be amended, supplemented or otherwise modified from time to time and
any guarantees issued thereunder and (ii) any renewal, extension, refunding,
restructuring, replacement or refinancing thereof (whether with the original
Administrative Agent and lenders or another administrative agent or agents or
other lenders and whether provided under the original Senior Credit Agreement
or any other credit or other agreement or indenture).
"Senior Indebtedness" means, whether outstanding on the Issue
Date or thereafter issued, created, incurred or assumed, the Bank Indebtedness
and all other Indebtedness of the Company, including accrued and unpaid
interest thereon (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company at the
rate specified in the documentation with respect thereto whether or not a claim
for post filing interest is allowed in such proceeding) and fees relating
thereto, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that the obligations in
respect of such Indebtedness are not superior in right of, or are subordinate
to, payment of the Securities; provided, however, that Senior Indebtedness will
not include (i) any obligation of the Company to any Subsidiary, (ii) any
liability for Federal, state, foreign, local or other taxes owed or owing by
the Company, (iii) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (iv) any Indebtedness, Guarantee or
obligation of the Company that is expressly subordinate or junior in right of
payment to any other Indebtedness, Guarantee or obligation of the Company,
including any Senior Subordinated Indebtedness and any Subordinated Obligations
or (v) any obligations in respect of Capital Stock.
"Senior Subordinated Indebtedness" means the Securities and
any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Securities in right of payment and
is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of the Company which is not Senior Indebtedness.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and
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payable, including pursuant to any mandatory redemption provision (but
excluding any provision providing for the repurchase of such security at the
option of the holder thereof upon the happening of any contingency beyond the
control of the issuer unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsequent Series Securities" has the meaning ascribed to it
in Section 2.2.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary shall refer to a Subsidiary of the Company.
"Subsidiary Guarantee" means, individually, any Guarantee of
payment of the Securities by a Subsidiary Guarantor pursuant to the terms of
this Indenture, and, collectively, all such Guarantees. Each such Subsidiary
Guarantee by any Restricted Subsidiary created or acquired by the Company after
the Issue Date (other than a Foreign Subsidiary) which Guarantees the Bank
Indebtedness or Incurs Indebtedness under paragraph (a) of Section 3.3 will be
in the form set forth in Exhibit C of this Indenture.
"Subsidiary Guarantor" means each Subsidiary of the Company in
existence on the Issue Date (Selfix, Inc., Seymour Housewares Corporation,
Shutters, Inc. and Tamor Corporation) and any Restricted Subsidiary created or
acquired by the Company after the Issue Date (other than a Foreign Subsidiary)
which Guarantees the Bank Indebtedness or Incurs Indebtedness under paragraph
(a) of Section 3.3.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act
of 1939 (15 U.S.C. Sections 77aaa-77bbbb), as in effect on the date of this
Indenture.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person's knowledge of and familiarity with
the particular subject and who shall have direct responsibility for the
administration of this Indenture.
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"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness
of, or owns or holds any Lien on any property of, the Company or any Restricted
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so
designated has total consolidated assets of $10,000 or less or (B) if such
Subsidiary has consolidated assets greater than $10,000, then such designation
would be permitted under Section 3.5. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (i) the Company could Incur
$1.00 of additional Indebtedness pursuant to Section 3.3(a) and (ii) no Default
shall have occurred and be continuing. 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. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares) is owned by the Company or one or more Wholly-Owned Subsidiaries.
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SECTION 1.2. Other Definitions.
Defined in
Term Section
---- -----------
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8
"Agent Member" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(d)
"Authenticating Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Blockage Notice" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
"Change of Control" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Change of Control Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Change of Control Payment" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Change of Control Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . 3.9
"Company Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
"covenant defeasance option" . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(b)
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Definitive Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(e)
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
"Exchange Global Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Global Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Institutional Accredited Investor Global Note" . . . . . . . . . . . . . . . . . 2.1
"Institutional Accredited Investor Note" . . . . . . . . . . . . . . . . . . . . . 2.1
"legal defeasance option" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(b)
"Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1
"Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
"Offer Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
"pay the Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Payment Blockage Period" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3
"Private Placement Legend" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(c)
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
"Regulation S" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
"Regulation S Certificate" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Regulation S Global Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Regulation S Legend" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Regulation S Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Release Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Resale Restriction Termination Date" . . . . . . . . . . . . . . . . . . . . . . 2.6
"Restricted Payment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5
"Rule 144A" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(b)
"Rule 144A Global Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Rule 144A Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1
"Special Interest Payment Date" . . . . . . . . . . . . . . . . . . . . . . . . . 2.13
"Special Record Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.13
"Subsequent Series Securities" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2
"Successor Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1
SECTION 1.3. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which
are incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
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"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined in the TIA by reference to another statute or defined by SEC
rule have the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal amount
thereof that would be shown on a balance sheet of the issuer dated
such date prepared in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be
(i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater.
ARTICLE II
The Securities
SECTION 2.1. Form, Dating and Terms. (a) The Initial
Securities are being offered and sold by the Company pursuant to a Purchase
Agreement, dated May 7, 1998,
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among the Company, the Subsidiary Guarantors, Chase Securities Inc. and
NationsBanc Xxxxxxxxxx Securities LLC.
Initial Securities offered and sold to the qualified
institutional buyers (as defined in Rule 144A under the Securities Act ("Rule
144A")) in the United States of America (the "Rule 144A Note") will be issued
on the Issue Date in the form of a permanent global Security substantially in
the form of Exhibit A, which is hereby incorporated by reference and made a
part of this Indenture, together with appropriate legends as set forth in
Section 2.1(c) (the "Rule 144A Global Note"), deposited with the Trustee, as
custodian for DTC, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Rule 144A Global Note may be represented
by more than one certificate, if so required by DTC's rules regarding the
maximum principal amount to be represented by a single certificate. The
aggregate principal amount of the Rule 144A Global Note may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as
custodian for DTC or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States
of America ("Regulation S Note") in reliance on Regulation S will be issued on
the Issue Date in the form of a permanent global Security, without interest
coupons, substantially in the form set forth in Exhibit A, which is hereby
incorporated by reference and made a part of this Indenture, together with
appropriate legends as set forth in Section 2.1(c) (the "Regulation S Global
Note") deposited with the Trustee, as custodian for DTC, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
Regulation S Global Note may be represented by more than one certificate, if so
required by DTC's rules regarding the maximum principal amount to be
represented by a single certificate. The aggregate principal amount of the
Regulation S Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for DTC or its
nominee, as hereinafter provided.
Initial Securities resold to institutional "accredited
investors" (as defined in Rules 501(a)(1), (2), (3) and (7) under the
Securities Act) in the United States of America (the "Institutional Accredited
Investor Note") will be issued in the form of a permanent global Security
substantially in the form of Exhibit A, which is hereby incorporated by
reference and made a part of this Indenture, together with appropriate legends
as set forth in Section 2.1(c) (the "Institutional Accredited Investor Global
Note") deposited with the Trustee, as custodian for DTC, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
Institutional Accredited Investor Global Note may be represented by more than
one certificate, if so required by DTC's rules regarding the maximum principal
amount to be represented by a single certificate. The aggregate principal
amount of the Institutional Accredited Investor Global Note may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for DTC or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A
Note, the Regulation S Note and the Institutional Accredited Investor Note will
be issued in the form of a permanent global Security substantially in the form
of Exhibit B, which is hereby
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incorporated by reference and made a part of this Indenture, deposited with the
Trustee as hereinafter provided, with the appropriate legend set forth in
Section 2.1(c) (the "Exchange Global Note"). The Exchange Global Note may be
represented by more than one certificate, if so required by DTC's rules
regarding the maximum principal amount to be represented by a single
certificate.
The Rule 144A Global Note, the Regulation S Global Note, the
Exchange Global Note and the Institutional Accredited Investor Global Note are
sometimes collectively herein referred to as the "Global Securities."
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to Section 2.3;
provided, however, that, at the option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
thereto as such addresses shall appear on the Note Register or (ii) wire
transfer to an account located in the United States maintained by the payee.
The Private Exchange Securities shall be in the form of
Exhibit A. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage, in addition to those set forth on
Exhibits A and B and in Section 2.1(c). The Company and the Trustee shall
approve the forms of the Securities and any notation, endorsement or legend on
them. Each Security shall be dated the date of its authentication. The terms
of the Securities set forth in Exhibit A and Exhibit B are part of the terms of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to be bound by
such terms.
(b) Denominations. The Securities shall be issuable only in
fully registered form, without coupons, and only in denominations of $1,000 and
any integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial
Security is sold under an effective registration statement or (ii) an Initial
Security is exchanged for an Exchange Security in connection with an effective
registration statement, in each case pursuant to the Exchange and Registration
Rights Agreement, (A) such Rule 144A Global Note and the Institutional
Accredited Investor Global Note shall bear the following legend (the "Private
Placement Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH
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TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS
OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION
INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SECURITIES, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) AND (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE."; and
(B) the Regulation S Global Note shall bear the following
legend (the "Regulation S Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED
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STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT
PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A)
TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S,
(E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION
INVOLVING A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE
TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS
BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON WHICH THE
SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED
IN REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE ORIGINAL
OFFERING. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED
STATES" AND "U.S. PERSON" HAVE THE
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MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
The Global Securities, whether or not an Initial Security,
shall bear the following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF."
(d) Book-Entry Provisions. (i) This Section 2.1(d) shall
apply only to Global Securities deposited with the Trustee, as custodian for
DTC.
(ii) Each Global Security initially shall (x) be registered
in the name of DTC for such Global Security or the nominee of DTC, (y) be
delivered to the Trustee as custodian for DTC and (z) bear legends as set forth
in Section 2.1(c).
(iii) Members of, or participants in, DTC ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by DTC or by the Trustee as the custodian of DTC or under
such Global Security, and DTC may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by DTC or impair, as between DTC and its Agent Members,
the operation of customary practices of DTC governing the exercise of the
rights of a holder of a beneficial interest in any Global Security.
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(iv) In connection with any transfer of a portion of the
beneficial interest in a Global Security pursuant to subsection (e) of this
Section to beneficial owners who are required to hold Definitive Securities,
the Security Trustee shall reflect on its books and records the date and a
decrease in the principal amount of such Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Definitive Securities of like tenor and amount.
(v) In connection with the transfer of an entire Global
Security to beneficial owners pursuant to subsection (e) of this Section, such
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by DTC in exchange for its
beneficial interest in such Global Security, an equal aggregate principal
amount of Definitive Securities of authorized denominations.
(e) Definitive Securities. Except as provided below, owners
of beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("Definitive Securities"). If required to do so
pursuant to any applicable law or regulation, beneficial owners may obtain
Definitive Securities in exchange for their beneficial interests in a Global
Security upon written request in accordance with DTC's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) DTC notifies the Company that it is unwilling or unable to
continue as depositary for such Global Security or DTC ceases to be a clearing
agency registered under the Exchange Act, at a time when DTC is required to be
so registered in order to act as depositary, and in each case a successor
depositary is not appointed by the Company within 90 days of such notice or,
(ii) the Company executes and delivers to the Trustee and Registrar an
Officers' Certificate stating that such Global Security shall be so
exchangeable or (iii) an Event of Default has occurred and is continuing and
the Registrar has received a request from DTC.
(f) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d)(iv) or (v) shall,
except as otherwise provided by Section 2.6(c), bear the applicable legend
regarding transfer restrictions applicable to the Definitive Security set forth
in Section 2.1(c).
(g) The registered holder of a Global Security may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.
SECTION 2.2. Execution and Authentication. One Officer shall
sign the Securities for the Company by manual or facsimile signature. If an
Officer whose signature is on a Security no longer holds that office at the
time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
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A Security shall not be valid until an authorized signatory of
the Trustee manually authenticates the Security. The signature of the Trustee
on a Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Trustee shall authenticate and make available
for delivery: (1) Initial Securities for original issue on the Issue Date in an
aggregate principal amount of $125.0 million and (2) Exchange Securities for
issue only in a Registered Exchange Offer pursuant to the Exchange and
Registration Rights Agreement, and only in exchange for Initial Securities of
an equal principal amount, and (3) additional series of notes which may be
offered subsequent to the Issue Date (the "Subsequent Series Securities") in an
aggregate principal amount not to exceed $125,000,000, in each case upon a
written order of the Company signed by two Officers or by an Officer and either
an Assistant Treasurer or an Assistant Secretary of the Company (the "Company
Order"). Such Company Order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated and whether the Securities are to be Initial Securities or
Exchange Securities. The aggregate principal amount of notes which may be
authenticated and delivered under this Indenture is limited to $250.0 million
outstanding except as provided in Section 2.9. No Subsequent Series
Securities may be authenticated and delivered in an aggregate principal amount
of less than $25,000,000. All Securities issued on the Issue Date and all
Subsequent Series Securities shall be identical in all respects other than
issue dates, the date from which interest accrues and any changes relating
thereto. Notwithstanding anything to the contrary contained in this Indenture,
all notes issued under this Indenture shall vote and consent together on all
matters as one class and no series of notes will have the right to vote or
consent as a separate class on any matter.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company or any Subsidiary Guarantor, pursuant to
Article IV, shall be consolidated or merged with or into any other Person or
shall convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
any Subsidiary Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article IV, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like
principal amount; and the Trustee, upon Company Order of the successor Person,
shall authenticate and deliver
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Securities as specified in such order for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of
a successor Person pursuant to this Section 2.2 in exchange or substitution for
or upon registration of transfer of any Securities, such successor Person, at
the option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time outstanding for Securities authenticated
and delivered in such new name.
SECTION 2.3. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company
shall cause each of the Registrar and the Paying Agent to maintain an office or
agency in the Borough of Manhattan, The City of New York. The Registrar shall
keep a register of the Securities and of their transfer and exchange (the "Note
Register"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement
the provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of each such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.7. The Company or any of its domestically incorporated Wholly-Owned
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer
agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent for the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at
least 12:00 p.m. (New York City time) on the date on which any principal of or
interest on any Security is due and payable, the Company shall deposit with the
Paying Agent a sum sufficient to pay such principal or interest when due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that such Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by such Paying Agent for the
payment of principal of or interest on the Securities and shall notify the
Trustee in writing of any default by the Company or any Subsidiary Guarantor in
making any such payment. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent (other
than the Trustee) to pay all money held by it to the Trustee and to account for
any funds disbursed by such Paying Agent. Upon complying with this Section,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money delivered to the Trustee. Upon any bankruptcy,
reorganization or similar proceeding with respect to the Company, the Trustee
shall serve as Paying Agent for the Securities.
SECTION 2.5. Securityholder Lists. The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and
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addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee, in writing at least seven Business Days before
each interest payment date and at such other times as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Note or an Institutional Accredited Investor
Note prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Securities (or any predecessor thereto) (the
"Resale Restriction Termination Date"):
(i) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a QIB
shall be made upon the representation of the transferee that it is
purchasing the Security for its own account or an account with respect
to which it exercises sole investment discretion and that it and any
such account is a "qualified institutional buyer" within the meaning
of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to an
institutional accredited investor shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set
forth in Section 2.7 from the proposed transferee and, if requested by
the Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them;
and
(iii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a
Non-U.S. Person shall be made upon receipt by the Trustee or its agent
of a certificate substantially in the form set forth in Section 2.8
from the proposed transferee and, if requested by the Company or the
Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(i) a transfer of a Regulation S Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee, in the form of assignment on the reverse of the
certificate, that it is purchasing the Security for its own account or
an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of
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Rule 144A, and is aware that the sale to it is being made in reliance
on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial
interest therein to an institutional accredited investor shall be made
upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.7 from the proposed
transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and
(iii) a transfer of a Regulation S Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon receipt by
the Trustee or its agent of a certificate substantially in the form
set forth in Section 2.8 from the proposed transferee and, if
requested by the Company or the Trustee, receipt by the Trustee or its
agent of an opinion of counsel, certification and/or other information
satisfactory to each of them.
After the expiration of the Restricted Period, interests in
the Regulation S Note may be transferred without requiring certification set
forth in Section 2.8 or any additional certification.
(c) Restricted Securities Legend. Upon the transfer,
exchange or replacement of Securities not bearing a Restricted Securities
Legend, the Registrar shall deliver Securities that do not bear a Restricted
Securities Legend. Upon the transfer, exchange or replacement of Securities
bearing a Restricted Securities Legend, the Registrar shall deliver only
Securities that bear a Restricted Securities Legend unless there is delivered
to the Registrar an Opinion of Counsel to the effect that neither such legend
nor the related restrictions on transfer are required in order to maintain
compliance with the provisions of the Securities Act.
(d) The Company shall deliver to the Trustee an Officer's
Certificate setting forth the Resale Restriction Termination Date and the
Restricted Period.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.1 or this Section
2.6. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
(e) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges,
the Company shall, subject to the other terms and conditions of this
Article II, execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-registrar's
request.
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(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other
than any such transfer taxes, assessments or similar governmental
charges payable upon exchange or transfer pursuant to Sections 3.7,
3.9 or 9.5).
(iii) The Registrar or co-registrar shall not be required
to register the transfer of or exchange of any Security for a period
beginning (1) 15 days before the mailing of a notice of an offer to
repurchase or redeem Securities and ending at the close of business on
the day of such mailing or (2) 15 days before an interest payment date
and ending on such interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d) shall, except
as otherwise provided by Section 2.6(c), bear the applicable legend
regarding transfer restrictions applicable to the Definitive Security
set forth in Section 2.1(c).
(vi) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee. (i) The Trustee shall have
no responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, DTC or other Person with respect to the
accuracy of the records of DTC or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Securities or with
respect to the delivery to any participant, member, beneficial owner or other
Person (other than DTC) of any notice (including any notice of redemption) or
the payment of any amount or delivery of any Securities (or other security or
property) under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to
Holders in respect of the Securities shall be given or made only to or upon the
order of the registered Holders (which shall be DTC or its nominee in the case
of a Global Security). The rights of beneficial owners in any Global Security
shall be exercised only through DTC subject to the applicable rules and
procedures of DTC. The Trustee may rely and shall be fully protected in
relying upon information furnished by DTC with respect to its members,
participants and any beneficial owners.
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(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between
or among DTC participants, members or beneficial owners in any Global Security)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
SECTION 2.7. Form of Certificate to be Delivered in
Connection with Transfers to Institutional Accredited Investors.
[Date]
LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services Division
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the 9 5/8% Senior Subordinated Notes due 2008 (the
"Securities") of Home Products International, Inc. (the "Company").
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act")) purchasing for our own account or for the
account of such an institutional "accredited investor" at least $250,000
principal amount of the Securities, and we are acquiring the Securities not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of our investment in the Securities and we invest in or purchase
securities similar to the Securities in the normal course of our business. We
and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
2. We understand that the Securities have not been
registered under the Securities Act and, unless so registered, may not be sold
except as permitted in the following sentence. We agree on our own behalf and
on behalf of any investor account for which we are purchasing Securities to
offer, sell or otherwise transfer such Securities prior to the date which is
two years after the later of the date of original issue and the last date on
which the Company or any affiliate of the Company was the owner of such
Securities (or any
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predecessor thereto) (the "Resale Restriction Termination Date") only (a) to
the Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of
such an institutional "accredited investor," in each case in a minimum
principal amount of Securities of $250,000 or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or
accounts be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will
not apply subsequent to the Resale Restriction Termination Date. If any resale
or other transfer of the Securities is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the transferor
shall deliver a letter from the transferee substantially in the form of this
letter to the Company and the Trustee, which shall provide, among other things,
that the transferee is an institutional "accredited investor" (within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and that
it is acquiring such Securities for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser acknowledges
that the Company and the Trustee reserve the right prior to any offer, sale or
other transfer prior to the Resale Termination Date of the Securities pursuant
to clauses (d), (e) or (f) above to require the delivery of an opinion of
counsel, certifications and/or other information satisfactory to the Company
and the Trustee.
TRANSFEREE:
---------------------
BY
------------------------------
SECTION 2.8. Form of Certificate to be Delivered in
Connection with Transfers Pursuant to Regulation S.
[Date]
LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services Division
Re: Home Products International, Inc.
9 5/8% Senior Subordinated Notes due 2008 (the
"Securities")
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Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Securities was not made to a person
in the United States;
(b) either (i) at the time the buy order was originated,
the transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee was
outside the United States or (ii) the transaction was executed in, on
or through the facilities of a designated off-shore securities market
and neither we nor any person acting on our behalf knows that the
transaction has been pre- arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate
have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------
------------------------------
Authorized Signature Signature Medallion Guaranteed
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities.
If a mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform
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Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee, the Paying Agent,
the Registrar and any co-registrar from any loss which any of them may suffer
if a Security is replaced, and, in the absence of notice to the Company, any
Subsidiary Guarantor or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon Company Order the
Trustee shall authenticate and make available for delivery, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount, bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.9, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture,
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then on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.11. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Securities. After the preparation of Definitive
Securities, the temporary Securities shall be exchangeable for Definitive
Securities upon surrender of the temporary Securities at any office or agency
maintained by the Company for that purpose and such exchange shall be without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute, and the Trustee shall
authenticate and make available for delivery in exchange therefor, one or more
Definitive Securities representing an equal principal amount of Securities.
Until so exchanged, the Holder of temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as a holder of Definitive
Securities.
SECTION 2.12. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Securities surrendered to them
for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and return to the Company all Securities surrendered for
registration of transfer, exchange, payment or cancellation. The Company may
not issue new Securities to replace Securities it has paid or delivered to the
Trustee for cancellation for any reason other than in connection with a
transfer or exchange.
SECTION 2.13. Payment of Interest; Defaulted Interest.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any interest payment date shall be paid to the Person in whose
name such Security (or one or more predecessor Securities) is registered at the
close of business on the regular record date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a
period of 30 days shall forthwith cease to be payable to the Holder on the
regular record date by virtue of having been such Holder, and such defaulted
interest and (to the extent lawful) interest on such defaulted interest at the
rate borne by the Securities (such defaulted interest and interest thereon
herein collectively called "Defaulted Interest") shall be paid by the Company,
at its election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of
business on a Special Record Date (as defined below) for the payment
of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest
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proposed to be paid on each Security and the date (not less than 30
days after such notice) of the proposed payment (the "Special Interest
Payment Date"), and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix
a record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the Special Interest Payment Date and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date, and in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date
therefor to be given in the manner provided for in Section 13.2, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date and Special Interest Payment Date therefor having been so given,
such Defaulted Interest shall be paid on the Special Interest Payment
Date to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to
the following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed practicable by
the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 2.14. Computation of Interest. Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.
SECTION 2.15. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such CUSIP numbers.
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In the event that the Company shall issue and the Trustee
shall authenticate any Subsequent Series Securities pursuant to Section 2.2,
the Company shall use its best efforts to obtain the same CUSIP number for such
Subsequent Series Securities as is printed on the Securities outstanding at
such time; provided, however, that if any series of Subsequent Series
Securities is determined, pursuant to an Opinion of Counsel, to be a different
class of security than the Securities outstanding at such time for federal
income tax purposes, the Company may obtain a CUSIP number for such series of
Subsequent Series Securities that is different from the CUSIP number printed on
the Securities then outstanding.
ARTICLE III
Covenants
SECTION 3.1. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and
in the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee
or the Paying Agent holds in accordance with this Indenture money sufficient to
pay all principal and interest then due and the Trustee or the Paying Agent, as
the case may be, is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States
of America from principal or interest payments hereunder.
SECTION 3.2. SEC Reports and Available Information.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, to the extent
permitted by the Exchange Act, the Company will file with the SEC, and provide,
within 15 days after the Company is required to file the same with the SEC, the
Trustee and the holders of the Securities with the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that are
specified in Sections and 15(d) of the Exchange Act. In the event that the
Company is not permitted to file such reports, documents and information with
the SEC pursuant to the Exchange Act, the Company shall nevertheless provide
such Exchange Act information to the Trustee and the holders of the Securities
as if the Company were subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act. The Company shall also comply with the other
provisions of TIA Section 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such
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shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 3.3. Limitation on Indebtedness. (a) The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, Incur
any Indebtedness; provided, however, that the Company may Incur Indebtedness if
on the date thereof the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries is at least (i) 2.00 to 1.00, if such Indebtedness is
Incurred on or prior to the second anniversary of the Issue Date and (ii) 2.25
to 1.00, if such Indebtedness is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness: (i)(A)
Indebtedness Incurred pursuant to the Senior Credit Agreement in an aggregate
principal amount not to exceed the greater of (1) $100 million less the amount
of all mandatory reductions of the revolving credit commitments thereunder and
(2) the Borrowing Base and (B) Indebtedness Incurred under any other senior
credit facility or facilities, providing for revolving loans; provided, that
the aggregate principal amount of all such additional revolving Indebtedness
under such other senior credit facility or facilities after giving effect to
such Incurrence, does not exceed (1) the Borrowing Base, less (2) the maximum
aggregate commitments under the Senior Credit Agreement; (ii) the Subsidiary
Guarantees and Guarantees of, or Liens in respect of, Indebtedness Incurred
pursuant to paragraph (a) above or clause (i) of this paragraph (b); (iii)
Indebtedness of the Company owing to and held by any Wholly-Owned Subsidiary or
Indebtedness of a Restricted Subsidiary owing to and held by the Company or any
Wholly-Owned Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock or any other event which results in any such
Wholly-Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary or any
subsequent transfer of any such Indebtedness (except to the Company or another
Wholly-Owned Subsidiary) will be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the issuer thereof; (iv) Indebtedness
represented by (A) the Securities, (B) any Indebtedness (other than the
Indebtedness described in clauses (i), (ii) and (iii)) outstanding on the Issue
Date and (C) any Refinancing Indebtedness Incurred in respect of any
Indebtedness described in this clause (iv), clause (v) or clause (vii) or
Incurred pursuant to paragraph (a) above; (v) Indebtedness of a Restricted
Subsidiary Incurred and outstanding on the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness Incurred (A) to
provide all or any portion of the funds utilized to consummate the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Subsidiary or was otherwise acquired by the Company or (B) otherwise
in connection with, or in contemplation of, such acquisition); provided,
however, that at the time such Restricted Subsidiary is acquired by the
Company, the Company would have been able to Incur $1.00 of additional
Indebtedness pursuant to paragraph (a) above after giving effect to the
Incurrence of such Indebtedness pursuant to this clause (v); (vi) Indebtedness
under Currency Agreements and Interest Rate Agreements and certain raw material
hedging transactions; provided, however, that in the case of Currency
Agreements and Interest Rate Agreements, such Currency Agreements and Interest
Rate Agreements are entered into for bona fide hedging purposes of the Company
or its Restricted
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Subsidiaries (as determined in good faith by the Board of Directors or senior
management of the Company) and correspond in terms of notional amount,
duration, currencies and interest rates, as applicable, to Indebtedness of the
Company or its Restricted Subsidiaries Incurred without violation of this
Indenture or to business transactions of the Company or its Restricted
Subsidiaries on customary terms entered into in the ordinary course of business
and in the case of raw material hedging transactions, such are entered into
with respect to the purchase of raw materials and are entered in the ordinary
course of business for bona fide hedging purposes; (vii) Purchase Money
Indebtedness and Capitalized Lease Obligations Incurred on or after the Issue
Date; provided, however, that the aggregate principal amount of such
Indebtedness Incurred on or after the Issue Date and outstanding at any time
pursuant to this clause (vii) shall not exceed $15 million, and such
Indebtedness as originally Incurred shall not constitute more than 100% of the
cost (determined in accordance with GAAP) of the property so purchased or
leased; and (viii) Indebtedness (other than Indebtedness described in clauses
(i) - (vii)) in a principal amount which, when taken together with the
principal amount of all other Indebtedness Incurred pursuant to this clause
(viii) and then outstanding, will not exceed $10 million.
(c) Neither the Company nor any Restricted Subsidiary shall Incur any
Indebtedness under Section 3.3(b) if the proceeds thereof are used, directly or
indirectly, to refinance any Subordinated Obligations of the Company unless
such Indebtedness shall be subordinated to the Securities to at least the same
extent as such Subordinated Obligations. No Subsidiary Guarantor shall incur
any Indebtedness under Section 3.3(b) if the proceeds thereof are used,
directly or indirectly to refinance any Guarantor Subordinated Obligations of
such Subsidiary Guarantor unless such Indebtedness shall be subordinated to the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee to at
least the same extent as such Guarantor Subordinated Obligations.
(d) In addition, the Company shall not Incur any Secured Indebtedness
which is not Senior Indebtedness unless contemporaneously therewith effective
provision is made to secure the Securities equally and ratably with such
Secured Indebtedness for so long as such Secured Indebtedness is secured by a
Lien. No Subsidiary Guarantor shall Incur any Secured Indebtedness which is
not Guarantor Senior Indebtedness of such Subsidiary Guarantor unless
contemporaneously therewith effective provision is made to secure such
Subsidiary Guarantor's obligations under its Subsidiary Guarantee equally and
ratably with such Secured Indebtedness for so long as such Secured Indebtedness
is secured by a Lien.
(e) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this Section 3.3, (i) in the event that Indebtedness meets the
criteria of more than one of the types of Indebtedness described in Section
3.3(b), the Company, in its sole discretion, shall classify, or later
reclassify, such item of Indebtedness and only be required to include the
amount and type of such Indebtedness in one of such clauses; and (ii) the
amount of Indebtedness issued at a price that is less than the principal amount
thereof will be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.
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SECTION 3.4. Limitation on Layering. The Company shall not
Incur any Indebtedness if such Indebtedness is subordinate or junior in ranking
in any respect to any Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of payment
to Senior Subordinated Indebtedness. No Subsidiary Guarantor shall Incur any
Indebtedness if such Indebtedness is contractually subordinate or junior in
ranking in any respect to any Guarantor Senior Indebtedness of such Subsidiary
Guarantor unless such Indebtedness is Guarantor Senior Subordinated
Indebtedness of such Subsidiary Guarantor or is contractually subordinated in
right of payment to Guarantor Senior Subordinated Indebtedness of such
Subsidiary Guarantor.
SECTION 3.5. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to (i) declare or pay any dividend or make any
distribution on or in respect of its Capital Stock (including any payment in
connection with any merger or consolidation involving the Company or any of its
Restricted Subsidiaries) except (A) dividends or distributions payable in its
Capital Stock (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock and (B) dividends or distributions
payable to the Company or a Restricted Subsidiary of the Company (and if such
Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of
Capital Stock or other equity interests, as applicable, on a pro rata basis),
(ii) purchase, redeem, retire or otherwise acquire for value any Capital Stock
of the Company held by Persons other than a Restricted Subsidiary of the
Company or any Capital Stock of a Restricted Subsidiary of the Company held by
any Affiliate of the Company, other than another Restricted Subsidiary (in
either case, other than in exchange for its Capital Stock (other than
Disqualified Stock)), (iii) purchase, repurchase, redeem, defease or otherwise
acquire or retire for value, prior to scheduled maturity, scheduled repayment
or scheduled sinking fund payment, any Subordinated Obligations (other than the
purchase, repurchase or other acquisition of Subordinated Obligations purchased
in anticipation of satisfying a sinking fund obligation, principal installment
or final maturity, in each case due within one year of the date of purchase,
repurchase or acquisition) or (iv) make any Investment (other than a Permitted
Investment) in any Unrestricted Subsidiary or any other Person (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment being herein referred to in clauses (i)
through (iv) as a "Restricted Payment"), if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment: (A) a Default shall have
occurred and be continuing (or would result therefrom); or (B) the Company is
not able to Incur an additional $1.00 of Indebtedness pursuant to Section
3.3(a); or (C) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made (without double counting) subsequent to
the Issue Date would exceed the sum of: (1) 50% of the Consolidated Net Income
accrued during the period (treated as one accounting period) from the Issue
Date to the end of the most recent fiscal quarter ending prior to the date of
such Restricted Payment as to which financial results are available (or, in
case such Consolidated Net Income is a deficit, minus 100% of such deficit);
(2) the aggregate Net Cash Proceeds received by the Company from the issue or
sale of its Capital Stock (other than Disqualified Stock) or other capital
contributions subsequent to the Issue Date (other than net proceeds received
from an issuance or sale of such Capital Stock to a Subsidiary of the Company
or an employee stock ownership plan or similar trust to the extent such sale to
an employee stock ownership plan or similar trust is financed by loans
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from or guaranteed by the Company or any Restricted Subsidiary unless such
loans have been repaid with cash on or prior to the date of determination); (3)
the amount by which Indebtedness of the Company is reduced on the Company's
balance sheet upon the conversion or exchange (other than by a Subsidiary of
the Company) subsequent to the Issue Date of any Indebtedness of the Company
convertible or exchangeable for Capital Stock of the Company (less the amount
of any cash, or other property, distributed by the Company upon such conversion
or exchange); and (4) the amount equal to the net reduction in Investments made
by the Company or any of its Restricted Subsidiaries in any Person resulting
from (x) repurchases or redemptions of such Investments by such Person,
proceeds realized upon the sale of such Investment to an unaffiliated
purchaser, repayments of loans or advances or other transfers of assets
(including by way of dividend or distribution) by such Person to the Company or
any Restricted Subsidiary of the Company or (y) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which
amount was included in the calculation of the amount of Restricted Payments;
provided, however, that no amount shall be included under this clause (4) to
the extent it is already included in Consolidated Net Income.
(b) The provisions of Section 3.5(a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock of the Company issued or sold to a Subsidiary or
an employee stock ownership plan or similar trust to the extent such sale to an
employee stock ownership plan or similar trust is financed by loans from or
guaranteed by the Company or any Restricted Subsidiary unless such loans have
been repaid with cash on or prior to the date of determination); provided,
however, that (A) such purchase or redemption will be excluded in subsequent
calculations of the amount of Restricted Payments and (B) the Net Cash Proceeds
from such sale will be excluded from clause (C) (2) of paragraph (a); (ii) any
purchase or redemption of Subordinated Obligations of the Company made by
exchange for, or out of the proceeds of the substantially concurrent sale of,
Subordinated Obligations of the Company; provided, however, that such purchase
or redemption will be excluded in subsequent calculations of the amount of
Restricted Payments; (iii) any purchase or redemption of Subordinated
Obligations from Net Available Cash to the extent permitted under Section 3.7;
provided, however, that such purchase or redemption will be excluded in
subsequent calculations of the amount of Restricted Payments; (iv) dividends
paid within 60 days after the date of declaration if at such date of
declaration such dividend would have complied with this provision; provided,
however, that such dividends will be included in subsequent calculations of the
amount of Restricted Payments; (v) repurchases of Capital Stock deemed to occur
upon the exercise of stock options if such Capital Stock represents a portion
of the exercise price hereof; provided, however, that such repurchases will be
excluded from the calculation of the amount of Restricted Payments; and (vi)
any repurchase, retirement or other acquisition or retirement for value of
Capital Stock of the Company held by any future, present or former employee of
the Company or any Subsidiary pursuant to any management equity plan or stock
option plan or any other management or employee benefit plan or agreement;
provided, however, that the aggregate Restricted Payment made under this
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clause (vi) does not exceed in any calendar year $2 million; provided further
that such amount in any calendar year may be increased by any unused amounts
from any of the three years prior to such calendar year.
SECTION 3.6. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual restriction on the
ability of any Restricted Subsidiary to (i) pay dividends or make any other
distributions on its Capital Stock or pay any Indebtedness or other obligations
owed to the Company, (ii) make any loans or advances to the Company or (iii)
transfer any of its property or assets to the Company, except (A) any
encumbrance or restriction pursuant to an agreement in effect at or entered
into on the date of this Indenture (including, without limitation, the Senior
Credit Agreement); (B) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by a Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the funds
utilized to consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Company) and outstanding on such date; (C) any encumbrance
or restriction with respect to a Restricted Subsidiary pursuant to an agreement
effecting a refinancing of Indebtedness Incurred pursuant to an agreement
referred to in clause (A) or (B) of this Section 3.6 or this clause (C) or
contained in any amendment to an agreement referred to in clause (A) or (B) of
this Section 3.6 or this clause (C); provided, however, that the encumbrances
and restrictions with respect to such Restricted Subsidiary contained in any
such agreement or amendment are no less favorable to the Holders of the
Securities than encumbrances and restrictions contained in such agreements; (D)
in the case of clause (iii) above, any encumbrance or restriction (1) that
restricts in a customary manner the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or similar contract, or
the assignment or transfer of any such lease, license or other contract, (2) by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by this Indenture, (3) contained in
mortgages, pledges or other security agreements securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or restrictions restrict
the transfer of the property subject to such mortgages, pledges or other
security agreements or (4) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal easement
agreements of the Company or any Restricted Subsidiary; (E) any restriction
with respect to a Restricted Subsidiary (or any of its property or assets)
imposed pursuant to an agreement entered into for the direct or indirect sale
or disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition; and (F)
encumbrances or restrictions arising or existing by reason of applicable law.
SECTION 3.7. Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless (i) the Company or such
Restricted Subsidiary receives consideration
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(including by way of relief from, or by any other Person assuming sole
responsibility for, any liabilities, contingent or otherwise) at the time of
such Asset Disposition at least equal to the fair market value, as determined
in good faith by the Board of Directors (including as to the value of all
non-cash consideration), of the shares and assets subject to such Asset
Disposition, (ii) at least 80% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents and (iii) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) (A) first, to the extent the Company or any
Restricted Subsidiary, as the case may be, elects (or is required by the terms
of any Senior Indebtedness, Guarantor Senior Indebtedness or Indebtedness
(other than Preferred Stock) of a Wholly-Owned Subsidiary), to prepay, repay or
purchase Senior Indebtedness or Indebtedness (other than any Preferred Stock)
of a Wholly-Owned Subsidiary (in each case other than Indebtedness owed to the
Company or an Affiliate of the Company) within 180 days from the later of the
date of such Asset Disposition or the receipt of such Net Available Cash; (B)
second, to the extent of the balance of such Net Available Cash after
application in accordance with clause (A), at the Company's election to invest
in Additional Assets (including by means of an Investment in Additional Assets
by a Restricted Subsidiary with Net Available Cash received by the Company or
another Restricted Subsidiary) within one year from the later of the date of
such Asset Disposition or the receipt of such Net Available Cash; (C) third, to
the extent of the balance of such Net Available Cash after application and in
accordance with clauses (A) and (B) (the "Excess Proceeds"), to make an offer
to purchase the Securities and other Senior Subordinated Indebtedness
outstanding with similar provisions requiring the Company to make an offer to
purchase such Indebtedness with the proceeds from any Asset Disposition ("Pari
Passu Notes") at 100% of the principal amount thereof (or 100% of the accreted
value of such Pari Passu Notes so tendered if such Pari Passu Notes were issued
at a discount) plus accrued and unpaid interest, if any, to the date of
purchase; and (D) fourth, to the extent of the balance of the Excess Proceeds,
after application in accordance with clause (C), to fund other corporate
purposes not prohibited by this Indenture; provided, however, that, in
connection with any prepayment, repayment or purchase of Indebtedness pursuant
to clause (A) above, the Company or such Restricted Subsidiary will retire such
Indebtedness and will cause the related loan commitment, if any, to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased. Notwithstanding the foregoing provisions, (i) the Company
and its Restricted Subsidiaries will not be required to apply any Net Available
Cash in accordance herewith except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in accordance
with this Section 3.7 exceed $5 million and (ii) in addition, the Company and
its Restricted Subsidiaries may make in the aggregate $1 million in Asset
Dispositions each year which are not subject to the provisions of this Section
3.7.
For the purposes of this Section 3.7, the following will be deemed to
be cash: (i) the assumption by the transferee of Senior Indebtedness of the
Company or Indebtedness of any Restricted Subsidiary of the Company and the
release of the Company or such Restricted Subsidiary from all liability on such
Senior Indebtedness or Indebtedness in connection with such Asset Disposition
(in which case the Company will, without further action, be deemed to have
applied such assumed Indebtedness in accordance with clause (iii) (A) of the
preceding paragraph) and (ii) securities received by the
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Company or any Restricted Subsidiary of the Company from the transferee that
are promptly converted by the Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to clause (iii)(C) of paragraph (a), the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes as follows: (i) the Company will make an offer to purchase
(an "Offer") within ten days of such time from all holders of the Securities in
accordance with the procedures set forth in this Indenture in the maximum
principal amount (expressed as a multiple of $1,000) of Securities that may be
purchased out of an amount (the "Note Amount") equal to the product of such
Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Securities and the denominator of which is
the sum of the outstanding principal amount of the Securities and the
outstanding principal amount (or accreted value, as the case may be) of the
Pari Passu Notes at a purchase price of 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase and (ii) the
Company will make an offer to purchase any Pari Passu Notes (a "Pari Passu
Offer") in an amount equal to the excess of the Excess Proceeds over the Note
Amount at a purchase price of 100% of the principal amount (or accreted value,
as the case may be) thereof plus accrued and unpaid interest, if any, to the
date of purchase in accordance with the procedures (including prorating in the
event of oversubscription) set forth in the documentation governing such Pari
Passu Notes with respect to the Pari Passu Offer. If the aggregate purchase
price of the Securities and Pari Passu Notes tendered pursuant to the Offer and
the Pari Passu Offer is less than the Excess Proceeds, the remaining Excess
Proceeds will be available to the Company for use in accordance with clause
(iii)(D) of paragraph (a) of this Section 3.7. The Company will not be
required to make an Offer for Securities pursuant to this Section 3.7 if the
Excess Proceeds available therefor are less than $10 million (which lesser
amounts will be carried forward for purposes of determining whether an Offer is
required with respect to the Excess Proceeds from any subsequent Asset
Disposition).
(c) (1) Promptly, and in any event within 10 days after the
Company is required to make an Offer, the Company will deliver to the Trustee
and send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in
whole or in part (subject to prorating as hereinafter described in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date").
(2) Not later than the date upon which such written notice of
an Offer is delivered to the Trustee and the Holders, the Company will deliver
to the Trustee an Officers' Certificate setting forth (i) the amount of the
Offer (the "Offer Amount"), (ii) the allocation of the Net Available Cash from
the Asset Dispositions as a result of which such Offer is being made and (iii)
the compliance of such allocation with the provisions of Section 3.7(a). Upon
the expiration of the period (the "Offer Period") for which the Offer remains
open, the Company shall deliver to the Trustee for cancellation the Securities
or portions thereof which have been properly tendered to and are to be accepted
by the Company. The Trustee shall, on the Purchase Date, mail or deliver
payment to each tendering Holder in the amount of the
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purchase price of the Securities tendered by such Holder to the extent such
funds are available to the Trustee.
(3) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form entitled "Option
of Holder to Elect Purchase" duly completed, to the Company at the address
specified in the notice prior to the expiration of the Offer Period. Each
Holder will be entitled to withdraw its election if the Trustee or the Company
receives, not later than one Business Day prior to the expiration of the Offer
Period, a facsimile transmission or overnight mail from such Holder setting
forth the name of such Holder, the principal amount of the Security or
Securities which were delivered for purchase by such Holder and a statement
that such Holder is withdrawing his election to have such Security or
Securities purchased. If at the expiration of the Offer Period the aggregate
principal amount of Securities surrendered by Holders exceeds the Offer Amount,
the Company shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part will be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(d) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.7, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
SECTION 3.8. Limitation on Affiliate Transactions. (a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or conduct any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") unless:
(i) the terms of such Affiliate Transaction are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that
could be obtained at the time of such transaction in arm's-length dealings with
a Person who is not such an Affiliate; (ii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $5 million, the terms of
such transaction have been approved by a majority of the members of the Board
of Directors of the Company having no personal stake in such transaction, if
any (and such majority determines that such Affiliate Transaction satisfies the
criteria in (i) above); and (iii) in the event such Affiliate Transaction
involves an aggregate amount in excess of $10 million, the Company has received
a written opinion from an independent investment banking firm of nationally
recognized standing that such Affiliate Transaction is not materially less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is not an
Affiliate.
(b) The foregoing paragraph (a) will not apply to (i) any Restricted
Payment permitted to be made pursuant to Section 3.5, (ii) any issuance of
securities, or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of,
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employment arrangements or bonuses (whether or not pursuant to an employment
agreement), stock options and stock ownership plans approved by the Board of
Directors of the Company, (iii) loans or advances to employees in the ordinary
course of business of the Company or any of its Restricted Subsidiaries, (iv)
the payment of reasonable fees to directors of the Company and its Restricted
Subsidiaries who are not employees of the Issuer or its Restricted
Subsidiaries, (v) any payments to the Company by the Restricted Subsidiaries
pursuant to a tax sharing agreement, (vi) transactions in the ordinary course
of business between the Company or any Restricted Subsidiary with Selfix Europe
L.L.C. or its successors and (vii) any transaction between the Company and a
Wholly-Owned Subsidiary or between Wholly-Owned Subsidiaries.
SECTION 3.9. Change of Control. Upon the occurrence of any
of the following events (each a "Change of Control"), unless the Company shall
have exercised its right to redeem the Securities as described in Section 5.1,
each holder will have the right to require the Company to repurchase all or any
part of such holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date):
(i) (A) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person shall be deemed
to have "beneficial ownership" of all shares that any such person has
the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than
40% of the total voting power of the Voting Stock of the Company (or
its successor by merger, consolidation or purchase of all or
substantially all of its assets); and (B) the Permitted Holders
"beneficially own" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the
Company (or its successor by merger, consolidation or purchase of all
or substantially all of its assets) than such other person and do not
have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the board of directors
of the Company or such successor; or
(ii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
of the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of at least a
majority of the directors of the Company then still in office who were
either directors at the beginning of such period or whose election or
nomination for election was previously so approved or is a designee of
the Permitted Holders or was nominated or elected by such Permitted
Holders or any of their designees) cease for any reason to constitute
a majority of the Board of Directors of the Company then in office; or
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(iii) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole
to any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) other than a Permitted Holder; or
(iv) the adoption by the stockholders of a plan for the
liquidation or dissolution of the Company.
Within 30 days following any Change of Control, unless the
Company has mailed a redemption notice with respect to all the outstanding
Securities in connection with such Change of Control as described in Section
5.1, the Company shall mail a notice to each holder with a copy to the Trustee
stating: (i) that a Change of Control has occurred and that such holder has the
right to require the Company pursuant to this Section 3.9 to purchase such
holder's Securities (the "Change of Control Offer") at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase (subject to the right of holders of record on a
record date to receive interest on the relevant interest payment date); (ii)
the repurchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed); (iii) that any Security not tendered
shall continue to accrue interest, if any; (iv) that, unless the Company
defaults in the payment of principal or interest, all Securities accepted for
payment pursuant to the Change of Control Offer shall cease to accrue interest,
if any, after the Change of Control Payment Date; (v) that holders electing to
have any Securities purchased pursuant to a Change of Control Offer shall be
required to surrender the Securities to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business
Day preceding the date of purchase for the Change of Control Payment Date; (vi)
that holders shall be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a facsimile transmission or
letter setting forth the name of the holder, the principal amount of Securities
delivered for purchase, and a statement that such holder is withdrawing his
election to have the Securities purchased; and (vii) that holders whose
Securities are being purchased only in part shall be issued new Securities
equal in principal amount to the unpurchased portion of the Securities
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof.
On a Business Day that is no earlier than 30 days nor later
than 60 days from the date that the Company mails or causes to be mailed notice
of the Change of Control to the holders (the "Change of Control Payment Date"),
the Company shall, to the extent lawful, (i) accept for payment all Securities
or portions thereof properly tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all the Securities or portions thereof so tendered and
(iii) deliver or cause to be delivered to the Trustee the Securities so
accepted together with an Officers' Certificate stating the aggregate principal
amount of such Securities or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail to each Holder of the Securities so
tendered the Change of Control Payment for such Securities, and the Trustee
shall promptly authenticate and mail (or cause to be transferred by book-entry)
to
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each Holder a new Security equal in principal amount to any unpurchased portion
of the Securities surrendered, if any; provided that each such new Security
shall be in a principal amount of $1,000 or an integral multiple thereof. The
Company shall publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue thereof.
SECTION 3.10. Limitation on Capital Stock of Restricted
Subsidiaries. The Company shall not sell any shares of Capital Stock of a
Restricted Subsidiary, and will not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell any shares of its Capital Stock except: (i) to
the Company or a Wholly-Owned Subsidiary; or (ii) (A) in compliance with
Section 3.7 if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would continue to be a Restricted Subsidiary or (B) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer be a Restricted Subsidiary, and, in each case, the
Investment of the Company in such Person after giving effect to such issuance
or sale would have been permitted to be made under Section 3.5 as if made on
the date of such issuance or sale. Notwithstanding the foregoing, the Company
may sell all the Capital Stock of a Subsidiary as long as the Company is in
compliance with the terms of Section 3.7.
SECTION 3.11. Future Subsidiary Guarantors. After the Issue
Date, the Company will cause each Restricted Subsidiary other than a Foreign
Subsidiary created or acquired by the Company which Guarantees the Bank
Indebtedness or Incurs Indebtedness under paragraph (a) of Section 3.3 to
execute and deliver to the Trustee a Subsidiary Guarantee pursuant to which
such Restricted Subsidiary will unconditionally Guarantee, on a joint and
several basis with the other Subsidiary Guarantors, the full and prompt payment
of the principal of, premium, if any and interest on the Securities on a senior
subordinated basis and become a party to this Indenture as a Subsidiary
Guarantor for all purposes of the Indenture.
SECTION 3.12. Limitation on Lines of Business. The Company
shall not, and will not permit any Restricted Subsidiary to, engage in any
business other than a Related Business. Notwithstanding the foregoing, the
Company may acquire and operate any business which is primarily engaged in a
Related Business at the time of acquisition.
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SECTION 3.13. Maintenance of Office or Agency. The Company
will maintain in The City of New York, an office or agency where the Securities
may be presented or surrendered for payment, where, if applicable, the
Securities may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The principal corporate trust office (the
"Corporate Trust Office") of the Trustee shall be such office or agency of the
Company, unless the Company shall designate and maintain some other office or
agency for one or more of such purposes. The Company will give prompt written
notice to the Trustee of any change in the location of any such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside of The City of New York) where the
Securities may be presented or surrendered for any or all such purposes and may
from time to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
SECTION 3.14. Corporate Existence. Subject to Article IV and
Section 11.2, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence and that of
each Restricted Subsidiary and the corporate rights (charter and statutory)
licenses and franchises of the Company and each Restricted Subsidiary;
provided, however, that the Company shall not be required to preserve any such
existence (except the Company), right, license or franchise if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and each of its
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not,
and will not be, disadvantageous in any material respect to the Holders.
SECTION 3.15. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (i) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (ii) all lawful claims
for labor, materials and supplies, which, if unpaid, might by law become a
material liability or lien upon the property of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate reserves, if necessary (in
the good faith judgment of management of the Company), are being maintained in
accordance with GAAP or where the failure to effect such payment will not be
disadvantageous to the Holders.
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SECTION 3.16. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each Fiscal Year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default or Event of Default and whether or not the
signers know of any Default or Event of Default that occurred during such
period. If they do, the certificate shall describe the Default or Event of
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section
314(a)(4).
SECTION 3.17. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
Successor Company
SECTION 4.1. Merger and Consolidation. The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation, partnership, trust,
limited liability company or other similar entity organized and
existing under the laws of the United States of America, any State
thereof or the District of Columbia and the Successor Company (if not
the Company) shall expressly assume, by supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Restricted Subsidiary of the Successor Company as a
result of such transaction as having been Incurred by the Successor
Company or such Restricted Subsidiary at the time of such
transaction), no Default or Event of Default shall have occurred and
be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least an additional $1.00
of Indebtedness pursuant to paragraph (a) of Section 3.3 of this
Indenture; and
(iv) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental
indenture, if any, comply with this Indenture.
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The Successor Company will succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture,
but, in the case of a lease of all or substantially all its assets, the Company
will not be released from the obligation to pay the principal of and interest
on the Securities.
Notwithstanding clauses (ii) and (iii) of the first sentence
of this Section 4.1, (i) any Restricted Subsidiary of the Company may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company and (ii) the Company may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
jurisdiction to realize tax or other benefits.
ARTICLE V
Redemption of Securities
SECTION 5.1. Optional Redemption. The Securities may or
shall, as the case may be, be redeemed, as a whole or from time to time in
part, subject to the conditions and at the Redemption Prices specified in the
form of Securities set forth in Exhibits A and B hereto, which are hereby
incorporated by reference and made a part of this Indenture, together with
accrued and unpaid interest to the redemption date.
SECTION 5.2. Applicability of Article. Redemption of
Securities at the election of the Company or otherwise, as permitted or
required by any provision of this Indenture, shall be made in accordance with
such provision and this Article.
SECTION 5.3. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities pursuant to Section 5.1 shall
be evidenced by a Board Resolution. In case of any redemption at the election
of the Company, the Company shall, upon not less than 30 and not more than 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and of the principal amount of Securities to be redeemed and shall deliver
to the Trustee such documentation and records as shall enable the Trustee to
select the Securities to be redeemed pursuant to Section 5.4.
SECTION 5.4. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities are to be redeemed at any time
pursuant to an optional redemption, the particular Securities to be redeemed
shall be selected not more than 90 days prior to the Redemption Date by the
Trustee, from the outstanding Securities not previously called for redemption,
in compliance with the requirements of the principal securities exchange, if
any, on which such Securities are listed, or, if such Securities are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee
shall deem fair and appropriate (and in such manner as complies with applicable
legal requirements) and which may provide for the selection for redemption of
portions of the principal of the Securities; provided, however, that no such
partial redemption shall reduce the portion of the principal amount of a
Security not redeemed to less than $1,000.
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The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 5.5. Notice of Redemption. Notice of redemption
shall be given in the manner provided for in Section 13.2 not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder of Securities to
be redeemed. The Trustee shall give notice of redemption in the Company's name
and at the Company's expense; provided, however, that the Company shall deliver
to the Trustee, at least 45 days prior to the Redemption Date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued
interest to the Redemption Date payable as provided in Section 5.7, if
any,
(3) if less than all outstanding Securities are to be
redeemed, the identification of the particular Securities (or portion
thereof) to be redeemed, as well as the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of
Securities to be Outstanding after such partial redemption,
(4) in case any Security is to be redeemed in part only,
the notice which relates to such Security shall state that on and
after the Redemption Date, upon surrender of such Security, the holder
will receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed,
(5) that on the Redemption Date the Redemption Price (and
accrued interest, if any, to the Redemption Date payable as provided
in Section 5.7) will become due and payable upon each such Security,
or the portion thereof, to be redeemed, and, unless the Company
defaults in making the redemption payment, that interest on Securities
called for redemption (or the portion thereof) will cease to accrue on
and after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest,
if any,
(7) the name and address of the Paying Agent,
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(8) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made
as to the accuracy or correctness of the CUSIP number, if any, listed
in such notice or printed on the Securities, and
(10) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 5.6. Deposit of Redemption Price. Prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.4) an amount of money sufficient to pay the
Redemption Price of, and accrued interest on, all the Securities which are to
be redeemed on that date.
SECTION 5.7. Notes Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified (together with accrued interest, if any, to the Redemption
Date), and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Date or Special Record Date,
as the case may be, according to their terms and the provisions of Section
2.13.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Securities.
SECTION 5.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to
the provisions of this Article) shall be surrendered at the office or agency of
the Company maintained for such purpose pursuant to Section 3.13 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder of such Security at the expense of the
Company, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered, provided, that each such new Security will be in a principal
amount of $1,000 or integral multiple thereof.
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ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article X of this Indenture, and such
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal or
premium, if any, of any Security when the same becomes due and payable
at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise, whether or not such payment
shall be prohibited by Article X of this Indenture;
(3) the Company fails to comply with Article IV of this
Indenture;
(4) the Company fails to comply with any of Sections 3.2,
3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, and
3.15 (in each case other than a failure to repurchase Securities when
required pursuant to Sections 3.7 or 3.9, which failure shall
constitute an Event of Default under Section 6.1(2)) and such failure
continues for 30 days after the notice specified below;
(5) the Company defaults in the performance of or a breach by
the Company of any other covenant or agreement in this Indenture or
under the Securities (other than those referred to in (1), (2), (3) or
(4) above) and such default continues for 60 days after the notice
specified below;
(6) Indebtedness of the Company or any Restricted Subsidiary
is not paid within any applicable grace period after final maturity or
is accelerated by the holders thereof and the total amount of such
unpaid or accelerated Indebtedness exceeds $5.0 million or its foreign
currency equivalent at the time;
(7) the Company or a Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian (as
defined below) of it or for any substantial part of its
property; or
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(D) makes a general assignment for the benefit of
its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess
of $5.0 million or its foreign currency equivalent at the time is
rendered against the Company or a Significant Subsidiary if such
judgment or decree remains undischarged or unstayed for a period of 60
days following such judgment or decree becomes final and
non-appealable; or
(10) any Subsidiary Guarantee ceases to be in full force and
effect (except as contemplated by the terms hereof) or any Subsidiary
Guarantor denies or disaffirms its obligations under the terms of this
Indenture or its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or
(5) of this Section 6.1 will not constitute an Event of Default until the
Trustee or the Holders of more than 25% in principal amount of the outstanding
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified in said clause (4) or (5) after receipt of
such notice. Such notice must specify the Default, demand that it be remedied
and state that such notice is a "Notice of Xxxxxxx".
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The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Default or Event of Default under clauses (3), (4), (5), (6), (9) or
(10) of this Section 6.1.
SECTION 6.2. Acceleration. If an Event of Default (other
than an Event of Default specified in Section 6.1(7) or (8) with respect to the
Company or a Significant Subsidiary) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in outstanding principal
amount of the Securities by notice to the Company and the Trustee, may, and the
Trustee at the request of such Holders shall, declare the principal of,
premium, if any, and accrued but unpaid interest on all the Securities to be
due and payable. Upon such a declaration, such principal, premium and interest
shall, subject to Section 10.4 of this Indenture, be immediately due and
payable. In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.1(6) above has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if
the event of default or payment default triggering such Event of Default
pursuant to Section 6.1(6) shall be remedied or cured by the Company and/or the
relevant Significant Subsidiaries 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 Section 6.1(7) or (8) with
respect to the Company occurs, the principal of, premium and accrued and unpaid
interest on all the Securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.
The Holders of a majority in principal amount of the Securities by notice to
the Trustee may waive all past defaults (except with respect to nonpayment of
principal, premium or interest) and rescind an acceleration with respect to the
Securities and its consequences if (i) the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction and (ii) all
existing Events of Default, other than the nonpayment of principal or interest
that has become due solely because of such acceleration, have been cured or
waived. No such rescission shall affect any subsequent Default or Event of
Default or impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default or Event of Default and its consequences except (i) a
Default or Event of Default in the payment of the principal of or interest on a
Security or (ii) a Default or Event of Default in respect of a provision that
under Section 9.2 cannot be amended without the consent of each
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Securityholder affected. When a Default or Event of Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority
in principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
or, subject to Sections 7.1 and 7.2, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal
amount of the Securities make a request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense
(including reasonable attorneys' fees and expenses);
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
SECTION 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of, premium (if any) or interest on the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities, or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of
Default specified in Section 6.1(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.7.
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SECTION 6.9. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries
or its or their respective creditors or properties and, unless prohibited by
law or applicable regulations, may vote on behalf of the Holders in any
election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money
or property pursuant to this Article VI, it shall pay out the money or property
in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness to the extent
required by Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to
Section 6.7 or a suit by Holders of more than 10% in outstanding principal
amount of the Securities.
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ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to
be furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts
stated therein).
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
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(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
SECTION 7.2. Rights of Trustee. Subject to Section 7.1, (a)
The Trustee may 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 or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on an Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection,
and the advice or opinion of counsel with respect to legal matters relating to
this Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered
by it hereunder in good faith and in accordance with the advice or opinion of
such counsel.
SECTION 7.3. Individual Rights of Trustee. The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee.
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Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and
7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for
any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or Event of
Default occurs and is continuing and if a Trust Officer has actual knowledge
thereof, the Trustee shall mail to each Securityholder notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium (if any), or
interest on any Security (including payments pursuant to the optional
redemption or required repurchase provisions of such Security, if any), the
Trustee may withhold the notice if and so long as its board of directors, a
committee of its board of directors or a committee of its Trust Officers in
good faith determines that withholding the notice is in the interests of
Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each April 15 beginning with the April 15 following the date
of this Indenture, and in any event prior to June 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such April 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b). The Trustee shall also transmit by mail all reports required
by TIA Section 313(c).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall
pay to the Trustee from time to time reasonable compensation for its acceptance
of this Indenture and services hereunder as the Company and the Trustee shall
from time to time agree in writing. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
costs of preparing and reviewing reports, certificates and other documents,
costs of preparation and mailing of notices to Securityholders and reasonable
costs of counsel retained by the Trustee in connection with the delivery of an
Opinion of Counsel or otherwise, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any
and all loss, liability or expense (including reasonable attorneys' fees and
expenses) incurred by it without negligence or bad faith on its part in
connection with the administration of this trust and the performance
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of its duties hereunder, including the costs and expenses of enforcing this
Indenture (including this Section 7.7) and of defending itself against any
claims (whether asserted by any Securityholder, the Company or otherwise). The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee may have separate counsel and the Company shall pay the fees
and expenses of such counsel provided that the Company shall not be required to
pay such fees and expenses if it assumes the Trustee's defense, and, in the
reasonable judgement of outside counsel to the Trustee, there is no conflict of
interest between the Company and the Trustee in connection with such defense.
The Company need not reimburse any expense or indemnify against any loss,
liability or expense incurred by the Trustee through the Trustee's own wilful
misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.1(7) or (8)
with respect to the Company, the expenses are intended to constitute expenses
of administration under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in
principal amount of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of the Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring
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Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Securityholders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.7.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition, at the
Company's expense, any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.7 shall continue for
the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Trustee shall have a combined capital and surplus of at least $100 million as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
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ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.9) for
cancellation or (ii) all outstanding Securities have become due and payable,
whether at maturity or upon redemption and the Company irrevocably deposits
with the Trustee funds sufficient to pay at maturity or upon redemption all
outstanding Securities (other than Securities replaced pursuant to Section
2.9), including interest thereon to maturity or such redemption date, and if in
either case the Company pays all other sums payable hereunder by the Company,
then this Indenture shall, subject to Section 8.1(c), cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Indenture on demand of the Company (accompanied by an Officers' Certificate and
an Opinion of Counsel stating that all conditions precedent specified herein
relating to the satisfaction and discharge of this Indenture have been complied
with) and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option"), and after giving effect to such legal
defeasance, any omission to comply with such obligations shall no longer
constitute a Default or Event of Default or (ii) its obligations under Sections
3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14 and 3.15,
and 4.1(iii) and the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall no longer constitute a Default or an Event of Default under
Section 6.1(3) and 6.1(4) ("covenant defeasance option"), but except as
specified above, the remainder of this Indenture and the Securities shall be
unaffected thereby. The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option. If the
Company exercises its covenant defeasance option, the Company may, by written
notice to the Trustee prior to the delivery of the Opinion of Counsel referred
to in Section 8.2(8), elect to have any Subsidiary Guarantees in effect at such
time terminate.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of any event that, in the
absence of such legal defeasance, would have constituted an Event of Default,
and the Subsidiary Guarantees in effect at such time shall terminate. If the
Company exercises its covenant defeasance option, the events specified in
Sections 6.1(4), 6.1(6), 6.1(7) (but only with respect to a Significant
Subsidiary), 6.1(8) (but only with respect to a Significant Subsidiary), 6.1(9)
and 6.1(10) will no longer constitute an Event of Default, and payment of the
Securities may not be accelerated because of the occurrence of any such event
or because of the failure of the Company to comply with Sections 4.1(iii).
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Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and
(b), the Company's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.9, 7.7,
7.8, 8.4, 8.5 and 8.6 shall survive until the Securities have been paid in
full. Thereafter, the Company's obligations in Sections 7.7 and 8.5 and the
Trustee's obligations in Section 8.4 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee for the benefit of the Holders money in U.S. dollars or U.S.
Government Obligations or a combination thereof for the payment of
principal of and interest on the Securities to maturity or redemption,
as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and
interest when due on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default with respect to this Indenture resulting from the
Incurrence of Indebtedness, all or a portion of which will be used to
defease the Securities concurrently with such Incurrence);
(4) such legal defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default under,
this Indenture or any other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that (A) the Securities and (B)
assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit and that no Holder of
the Securities is an insider of the Company, after 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' right generally;
(6) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article X;
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(7) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(8) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such legal defeasance had not occurred;
(9) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States to the effect that the Securityholders will not
recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not
occurred; and
(10) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Securities
and this Indenture as contemplated by this Article VIII have been
complied with.
SECTION 8.3. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant
to this Article VIII. It shall apply the deposited money and the money from
U.S. Government Obligations through the Paying Agent and in accordance with
this Indenture to the payment of principal of and interest on the Securities.
Money and securities so held in trust are not subject to Article X.
SECTION 8.4. Repayment to Company. The Trustee and the
Paying Agent shall promptly turn over to the Company upon request any excess
money or securities held by them upon payment of all the obligations under this
Indenture.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal of or interest on the Securities that remains
unclaimed for two years, and, thereafter, Securityholders entitled to the money
must look to the Company for payment as general creditors.
SECTION 8.5. Indemnity for U.S. Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
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SECTION 8.6. Reinstatement. If the Trustee or Paying Agent
is unable to apply any money or U.S. Government Obligations in accordance with
this Article VIII by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided, however, that, if
the Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the
Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by
a Successor Company of an obligation of the Company under this
Indenture;
(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Code or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the
Code;
(4) to add guarantees with respect to the Securities or to
secure the Securities;
(5) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(6) to comply with any requirements of the SEC in connection
with qualifying this Indenture under the TIA;
(7) to make any change that does not adversely affect the
rights of any Securityholder; or
(8) to provide for the issuance of the Exchange Securities,
which will have terms substantially identical in all material respects
to the Initial Securities (except that the transfer restrictions
contained in the Initial Securities will be modified or
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eliminated, as appropriate), and which will be treated, together with
any outstanding Initial Securities, as a single issue of securities.
An amendment under this Section may not make any change that
adversely affects the rights under Article X of any holder of Senior
Indebtedness or under Article XII of any holder of Guarantor Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness
(or any group or representative thereof authorized to give a consent) consent
to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
SECTION 9.2. With Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the
Securities without notice to any Securityholder but with the written consent of
the Holders of at least a majority in principal amount of the Securities.
However, without the consent of each Securityholder affected, an amendment may
not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of
any Security;
(4) reduce the premium payable upon the redemption or
repurchase of any Security or change the time at which any Security
may or shall be redeemed or repurchased in accordance with this
Indenture;
(5) make any Security payable in money other than that stated
in the Security;
(6) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(7) make any change to the amendment provisions which require
each Holder's consent or to the waiver provisions.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
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An amendment under this Section may not make any change that
adversely affects the rights under Article X or Article XII of any holder of
Senior Indebtedness or Guarantor Senior Indebtedness then outstanding unless
the holders of such Senior Indebtedness or Guarantor Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers.
A consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective.
After an amendment or waiver becomes effective, it shall bind every
Securityholder. An amendment or waiver shall become effective upon receipt by
the Trustee of the requisite number of written consents under Section 9.1 or
9.2 as applicable.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall
become valid or effective more than 120 days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder
of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article IX if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need
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not sign it. In signing such amendment the Trustee shall be entitled to
receive indemnity reasonably satisfactory to it and to receive, and (subject to
Sections 7.1 and 7.2) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture.
ARTICLE X
Subordination
SECTION 10.1. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities and other obligations relating to the Securities
are subordinated in right of payment, to the extent and in the manner provided
in this Article X, to the prior payment when due in cash or Cash Equivalents of
all Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. The Securities shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
Company and only Indebtedness of the Company which is Senior Indebtedness will
rank senior to the Securities in accordance with the provisions set forth
herein. All provisions of this Article X shall be subject to Section 10.12.
SECTION 10.2. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets or securities of the Company upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its respective properties:
(1) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash or Cash Equivalents of the
Senior Indebtedness (including interest accruing after, or which would
accrue but for, the commencement of any proceeding at the rate
specified in the applicable Senior Indebtedness, whether or not a
claim for such interest would be allowed) before Securityholders shall
be entitled to receive any payment of principal of or interest on or
other amounts with respect to the Securities; and
(2) until the Senior Indebtedness is paid in full in cash or
Cash Equivalents, any payment or distribution to which Securityholders
would be entitled but for this Article X shall be made to holders of
Senior Indebtedness as their respective interests may appear.
SECTION 10.3. Default on Senior Indebtedness. The Company
shall not pay the principal of, premium (if any) or interest on or other
amounts with respect to the Securities or make any deposit pursuant to Section
8.1 or repurchase, redeem or otherwise retire any Securities ("pay the
Securities") if (i) any Senior Indebtedness of the Company is not paid when due
in cash or Cash Equivalents or (ii) any other default on Senior Indebtedness of
the Company occurs and the maturity of such Senior Indebtedness of the Company
is accelerated in accordance with its terms unless, in either case, (x) the
default has
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been cured or waived and any such acceleration has been rescinded in writing or
(y) such Senior Indebtedness of the Company has been paid in full in cash or
Cash Equivalents; provided, however, that the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of the Senior
Indebtedness of the Company with respect to which either of the events set
forth in clause (i) or (ii) of this sentence has occurred or is continuing.
During the continuance of any default (other than a default described in clause
(i) or (ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Company may not pay the Securities for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a "Blockage Notice") of such default from the
Representative of the holders of such Designated Senior Indebtedness specifying
an election to effect a Payment Blockage Period and ending 179 days thereafter
(or earlier if such Payment Blockage Period is terminated (i) by written notice
to the Trustee and the Company from the Person or Persons who gave such
Blockage Notice, (ii) because the default giving rise to such Blockage Notice
is no longer continuing or (iii) because such Designated Senior Indebtedness
has been repaid in full in cash or Cash Equivalents). Notwithstanding the
provisions of the immediately preceding sentence, unless the holders of such
Designated Senior Indebtedness or the Representative of such holders shall have
accelerated the maturity of such Designated Senior Indebtedness, the Company
may resume payments on the Securities after the end of such Payment Blockage
Period. Not more than one Blockage Notice may be given in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness during such period.
SECTION 10.4. Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness (or their Representatives) of the acceleration; provided,
however, that the Company and the Trustee shall be obligated to notify such a
Representative only if such Representative has delivered or caused to be
delivered to the Company and the Trustee an address for service of such a
notice (and the Company and the Trustee shall only be obligated to deliver the
notice to the address so specified). If any Designated Senior Indebtedness is
outstanding, the Company shall not pay the Securities until five Business Days
after the holders or Representative of such Designated Senior Indebtedness
receives notice of such acceleration and, thereafter, may pay the Securities
only if this Article X otherwise permits payments at that time.
SECTION 10.5. When Distribution Must Be Paid Over. If a
payment or distribution is made to the Trustee or Securityholders that because
of this Article X should not have been made to them, the Trustee or the
Securityholders who receive the payment or distribution shall hold it in trust
for holders of Senior Indebtedness and promptly pay it over to them as their
respective interests may appear.
SECTION 10.6. Subrogation. After all Senior Indebtedness is
paid in full in cash or Cash Equivalents and until the Securities are paid in
full, Securityholders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to
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Senior Indebtedness. A payment or distribution made under this Article X to
holders of Senior Indebtedness which otherwise would have been made to
Securityholders is not, as between the Company and Securityholders, a payment
by the Company of Senior Indebtedness.
SECTION 10.7. Relative Rights. This Article X defines the
relative rights of Securityholders and holders of Senior Indebtedness. Nothing
in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject to
the rights of holders of Senior Indebtedness to receive payments and
distributions otherwise payable to Securityholders.
SECTION 10.8. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness to enforce the subordination of
the Indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by the failure of any of them to comply with
this Indenture.
SECTION 10.9. Rights of Trustee and Paying Agent.
Notwithstanding Section 10.3, the Trustee or Paying Agent may continue to make
payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than one Business Day prior to the date of such payment, a Trust
Officer of the Trustee receives notice satisfactory to it that payments may not
be made under this Article X. The Company, the Registrar or co-registrar, the
Paying Agent, a Representative or a holder of Senior Indebtedness may give the
notice; provided, however, that, if an issue of Senior Indebtedness has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.7. Each Paying Agent shall have the
same rights and obligations under this Article X as does the Trustee.
SECTION 10.10. Distribution or Notice to Representative.
Whenever a payment or distribution is to be made or a notice given to holders
of Senior Indebtedness, the payment or distribution may be made and the notice
given to their Representative (if any).
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SECTION 10.11. Article X Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment in respect of the
Securities by reason of any provision in this Article X shall not be construed
as preventing the occurrence of a Default or Event of Default. Nothing in this
Article X shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of U.S. Government Obligations held in trust under Article VIII
by the Trustee for the payment of principal of and interest on the Securities
shall not be subordinated to the prior payment of any Senior Indebtedness or
subject to the restrictions set forth in this Article X, and none of the
Securityholders shall be obligated to pay over any such amount to the Company,
any holder of Senior Indebtedness of the Company, or any other creditor of the
Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other Indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article X. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article X, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article X, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.1 and 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article X.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and the
holders of Senior Indebtedness as provided in this Article X and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to Section 10.9, shall not be
liable to any such holders if it shall mistakenly pay over or distribute to
Securityholders or the Company or any other Person, money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
X or otherwise.
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SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Securities, to acquire and continue to
hold, or to continue to hold, such Senior Indebtedness and such holder of
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Indebtedness.
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ARTICLE XI
Guarantee
SECTION 11.1. Guarantee. Each Subsidiary Guarantor hereby
fully, unconditionally and irrevocably guarantees, as primary obligor and not
merely as surety, jointly and severally with each other Subsidiary Guarantor,
to each Holder of the Securities and the Trustee, the full and punctual payment
when due, whether at maturity, by acceleration, by redemption or otherwise, of
the principal of, premium, if any, and interest on the Securities (all the
foregoing being hereinafter collectively called the "Obligations"). Each
Subsidiary Guarantor further agrees (to the extent permitted by law) that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from it, and that it will remain bound under this Article XI
notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of
payment from and protest to the Company of any of the Obligations and also
waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Obligations. The obligations
of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure
of any Holder to assert any claim or demand or to enforce any right or remedy
against the Company or any other person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any thereof;
(c) any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Obligations
or any of them; (e) the failure of any Holder to exercise any right or remedy
against any other Subsidiary Guarantor; or (f) any change in the ownership of
the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein constitutes a Guarantee of payment when due (and not a
Guarantee of collection) and waives any right to require that any resort be had
by any Holder to any security held for payment of the Obligations.
The Subsidiary Guarantee of each Subsidiary Guarantor is, to
the extent and in the manner set forth in Article XII, subordinated and subject
in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness of such Subsidiary Guarantor and the Subsidiary Guarantee is made
subject to such provisions of such Guarantees.
The obligations of each Subsidiary Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason (other than payment of the Obligations in full), including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Obligations
or otherwise. Without limiting the generality of the foregoing, the
obligations of each Subsidiary Guarantor herein shall not be discharged or
impaired or otherwise affected by
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the failure of any Holder to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other
act or thing or omission or delay to do any other act or thing which may or
might in any manner or to any extent vary the risk of any Subsidiary Guarantor
or would otherwise operate as a discharge of such Subsidiary Guarantor as a
matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or
interest on any of the Obligations is rescinded or must otherwise be restored
by any Holder upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder has at law or in equity against any Subsidiary
Guarantor by virtue hereof, upon the failure of the Company to pay any of the
Obligations when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of
(i) the unpaid amount of such Obligations then due and owing and (ii) accrued
and unpaid interest on such Obligations then due and owing (but only to the
extent not prohibited by law).
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as
provided in this Indenture for the purposes of the Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby and (y) in the
event of any such declaration of acceleration of such Obligations, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Subsidiary Guarantor for the purposes of this Subsidiary
Guarantee.
Each Subsidiary Guarantor also agrees to pay any and all
reasonable costs and expenses (including reasonable attorneys' fees) incurred
by the Trustee or the Holders in enforcing any rights under this Section.
SECTION 11.2. Limitation on Liability; Termination, Release
and Discharge. The obligations of each Subsidiary Guarantor will be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Subsidiary Guarantor (including, without limitation,
any guarantees under the Senior Credit Agreement) and after giving effect to
any collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Subsidiary Guarantee or pursuant to its contribution obligations
under this Indenture, result in the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law.
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Each Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Subsidiary Guarantor without limitation.
Each Subsidiary Guarantor may consolidate with or merge into or sell all or
substantially all its assets to a corporation, partnership or trust other than
the Company or another Subsidiary Guarantor except that if the surviving
corporation of any such merger or consolidation is a Subsidiary of the Company,
such Subsidiary shall not be a Foreign Subsidiary. Upon the sale or disposition
of a Subsidiary Guarantor (by merger, consolidation, the sale of its Capital
Stock or the sale of all or substantially all of its assets) to a Person
(whether or not an Affiliate of the Subsidiary Guarantor) which is not a
Subsidiary of the Company, which sale or disposition is otherwise in compliance
with this Indenture (including Section 3.7), such Subsidiary Guarantor will be
deemed released from all its obligations under this Indenture and its
Subsidiary Guarantee and such Subsidiary Guarantee will terminate; provided,
however, that any such termination will occur only to the extent that all
obligations of such Subsidiary Guarantor under the Senior Credit Agreement and
all of its guarantees of, and under all of its pledges of assets or other
security interests which secure, any other Indebtedness of the Company will
also terminate upon such release, sale or transfer.
SECTION 11.3. Right of Contribution. Each Subsidiary
Guarantor hereby agrees that to the extent that any Subsidiary Guarantor shall
have paid more than its proportionate share of any payment made on the
obligations under the Subsidiary Guarantees, such Subsidiary Guarantor shall be
entitled to seek and receive contribution from and against the Company or any
other Subsidiary Guarantor who has not paid its proportionate share of such
payment. Each Subsidiary Guarantor's right of contribution shall be subject to
the terms and conditions of Section 3.6. The provisions of this Section 11.3
shall in no respect limit the obligations and liabilities of each Subsidiary
Guarantor to the Trustee and the Holders and each Subsidiary Guarantor shall
remain liable to the Trustee and the Holders for the full amount guaranteed by
such Subsidiary Guarantor hereunder.
SECTION 11.4. No Subrogation. Notwithstanding any payment or
payments made by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor
shall be entitled to be subrogated to any of the rights of the Trustee or any
Holder against the Company or any other Subsidiary Guarantor or any collateral
security or guarantee or right of offset held by the Trustee or any Holder for
the payment of the Obligations, nor shall any Subsidiary Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any
other Subsidiary Guarantor in respect of payments made by such Subsidiary
Guarantor hereunder, until all amounts owing to the Trustee and the Holders by
the Company on account of the Obligations are paid in full. If any amount
shall be paid to any Subsidiary Guarantor on account of such subrogation rights
at any time when all of the Obligations shall not have been paid in full, such
amount shall be held by such Subsidiary Guarantor in trust for the Trustee and
the Holders, segregated from other funds of such Subsidiary Guarantor, and
shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to
the Trustee in the exact form received by such Subsidiary Guarantor (duly
indorsed by such Subsidiary Guarantor to the Trustee, if required), to be
applied against the Obligations.
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ARTICLE XII
Subordination of Subsidiary Guarantees
SECTION 12.1. Agreement To Subordinate. Each Subsidiary
Guarantor agrees, and each Securityholder by accepting a Security agrees, that
the Indebtedness evidenced by each Subsidiary Guarantee and other obligations
relating to the Securities are subordinated in right of payment, to the extent
and in the manner provided in this Article XII, to the prior payment when due
in cash or Cash Equivalents of all Guarantor Senior Indebtedness and that the
subordination is for the benefit of and enforceable by the holders of Guarantor
Senior Indebtedness. Each Subsidiary Guarantee shall in all respects rank pari
passu with all other Guarantor Senior Subordinated Indebtedness of such
Subsidiary Guarantor and only Indebtedness of the Subsidiary Guarantor which is
Guarantor Senior Indebtedness will rank senior to such Subsidiary Guarantee in
accordance with the provisions set forth herein. All provisions of this
Article XII shall be subject to Section 12.12.
SECTION 12.2. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets or securities of any Subsidiary Guarantor
upon a total or partial liquidation or a total or partial dissolution of a
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to any Subsidiary Guarantor or its
respective properties:
(1) holders of Guarantor Senior Indebtedness shall be
entitled to receive payment in full in cash or Cash Equivalents of the
Guarantor Senior Indebtedness (including interest accruing after, or
which would accrue but for, the commencement of any proceeding at the
rate specified in the applicable Guarantor Senior Indebtedness,
whether or not a claim for such interest would be allowed) before
Securityholders shall be entitled to receive any payment of principal
of, premium, if any, or interest on or other amounts with respect to
the Securities; and
(2) until the Guarantor Senior Indebtedness is paid in full
in cash or Cash Equivalents, any payment or distribution to which
Securityholders would be entitled but for this Article XII shall be
made to holders of Guarantor Senior Indebtedness as their respective
interests may appear.
SECTION 12.3. Default on Senior Indebtedness. No Subsidiary
Guarantor shall pay the principal of, premium (if any) or interest on or other
amounts with respect to the Securities or make any deposit pursuant to Section
8.1 or pay the Securities if (i) any Guarantor Senior Indebtedness or Senior
Indebtedness of the Company is not paid when due in cash or Cash Equivalents or
(ii) any other default on Guarantor Senior Indebtedness or Senior Indebtedness
of the Company occurs and the maturity of such Guarantor Senior Indebtedness or
Senior Indebtedness of the Company is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded in writing or (y) such Guarantor Senior
Indebtedness or Senior Indebtedness of the Company has been paid in full in
cash or Cash Equivalents; provided, however, that a Subsidiary Guarantor may
pay the Securities without regard to the
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foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of the Guarantor Senior Indebtedness or the
Senior Indebtedness of the Company with respect to which either of the events
set forth in clause (i) or (ii) of this sentence has occurred or is continuing.
During the continuance of any default (other than a default described in clause
(i) or (ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Subsidiary Guarantor may not pay the Securities for a Payment Blockage
Period commencing upon the receipt by the Trustee (with a copy to the Company)
of a Blockage Notice of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice is no longer continuing or
(iii) because such Designated Senior Indebtedness has been repaid in full in
cash or Cash Equivalents). Notwithstanding the provisions of the immediately
preceding sentence, unless the holders of such Designated Senior Indebtedness
or the Representative of such holders shall have accelerated the maturity of
such Designated Senior Indebtedness, a Subsidiary Guarantor may resume payments
on the Securities after the end of such Payment Blockage Period. Not more than
one Blockage Notice may be given in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior
Indebtedness during such period.
SECTION 12.4. Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default and if
any Designated Senior Indebtedness is outstanding, no Subsidiary Guarantor
shall pay the Securities until five Business Days after the holders or
Representative of the Designated Senior Indebtedness receives notice of such
acceleration as provided in this Indenture and, thereafter, Subsidiary
Guarantors may pay the Securities only if this Article XII otherwise permits
payments at that time.
SECTION 12.5. When Distribution Must Be Paid Over. If a
payment or distribution is made to the Trustee or Securityholders that because
of this Article XII should not have been made to them, the Trustee or the
Securityholders who receive the payment or distribution shall hold it in trust
for holders of Guarantor Senior Indebtedness and promptly pay it over to them
as their respective interests may appear.
SECTION 12.6. Subrogation. After all Guarantor Senior
Indebtedness is paid in full in cash or Cash Equivalents and the Securities are
paid in full, Securityholders shall be subrogated to the rights of holders of
Guarantor Senior Indebtedness to receive distributions applicable to Guarantor
Senior Indebtedness. A payment or distribution made under this Article XII to
holders of Guarantor Senior Indebtedness which otherwise would have been made
to Securityholders is not, as between a Subsidiary Guarantor and
Securityholders, a payment by such Subsidiary Guarantor of Guarantor Senior
Indebtedness.
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SECTION 12.7. Relative Rights. This Article XII defines the
relative rights of Holders and holders of Guarantor Senior Indebtedness.
Nothing in the Subsidiary Guarantee shall:
(1) impair, as between a Subsidiary Guarantor and Holders,
the obligation of a Subsidiary Guarantor which is absolute and
unconditional, to pay the Obligations in accordance with the terms of
the Subsidiary Guarantee; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default or Event of Default, subject to
the rights of holders of Guarantor Senior Indebtedness to receive
payments and distributions otherwise payable to Securityholders.
SECTION 12.8. Subordination May Not Be Impaired by Subsidiary
Guarantor. No right of any holder of Guarantor Senior Indebtedness to enforce
the subordination of the Indebtedness evidenced by the Subsidiary Guarantee
shall be impaired by any act or failure to act by a Subsidiary Guarantor or by
the failure of any of them to comply with the Subsidiary Guarantee or this
Indenture.
SECTION 12.9. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.3, the Trustee or Paying Agent may continue to make
payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than one Business Day prior to the date of such payment, a Trust
Officer of the Trustee receives notice satisfactory to it that payments may not
be made under this Article XII. A Subsidiary Guarantor, the Company, the
Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of the Company or Guarantor Senior Indebtedness may give
the notice; provided, however, that, if an issue of Senior Indebtedness of the
Company or Guarantor Senior Indebtedness has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article XII with respect to any Guarantor Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Guarantor
Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article XII shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.7. Each
Paying Agent shall have the same rights and obligations under this Article XII
as does the Trustee.
SECTION 12.10. Distribution or Notice to Representative.
Whenever a payment or distribution is to be made or a notice given to holders
of Guarantor Senior Indebtedness, the payment or distribution may be made and
the notice given to their Representative (if any).
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SECTION 12.11. Article XII Not To Prevent Events of Default
or Limit Right To Accelerate. The failure to make a payment in respect of the
Securities by reason of any provision in this Article XII shall not be
construed as preventing the occurrence of a Default or Event of Default.
Nothing in this Article XII shall have any effect on the right of the
Securityholders or the Trustee to accelerate the maturity of the Securities.
SECTION 12.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of U.S. Government Obligations held in trust under Article VIII
by the Trustee for the payment of principal of and interest on the Securities
shall not be subordinated to the prior payment of any Guarantor Senior
Indebtedness or subject to the restrictions set forth in this Article XII, and
none of the Securityholders shall be obligated to pay over any such amount to a
Subsidiary Guarantor, any holder of Guarantor Senior Indebtedness or Senior
Indebtedness of the Company, or any other creditor of a Subsidiary Guarantor or
the Company.
SECTION 12.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Guarantor
Senior Indebtedness or Senior Indebtedness of the Company for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Guarantor Senior Indebtedness or Senior
Indebtedness and other Indebtedness of the Company or a Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XII. In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Guarantor
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XII, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article XII, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 7.1 and 7.2 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article XII.
SECTION 12.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on
its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Securityholders and the
holders of Guarantor Senior Indebtedness and Senior Indebtedness of the Company
as provided in this Article XII and appoints the Trustee as attorney-in-fact
for any and all such purposes.
SECTION 12.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior
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Indebtedness or Senior Indebtedness of the Company and, subject to Section
12.9, shall not be liable to any such holders if it shall mistakenly pay over
or distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Guarantor Senior Indebtedness shall be entitled
by virtue of this Article XII or otherwise.
SECTION 12.16. Reliance on Subordination Provisions. Each
Securityholder by accepting a Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Guarantor Senior Indebtedness,
whether such Guarantor Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Guarantor Senior Indebtedness and such holder of
Guarantor Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Guarantor Senior Indebtedness.
ARTICLE XIII
Miscellaneous
SECTION 13.1. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which
is required to be included in this Indenture by the TIA, the provision required
by the TIA shall control.
SECTION 13.2. Notices. Any notice or communication shall be
in writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Home Products International, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
With a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
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if to the Trustee:
LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services Division
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a registered
Securityholder shall be mailed to the Securityholder at the Securityholder's
address as it appears on the registration books of the Registrar and shall be
sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 13.4. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to
take or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such certificate
or opinion has read such covenant or condition;
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(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to
factual matters on an Officer's Certificate or on certificates of public
officials.
SECTION 13.6. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.8. Legal Holidays. A "Legal Holiday" is a
Saturday, a Sunday or other day on which commercial banking institutions are
authorized or required to be closed in New York City. If a payment date is a
Legal Holiday, payment shall be made on the next succeeding day that is not a
Legal Holiday, and no interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date shall not be affected.
SECTION 13.9. GOVERNING LAW. THIS INDENTURE AND THE
SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By
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accepting a Security, each Securityholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 13.11. Successors. All agreements of the Company in
this Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough
to prove this Indenture.
SECTION 13.13. Variable Provisions. The Company initially
appoints the Trustee as Paying Agent and Registrar and custodian with respect
to any Global Securities.
SECTION 13.14. Qualification of Indenture. The Company shall
qualify this Indenture under the TIA in accordance with the terms and
conditions of the Exchange and Registration Rights Agreement and shall pay all
reasonable costs and expenses (including attorneys' fees and expenses for the
Company, the Trustee and the Holders) incurred in connection therewith,
including, but not limited to, costs and expenses of qualification of this
Indenture and the Securities and printing this Indenture and the Securities.
The Trustee shall be entitled to receive from the Company any such Officers'
Certificates, Opinions of Counsel or other documentation as it may reasonably
request in connection with any such qualification of this Indenture under the
TIA.
SECTION 13.15. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
HOME PRODUCTS INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
SELFIX, INC.,
as a Subsidiary Guarantor
By:
-------------------------------
Name:
Title:
SEYMOUR HOUSEWARES CORPORATION,
as a Subsidiary Guarantor
By:
-------------------------------
Name:
Title:
SHUTTERS, INC.,
as a Subsidiary Guarantor
By:
-------------------------------
Name:
Title:
TAMOR CORPORATION,
as a Subsidiary Guarantor
By:
-------------------------------
Name:
Title:
LASALLE NATIONAL BANK
By:
-------------------------------
Name:
Title:
94
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
No. [___] Principal Amount $[_______]
CUSIP NO. ____________
9 5/8% Senior Subordinated Notes due 2008
Home Products International, Inc., a Delaware corporation,
promises to pay to [___________], or registered assigns, the principal sum of
[__________________] Dollars on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing on
November 15, 1998
Record Dates: May 1 and November 1
Additional provisions of this Security are set forth on the
other side of this Security.
HOME PRODUCTS INTERNATIONAL, INC.
By:
--------------------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE NATIONAL BANK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
------------------------------
Authorized Signatory Date: _____________, 1998
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[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9 5/8% Senior Subordinated Note due 2008
1. Interest
Home Products International, Inc., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above.
The Company will pay interest semiannually on May 15 and
November 15 of each year commencing on November 15, 1998. Interest on the
Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from November 15,
1998. The Company shall pay interest on overdue principal or premium, if any
(plus interest on such interest to the extent lawful), at the rate borne by the
Securities to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
By at least 12:00 p.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The
Company will pay interest (except Defaulted Interest) to the Persons who are
registered Holders of Securities at the close of business on the May 1 or
November 1 immediately preceding the interest payment date even if Securities
are cancelled, repurchased or redeemed after the record date and on or before
the interest payment date. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal
and interest by check payable in such money. It may mail an interest check to
a Holder's registered address.
3. Paying Agent and Registrar
Initially, LaSalle National Bank, a banking corporation duly
organized and existing under the laws of the State of Illinois (the "Trustee"),
will act as Trustee, Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its domestically incorporated
Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of May 14, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939
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(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture
(the "Act"). Capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and the Act for a
statement of those terms.
The Securities are general unsecured senior subordinated
obligations of the Company limited to $125.0 million aggregate principal amount
(subject to Section 2.9 of the Indenture). The aggregate principal amount of
notes which may be authenticated and delivered under the Indenture, including
the Securities, is limited to $250.0 million (subject to Section 2.9 of the
Indenture). This Security is one of the Initial Securities referred to in the
Indenture. The Securities include the Initial Securities and any Exchange
Securities issued in exchange for the Initial Securities pursuant to the
Indenture and the Exchange and Registration Rights Agreement. The Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on:
the Incurrence of Indebtedness by the Company and its Restricted Subsidiaries,
the Incurrence of Indebtedness by the Company and its Subsidiary Guarantors if
subordinate or junior in any respect to any Senior Indebtedness or Guarantor
Senior Indebtedness, respectively, the payment of dividends and other
distributions on the Capital Stock of the Company and its Restricted
Subsidiaries, the purchase or redemption of Capital Stock of the Company and
Capital Stock of such Restricted Subsidiaries, certain purchases or redemptions
of Subordinated Indebtedness, the sale or transfer of assets and Capital Stock
of Restricted Subsidiaries, the issuance or sale of Capital Stock of Restricted
Subsidiaries, the business activities and investments of the Company and its
Restricted Subsidiaries and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal,
premium, if any, and interest on the Securities and all other amounts payable
by the Company under the Indenture and the Securities when and as the same
shall be due and payable, whether at maturity, by acceleration or otherwise,
according to the terms of the Securities and the Indenture, the Subsidiary
Guarantors have unconditionally guaranteed (and future Subsidiary Guarantors,
together with the Subsidiary Guarantors, will unconditionally guarantee),
jointly and severally, such obligations on a senior subordinated basis pursuant
to the terms of the Indenture.
5. Redemption
Except as set forth below, the Securities will not be
redeemable at the option of the Company prior to May 15, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior
notice mailed by first-class mail to each holder's registered address, at the
following redemption prices (expressed in percentages of principal amount),
plus accrued and unpaid interest to the redemption date (subject to the right
of holders of record on the relevant record date to receive interest due on the
relevant interest payment date):
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If redeemed during the 12-month period commencing on May 15 of the
years set forth below:
PERIOD REDEMPTION PRICE
------ ----------------
2003 104.813 %
2004 103.208 %
2005 101.604 %
2006 and thereafter 100.000 %
In addition, at any time and from time to time prior to May
15, 2001, the Company may redeem in the aggregate up to 35% of the original
principal amount of the Securities with the proceeds of one or more Equity
Offerings received by, or invested in, the Company so long as there is a Public
Market at the time of such redemption, at a redemption price (expressed as a
percentage of principal amount) of 109.625% plus accrued and unpaid interest,
if any, to the redemption date (subject to the right of holders of record on
the relevant record date to receive interest due on the relevant interest
payment date); provided, however, that at least 65% of the original principal
amount of the Securities must remain outstanding after each such redemption;
provided, further, that each such redemption occurs within 90 days after the
closing of each Equity Offering.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the
holder thereof upon cancellation of the original Security.
6. Repurchase Provisions
(a) Upon a Change of Control, unless the Company has
exercised its right to redeem the Securities as described under Section 5
hereof, any Holder of Securities will have the right to cause the Company to
repurchase all or any part of the Securities of such Holder at a purchase price
in cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date) as provided in, and subject to the terms of, the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates
any Asset Sales permitted by the Indenture, when the aggregate amount of Excess
Proceeds equals or exceeds $10.0 million, the Company shall make an Offer for
all outstanding Securities pro rata up to a maximum principal amount (expressed
as a multiple of $1,000) of Securities equal to such Excess Proceeds, at a
purchase price in cash equal to 100% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the date of purchase in
accordance with the procedures set forth in Section 3.7 of the Indenture.
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7. Subordination
The Securities are subordinated to Senior Indebtedness and the
Guarantees are subordinated to Guarantor Senior Indebtedness, each as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose. The Securities will
in all respects rank pari passu with all other Senior Subordinated
Indebtedness.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the
transfer of or exchange (i) any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) for a period beginning 15 days before the mailing of a notice
of Securities to be redeemed and ending on the date of such mailing or (ii) any
Securities for a period beginning 15 days before an interest payment date and
ending on such interest payment date.
9. Persons Deemed Owners
The registered holder of this Security may be treated as the
owner of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
11. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Securityholder, the Company and the
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Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article IV of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act,
or to make any change that does not adversely affect the rights of any
Securityholder, or to provide for the issuance of Exchange Securities.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest when due on the Securities; (ii) default in
payment of principal on the Securities at maturity, upon required repurchase or
upon redemption pursuant to paragraphs 5 and 6 of the Securities, upon
declaration or otherwise; (iii) the failure by the Company to comply with its
obligations under Article IV of the Indenture, (iv) failure by the Company to
comply for 30 days after notice with any of its obligations under the covenants
described under Sections 3.2 through 3.15 inclusive of the Indenture (in each
case, other than a failure to purchase Securities, which shall constitute an
Event of Default under clause (ii) above), (v) the failure by the Company to
comply for 60 days after notice with its other agreements contained in the
Indenture, (vi) Indebtedness of the Company or any Restricted Subsidiary if not
paid within any applicable grace period after final maturity or is accelerated
by the holders thereof because of a default and the total amount of such
Indebtedness unpaid or accelerated exceeds $5 million (the "cross acceleration
provision"), (vii) certain events of bankruptcy, insolvency or reorganization
of the Company or a Significant Subsidiary (the "bankruptcy provisions"),
(viii) any judgment or decree for the payment of money in excess of $5.0
million is rendered against the Company or a Significant Subsidiary and such
judgment or decree shall remain undischarged or unstayed for a period of 60
days after such judgment becomes final and non-appealable (the "judgment
default provision") or (ix) any Subsidiary Guarantee ceases to be in full force
and effect (except as contemplated by the terms of the Indenture) or any
Subsidiary Guarantor denies or disaffirms its obligations under the Indenture
or its Subsidiary Guarantee. However, a default under clauses (iv) and (v) will
not constitute an Event of Default until the Trustee or the holders of more
than 25% in principal amount of the outstanding Securities notify the Company
of the default and the Company does not cure such default within the time
specified in clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of
any continuing Default or Event of Default (except a Default or Event of
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.
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00. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its affiliates with the same rights it would
have if it were not Trustee.
15. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for
any obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent acting on its behalf) manually signs
the certificate of authentication on the other side of this Security.
17. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to
Minors Act).
18. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
19. Governing Law
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
---------------------- -------------------------
Signature Guarantee:
------------------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1 [ ] acquired for the undersigned's own account, without
transfer; or
2 [ ] transferred to the Company; or
3 [ ] transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933, as amended
(the "Securities Act"); or
4 [ ] transferred pursuant to an effective registration
statement under the Securities Act; or
5 [ ] transferred pursuant to and in compliance with
Regulation S under the Securities Act; or
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0 [ ] transferred to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act), that has furnished to the
Trustee a signed letter containing certain
representations and agreements (the form of which
letter appears as Section 2.7 of the Indenture); or
7 [ ] transferred pursuant to another available exemption
from the registration requirements of the Securities
Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering
any such transfer of the Securities, in their sole discretion, such legal
opinions, certifications and other information as the Trustee or the Company
may reasonably request to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
------------------------------
Signature
Signature Guarantee:
------------------------------ ------------------------------
(Signature must be guaranteed) Signature
----------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, as amended, and is aware that the sale to it is being made in reliance
on Rule 144A and acknowledges that it has received such information regarding
the Company as the undersigned has requested pursuant to Rule 144A or has
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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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[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Security authorized signatory
Date of Principal Amount of Principal Amount of following such of Trustee or
Exchange this Global Security this Global Security decrease or increase Securities Custodian
_______ ______________ __________ ____________ ______________
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $
Date: Your Signature
--------- --------------------------------------
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee:
------------------------------------------------
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
No. [_____] Principal Amount $[____________]
CUSIP NO. _____________
9 5/8% Senior Subordinated Notes due 2008
Home Products International, Inc., a Delaware corporation,
promises to pay to [______________], or registered assigns, the principal sum
of [_______________] Dollars on May 15, 2008.
Interest Payment Dates: May 15 and November 15, commencing on
November 15, 1998
Record Dates: May 1 and November 1
Additional provisions of this Security are set forth on the
other side of this Security.
HOME PRODUCTS INTERNATIONAL, INC.
By:
----------------------------
By:
----------------------------
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TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE NATIONAL BANK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
-----------------------------
Authorized Signatory Date:
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[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
9 5/8% Senior Subordinated Note due 2008
1. Interest
Home Products International, Inc., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being herein called the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above.
The Company will pay interest semiannually on May 15 and
November 15 of each year commencing on November 15, 1998. Interest on the
Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from November 15,
1998. The Company shall pay interest on overdue principal or premium, if any
(plus interest on such interest to the extent lawful), at the rate borne by the
Securities to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
By at least 12:00 p.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The
Company will pay interest (except Defaulted Interest) to the Persons who are
registered Holders of the Securities at the close of business on the May 1 or
November 1 immediately preceding the interest payment date even if Securities
are cancelled, repurchased or redeemed after the record date and on or before
the interest payment date. Holders must surrender Securities to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal
and interest by check payable in such money. It may mail an interest check to
a Holder's registered address.
3. Paying Agent and Registrar
Initially, LaSalle National Bank, a banking corporation duly
organized and existing under the laws of the State of Illinois (the "Trustee"),
will act as Trustee, Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its domestically incorporated
Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of May 14, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and
the Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the
Indenture (the "Act"). Capitalized terms
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used herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders
are referred to the Indenture and the Act for a statement of those terms.
The Securities are general unsecured senior subordinated
obligations of the Company limited to $125.0 million aggregate principal amount
(subject to Section 2.9 of the Indenture). The aggregate principal amount of
notes which may be authenticated and delivered under the Indenture, including
the Securities, is limited to $250.0 million (subject to Section 2.9 of the
Indenture). This Security is one of the Exchange Securities referred to in the
Indenture. The Securities include the Initial Securities and any Exchange
Securities issued in exchange for the Initial Securities pursuant to the
Indenture and the Exchange and Registration Rights Agreement. The Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on:
the Incurrence of Indebtedness by the Company and its Restricted Subsidiaries,
the Incurrence of Indebtedness by the Company and its Subsidiary Guarantors if
subordinate or junior in any respect to any Senior Indebtedness or Guarantor
Senior Indebtedness, respectively, the payment of dividends and other
distributions on the Capital Stock of the Company and its Restricted
Subsidiaries, the purchase or redemption of Capital Stock of the Company and
Capital Stock of such Restricted Subsidiaries, certain purchases or redemptions
of Subordinated Indebtedness, the sale or transfer of assets and Capital Stock
of Restricted Subsidiaries, the issuance or sale of Capital Stock of Restricted
Subsidiaries, the business activities and investments of the Company and its
Restricted Subsidiaries, and transactions with Affiliates. In addition, the
Indenture limits the ability of the Company and its Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal,
premium, if any, and interest on the Securities and all other amounts payable
by the Company under the Indenture and the Securities when and as the same
shall be due and payable, whether at maturity, by acceleration or otherwise,
according to the terms of the Securities and the Indenture, the Subsidiary
Guarantors have unconditionally guaranteed (and future Subsidiary Guarantors,
together with the Subsidiary Guarantors, will unconditionally guarantee),
jointly and severally, such obligations on a senior subordinated basis pursuant
to the terms of the Indenture.
5. Optional Redemption
Except as set forth below, the Securities will not be
redeemable at the option of the Company prior to May 15, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior
notice mailed by first-class mail to each holder's registered address, at the
following redemption prices (expressed in percentages of principal amount),
plus accrued and unpaid interest to the redemption date (subject to the right
of holders of record on the relevant record date to receive interest due on the
relevant interest payment date):
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If redeemed during the 12-month period commencing on May 15 of the
years set forth below:
PERIOD REDEMPTION PRICE
------ ----------------
2003 104.813%
2004 103.208%
2005 101.604%
2006 and thereafter 100.000%
In addition, at any time and from time to time prior to May 15, 2001,
the Company may redeem in the aggregate up to 35% of the original principal
amount of the Securities with the proceeds of one or more Equity Offerings
received by, or invested in, the Company so long as there is a Public Market at
the time of such redemption, at a redemption price (expressed as a percentage
of principal amount) of 109.625% plus accrued and unpaid interest, if any, to
the redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the original principal amount of the
Securities must remain outstanding after each such redemption; provided,
further, that each such redemption occurs within 90 days after the closing of
each Equity Offering.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the
holder thereof upon cancellation of the original Security.
6. Repurchase Provisions
(a) Upon a Change of Control, unless the Company has
exercised its right to redeem the Securities as described under Section 5
hereof, any Holder of Securities will have the right to cause the Company to
repurchase all or any part of the Securities of such Holder at a purchase price
in cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date) as provided in, and subject to the terms of, the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates
any Asset Sales permitted by the Indenture, when the aggregate amount of Excess
Proceeds equals or exceeds $10.0 million, the Company shall make an Offer for
all outstanding Securities pro rata up to a maximum principal amount (expressed
as a multiple of $1,000) of Securities equal to such Excess Proceeds, at a
purchase price in cash equal to 100% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the date of purchase in
accordance with the procedures set forth in Section 3.7 of the Indenture.
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7. Subordination
The Securities are subordinated to Senior Indebtedness and the
Guarantees are subordinated to Guarantor Senior Indebtedness, each as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose. The Securities will
in all respects rank pari passu with all other Senior Subordinated
Indebtedness.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the
transfer of or exchange (i) any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or for a period beginning 15 days before the mailing of a
notice of Securities to be redeemed and ending on the date of such mailing or
(ii) any Securities for a period beginning 15 days before an interest payment
date and ending on such interest payment date.
9. Persons Deemed Owners
The registered holder of this Security may be treated as the
owner of it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back
to the Company at its request unless an abandoned property law designates
another person. After any such payment, Holders entitled to the money must
look only to the Company and not to the Trustee for payment.
11. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
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Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Securityholder, the Company and the Trustee may amend the Indenture or
the Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the
Company or Communications or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder, or to provide
for the issuance of Exchange Securities.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest when due on the Securities; (ii) default in
payment of principal on the Securities at maturity, upon required repurchase,
upon required repurchase or upon redemption pursuant to paragraphs 5 and 6 of
the Securities, upon declaration or otherwise; (iii) the failure by the Company
to comply with its obligations under Article IV of the Indenture (iv) failure
by the Company to comply for 30 days after notice with any of its obligations
under the covenants described under Sections 3.2 through 3.15 inclusive of the
Indenture (in each case, other than a failure to purchase Securities, which
shall constitute an Event of Default under clause (ii) above), (v) the failure
by the Company to comply for 60 days after notice with its other agreements
contained in the Indenture, (vi) Indebtedness of the Company or any Restricted
Subsidiary if not paid within any applicable grace period after final maturity
or is accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million (the
"cross acceleration provision"), (vii) certain events of bankruptcy, insolvency
or reorganization of the Company or a Significant Subsidiary (the "bankruptcy
provisions"), (viii) any judgment or decree for the payment of money in excess
of $5.0 million is rendered against the Company or a Significant Subsidiary and
such judgment or decree shall remain undischarged or unstayed for a period of
60 days after such judgment becomes final and non-appealable (the "judgment
default provision") or (ix) any Subsidiary Guarantee ceases to be in full force
and effect (except as contemplated by the terms of the Indenture) or any
Subsidiary Guarantor denies or disaffirms its obligations under the Indenture
or its Subsidiary Guarantee. However, a default under clauses (iv) and (v)
will not constitute an Event of Default until the Trustee or the holders of
more than 25% in principal amount of the outstanding Securities notify the
Company of the default and the Company does not cure such default within the
time specified in clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of
any continuing Default or Event of Default (except a
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Default or Event of Default in payment of principal or interest) if it
determines that withholding notice is in their interest.
14. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its affiliates with the same rights it would
have if it were not Trustee.
15. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for
any obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent acting on its behalf) manually signs
the certificate of authentication on the other side of this Security.
17. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to
Minors Act).
18. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
19. Governing Law
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York but without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature
------------------ -------------------------
Signature Guarantee:
-------------------------------------------------
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $
Date: Your Signature:
--------- --------------------------------------
(Sign exactly as your name appears on
the other side of the Security)
Signature Guarantee:
--------------------------------------------
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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EXHIBIT C
FORM OF SUBSIDIARY GUARANTEE
This Supplemental Indenture, dated as of [__________] (this
"Supplemental Indenture" or "Guarantee"), among [name of future Subsidiary
Guarantor] (the "Guarantor"), Home Products International, Inc. (together with
its successors and assigns, the "Company"), each other then existing Subsidiary
Guarantor under the Indenture referred to below, and LaSalle National Bank, as
Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed
and delivered an Indenture, dated as of May 14, 1998 (as amended, supplemented,
waived or otherwise modified, the "Indenture"), providing for the issuance of
an aggregate principal amount of $125.0 million of 9 5/8% Senior Subordinated
Notes due 2008 of the Company (the "Securities");
WHEREAS, Section 3.11 of the Indenture provides that the
Company is required to cause each Restricted Subsidiary (other than a Foreign
Subsidiary) created or acquired by the Company which Guarantees the Bank
Indebtedness or Incurs Indebtedness under paragraph (a) of Section 3.3 of the
Indenture to execute and deliver to the Trustee a Subsidiary Guarantee pursuant
to which such Subsidiary Guarantor will unconditionally Guarantee, on a joint
and several basis, the full and prompt payment of the principal of, premium, if
any and interest on the Securities on a senior subordinated basis; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee
and the Company are authorized to execute and deliver this Supplemental
Indenture to amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor, the Company, the other Subsidiary Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of
the holders of the Securities as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. As used in this Subsidiary
Guarantee, terms defined in the Indenture or in the preamble or recital hereto
are used herein as therein defined, except that the term "Holders" in this
Guarantee shall refer to the term "Holders" as defined in the Indenture and the
Trustee acting on behalf or for the benefit of such holders. The words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
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ARTICLE II
Agreement to be Bound; Guarantee
SECTION 2.1 Agreement to be Bound. The Guarantor hereby
becomes a party to the Indenture as a Subsidiary Guarantor and as such will
have all of the rights and be subject to all of the obligations and agreements
of a Subsidiary Guarantor under the Indenture. The Guarantor agrees to be
bound by all of the provisions of the Indenture applicable to a Subsidiary
Guarantor and to perform all of the obligations and agreements of a Subsidiary
Guarantor under the Indenture.
SECTION 2.2 Guarantee. (a) The Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely
as surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and the Trustee, the full and punctual payment when
due, whether at maturity, by acceleration, by redemption or otherwise, of the
Obligations pursuant to Article XI of the Indenture.
(b) The Guarantor agrees that the Indebtedness evidenced by
its Subsidiary Guarantee shall be subordinated in right of payment, to the
extent and in the manner provided in Article XII of the Indenture, to the prior
payment when due in cash or Cash Equivalents of all Guarantor Senior
Indebtedness of the Guarantor and that the subordination is for the benefit of
and enforceable by the holders of Guarantor Senior Indebtedness of the
Guarantor. This Guarantee shall in all respects rank pari passu with all other
Guarantor Senior Subordinated Indebtedness of the Guarantor and only
Indebtedness of the Guarantor which is Guarantor Senior Indebtedness will rank
senior to this Guarantee in accordance with the provisions set forth herein.
ARTICLE III
Miscellaneous
SECTION 3.1 Notices. All notices and other communications to
the Guarantor shall be given as provided in the Indenture to the Guarantor, at
its address set forth below, with a copy to the Company as provided in the
Indenture for notices to the Company.
SECTION 3.2 Parties. Nothing expressed or mentioned herein
is intended or shall be construed to give any Person, firm or corporation,
other than the Holders and the Trustee and the holders of any Guarantor Senior
Indebtedness, any legal or equitable right, remedy or claim under or in respect
of this Supplemental Indenture or the Indenture or any provision herein or
therein contained.
SECTION 3.3 Governing Law. This Supplemental Indenture shall
be governed by the laws of the State of New York.
SECTION 3.4 Severability Clause. In case any provision in
this Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and such provision shall be ineffective
only to the extent of such invalidity, illegality or unenforceability.
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SECTION 3.5 Ratification of Indenture; Supplemental
Indentures Part of Indenture. Except as expressly amended hereby, the
Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and
every holder of Securities heretofore or hereafter authenticated and delivered
shall be bound hereby. The Trustee makes no representation or warranty as to
the validity or sufficiency of this Supplemental Indenture.
SECTION 3.6 Counterparts. The parties hereto may sign one or
more copies of this Supplemental Indenture in counterparts, all of which
together shall constitute one and the same agreement.
SECTION 3.7 Headings. The headings of the Articles and the
sections in this Guarantee are for convenience of reference only and shall not
be deemed to alter or affect the meaning or interpretation of any provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NAME OF GUARANTOR],
as a Subsidiary Guarantor
By:
----------------------------
Name:
Title:
HOME PRODUCTS INTERNATIONAL, INC.
By:
----------------------------
Name:
Title:
SELFIX, INC.,
as a Subsidiary Guarantor
By:
----------------------------
Name:
Title:
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SEYMOUR HOUSEWARES CORPORATION,
as a Subsidiary Guarantor
By:
----------------------------
Name:
Title:
SHUTTERS, INC.,
as a Subsidiary Guarantor
By:
----------------------------
Name:
Title:
TAMOR CORPORATION,
as a Subsidiary Guarantor
By:
----------------------------
Name:
Title:
[Add signature block for any other existing Subsidiary Guarantors]
LASALLE NATIONAL BANK
By:
----------------------------
Name:
Title:
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