EXHIBIT 4.6
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SALT HOLDINGS CORPORATION,
as Issuer,
and
THE BANK OF NEW YORK,
as Trustee
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INDENTURE
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Dated as of May 22, 2003
12% Senior Subordinated Discount Notes Due 2013
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CROSS-REFERENCE TABLE
TIA Section Indenture Section
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310(a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A.
(a)(5)................................................................... 7.8; 7.10
(b)...................................................................... 7.8; 7.10; 13.2
(c)...................................................................... N.A.
311(a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312(a)...................................................................... 2.5
(b)...................................................................... 13.3
(c)...................................................................... 13.3
313(a)...................................................................... 7.6
(b)(1)................................................................... 7.6
(b)(2)................................................................... 7.6
(c)...................................................................... 7.6; 13.2
(d)...................................................................... 7.6
314(a)...................................................................... 4.8; 4.10
(b)...................................................................... N.A.
(c)(1)................................................................... 7.2; 13.4; 13.5
(c)(2)................................................................... 7.2; 13.4; 13.5
(c)(3)................................................................... N.A.
(d)...................................................................... N.A.
(e)...................................................................... 13.5
(f)...................................................................... N.A.
315(a)...................................................................... 7.1(b)
(b)...................................................................... 7.5
(c)...................................................................... 7.1
(d)...................................................................... 6.5; 7.1(c)
(e)...................................................................... 6.11
316(a)(last sentence)....................................................... 2.9
(a)(1)(A)................................................................ 6.5
(a)(1)(B)................................................................ 6.4
(a)(2)................................................................... N.A.
(b)...................................................................... 6.7
(c)...................................................................... 9.5
317(a)(1)................................................................... 6.8
(a)(2)................................................................... 6.9
(b)...................................................................... 2.4
318(a)...................................................................... 13.1
(c)...................................................................... 13.1
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N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this
Indenture.
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1. DEFINITIONS.............................................................................1
1.2. INCORPORATION BY REFERENCE OF TIA......................................................38
1.3. RULES OF CONSTRUCTION..................................................................38
ARTICLE TWO
THE SECURITIES
2.1. FORM AND DATING........................................................................39
2.2. EXECUTION AND AUTHENTICATION...........................................................41
2.3. REGISTRAR AND PAYING AGENT.............................................................42
2.4. PAYING AGENT TO HOLD ASSETS IN TRUST...................................................42
2.5. HOLDER LISTS...........................................................................43
2.6. TRANSFER AND EXCHANGE..................................................................43
2.7. REPLACEMENT SECURITIES.................................................................45
2.8. OUTSTANDING SECURITIES.................................................................45
2.9. TREASURY SECURITIES....................................................................45
2.10. TEMPORARY SECURITIES...................................................................46
2.11. CANCELLATION...........................................................................46
2.12. DEFAULTED INTEREST.....................................................................46
2.13. CUSIP AND ISIN NUMBERS.................................................................46
2.14. RESTRICTIVE LEGENDS....................................................................47
2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY..............................................49
2.16. SPECIAL TRANSFER PROVISIONS............................................................50
ARTICLE THREE
REDEMPTION
3.1. NOTICES TO TRUSTEE.....................................................................55
3.2. SELECTION OF SECURITIES TO BE REDEEMED.................................................55
3.3. NOTICE OF REDEMPTION...................................................................55
3.4. EFFECT OF NOTICE OF REDEMPTION.........................................................56
3.5. DEPOSIT OF REDEMPTION PRICE............................................................57
3.6. SECURITIES REDEEMED IN PART............................................................57
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ARTICLE FOUR
COVENANTS
4.1. PAYMENT OF SECURITIES..................................................................57
4.2. MAINTENANCE OF OFFICE OR AGENCY........................................................58
4.3. LIMITATION ON RESTRICTED PAYMENTS......................................................58
4.4. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS....................................63
4.5. CORPORATE EXISTENCE....................................................................63
4.6. PAYMENT OF TAXES AND OTHER CLAIMS......................................................63
4.7. MAINTENANCE OF PROPERTIES AND INSURANCE................................................64
4.8. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT..............................................64
4.9. COMPLIANCE WITH LAWS...................................................................65
4.10. REPORTS TO HOLDERS.....................................................................65
4.11. WAIVER OF STAY, EXTENSION OR USURY LAWS................................................66
4.12. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES............................................66
4.13. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES...........68
4.14. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.......................70
4.15. LIMITATION ON LIENS....................................................................71
4.16. CHANGE OF CONTROL......................................................................72
4.17. LIMITATION ON ASSET SALES..............................................................74
4.18. PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT..................................78
ARTICLE FIVE
SUCCESSOR CORPORATION
5.1. MERGER, CONSOLIDATION AND SALE OF ASSETS...............................................78
5.2. SUCCESSOR CORPORATION SUBSTITUTED......................................................80
ARTICLE SIX
DEFAULT AND REMEDIES
6.1. EVENTS OF DEFAULT......................................................................81
6.2. ACCELERATION...........................................................................82
6.3. OTHER REMEDIES.........................................................................83
6.4. WAIVER OF PAST DEFAULTS................................................................83
6.5. CONTROL BY MAJORITY....................................................................84
6.6. LIMITATION ON SUITS....................................................................84
6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT...................................................84
6.8. COLLECTION SUIT BY TRUSTEE.............................................................85
6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.......................................................85
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6.10. PRIORITIES.............................................................................85
6.11. UNDERTAKING FOR COSTS..................................................................86
6.12. RESTORATION OF RIGHTS AND REMEDIES.....................................................86
6.13. RIGHTS AND REMEDIES CUMULATIVE.........................................................86
ARTICLE SEVEN
TRUSTEE
7.1. DUTIES OF TRUSTEE......................................................................87
7.2. RIGHTS OF TRUSTEE......................................................................88
7.3. INDIVIDUAL RIGHTS OF TRUSTEE...........................................................90
7.4. TRUSTEE'S DISCLAIMER...................................................................90
7.5. NOTICE OF DEFAULT......................................................................90
7.6. REPORTS BY TRUSTEE TO HOLDERS..........................................................90
7.7. COMPENSATION AND INDEMNITY.............................................................91
7.8. REPLACEMENT OF TRUSTEE.................................................................92
7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.......................................................93
7.10. ELIGIBILITY; DISQUALIFICATION..........................................................93
7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER...................................93
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
8.1. TERMINATION OF THE ISSUER'S OBLIGATIONS................................................94
8.2. LEGAL DEFEASANCE AND COVENANT DEFEASANCE...............................................95
8.3. CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE..................................96
8.4. APPLICATION OF TRUST MONEY.............................................................98
8.5. REPAYMENT TO THE ISSUER................................................................98
8.6. REINSTATEMENT..........................................................................99
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.1. WITHOUT CONSENT OF HOLDERS.............................................................99
9.2. WITH CONSENT OF HOLDERS...............................................................100
9.3. EFFECT ON SENIOR DEBT.................................................................101
9.4. COMPLIANCE WITH TIA...................................................................101
9.5. REVOCATION AND EFFECT OF CONSENTS.....................................................102
9.6. NOTATION ON OR EXCHANGE OF SECURITIES.................................................102
9.7. TRUSTEE TO SIGN AMENDMENTS, ETC.......................................................103
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ARTICLE TEN
SUBORDINATION OF SECURITIES
10.1. SECURITIES SUBORDINATED TO SENIOR DEBT................................................103
10.2. SUSPENSION OF PAYMENT WHEN SENIOR DEBT IS IN DEFAULT..................................103
10.3. Securities Subordinated to Prior Payment of All Senior Debt on
Dissolution, LIQUIDATION OR REORGANIZATION OF THE ISSUER..........................105
10.4. PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION.............................................106
10.5. HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR DEBT..........................107
10.6. OBLIGATIONS OF THE ISSUER UNCONDITIONAL...............................................107
10.7. NOTICE TO TRUSTEE.....................................................................107
10.8. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT........................108
10.9. TRUSTEE'S RELATION TO SENIOR DEBT.....................................................108
10.10. Subordination Rights Not Impaired By Acts or Omissions of the Issuer OR
HOLDERS OF SENIOR DEBT. ..........................................................109
10.11. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF SECURITIES...........109
10.12. THIS ARTICLE TEN NOT TO PREVENT EVENTS OF DEFAULT.....................................110
10.13. TRUSTEE'S COMPENSATION NOT PREJUDICED.................................................110
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
11.1. UNCONDITIONAL GUARANTEE...............................................................110
11.2. LIMITATIONS ON GUARANTEES.............................................................112
11.3. EXECUTION AND DELIVERY OF GUARANTEE...................................................112
11.4. RELEASE OF A GUARANTOR................................................................113
11.5. WAIVER OF SUBROGATION.................................................................114
11.6. IMMEDIATE PAYMENT.....................................................................114
11.7. NO SETOFF.............................................................................114
11.8. OBLIGATIONS ABSOLUTE..................................................................115
11.9. OBLIGATIONS CONTINUING................................................................115
11.10. OBLIGATIONS NOT REDUCED...............................................................115
11.11. OBLIGATIONS REINSTATED................................................................115
11.12. OBLIGATIONS NOT AFFECTED..............................................................116
11.13. WAIVER................................................................................117
11.14. NO OBLIGATION TO TAKE ACTION AGAINST THE ISSUER.......................................117
11.15. DEALING WITH THE ISSUER AND OTHERS....................................................117
11.16. DEFAULT AND ENFORCEMENT...............................................................118
11.17. AMENDMENT, ETC........................................................................118
11.18. ACKNOWLEDGMENT........................................................................118
11.19. COSTS AND EXPENSES....................................................................118
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11.20. NO MERGER OR WAIVER; CUMULATIVE REMEDIES..............................................119
11.21. SURVIVAL OF OBLIGATIONS...............................................................119
11.22. GUARANTEE IN ADDITION TO OTHER OBLIGATIONS............................................119
11.23. SEVERABILITY..........................................................................119
11.24. SUCCESSORS AND ASSIGNS................................................................119
ARTICLE TWELVE
SUBORDINATION OF SUBSIDIARY GUARANTEES
12.1. GUARANTEE OBLIGATIONS SUBORDINATED TO GUARANTOR SENIOR DEBT...........................120
12.2. Suspension of Guarantee Obligations When GUARANTOR SENIOR DEBT IS IN DEFAULT..........120
12.3. Guarantee Obligations Subordinated to Prior Payment of
All Guarantor Senior Debt on Dissolution, Liquidation OR
REORGANIZATION OF SUCH GUARANTOR. ................................................121
12.4. PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION.............................................122
12.5. Holders of Guarantee Obligations To Be Subrogated to
RIGHTS OF HOLDERS OF GUARANTOR SENIOR DEBT........................................123
12.6. OBLIGATIONS OF THE GUARANTORS UNCONDITIONAL...........................................123
12.7. NOTICE TO TRUSTEE.....................................................................123
12.8. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT........................124
12.9. TRUSTEE'S RELATION TO GUARANTOR SENIOR DEBT...........................................125
12.10. Subordination Rights Not Impaired by Acts or Omissions of
THE GUARANTORS OR HOLDERS OF GUARANTOR SENIOR DEBT................................125
12.11. Holders Authorize Trustee To Effectuate Subordination
OF GUARANTEE OBLIGATIONS..........................................................126
12.12. THIS ARTICLE TWELVE NOT TO PREVENT EVENTS OF DEFAULT..................................126
12.13. TRUSTEE'S COMPENSATION NOT PREJUDICED.................................................126
ARTICLE THIRTEEN
MISCELLANEOUS
13.1. TIA CONTROLS..........................................................................127
13.2. NOTICES...............................................................................127
13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS..........................................128
13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT....................................128
13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.........................................129
13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.............................................129
13.7. LEGAL HOLIDAYS........................................................................129
13.8. GOVERNING LAW.........................................................................129
13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.........................................130
13.10. NO RECOURSE AGAINST OTHERS............................................................130
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13.11. SUCCESSORS............................................................................130
13.12. DUPLICATE ORIGINALS...................................................................130
13.13. SEVERABILITY..........................................................................130
Exhibit A - Form of Initial Note
Exhibit B - Form of Exchange Note
Exhibit C - Form of Certificate for Transfers to Non-QIB Accredited Investors
Exhibit D - Form of Certificate for Transfers Pursuant to Regulation S
Exhibit E - Guarantee
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this
Indenture
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INDENTURE dated as of May 22, 2003 between
SALT HOLDINGS CORPORATION, a
Delaware corporation (the "ISSUER" or the "COMPANY"), and THE BANK OF
NEW YORK,
as trustee (the "TRUSTEE").
The Issuer has duly authorized the creation of an issue of 12% Senior
Subordinated Discount Notes Due 2013 and, when and if issued as provided in the
Registration Rights Agreement in an Exchange Offer, 12% Senior Subordinated
Discount Notes Due 2013 registered under the Securities Act of 1933, as amended,
and, to provide therefor, the Issuer has duly authorized the execution and
delivery of this
Indenture. All things necessary to make the Securities, when
duly issued and executed by the Issuer and authenticated and delivered
hereunder, the valid and binding obligations of the Issuer and to make this
Indenture a valid and binding agreement of the Issuer have been done.
This
Indenture is subject to, and shall be governed by, the mandatory
provisions of the Trust
Indenture Act of 1939 (the "TIA"), as amended, that are
required to be a part of and to govern indentures qualified under the TIA.
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1. DEFINITIONS.
"ACCELERATION NOTICE" has the meaning set forth in Section 6.2.
"ACCREDITED INVESTOR" has the meaning set forth in Section 2.16(a).
"ACCRETED VALUE" means, as of any date (the "SPECIFIED DATE"), the
amount provided below for each $1,000 principal amount at maturity of
Securities:
(1) if the Specified Date occurs on one of the following dates
(each, a "SEMI-ANNUAL ACCRUAL DATE"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE
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June 1, 2003................................................ $ 558.39
December 1, 2003............................................ $ 591.90
June 1, 2004................................................ $ 627.41
December 1, 2004............................................ $ 665.06
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June 1, 2005................................................ $ 704.96
December 1, 2005............................................ $ 747.26
June 1, 2006................................................ $ 792.09
December 1, 2006............................................ $ 839.62
June 1, 2007................................................ $ 890.00
December 1, 2007............................................ $ 943.40
June 1, 2008................................................ $ 1,000.00
(2) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (A) the original
issue price of a Security and (B) an amount equal to the product of (x)
the Accreted Value for the first Semi-Annual Accrual Date less such
original issue price multiplied by (y) a fraction, the numerator of
which is the number of days from the Issue Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is the number of days elapsed from the Issue Date to the first
Semi-Annual Accrual Date, using a 360-day year of twelve 30-day months;
(3) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (A) the Accreted Value
for the Semi-Annual Accrual Date immediately preceding such Specified
Date and (B) an amount equal to the product of (x) the Accreted Value
for the immediately following Semi-Annual Accrual Date less the Accreted
Value for the immediately preceding Semi-Annual Accrual Date multiplied
by (y) a fraction, the numerator of which is the number of days from the
immediately preceding Semi-Annual Accrual Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is 180; or
(4) if the Specified Date occurs after the last Semi-Annual
Date, the Accreted Value will equal $1,000.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its
Subsidiaries (1) existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Restricted Subsidiaries or (2) assumed in connection with
the acquisition of assets from such Person, in each case, not incurred by such
Person in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"AFFILIATE" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Controlling" and "controlled" have correlative meanings. For purposes of this
Indenture,
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IMC Global Inc. and its Affiliates shall not be deemed to be an Affiliate of the
Company so long as they beneficially own securities representing equal to or
less than thirty-five percent of the voting power of the Company; PROVIDED that
Apollo beneficially owns securities representing a greater percentage of the
voting power of the Company than IMC Global Inc. and its Affiliates.
"AFFILIATE TRANSACTION" has the meaning set forth in Section 4.12(a).
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGENT MEMBERS" has the meaning set forth in Section 2.15(a).
"APOLLO" means Apollo Management V, L.P. and its Affiliates.
"APPLICABLE PREMIUM" means, with respect to a Security, the greater of
(i) 1.0% of the Accreted Value of such Security and (ii) (a) the present value
of all remaining required principal payments due on such Security and all
premium payments relating thereto assuming a redemption date of June 1, 2008
computed using a discount rate equal to the Treasury Rate plus 50 basis points,
minus (b) the Accreted Value of such Security on the date of redemption.
"ASSET ACQUISITION" means:
(1) an Investment by the Company or any of its Restricted
Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into or
consolidated with the Company or any Restricted Subsidiary of the
Company; or
(2) the acquisition by the Company or any of its Restricted
Subsidiaries of the assets of any Person (other than a Restricted
Subsidiary of the Company) which constitute all or substantially all of
the assets of such Person or comprise any division or line of business
of such Person or any other properties or assets of such Person other
than in the ordinary course of business.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer for value by the Company or any of
its Restricted Subsidiaries, including any Sale and Leaseback Transaction, to
any Person other than the Company or a Wholly Owned Restricted Subsidiary of the
Company of (a) any Capital Stock of any Restricted Subsidiary of the Company
(other than directors' qualifying shares); or (b) any other property or assets
of the Company or any Restricted Subsidiary of the Company other than in the
ordinary course of business; PROVIDED, HOWEVER, that Asset Sales shall not
include:
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(1) a transaction or series of related transactions for which
the Company or its Restricted Subsidiaries receive aggregate
consideration of less than $3.0 million;
(2) the sale or exchange of equipment in connection with the
purchase or other acquisition of other equipment, in each case used in
the business of the Company and its Restricted Subsidiaries;
(3) the sale, lease, conveyance, disposition or other transfer
of all or substantially all of the assets of the Company as permitted
under Section 5.1;
(4) disposals of equipment in connection with the reinvestment
in or the replacement of its equipment and disposals of worn-out or
obsolete equipment, in each case in the ordinary course of business of
the Company or its Restricted Subsidiaries;
(5) the sale of accounts receivable pursuant to a Qualified
Receivables Transaction;
(6) sales or grants of licenses to use the Company's or any
Restricted Subsidiary's patents, trade secrets, know-how and technology
to the extent that such license does not prohibit the licensor from
using the patent, trade secret, know-how or technology;
(7) the disposition of any Capital Stock or other ownership
interest in or assets or property of an Unrestricted Subsidiary;
(8) Capacity Arrangements;
(9) any Restricted Payment permitted under Section 4.3 or that
constitutes a Permitted Investment; and
(10) one or more Sale and Leaseback Transactions for which the
Company or any Restricted Subsidiary of the Company receives aggregate
consideration of less than $15.0 million.
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar federal,
state or foreign law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as such term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition, regardless of when such right may be exercised.
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"BOARD OF DIRECTORS" means, as to any Person, the board of directors or
equivalent governing board of such Person or any duly authorized committee
thereof.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other
day on which banking institutions in the City of
New York are required or
authorized by law or other governmental action to be closed.
"CAPACITY ARRANGEMENTS" means any agreement or arrangement involving,
relating to or otherwise facilitating, (a) requirement contracts, (b) tolling
arrangements or (c) the reservation or presale of production capacity of the
Company or its Restricted Subsidiaries by one or more third parties.
"CAPITALIZED LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability of a Person under a capital
lease that would at that time be required to be capitalized on a balance sheet
in accordance with GAAP, with the stated maturity being the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be prepaid by the lessee without payment of a penalty.
"CAPITAL STOCK" means:
(1) with respect to any person that is in the case of a
corporation, any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents (however
designated and whether or not voting) of corporate stock; and
(2) with respect to any other Person, any and all partnership,
membership, limited liability company interests or other equity
interests of such Person.
"CASH EQUIVALENTS" means:
(1) U.S. dollars, and in the case of any Foreign Restricted
Subsidiaries of the Company, Euros and such local currencies held by
them from time to time in the ordinary course of business;
(2) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States, Canada and the United Kingdom or
issued by any agency of these countries and backed by the full faith and
credit of the respective country, in each case maturing within one year
from the date of acquisition thereof;
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(3) marketable direct obligations issued by any State of the
United States of America or any political subdivision of any such State
or any public instrumentality thereof maturing within one year from the
date of acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from either Standard & Poor's
Ratings Services ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S")
or, if ▇▇▇▇▇'▇ and S&P cease to exist, any other nationally recognized
statistical rating organization designated by the Board of Directors of
the Company;
(4) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a
rating of at least A- 1 from S&P or at least P-1 from Moody's or, if
▇▇▇▇▇'▇ and S&P cease to exist, the equivalent from any other nationally
recognized statistical rating organization designated by the Board of
Directors of the Company;
(5) time deposits, certificates of deposit or bankers'
acceptances maturing within one year from the date of acquisition
thereof issued by any bank organized under the laws of the United States
of America or any state thereof or the District of Columbia or any
foreign jurisdiction having at the date of acquisition thereof combined
capital and surplus of at least $250.0 million;
(6) repurchase obligations with a term of not more than thirty
days for underlying securities of the types described in clause (2)
above entered into with any bank meeting the qualifications specified in
clause (5) above;
(7) investments in money market funds which invest substantially
all their assets in securities of the types described in clauses (2)
through (6) above; and
(8) overnight deposits and demand deposit accounts (in the
respective local currencies) maintained in the ordinary course of
business.
"CHANGE OF CONTROL" means the occurrence of one or more of the following
events:
(1) any sale, lease, exchange, conveyance, disposition or other
transfer (in one transaction or a series of related transactions) of all
or substantially all of the Company's assets to any Person or group of
related Persons for purposes of Section 13(d) of the Exchange Act (a
"GROUP"), together with any Affiliates of such Person, other than to the
Permitted Holders;
(2) any approval, adoption or initiating of a plan or proposal
for the liquidation or dissolution of the Company;
(3) any Person or Group, together with any Affiliates thereof
(other than the Permitted Holders), shall become the Beneficial Owner or
owner of record (by
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way of merger, consolidation or other business combinations or by
purchase in one transaction or a series of related transactions) of
shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company;
(4) any Person or Group, together with any Affiliates or Related
Persons thereof (other than the Permitted Holders), shall succeed in
having a sufficient number of its nominees elected to the Board of
Directors of the Company such that such nominees, when added to any
existing director remaining on the Board of Directors of the Company
after such election who was a nominee of or is an Affiliate or Related
Person of such Person or Group, will constitute a majority of the Board
of Directors of the Company; or
(5) the Company shall cease to own, directly or indirectly, a
majority of the Capital Stock of Compass Minerals.
"CHANGE OF CONTROL DATE" has the meaning set forth in Section 4.16(c).
"CHANGE OF CONTROL OFFER" has the meaning set forth in Section 4.16(a).
"CHANGE OF CONTROL PAYMENT DATE" has the meaning set forth in Section
4.16(a).
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, with respect to the
Commission's duties under the TIA, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the TIA, then the body performing such duties at such time.
"COMMODITY AGREEMENT" means any commodity futures contract, commodity
option or other similar agreement or arrangement entered into by the Company or
any Restricted Subsidiaries of the Company designed to protect the Company or
any of its Restricted Subsidiaries against fluctuations in the price of the
commodities at the time used in the ordinary course of business of the Company
or any of its Restricted Subsidiaries.
"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter shall mean such
successor Person.
"COMPASS MINERALS" means Compass Minerals Group, Inc.
-8-
"CONSOLIDATED EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of:
(1) Consolidated Net Income; and
(2) to the extent Consolidated Net Income has been reduced by
the following,
(a) all income taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for such
period (other than income taxes attributable to extraordinary,
unusual or nonrecurring gains or losses),
(b) Consolidated Interest Expense, and
(c) Consolidated Non-cash Charges less any non-cash items
increasing Consolidated Net Income for such period,
all as determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP as applicable.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters for which financial statements are available (the "FOUR QUARTER
PERIOD") ending on or prior to the date of the transaction giving rise to the
need to calculate the Consolidated Fixed Charge Coverage Ratio (the "TRANSACTION
DATE") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be
calculated after giving effect on a pro forma basis (consistent with the
provisions below) for the period of such calculation to:
(1) the incurrence or repayment of any Indebtedness of such
Person or any of its Restricted Subsidiaries (and the application of the
proceeds thereof) giving rise to the need to make such calculation and
any incurrence or repayment of other Indebtedness (and the application
of the proceeds thereof), other than the incurrence or repayment of
Indebtedness in the ordinary course of business for working capital
purposes pursuant to working capital facilities, occurring during the
Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter Period;
(2) any asset sales or other dispositions or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to the
need to make such
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calculation as a result of such Person or one of its Restricted
Subsidiaries (including any Person who becomes a Restricted Subsidiary
as a result of the Asset Acquisition) incurring, assuming or otherwise
being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost
reductions, adjustments and other operating improvements or synergies
both achieved by such Person during such period and to be achieved by
such Person and with respect to the acquired assets, all as determined
in good faith by a responsible financial or accounting officer of such
Person attributable to the assets which are the subject of the Asset
Acquisition or asset sale or other disposition during the Four Quarter
Period) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to
the Transaction Date, as if such asset sale or other disposition or
Asset Acquisition (including the incurrence, assumption or liability for
any such Acquired Indebtedness) occurred on the first day of the Four
Quarter Period. If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the
preceding sentence shall give effect to the incurrence of such
guaranteed Indebtedness as if such Person or any Restricted Subsidiary
of such Person had directly incurred or otherwise assumed such
guaranteed Indebtedness; and
(3) all adjustments used in connection with the calculation of
pro forma EBITDA and Adjusted EBITDA as set forth in the offering
circular dated November 15, 2001 relating to the issuance by Compass
Minerals of the Existing Compass Minerals Notes to the extent such
adjustments are not fully reflected in such Four Quarter Period and
continue to be applicable.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio,"
(1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to
be so determined thereafter shall be deemed to have accrued at a fixed
rate per annum equal to the rate of interest on such Indebtedness in
effect on the Transaction Date; and
(2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Interest Swap Obligations or Currency
Agreements, shall be deemed to accrue at the rate per annum resulting
after giving effect to the operation of such agreements.
"CONSOLIDATED FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of:
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(1) Consolidated Interest Expense (excluding amortization or
write-off of deferred financing costs and the payment of non-cash
interest relating to the Securities or any other debt securities), plus
(2) the product of (x) the amount of all dividend payments on
any series of Preferred Stock of such Person or its Restricted
Subsidiaries (other than dividends paid in Qualified Capital Stock)
paid, accrued or scheduled to be paid or accrued during such period
times (y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal,
state and local income tax rate of such Person, expressed as a decimal.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication:
(1) the aggregate of the interest expense of such Person and its
Restricted Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount and amortization or write-off of deferred
financing costs (including the amortization of costs relating to
interest rate caps or other similar agreements), (b) the net costs under
Interest Swap Obligations, (c) all capitalized interest and (d) the
interest portion of any deferred payment obligation; and
(2) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and
its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP, minus interest income for
such period.
"CONSOLIDATED NET INCOME" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; PROVIDED that there shall be excluded therefrom:
(1) after-tax gains or losses from Asset Sales (without regard
to the $3.0 million limitation set forth in the definition thereof) or
abandonments or reserves relating thereto;
(2) after-tax items which are extraordinary gains or losses or
nonrecurring gains, losses, expenses or income (including, without
limitation, expenses related to the Transactions, severance and
transition expenses incurred as a direct result of the transition of the
Company to an independent operating company in connection with the
Transactions provided that with respect to any nonrecurring item or
transition expense, the Company delivers to the Trustee an Officers'
Certificate specifying and
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quantifying such item or expense and states that such item or expense is
a general non-recurring item or specifically a severance or transition
expense, as the case may be);
(3) the net income of any Person acquired in a "pooling of
interests" transaction accrued before the date it becomes a Restricted
Subsidiary of the referent Person or is merged or consolidated with the
referent Person or any Restricted Subsidiary of the referent Person;
(4) the net income (but not loss) of any Restricted Subsidiary
of the referent Person to the extent that the declaration of dividends
or similar distributions by that Restricted Subsidiary of that income is
prohibited by contract, operation of law or otherwise (other than as
permitted by Section 4.13);
(5) the net income of any Person, other than a Restricted
Subsidiary of the referent Person, except to the extent of cash
dividends or distributions paid to the referent Person or to a
Restricted Subsidiary of the referent Person by such Person;
(6) the establishment of accruals and reserves within twelve
months after November 28, 2001 that are required to be so established in
accordance with GAAP;
(7) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such
period whether or not such operations were classified as discontinued);
(8) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's
assets, any earnings of the successor corporation prior to such
consolidation, merger or transfer of assets; and
(9) solely for the purposes of determining the amount available
to make Restricted Payments pursuant to Section 4.3(c)(i), payments of
non-cash interest (net of any related tax benefit included in
determining Consolidated Net Income) on the Securities or any other debt
securities.
"CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash expenses
(solely for the purpose of determining compliance with Section 4.3, excluding
any non-cash items for which a future cash payment will be required and for
which an accrual or reserve is required by GAAP to be made) of such Person and
its Restricted Subsidiaries reducing Consolidated Net Income of such Person and
its Restricted Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office
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is, at the date of this Indenture, located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration.
"COVENANT DEFEASANCE" has the meaning set forth in Section 8.2(c).
"CREDIT AGREEMENT" means the Credit Agreement dated as of November 28,
2001, as amended, among the Company, Compass Minerals, one or more other
Subsidiaries of the Company, the lenders party thereto in their capacities as
lenders thereunder and The Chase Manhattan Bank, as administrative agent,
together with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding Restricted
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means an event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DESIGNATED SENIOR DEBT" means:
(1) Indebtedness under, or with respect to, the Credit
Agreement; and
(2) any other Indebtedness constituting Senior Debt which, at
the time of determination, has an aggregate principal amount of at least $25.0
million and is specifically designated in the instrument evidencing such Senior
Debt as "Designated Senior Debt" by the Company.
"DEPOSITORY" shall mean The Depository Trust Company,
New York,
New
York, or a successor thereto registered under the Exchange Act or other
applicable statute or regulation.
"DISQUALIFIED CAPITAL STOCK" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event (other than an
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event which would constitute a Change of Control or an Asset Sale), matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control or an Asset Sale), on or prior to the
final maturity date of the Securities; PROVIDED that any class of Capital Stock
of such Person that by its terms authorizes such Person to satisfy its
obligations thereunder by delivery of Qualified Capital Stock shall not be
deemed Disqualified Capital Stock.
"DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of the
Company incorporated or otherwise organized or existing under the laws of the
United States, any State thereof or the District of Columbia.
"EQUITY OFFERING" means a public or private sale of Qualified Capital
Stock (other than on Form S-8) of the Issuer or any direct or indirect parent of
the Issuer; PROVIDED that with respect to any Equity Offering by such direct or
indirect parent of the Issuer, such Person contributes the net cash proceeds
from such Equity Offering to the Issuer.
"EUROS" means the single currency of the participating member states as
described in any legislative measures of the European Union for the introduction
of, change over to, or operation of, a single or unified European currency.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"EXCHANGE NOTES" means the 12% Senior Subordinated Discount Notes Due
2013 (the terms of which are identical to the Initial Notes except that the
Exchange Notes shall be registered under the Securities Act, and shall not
contain the restrictive legend on the face of the form of the Initial Notes) to
be issued in exchange for the Initial Notes pursuant to the registered Exchange
Offer.
"EXCHANGE OFFER" means the registration by the Company under the
Securities Act pursuant to a registration statement of the offer by the Company
to each Holder of the Initial Notes to exchange all the Initial Notes held by
such Holder for the Exchange Notes in an aggregate Accreted Value and aggregate
principal amount at maturity equal to the aggregate Accreted Value and aggregate
principal amount at maturity of the Initial Notes held by such Holder, all in
accordance with the terms and conditions of the Registration Rights Agreement.
"EXCLUDED CONTRIBUTION" means Net Cash Proceeds received by the Company
from (a) contributions to its common equity capital and (b) the sale of
Qualified Capital Stock of the Company, in each case designated as Excluded
Contributions pursuant to an Officers' Certificate executed on the date such
capital contributions are made or the date such Qualified
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Capital Stock is sold, as the case may be, which are excluded from the
calculation set forth in clause (c) of Section 4.3.
"EXISTING COMPASS MINERALS INDENTURE" means the indenture dated as of
November 28, 2001 among Compass Minerals, the guarantors named therein and The
Bank of
New York, as trustee.
"EXISTING COMPASS MINERALS NOTES" means the 10% Senior Subordinated
Notes due 2011 of Compass Minerals issued under the Existing Compass Minerals
Indenture.
"EXISTING HOLDINGS INDENTURE" means the indenture dated as of December
20, 2002 between the Issuer and the Trustee, as the same may be amended or
supplemented from time to time.
"EXISTING HOLDINGS NOTES" means the 12 3/4% Senior Discount Notes Due
2012 of the Issuer issued under the Existing Holdings Indenture.
"FAIR MARKET VALUE" means with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined conclusively by the Board of Directors of the Company
acting reasonably and in good faith and shall be evidenced by a Board Resolution
of the Board of Directors of the Company delivered to the Trustee.
"FOREIGN RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of the
Company incorporated in any jurisdiction outside of the United States.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of November 28, 2001.
"GLOBAL SECURITY" has the meaning set forth in Section 2.1.
"GUARANTEE" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person,
including 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 (unless such purchase arrangements are on arm's-
length terms and are entered into in the ordinary course of business), to take-
or-pay, or to maintain
-15-
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 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.
"GUARANTEE" means the guarantee by each Guarantor of the Issuer's
obligations under this Indenture.
"GUARANTOR" means each of the Company's Restricted Subsidiaries that in
the future executes a supplemental indenture in which such Restricted Subsidiary
agrees to be bound by the terms of this Indenture as a Guarantor; PROVIDED that
any Person constituting a Guarantor as described above shall cease to constitute
a Guarantor when its Guarantee is released in accordance with the terms of this
Indenture.
"GUARANTOR SENIOR DEBT" means, with respect to any Guarantor, the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of a Guarantor, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Guarantee of such Guarantor. Without limiting the generality of the foregoing,
"Guarantor Senior Debt" shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing by any Guarantor in respect of,
(x) all obligations of every nature of a Guarantor under, or with
respect to, the Credit Agreement, including, without limitation,
obligations to pay principal, premium and interest, reimbursement
obligations under letters of credit, fees, expenses and indemnities
(including guarantees thereof);
(y) all Interest Swap Obligations (including guarantees thereof);
and
(z) all obligations under Currency Agreements (including guarantees
thereof), in each case whether outstanding on the Issue Date or
thereafter incurred.
Notwithstanding the foregoing, "Guarantor Senior Debt" shall not
include:
(1) any Indebtedness of such Guarantor to a Restricted
Subsidiary of such Guarantor;
-16-
(2) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of such Guarantor or any director, officer or
employee of any Restricted Subsidiary of such Guarantor (including,
without limitation, amounts owed for compensation);
(3) Indebtedness or other liabilities to trade creditors and
other amounts incurred in connection with obtaining goods, materials or
services (other than if incurred under the Credit Agreement);
(4) Indebtedness represented by Disqualified Capital Stock or in
respect of Capital Stock;
(5) any liability for federal, state, local or other taxes owed
or owing by such Guarantor;
(6) that portion of any Indebtedness incurred in violation of
Section 4.4 (but, as to any such obligation, no such violation shall be
deemed to exist for purposes of this clause (6) if the holder(s) of such
obligation or their representative shall have received an Officers'
Certificate of the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit Indebtedness,
that the incurrence of the entire committed amount thereof at the date
on which the initial borrowing thereunder is made would not) violate
such provisions of this Indenture);
(7) any Indebtedness which, when incurred and without respect to
any election under Section 1111(b) of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, is
without recourse to such Guarantor; and
(8) any Indebtedness or other Obligation, which is, by its
express terms, subordinated in right of payment to any other
Indebtedness or other Obligation of such Guarantor;
PROVIDED, if any Guarantor Senior Debt is disallowed under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇
▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any applicable state fraudulent conveyance law, such
Guarantor Senior Debt shall nevertheless constitute Guarantor Senior Debt for
all purposes of this Indenture.
"HOLDER" or "SECURITYHOLDER" means the registered holder of any
Security.
"INDEBTEDNESS" means with respect to any Person, any indebtedness of
such Person, without duplication, in respect of:
(1) all obligations of such Person for borrowed money;
-17-
(2) all Obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) the deferred and unpaid purchase price of property, all
conditional sale obligations and all obligations under any title
retention agreement (but excluding trade accounts payable and other
accrued liabilities arising in the ordinary course of business);
(5) all Obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction;
(6) guarantees and other contingent Obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause (8)
below;
(7) all Obligations of any other Person of the type referred to
in clauses (1) through (6) which are secured by any Lien on any property
or asset of such Person, the amount of such Obligations being deemed to
be the lesser of the fair market value of such property or asset or the
amount of the Obligation so secured;
(8) all Obligations under Currency Agreements or Commodity
Agreements and Interest Swap Obligations of such Person; and
(9) all Disqualified Capital Stock issued by such Person with
the amount of Indebtedness represented by such Disqualified Capital
Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but
excluding accrued dividends, if any.
For purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock. For purposes of Section 4.4, in determining the principal amount of any
Indebtedness to be incurred by the Company or any Restricted Subsidiary or which
is outstanding at any date, the principal amount of any Indebtedness which
provides that an amount less than the principal amount thereof shall be due upon
any declaration of acceleration thereof shall be the accreted value thereof at
the date of determination.
-18-
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means a firm:
(1) which does not have a direct or indirect common equity
interest in the Company; and
(2) which, in the judgment of the Board of Directors of the
Company, is otherwise independent and qualified to perform the task for
which it is to be engaged.
"INITIAL NOTES" means the 12% Senior Subordinated Discount Notes Due
2013 of the Issuer issued on the Issue Date and authenticated and delivered
under this Indenture pursuant to Section 2.2 and any other Securities (other
than Exchange Notes) issued after the Issue Date in accordance with clause (iii)
of the fourth paragraph of Section 2.2.
"INSTITUTIONAL ACCREDITED INVESTOR" has the meaning set forth in Section
2.16(a).
"INTEREST PAYMENT DATE" means the stated maturity of an installment of
interest on the Securities.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person pursuant
to any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"INVESTMENT" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
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 by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any Person. "Investment" shall exclude extensions of trade credit by,
prepayment of expenses by, and receivables owing to, the Company and its
Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the case
may be. For purposes of Section 4.3:
(1) "Investment" shall include and be valued at the fair market
value of the net assets of any Restricted Subsidiary of the Company at
the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary of the Company and shall exclude the fair market value of the
net assets of any Unrestricted Subsidiary of
-19-
the Company at the time that such Unrestricted Subsidiary is designated
a Restricted Subsidiary of the Company; and
(2) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by the
Company or any of its Restricted Subsidiaries, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-
offs with respect to such Investment, reduced by the payment of
dividends or distributions in connection with such Investment or any
other amounts received in respect of such Investment; PROVIDED that no
such payment of dividends or distributions or receipt of any such other
amounts shall reduce the amount of any Investment if such payment of
dividends or distributions or receipt of any such amounts would be
included in Consolidated Net Income.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Common Stock of any Person that prior to such sale or
disposition was a direct or indirect Restricted Subsidiary of the Company such
that after giving effect to any such sale or disposition, such Person ceases to
be a Restricted Subsidiary of the Company, the Company shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the fair
market value of the Common Stock of such Person not sold or disposed of.
"ISSUE DATE" means May 22, 2003, the date of original issuance of the
Initial Notes.
"ISSUER" means the parties named as such in the first paragraph of this
Indenture.
"LEGAL DEFEASANCE" has the meaning set forth in Section 8.2(b).
"LIEN" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"MANAGEMENT AGREEMENT" means the Management Agreement dated as of
November 28, 2001 between Compass Minerals and Apollo.
"MATURITY DATE" means June 1, 2013.
"MERGER AGREEMENT" means the Agreement and Plan of Merger, dated as of
October 13, 2001, among IMC Global, Inc., the Company, YBR Holdings LLC and YBR
Acquisition Corp.
"NET CASH PROCEEDS" means (a) with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any
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such deferred payment constituting interest) received by the Company or any of
its Restricted Subsidiaries from such Asset Sale net of:
(1) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions);
(2) taxes paid or payable after taking into account any
reduction in consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements;
(3) any repayment of Indebtedness that is required to be repaid
in connection with such Asset Sale;
(4) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance
with GAAP, against any liabilities associated with such Asset Sale and
retained by the Company or such Restricted Subsidiary, as the case may
be, after such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale; and
(5) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries or joint ventures
as a result of such Asset Sale;
and (b) 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' or initial purchasers' fees, discounts or
commissions and brokerage, consultant and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"NET PROCEEDS OFFER" has the meaning set forth in Section 4.17.
"NET PROCEEDS OFFER AMOUNT" has the meaning set forth in Section 4.17.
"NET PROCEEDS OFFER PAYMENT DATE" has the meaning set forth in Section
4.17.
"NET PROCEEDS OFFER TRIGGER DATE" has the meaning set forth in Section
4.17.
"NON-U.S. PERSON" means a Person who is not a "U.S. Person" (as defined
in Regulation S).
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"OBLIGATIONS" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFERING CIRCULAR" means the Offering Circular dated May 19, 2003
relating to the offering of the Initial Notes.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, the Treasurer or the Secretary of such
Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers of
the Issuer or of any Guarantor, as applicable, except that an authentication
order pursuant to Section 2.2 may be signed by only one such Officer.
"OFFSHORE GLOBAL SECURITIES" has the meaning provided in Section 2.1.
"OFFSHORE PHYSICAL SECURITIES" has the meaning provided in Section 2.1.
"OPINION OF COUNSEL" means a written opinion from legal counsel, which
opinion and counsel are reasonably acceptable to the Trustee.
"PAYING AGENT" has the meaning set forth in Section 2.3.
"PERMANENT OFFSHORE GLOBAL SECURITIES" has the meaning provided in
Section 2.1.
"PERMITTED BUSINESS" means the business of the Company and its
Restricted Subsidiaries as existing on the Issue Date and any other businesses
that are the same, similar or reasonably related, ancillary or complementary
thereto and reasonable extensions thereof.
"PERMITTED HOLDERS" means Apollo and other Related Parties.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
(1) Indebtedness under (y) the Securities issued on the Issue
Date and the Exchange Notes issued in exchange therefor and any
Guarantees thereof and (z) additional Securities or other debt
securities (i) issued, directly or indirectly, in exchange for shares of
the Issuer's Series A Preferred Stock outstanding on December 20, 2002
and (ii) with a principal amount or accreted value (in the case of the
Securities or debt securities issued at a discount) not in excess of the
aggregate liquidation preference and accumulated but unpaid dividends on
such Series A Preferred Stock;
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(2) Indebtedness incurred pursuant to the Credit Agreement by
the Company and its Restricted Subsidiaries, in an aggregate principal
amount at any time outstanding not to exceed $360.0 million less the
amount of all repayments of term debt and permanent commitment
reductions under the Credit Agreement with Net Cash Proceeds of Asset
Sales applied thereto as required by Section 4.17(iii); PROVIDED that
the aggregate principal amount of Indebtedness permitted to be incurred
from time to time under this clause (2) shall be reduced dollar for
dollar by the amount of any Indebtedness then outstanding under clause
(12) below and PROVIDED FURTHER that any Indebtedness outstanding
pursuant to the Credit Agreement as of the Issue Date shall be deemed to
be incurred under this clause (2); and PROVIDED FURTHER that the amount
of Indebtedness permitted to be incurred pursuant to the Credit
Agreement in accordance with this clause (2) shall be in addition to any
Indebtedness to be incurred pursuant to the Credit Agreement in reliance
on and in accordance with clauses (10) and (16) below;
(3) other Indebtedness (including Indebtedness under the
Issuer's 10.23% Seller Notes due November 28, 2015 in an aggregate
principal amount not to exceed the sum of $8.4 million as of December
20, 2002 plus accrued and unpaid interest thereon in the form of
additional Indebtedness) of the Company and its Restricted Subsidiaries
outstanding on the Issue Date (other than pursuant to the Credit
Agreement) reduced by the amount of any scheduled amortization payments
or mandatory prepayments when actually paid or permanent reductions
therein;
(4) Interest Swap Obligations of the Company covering
Indebtedness of the Company or any of its Restricted Subsidiaries and
Interest Swap Obligations of any Restricted Subsidiary of the Company
covering Indebtedness of the Company or such Restricted Subsidiary;
PROVIDED, HOWEVER, that such Interest Swap Obligations are entered into
to protect the Company and its Restricted Subsidiaries from fluctuations
in interest rates on Indebtedness incurred in accordance with this
Indenture to the extent the notional principal amount of each such
Interest Swap Obligation does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates;
(5) Indebtedness under Currency Agreements; provided that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(6) Indebtedness of a Restricted Subsidiary of the Company to
the Company or to a Restricted Subsidiary of the Company for so long as
such Indebtedness is held by the Company, a Restricted Subsidiary of the
Company or the
-23-
lenders or collateral agent under the Credit Agreement, in each case
subject to no Lien held by a Person other than the Company, a Restricted
Subsidiary of the Company or the lenders or collateral agent under the
Credit Agreement; PROVIDED that if as of any date any Person other than
the Company, a Restricted Subsidiary of the Company or the lenders or
collateral agent under the Credit Agreement owns or holds any such
Indebtedness or holds a Lien in respect of such Indebtedness, such date
shall be deemed the incurrence of Indebtedness not constituting
Permitted Indebtedness under this clause (6) by the issuer of such
Indebtedness;
(7) Indebtedness of the Company to a Restricted Subsidiary of
the Company for so long as such Indebtedness is held by a Restricted
Subsidiary of the Company or the lenders or the collateral agent under
the Credit Agreement and is subject to no Lien other than a Lien in
favor of the lenders or collateral agent under the Credit Agreement;
provided that (a) any Indebtedness of the Company to any Restricted
Subsidiary of the Company is unsecured and subordinated, pursuant to a
written agreement, to the Company's obligations under this Indenture and
the Securities and (b) if as of any date any Person other than a
Restricted Subsidiary of the Company owns or holds any such Indebtedness
or any Person holds a Lien other than a Lien in favor of the lenders or
collateral agent under the Credit Agreement in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness
not constituting Permitted Indebtedness under this clause (7) by the
Company;
(8) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; PROVIDED,
HOWEVER, that such Indebtedness is extinguished within two Business Days
of incurrence;
(9) Indebtedness of the Company or any of its Restricted
Subsidiaries in respect of performance bonds, bankers' acceptances,
workers' compensation claims, surety or appeal bonds, payment
obligations in connection with self-insurance or similar obligations,
and bank overdrafts (and letters of credit in respect thereof);
(10) Indebtedness represented by Capitalized Lease Obligations,
Purchase Money Indebtedness or Acquired Indebtedness of the Company and
its Restricted Subsidiaries not to exceed $20.0 million in the aggregate
at any one time outstanding; PROVIDED that all or a portion of the $20.0
million permitted to be incurred under this clause (10) may, at the
option of the Company, be incurred under the Credit Agreement or
pursuant to clause (16) below (in addition to the amount set forth
therein) instead of pursuant to Capitalized Lease Obligations, Purchase
Money Indebtedness or Acquired Indebtedness;
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(11) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary of the Company providing for indemnification,
adjustment of purchase price or similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary, other than guarantees by the Company or a
Restricted Subsidiary of the Company of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or a
Subsidiary for the purpose of financing such acquisition; PROVIDED,
HOWEVER, that:
(a) such Indebtedness is not reflected on the balance
sheet of the Company or any Restricted Subsidiary of the Company
(contingent obligations referred to in a footnote to financial
statements and not otherwise reflected on the balance sheet will
not be deemed to be reflected on such balance sheet for purposes of
this clause (a)); and
(b) the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds including
the fair market value of non-cash proceeds (the fair market value
of such non-cash proceeds being measured at the time they are
received as determined in good faith by the Board of Directors of
the Company or the Restricted Subsidiary, as applicable, and
without giving effect to any subsequent changes in value) actually
received by the Company and its Restricted Subsidiaries in
connection with such disposition;
(12) the incurrence by a Receivables Subsidiary of Indebtedness
in a Qualified Receivables Transaction that is without recourse (other
than pursuant to representations, warranties, covenants and indemnities
entered into in the ordinary course of business in connection with a
Qualified Receivables Transaction) to the Company or to any Restricted
Subsidiary of the Company or their assets (other than such Receivables
Subsidiary and its assets), and is not guaranteed by any such Person,
PROVIDED that any outstanding Indebtedness incurred under this clause
(12) shall reduce (for so long as, and to the extent that, the
Indebtedness referred to in this clause (12) remains outstanding) the
aggregate amount permitted to be incurred under clause (2) above to the
extent set forth therein;
(13) Indebtedness under Commodity Agreements;
(14) guarantees by the Company or any Restricted Subsidiary of
the Company of each other's Indebtedness, including agreements of the
Company to keep-well or maintain financial statement conditions of any
Restricted Subsidiary of the Company, PROVIDED that such Indebtedness is
permitted to be incurred under this Indenture and, if a Restricted
Subsidiary guarantees the Company's Indebtedness, such Restricted
Subsidiary has complied, to the extent applicable, with Section 4.14;
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(15) Refinancing Indebtedness;
(16) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $50.0
million at any one time outstanding (which amount may, but need not, be
incurred in whole or in part under the Credit Agreement) plus up to an
additional amount as contemplated by, and to the extent not incurred
under, clause (10) above; and
(17) Indebtedness of the Company or any of its Restricted
Subsidiaries consisting of (x) the financing of insurance premiums in
the ordinary course of business or (y) take-or-pay obligations contained
in supply arrangements entered into in the ordinary course of business
and on a basis consistent with past practice.
For purposes of determining compliance with Section 4.4,
(a) in the event that an item of Indebtedness meets the criteria
of more than one of the categories of Permitted Indebtedness described
in clauses (1) through (17) above or is entitled to be incurred pursuant
to the Consolidated Fixed Charge Coverage Ratio provisions of such
Section, the Company shall, in its sole discretion, classify (or later
reclassify) such item of Indebtedness in any manner that complies with
Section 4.4,
(b) accrual of interest, accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form
of additional Indebtedness with the same terms or in the form of Capital
Stock, the payment of dividends on Disqualified Capital Stock in the
form of additional shares of the same class of Disqualified Capital
Stock and increases in the amount of Indebtedness outstanding solely as
a result of fluctuations in the exchange rate of currencies will not be
deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Capital Stock for purposes of Section 4.4,
(c) guarantees of, or obligations in respect of letters of
credit relating to, Indebtedness which is otherwise included in the
determination of a particular amount of Indebtedness shall not be
included,
(d) if obligations in respect of letters of credit are incurred
pursuant to the Credit Agreement and are being treated as incurred
pursuant to clause (2) above and the letters of credit relate to other
Indebtedness, then such other Indebtedness shall not be included, and
(e) if such Indebtedness is denominated in a currency other than
U.S. dollars, the U.S. dollar equivalent principal amount thereof will
be calculated based on
-26-
the relevant currency exchange rates in effect on the date such
Indebtedness was incurred.
"PERMITTED INVESTMENTS" means:
(1) Investments by the Company or any Restricted Subsidiary of
the Company in any Person that is or will become immediately after such
Investment a Restricted Subsidiary of the Company or that will merge or
consolidate into the Company or a Restricted Subsidiary of the Company;
PROVIDED that such Restricted Subsidiary of the Company is not
restricted from making dividends or similar distributions by contract,
operation of law or otherwise other than as permitted by Section 4.13;
(2) Investments in the Company by any Restricted Subsidiary of
the Company; PROVIDED that any Indebtedness evidencing such Investment
is unsecured and subordinated, pursuant to a written agreement, to the
Company's obligations under the Securities and this Indenture;
(3) Investments in cash and Cash Equivalents;
(4) loans and advances to employees and officers of the Company
and its Restricted Subsidiaries made (a) in the ordinary course of
business for bona fide business purposes not to exceed $5.0 million in
the aggregate at any one time outstanding or (b) to fund purchases of
Capital Stock of the Company or Compass Minerals under any stock option
plan or similar employment arrangements so long as no cash is actually
advanced by the Company or any of its Restricted Subsidiaries to such
employees and officers to fund such purchases;
(5) Currency Agreements, Commodity Agreements and Interest Swap
Obligations entered into in the ordinary course of the Company's or its
Restricted Subsidiaries' businesses and otherwise in compliance with
this Indenture;
(6) Investments in securities of trade creditors or customers
received (a) pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers or (b) in settlement of delinquent obligations of, and other
disputes with, customers, suppliers and others, in each case arising in
the ordinary course of business or otherwise in satisfaction of a
judgment;
(7) Investments (a) made by the Company or its Restricted
Subsidiaries consisting of consideration received in connection with an
Asset Sale made in compliance with Section 4.17, (b) consisting of
consideration received by the Company or any of its Restricted
Subsidiaries in connection with a transaction that would be an Asset
Sale if it consisted of aggregate consideration received by the
-27-
Company or any of its Restricted Subsidiaries of $3.0 million or more or
(c) acquired in exchange for, or out of the proceeds of, a substantially
concurrent offering of Capital Stock (other than Disqualified Capital
Stock) of the Company (which proceeds of any such offering of Capital
Stock of the Company shall not have been, and shall not be, included in
clause (3)(b) of the first paragraph of Section 4.3);
(8) Investments of a Person or any of its Subsidiaries existing
at the time such Person becomes a Restricted Subsidiary of the Company
or at the time such Person merges or consolidates with the Company or
any of its Restricted Subsidiaries, in either case in compliance with
this Indenture; PROVIDED that such Investments were not made by such
Person in connection with, or in anticipation or contemplation of, such
Person becoming a Restricted Subsidiary of the Company or such merger or
consolidation;
(9) Investments in the Securities or the Existing Compass
Minerals Notes;
(10) Investments in existence on the Issue Date;
(11) guarantees of Indebtedness to the extent permitted pursuant
to Sections 4.4 and 4.14; and
(12) additional Investments (including Investments in joint
ventures and Unrestricted Subsidiaries) not to exceed $35.0 million at
any one time outstanding.
"PERMITTED LIENS" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or
claims that are either (a) not delinquent or (b) contested in good faith
by appropriate proceedings and as to which the Company or its Restricted
Subsidiaries shall have set aside on its books such reserves, if any, as
shall be required pursuant to (x) GAAP in the case of a Domestic
Restricted Subsidiary, and (y) generally accepted accounting principles
in effect from time to time in the applicable jurisdiction, in the case
of a Foreign Restricted Subsidiary;
(2) statutory and common law Liens of landlords and Liens of
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen,
customs and revenue authorities and other Liens imposed by law incurred
in the ordinary course of business for sums not yet delinquent or being
contested in good faith, if such reserve or other appropriate provision,
if any, as shall be required by GAAP shall have been made in respect
thereof;
(3) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of
-28-
social security, including any Lien securing letters of credit issued in
the ordinary course of business consistent with past practice in
connection therewith, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(4) judgment Liens not giving rise to an Event of Default so
long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;
(5) licenses, sublicenses, leases, subleases, easements, rights-
of-way, zoning restrictions and other similar charges or encumbrances in
respect of property not interfering in any material respect with the
ordinary conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole;
(6) any interest or title of a lessor under any Capitalized
Lease Obligation or operating lease; provided that such Liens do not
extend to any property or asset which is not leased property subject to
such Capitalized Lease Obligation or operating lease;
(7) Liens securing Indebtedness permitted pursuant to
clause (10) of the definition of "Permitted Indebtedness"; PROVIDED,
HOWEVER, that in the case of Purchase Money Indebtedness (a) the
Indebtedness shall not exceed the cost of such property or assets and
shall not be secured by any property or assets of the Company or any
Restricted Subsidiary of the Company other than the property and assets
so acquired or constructed and any improvements thereon and (b) the Lien
securing such Indebtedness shall be created within 180 days of such
acquisition or construction or, in the case of a refinancing of any
Purchase Money Indebtedness, within 180 days of such refinancing;
(8) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances or similar credit transactions issued or created
for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;
(9) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
-29-
(10) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual, or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off;
(11) Liens securing Interest Swap Obligations so long as the
Interest Swap Obligations relate to Indebtedness that is otherwise
permitted under this Indenture;
(12) Liens in the ordinary course of business not exceeding $10.0
million at any one time outstanding that (a) are not incurred in
connection with borrowing money and (b) do not materially detract from
the value of the property or materially impair its use;
(13) Liens by reason of judgment or decree not otherwise
resulting in an Event of Default;
(14) Liens securing Indebtedness permitted to be incurred
pursuant to clause (16) of the definition of "Permitted Indebtedness";
(15) Liens securing Indebtedness under Currency Agreements and
Commodity Agreements permitted under this Indenture;
(16) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with
importation of goods;
(17) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into
by the Company or any of its Restricted Subsidiaries in the ordinary
course of business;
(18) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.4 (including, without limitation, clause (10) of the
definition of "Permitted Indebtedness"); PROVIDED that:
(a) such Liens secured such Acquired Indebtedness at the
time of and prior to the incurrence of such Acquired Indebtedness
by the Company or a Restricted Subsidiary of the Company and were
not granted in connection with, or in anticipation of, the
incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary of the Company; and
(b) such Liens do not extend to or cover any property or
assets of the Company or of any of its Restricted Subsidiaries
other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary of the
Company and are no more favorable to the lienholders than those
securing
-30-
the Acquired Indebtedness prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the
Company; and
(19) Liens securing insurance premium financing arrangements,
PROVIDED that such Lien is limited to the applicable insurance
contracts.
"PERSON" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof or any other entity.
"PHYSICAL SECURITIES" has the meaning provided in Section 2.1. Physical
Securities are sometimes referred to herein as certificated Securities.
"PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Initial Notes in the form set forth in the first paragraph of Section 2.14.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries incurred in the normal course of business for the
purpose of financing all or any part of the purchase price, or the cost of
installation, construction or improvement, of property or equipment or other
related assets and any Refinancing thereof.
"QIB" means any "qualified institutional buyer" (as defined under the
Securities Act).
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (1) a Receivables Subsidiary (in the
case of a transfer by the Company or any of its Restricted Subsidiaries) and (2)
any other Person (in the case of a transfer by a Receivables Subsidiary), or may
grant a security interest in, any accounts receivable (whether now existing or
arising in the future) of the Company or any of its Restricted Subsidiaries, and
any assets related thereto including, without limitation, all collateral
securing such accounts receivable, all contracts and all guarantees or other
obligations in respect of such accounts receivable, proceeds of such accounts
receivable and other assets (including contract rights) which are customarily
transferred or in respect of which security interests are customarily granted in
connection with asset securitization transactions involving accounts receivable.
-31-
"RECAPITALIZATION" means the recapitalization of the Company and Compass
Minerals consummated on November 28, 2001.
"RECEIVABLES SUBSIDIARY" means a Wholly Owned Restricted Subsidiary of
the Company that engages in no activities other than in connection with the
financing of accounts receivable and that is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary:
(1) no portion of the Indebtedness or any other Obligations
(contingent or otherwise) of which (a) is guaranteed by the Company or
any Restricted Subsidiary of the Company (excluding guarantees of
Obligations (other than the principal of, and interest on, Indebtedness)
pursuant to representations, warranties, covenants and indemnities
entered into in the ordinary course of business in connection with a
Qualified Receivables Transaction), (b) is recourse to or obligates the
Company or any Restricted Subsidiary of the Company in any way other
than pursuant to representations, warranties, covenants and indemnities
entered into in the ordinary course of business in connection with a
Qualified Receivables Transaction or (c) subjects any property or asset
of the Company or any Restricted Subsidiary of the Company, directly or
indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to representations, warranties, covenants and
indemnities entered into in the ordinary course of business in
connection with a Qualified Receivables Transaction;
(2) with which neither the Company nor any Restricted Subsidiary
of the Company has any material contract, agreement, arrangement or
understanding other than on terms no less favorable to the Company or
such Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company, other than fees
payable in the ordinary course of business in connection with servicing
accounts receivable; and
(3) with which neither the Company nor any Restricted Subsidiary
of the Company has any obligation to maintain or preserve such
Restricted Subsidiary's financial condition or cause such Restricted
Subsidiary to achieve certain levels of operating results.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a Board Resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
"RECORD DATE" means the applicable record date specified in the
Securities.
-32-
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"REFERENCE DATE" has the meaning set forth in Section 4.3(c)(i).
"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "REFINANCED" and "REFINANCING"
shall have correlative meanings.
"REFINANCING INDEBTEDNESS" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of (A) for purposes of clause (15) of the
definition of Permitted Indebtedness, Indebtedness incurred or existing in
accordance with Section 4.4 (other than pursuant to clause (2), (4), (5), (6),
(7), (8), (9), (10), (11), (12), (13) or (14) of the definition of "Permitted
Indebtedness") or (B) for any other purpose, Indebtedness incurred in accordance
with Section 4.4, in each case that does not:
(1) result in an increase in the aggregate principal amount of
Indebtedness of such Person as of the date of such proposed Refinancing
(plus the amount of any premium, accrued interest and defeasance costs,
required to be paid under the terms of the instrument governing such
Indebtedness and plus the amount of reasonable fees, expenses, discounts
and commissions incurred by the Company in connection with such
Refinancing); or
(2) create Indebtedness with (a) if the Indebtedness being
Refinanced was incurred pursuant to clause (3) of the definition of
"Permitted Indebtedness," a Weighted Average Life to Maturity that is
less than the Weighted Average Life to Maturity of the Indebtedness
being Refinanced or a final maturity earlier than the final maturity of
the Indebtedness being Refinanced or (b) if the Indebtedness being
Refinanced was otherwise incurred in accordance with the definition of
"Permitted Indebtedness" or with Section 4.4, a Weighted Average Life to
Maturity that is less than the Weighted Average Life to Maturity of the
Securities or a final maturity earlier than the final maturity of the
Securities; PROVIDED that (x) if such Indebtedness being Refinanced is
Indebtedness solely of the Company, then such Refinancing Indebtedness
shall be Indebtedness solely of the Company and (y) if such Indebtedness
being Refinanced is subordinate or junior to the Securities, then such
Refinancing Indebtedness shall be subordinate to the Securities at least
to the same extent and in the same manner as the Indebtedness being
Refinanced.
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"REGISTRAR" has the meaning set forth in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated May 22, 2003 among the Issuer and Credit Suisse First Boston LLC, ▇.▇.
▇▇▇▇▇▇ Securities Inc., Deutsche Bank Securities Inc. and Credit Lyonnais
Securities (USA), Inc.
"REGULATION S" means Regulation S under the Securities Act.
"RELATED PARTIES" means with respect to a Person (a) that is a natural
person (1) any spouse, parent or lineal descendant (including by adoption) of
such Person or (2) the estate of such Person during any period in which such
estate holds Capital Stock of the Company for the benefit of any Person referred
to in clause (a)(1) and (b) that is a trust, corporation, partnership, limited
liability company or other entity, the beneficiaries, stockholders, partners,
owners or Persons beneficially owning an interest of more than 50% of which
consist of such Person and/or such other Persons referred to in the immediately
preceding clause (a).
"REPLACEMENT ASSETS" has the meaning set forth in Section 4.17(iii)(B).
"REPRESENTATIVE" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Debt; PROVIDED that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer in the Corporate Trust Office of the Trustee with direct responsibility
for the administration of this Indenture or to whom any corporate trust matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"RESTRICTED PAYMENT" has the meaning set forth in Section 4.3.
"RESTRICTED SECURITY" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; PROVIDED that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Security constitutes a Restricted Security.
"RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a
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Restricted Subsidiary of any property, whether owned by the Company or any
Restricted Subsidiary at the Issue Date or later acquired, which has been or is
to be sold or transferred by the Company or such Restricted Subsidiary to such
Person or to any other Person from whom funds have been or are to be advanced by
such Person on the security of such property other than (a) arrangements between
the Company and a Wholly Owned Restricted Subsidiary of the Company or between
Wholly Owned Restricted Subsidiaries of the Company or (b) any arrangement
whereby the transfer involves fixed or capital assets and is consummated within
120 days after the date the Company or a Restricted Subsidiary acquires or
finishes construction of such fixed or capital assets.
"SECURITIES" means the Initial Notes, the Exchange Notes and any other
Securities issued after the Issue Date in accordance with clause (iii) of the
fourth paragraph of Section 2.2 treated as a single class of securities, as
amended or supplemented from time to time in accordance with the terms hereof,
that are issued pursuant to this Indenture.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"SENIOR DEBT" means the principal of, premium, if any, and accrued and
unpaid interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy or other like proceeding at the rate provided for in the
documentation with respect thereto, whether or not such interest is an allowed
claim under applicable law) on any Indebtedness of the Issuer, whether
outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities. Without limiting the generality of the foregoing, "Senior Debt"
shall also include the principal of, premium, if any, interest (including any
interest accruing subsequent to the filing of petition of bankruptcy or other
like proceeding at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on, and all other amounts owing by the Issuer in respect of,
(x) all obligations of every nature (including guarantees
thereof) of the Issuer under, or with respect to, the Credit Agreement,
including, without limitation, obligations to pay principal, premium, if
any, and interest, reimbursement obligations under letters of credit,
fees, expenses and indemnities;
(y) all Interest Swap Obligations (including guarantees
thereof); and
(z) all obligations under Currency Agreements and Commodity
Agreements (including guarantees thereof), in each case whether
outstanding on the Issue Date or thereafter incurred.
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Notwithstanding the foregoing, "Senior Debt" shall not include:
(1) any Indebtedness of the Company to a Subsidiary of the
Company;
(2) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Company or any director, officer or employee
of any Subsidiary of the Company (including, without limitation, amounts
owed for compensation);
(3) Indebtedness or other liabilities to trade creditors and
other amounts incurred in connection with obtaining goods, materials or
services (other than if incurred under the Credit Agreement);
(4) Indebtedness represented by Disqualified Capital Stock or in
respect of Capital Stock;
(5) any liability for federal, state, local or other taxes owed
or owing by the Issuer;
(6) that portion of any Indebtedness incurred in violation of
Section 4.4 (but, as to any such obligation, no such violation shall be
deemed to exist for purposes of this clause (6) if the holder(s) of such
obligation or their representative shall have received an Officers'
Certificate of the Company to the effect that the incurrence of such
Indebtedness does not (or, in the case of revolving credit Indebtedness,
that the incurrence of the entire committed amount thereof at the date
on which the initial borrowing thereunder is made would not) violate
such provisions of this Indenture);
(7) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, is
without recourse to the Issuer; and
(8) any Indebtedness or other Obligation which is, by its
express terms, subordinated in right of payment to any of the Company's
other Indebtedness or other Obligation.
PROVIDED, if any Senior Debt is disallowed under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ Code, or any applicable state fraudulent conveyance law, such Senior Debt
shall nevertheless constitute Senior Debt for all purposes of this Indenture.
"SENIOR SUBORDINATED DEBT" means, with respect to a Person, the
Securities and any other Indebtedness of such Person 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 obligations of such Person which is not Senior Debt of
such Person.
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"SERIES A PREFERRED STOCK" means the 13 3/4% Series A Cumulative Senior
Redeemable Exchangeable Preferred Stock, par value $0.01 per share, of the
Issuer.
"SIGNIFICANT SUBSIDIARY," with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" as defined in Regulation S-X under the Securities Act
as such Regulation is in effect on the Issue Date and (2) any Restricted
Subsidiary that, when aggregated with all other Restricted Subsidiaries that are
not otherwise Significant Subsidiaries and as to which any event described in
clause (v), (vi) or (vii) of Section 6.1 has occurred and is continuing, would
constitute a Significant Subsidiary under clause (1) of this definition.
"SUBSIDIARY," with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock
having at least a majority of the votes entitled to be cast in the
election of directors under ordinary circumstances shall at the time be
owned, directly or indirectly, by such Person or a Subsidiary of such
Person; or
(2) any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person or a Subsidiary of such Person.
"SURVIVING ENTITY" has the meaning set forth in Section 5.1(a)(i).
"TEMPORARY OFFSHORE GLOBAL SECURITIES" has the meaning set forth in
Section 2.1.
"TIA" or "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb), as amended, as in effect on the date of the
execution of this Indenture until such time as this Indenture is qualified under
the TIA, and thereafter as in effect on the date on which this Indenture is
qualified under the TIA, except as otherwise provided in Section 9.4.
"TRANSACTION DATE" has the meaning specified in the definition of
"Consolidated Fixed Charge Coverage Ratio."
"TRANSACTIONS" means the Recapitalization and the related offering of
the Existing Compass Minerals Notes and the initial borrowings under the Credit
Agreement on November 28, 2001.
"TREASURY RATE" means the rate per annum equal to the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity most nearly equal to the period from such date of redemption to June 1,
2008; PROVIDED, HOWEVER, that if the period from such date of redemption to June
1, 2008 is not equal to the constant maturity of the
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United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from such date of redemption to June 1, 2008 is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"UNRESTRICTED SUBSIDIARY" of any Person means (1) any Subsidiary of such
Person that is designated an Unrestricted Subsidiary by the Board of Directors
of such Person in the manner provided below and (2) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, the Company or any other Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; PROVIDED that
(x) either (i) the Company certifies to the Trustee in an Officers' Certificate
that such designation complies with Section 4.3 or (ii) the Subsidiary to be so
designated at the time of designation has total consolidated assets of $1,000 or
less and (y) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness pursuant to which the lender has recourse to any of
the assets of the Company or any of its Restricted Subsidiaries (other than the
assets of such Unrestricted Subsidiary). The Board of Directors may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary only if (x)
immediately after giving effect to such designation, the Company is able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.4 and (y) immediately before and
immediately after giving effect to such designation, no Default or Event of
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. GLOBAL SECURITIES" has the meaning provided in Section 2.1.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of, and
obligations guaranteed by, the United States of America 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.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
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"U.S. PHYSICAL SECURITIES" means the Securities issued in the form of
permanent certificated Securities in registered form in substantially the form
set forth in Exhibit A to Institutional Accredited Investors which are not QIBs
(excluding Non-U.S. Persons) who purchased Securities pursuant to Regulation D
of the Securities Act.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (1) the then
outstanding aggregate principal amount of such Indebtedness into (2) the sum of
the total of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means any Restricted
Subsidiary of such Person of which all the outstanding voting securities (other
than in the case of a Foreign Restricted Subsidiary, directors' qualifying
shares or an immaterial amount of shares required to be owned by other Persons
pursuant to applicable law) are owned by such Person or any Wholly Owned
Restricted Subsidiary of such Person.
1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in, and made a part of, this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITY HOLDER" means a Holder or 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, any
Guarantor or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
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(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) provisions apply to successive events and transactions; and
(7) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
(8) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP
set forth in Section 1.1.
(9) all references to Sections or Articles refer to Sections or
Articles in this Indenture unless otherwise indicated.
ARTICLE TWO
THE SECURITIES
2.1. FORM AND DATING.
The Initial Notes and the Trustee's certificate of authentication shall
be substantially in the form of EXHIBIT A and the Exchange Notes and the
Trustee's certificate of authentication shall be substantially in the form of
EXHIBIT B. The Securities may have notations, legends or endorsements required
by law, stock exchange rule or usage. The Issuer and the Trustee shall approve
the form of the Securities and any notation, legend or endorsement on them. Each
Security shall be dated the date of its authentication.
The terms and provisions contained in the Securities, annexed hereto as
EXHIBIT A and EXHIBIT B, shall constitute, and are hereby expressly made, a part
of this Indenture and, to the extent applicable, the Issuer and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Securities in registered
form, substantially in the form
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set forth in EXHIBIT A (the "U.S. GLOBAL SECURITIES"), deposited with the
Trustee, as custodian for the Depository, duly executed by the Issuer and
authenticated by the Trustee as hereinafter provided, and shall bear the legends
set forth in Section 2.14. The aggregate principal amount at maturity of the
U.S. Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository,
as hereinafter provided.
Securities issued in exchange for interests in the U.S. Global
Securities pursuant to Section 2.15 may be issued in the form of permanent
certificated Securities in registered form and shall bear the first legend set
forth in Section 2.14.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Securities in registered form substantially in the form set forth in
EXHIBIT A (the "TEMPORARY OFFSHORE GLOBAL SECURITIES"), registered in the name
of the nominee of the Depository, deposited with the Trustee, as custodian for
the Depository, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided and shall bear the legends set forth in Section 2.14. At
any time on or after the 41st day after the Issue Date, upon receipt by the
Trustee, Registrar and the Issuer of a certificate substantially in the form of
EXHIBIT D hereto, one or more permanent global Securities in registered form
substantially in the form set forth in EXHIBIT A (the "PERMANENT OFFSHORE GLOBAL
SECURITIES"; and together with the Temporary Offshore Global Securities, the
"OFFSHORE GLOBAL SECURITIES"), duly executed by the Issuer and authenticated by
the Trustee as hereinafter provided shall be deposited with the Trustee, as
custodian for the Depository or its nominee, and the Registrar shall reflect on
its books and records the date and a decrease in the principal amount at
maturity of the Temporary Offshore Global Securities in an amount equal to the
principal amount at maturity of the beneficial interest in the Temporary
Offshore Global Securities transferred. The aggregate principal amount at
maturity of the Offshore Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Securities issued in exchange for interests in the Offshore Global
Securities pursuant to Section 2.15 may be issued in the form of permanent
certificated Securities in registered form (the "OFFSHORE PHYSICAL SECURITIES")
and shall bear the first legend set forth in Section 2.14. All Securities
offered and sold in reliance on Regulation S shall remain in the form of an
Offshore Global Security until the consummation of the Exchange Offer pursuant
to the Registration Rights Agreement.
The Offshore Physical Securities and the U.S. Physical Securities are
sometimes collectively herein referred to as the "PHYSICAL SECURITIES." The U.S.
Global Securities and the Offshore Global Securities are sometimes referred to
herein as the "GLOBAL SECURITIES."
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2.2. EXECUTION AND AUTHENTICATION.
One Officer or an Assistant Secretary of the Issuer (each of whom shall,
in each case, have been duly authorized by all requisite corporate actions)
shall sign the Securities for the Issuer by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall nevertheless be valid.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue on
the Issue Date in the aggregate principal amount at maturity not to exceed
$179,600,000, (ii) pursuant to the Exchange Offer, Exchange Notes from time to
time for issue only in exchange for a like Accreted Value and principal amount
at maturity of Initial Notes and (iii) subject to compliance with Section 4.4,
one or more series of Securities for original issue after the Issue Date (such
Securities to be substantially in the form of EXHIBIT A or EXHIBIT B, as the
case may be) in an unlimited amount (and if in the form of EXHIBIT A the same
Accreted Value and principal amount at maturity of Exchange Notes in exchange
therefor upon consummation of a registered exchange offer), in each case upon
written orders of the Issuer in the form of an Officers' Certificate, which
Officers' Certificate shall, in the case of any issuance pursuant to clause
(iii) above, certify that such issuance is in compliance with Section 4.4. In
addition, each such Officers' Certificate shall specify the amount of Securities
to be authenticated, the date on which the Securities are to be authenticated,
whether the Securities are to be Initial Notes, Exchange Notes or Securities
issued under clause (iii) of the preceding sentence and the aggregate principal
amount at maturity of Securities outstanding on the date of authentication, and
shall further specify the amount at maturity of such Securities to be issued as
a Global Security or Physical Securities. Such Securities shall initially be in
the form of one or more Global Securities, which (i) shall represent, and shall
be denominated in an amount equal to the aggregate principal amount at maturity
of, the Securities to be issued, (ii) shall be registered in the name of the
Depository for such Global Security or Securities or its nominee and (iii) shall
be delivered by the Trustee to the Depository or pursuant to the Depository's
instruction. All Securities issued under this Indenture shall vote and consent
together on all matters as one class and no series of Securities will have the
right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable to
the Issuer to authenticate the Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating
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agent has the same rights as an Agent to deal with the Issuer and Affiliates of
the Issuer.
The Securities shall be issuable only in registered form without coupons
in denominations of $1,000 principal amount at maturity and integral multiples
thereof.
2.3. REGISTRAR AND PAYING AGENT.
The Issuer shall maintain an office or agency in the Borough of
Manhattan, The City of
New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange ("REGISTRAR"), (b)
Securities may be presented or surrendered for payment ("PAYING AGENT") and (c)
notices and demands to or upon the Issuer in respect of the Securities and this
Indenture may be served. The Issuer may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Issuer of its obligation to maintain an office or agency
in the Borough of Manhattan, The City of
New York, for such purposes. The Issuer
may act as its own Registrar or Paying Agent except that for the purposes of
Articles Three and Eight and Sections 4.16 and 4.17, neither the Issuer nor any
Affiliate of the Issuer shall act as Paying Agent. The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Issuer, upon
notice to the Trustee, may have one or more co-Registrars and one or more
additional paying agents reasonably acceptable to the Trustee. The term "Paying
Agent" includes any additional paying agent. The Issuer hereby initially
appoints the Trustee as Registrar and Paying Agent until such time as the
Trustee has resigned or a successor has been appointed.
The Issuer shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuer shall notify
the Trustee, in advance, of the name and address of any such Agent. If the
Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
The Trustee is authorized to enter into a letter of representations with
the Depository in the form provided by the Issuer and to act in accordance with
such letter.
2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Issuer shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
Accreted Value of, premium, if any, or interest on, the Securities (whether such
assets have been distributed to it by the Issuer or any other obligor on the
Securities), and shall notify the Trustee of any Default or Event of Default by
the Issuer (or any other obligor on the Securities) in making any such payment.
If either the
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Issuer or a Subsidiary acts as Paying Agent, it shall segregate such assets and
hold them as a separate trust fund. The Issuer at any time may require a Paying
Agent to distribute all assets held by it to the Trustee and account for any
assets disbursed and the Trustee may at any time during the continuance of any
payment Default or payment Event of Default, upon written request to a Paying
Agent, require such Paying Agent to distribute all assets held by it to the
Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Issuer to the Paying
Agent, the Paying Agent shall have no further liability for such assets.
2.5. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Issuer shall furnish to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which list
may be conclusively relied upon by the Trustee.
2.6. TRANSFER AND EXCHANGE.
(a) Subject to the provisions of Sections 2.14 and 2.15, when
Securities are presented to the Registrar or a co-Registrar with a request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount at maturity of Securities of other authorized
denominations, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
PROVIDED, HOWEVER, that the Securities surrendered for registration of transfer
or exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Registrar or co-Registrar,
duly executed by the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfers and exchanges, the Issuer shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
request. No service charge shall be made for any registration of transfer or
exchange, but the Issuer may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.2, 2.10, 3.6, 4.16, 4.17 or 9.6).
The Registrar or co-Registrar shall not be required to register the transfer of
or exchange of any Security (i) during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Securities and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Security being redeemed in part, and (iii) during a Change of
Control Offer or a Net Proceeds Offer if such Security is tendered pursuant to
such Change of Control Offer or Net Proceeds Offer and not withdrawn. A Global
Security may be transferred, in whole but not in part, in the manner provided in
this Section 2.6(a),
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only to a nominee of the Depository for such Global Security, or to the
Depository, or a successor Depository for such Global Security selected or
approved by the Issuer, or to a nominee of such successor Depository.
(b) If at any time the Depository for the Global Security or Securities
notifies the Issuer that it is unwilling or unable to continue as Depository for
such Global Security or Securities or the Issuer becomes aware that the
Depository has ceased to be a clearing agency registered under the Exchange Act,
the Issuer shall appoint a successor Depository with respect to such Global
Security or Securities. If a successor Depository for such Global Security or
Securities has not been appointed within 90 days after the Issuer receives such
notice or become aware of such ineligibility, the Issuer shall execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Securities, shall authenticate and make available for delivery,
Securities in definitive form, in an aggregate principal amount at maturity
equal to the principal amount at maturity of the Global Security representing
such Securities, in exchange for such Global Security. The Issuer shall
reimburse the Registrar, the Depository and the Trustee for expenses they incur
in documenting such exchanges and issuances of Securities in definitive form.
The Issuer may at any time and in its sole discretion determine that the
Securities shall no longer be represented by such Global Security or Securities.
In such event the Issuer will execute, and the Trustee, upon receipt of a
written order for the authentication and delivery of individual Securities in
exchange in whole or in part for such Global Security or Securities, will
authenticate and make available for delivery individual Securities in definitive
form in an aggregate principal amount at maturity equal to the principal amount
at maturity of such Global Security or Securities in exchange for such Global
Security or Securities.
In any exchange provided for in any of the preceding two paragraphs, the
Issuer will execute and the Trustee will authenticate and make available for
delivery individual Securities in definitive registered form in authorized
denominations. Upon the exchange of a Global Security for individual Securities,
such Global Security shall be cancelled by the Trustee. Securities issued in
exchange for a Global Security pursuant to this Section 2.6(b) shall be
registered in such names and in such authorized denominations as the Depository
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall make
available for delivery such Securities to the Persons in whose names such
Securities are so registered.
Neither the Issuer, the Trustee, any Paying Agent or the Registrar will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
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2.7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Issuer shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements are met. If required by the Trustee or
the Issuer, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of both the Issuer and the Trustee, to protect the
Issuer, the Trustee or any Agent from any loss which any of them may suffer if a
Security is replaced. The Issuer may charge such Holder for its reasonable out-
of-pocket expenses in replacing a Security pursuant to this Section 2.7,
including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Issuer.
2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. A
Security does not cease to be outstanding because the Issuer, any Guarantor or
any of their respective Subsidiaries or Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a BONA FIDE purchaser or a protected purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement thereof
pursuant to Section 2.7. If the principal amount at maturity of any Security is
considered paid under Section 4.1, it ceases to be outstanding and interest
ceases to accrue.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Issuer or a Subsidiary) holds U.S. Legal Tender sufficient to pay all
of the Accreted Value of, premium, if any, and interest due on the Securities
payable on that date, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
2.9. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount at
maturity of Securities have concurred in any direction, waiver or consent,
Securities owned by the Issuer, any of its Subsidiaries or any of its respective
Affiliates shall be disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that a Responsible Officer of the Trustee knows or
has reason to know are so owned shall be disregarded.
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2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Issuer may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Issuer considers appropriate for temporary Securities,
as evidenced by execution of such temporary Securities by the Issuer. Without
unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate
definitive Securities in exchange for temporary Securities. Until such exchange,
temporary Securities shall be entitled to the same rights, benefits and
privileges as definitive Securities. Notwithstanding the foregoing, so long as
the Securities are represented by a Global Security, such Global Security may be
in typewritten form.
2.11. CANCELLATION.
The Issuer at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Issuer or a Subsidiary), and no one else, shall
cancel and shall dispose of all Securities surrendered for registration of
transfer, exchange, payment or cancellation in accordance with its procedures
for the disposition of cancelled securities. Subject to Section 2.7, the Issuer
may not issue new Securities to replace Securities that they have paid or
delivered to the Trustee for cancellation. If the Issuer or any Guarantor shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
2.12. DEFAULTED INTEREST.
If the Issuer defaults in a payment of interest on the Securities, it
shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, in any lawful manner. The Issuer may pay the defaulted
interest to the Persons who are Holders on a subsequent special record date,
which date shall be the fifteenth day next preceding the date fixed by the
Issuer for the payment of defaulted interest or the next succeeding Business Day
if such date is not a Business Day. At least 15 days before any such subsequent
special record date, the Issuer shall mail to each Holder, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.
2.13. CUSIP AND ISIN NUMBERS.
The Issuer in issuing the Securities may use "CUSIP" and "ISIN" numbers,
and if so, the Trustee shall use the CUSIP numbers in notices of redemption or
exchange as a convenience
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to Holders; PROVIDED, HOWEVER, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP and ISIN
numbers printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities and
that any such redemption or exchange shall not be affected by any defect or
omission of such CUSIP and ISIN numbers. The Issuer will promptly notify the
Trustee of any change in CUSIP or ISIN number.
2.14. RESTRICTIVE LEGENDS.
Unless and until a Security is exchanged for an Exchange Note or sold in
connection with an effective registration statement under the Securities Act
pursuant to the Registration Rights Agreement, (i) the U.S. Global Securities
and U.S. Physical Securities shall bear the legend set forth below (the "PRIVATE
PLACEMENT LEGEND") on the face thereof and (ii) the Offshore Physical
Securities, until at least the 41st day after the Issue Date and receipt by the
Issuer and the Trustee of a certificate substantially in the form of EXHIBIT D
hereto, and the Temporary Offshore Global Securities shall bear the legend set
forth below 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 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 (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN RULE
144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER
OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A)
TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS
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ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT AT MATURITY OF SECURITIES OF LESS THAN $100,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO IN RULE
144(k) UNDER THE SECURITIES ACT AFTER THE ORIGINAL ISSUANCE OF THE
SECURITIES, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR NON-U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
MAY REASONABLY REQUIRE 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. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING
RESTRICTION.
Each Global Security shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE
OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH
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SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE GOVERNING
THIS SECURITY.
2.15. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) Each Global Security initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.14.
Members of, or participants in, the Depository ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under any
Global Security, and the Depository may be treated by the Issuer, the Trustee
and any agent of the Issuer or the Trustee as the absolute owner of each Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in any Global Security may be
transferred or, subject to Section 2.1, exchanged for
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Physical Securities in accordance with the rules and procedures of the
Depository and the provisions of Section 2.16. In addition, U.S. Physical
Securities and Offshore Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in U.S. Global
Securities or Offshore Global Securities, as the case may be, if (i) the
Depository notifies the Issuer that it is unwilling or unable to continue as
Depository for the U.S. Global Securities or the Offshore Global Securities and
a successor depositary is not appointed by the Issuer within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository or the Trustee to
issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount at maturity of such Global Security in an amount equal to the
principal amount at maturity of the beneficial interest in such Global Security
to be transferred, and the Issuer shall execute, and the Trustee shall
authenticate and make available for delivery, one or more U.S. Physical
Securities or Offshore Physical Securities, as the case may be, of like tenor
and amount.
(d) In connection with the transfer of U.S. Global Securities or
Offshore Global Securities, in whole, to beneficial owners pursuant to paragraph
(b), the U.S. Global Securities or the Offshore Global Securities, as the case
may be, shall be deemed to be surrendered to the Trustee for cancellation, and
the Issuer shall execute, and the Trustee shall authenticate and make available
for delivery, to each beneficial owner identified by the Depository in exchange
for its beneficial interest in such U.S. Global Securities or Offshore Global
Securities, as the case may be, an equal aggregate principal amount at maturity
of U.S. Physical Securities or Offshore Physical Securities, as the case may be,
of authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (b) or
(c) shall, except as otherwise provided by paragraphs (a)(i)(x), (d), (e)(ii)
and (f) of Section 2.16, bear the legend regarding transfer restrictions
applicable to the Physical Securities set forth in Section 2.14.
(f) The Holder of a Global Security may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
2.16. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Security constituting a Restricted Security to any
institutional accredited investor (as defined in Rule
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501(a)(1), (2), (3) or (7) under the Securities Act) (an "ACCREDITED INVESTOR"
or an "INSTITUTIONAL ACCREDITED INVESTOR") which is not a QIB (excluding Non-
U.S. Persons):
(i) the Registrar shall register the transfer of any Security
constituting a Restricted Security, whether or not such Security bears
the Private Placement Legend, if (x) the transferee certifies that it is
not an Affiliate of the Issuer and the requested transfer is after the
second anniversary of the later of the (a) Issue Date and (b) the last
date on which the Issuer or an Affiliate of the Issuer was the owner of
such Security (or any predecessor Security) or such shorter period of
time as permitted by Rule 144(k) under the Securities Act or any
successor provision thereunder or (y) the proposed transferee has
delivered to the Registrar a certificate substantially in the form of
EXHIBIT C hereto and if such transfer is in respect of an aggregate
principal amount at maturity of Securities of less than $100,000, the
proposed transferee has delivered to the Registrar and the Issuer an
opinion of counsel acceptable to the Issuer that such transfer is in
compliance with the Securities Act and such other certifications, legal
opinions or other information that the Trustee may reasonably request in
order to confirm that such transaction is being made pursuant to an
exemption from or in a transaction not subject to the registration
requirements of the Securities Act; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, the Registrar shall
register the transfer of any Security constituting a Restricted
Security, whether or not such Security bears a Private Placement Legend
upon receipt by the Registrar of (x) the certificate, if any, required
by paragraph (i) above and (y) instructions given in accordance with the
Depository's and the Registrar's procedures, whereupon (a) the Registrar
shall reflect on its books and records the date and (if the transfer
does not involve a transfer of outstanding U.S. Physical Securities) a
decrease in the principal amount at maturity of the applicable U.S.
Global Security in an amount equal to the principal amount at maturity
of the beneficial interest in such U.S. Global Security to be
transferred, and (b) the Issuer shall execute and the Trustee shall
authenticate and make available for delivery one or more U.S. Physical
Securities of like tenor and amount.
(b) TRANSFERS TO QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security to a QIB
(excluding transfers to Non-U.S. Persons):
(i) if the Security to be transferred consists of (x) either
Offshore Physical Securities prior to the removal of the Private
Placement Legend or U.S. Physical Securities, the Registrar shall
register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security
stating, or has otherwise advised the Issuer and the Registrar in
writing, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed
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the certification provided for on the form of Security stating, or has
otherwise advised the Issuer and the Registrar in writing, that it is
purchasing the Security for its own account or an account with respect
to which it exercises sole investment discretion and that it and any
such account is a QIB within the meaning of Rule 144A, and is aware that
the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Issuer as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from
registration provided by Rule 144A or (y) an interest in the U.S. Global
Securities, the transfer of such interest may be effected only through
the book entry system maintained by the Depository; and
(ii) if the proposed transferee is an Agent Member, and the
Securities to be transferred consist of U.S. Physical Securities which
after transfer are to be evidenced by an interest in a U.S. Global
Security, upon receipt by the Registrar of instructions given in
accordance with the Depository's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an
increase in the principal amount at maturity of the applicable U.S.
Global Security in an amount equal to the principal amount at maturity
of the U.S. Physical Securities to be transferred, and the Trustee shall
cancel the U.S. Physical Securities so transferred.
(c) TRANSFERS OF INTERESTS IN THE TEMPORARY OFFSHORE GLOBAL SECURITIES.
The following provisions shall apply with respect to registration of any
proposed transfer of an interest in a Temporary Offshore Global Securities:
(i) The Registrar shall register the transfer of any Security
(x) if the proposed transferee is a Non-U.S. Person and the proposed
transferor has delivered to the Registrar a certificate substantially in
the form of Exhibit D hereto or (y) if the proposed transferee is a QIB
and the proposed transferor has checked the box provided for on the form
of Security stating, or has otherwise advised the Issuer and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise advised
the Issuer and the Registrar in writing, that it is purchasing the
Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is
a QIB within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Issuer as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A.
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(ii) If the proposed transferee is an Agent Member, upon receipt
by the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount at maturity of
the U.S. Global Securities in an amount equal to the principal amount at
maturity of the Temporary Offshore Global Securities to be transferred,
and the Trustee shall decrease the amount of the Temporary Offshore
Global Securities.
(d) TRANSFERS OF INTERESTS IN THE PERMANENT OFFSHORE GLOBAL SECURITIES
OR UNLEGENDED OFFSHORE PHYSICAL SECURITIES. The following provisions shall apply
with respect to any transfer of interests in Permanent Offshore Global
Securities or unlegended Offshore Physical Securities. The Registrar shall
register the transfer of any such Security without requiring any additional
certification.
(e) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following provisions
shall apply with respect to any transfer of a Security to a Non-U.S. Person:
(i) Prior to the 41st day after the Issue Date, the Registrar
shall register any proposed transfer of a Security to a Non-U.S. Person
upon receipt of a certificate substantially in the form of Exhibit D
hereto from the proposed transferor.
(ii) On and after the 41st day after the Issue Date, the
Registrar shall register any proposed transfer to any Non-U.S. Person if
the Security to be transferred is a U.S. Physical Security or an
interest in U.S. Global Securities, upon receipt of a certificate
substantially in the form of EXHIBIT D hereto from the proposed
transferor.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Securities, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and
(y) instructions in accordance with the Depository's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date and a decrease in the principal amount at maturity of the U.S.
Global Securities in an amount equal to the principal amount at maturity
of the beneficial interest in the U.S. Global Securities to be
transferred, and (b) if the proposed transferee is an Agent Member, upon
receipt by the Registrar of instructions given in accordance with the
Depository's and the Registrar's procedures, the Registrar shall reflect
on its books and records the date and an increase in the principal
amount at maturity of the Offshore Global Securities in an amount equal
to the principal amount at maturity of the U.S. Physical Securities or
the U.S. Global Securities, as the case may be, to be transferred, and
the Trustee shall cancel the U.S. Physical Security, if any, so
transferred or decrease the amount of the U.S. Global Security.
(f) PRIVATE PLACEMENT LEGEND. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall make
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available for delivery Securities that do not bear the Private Placement Legend.
Upon the registration of transfer, exchange or replacement of Securities bearing
the Private Placement Legend, the Registrar shall make available for delivery
only Securities that bear the Private Placement Legend unless (i) the
circumstance contemplated by paragraph (a)(i)(x), (d) or (e)(ii) of this Section
2.16 exists or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Issuer and the Trustee to the effect that neither
such legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(g) GENERAL. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such Security acknowledges the restrictions on
transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16 in
accordance with its customary procedures. The Issuer shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
(h) 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, the Depository or any other Person with respect
to the accuracy of the records of the Depository or its nominee or of any
participant 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 the Depository) of any notice
(including any notice of redemption or repurchase) or the payment of any amount,
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 under the Securities
shall be given or made only to the registered Holders (which shall be the
Depository or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the Depository. The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its members, participants and any
beneficial owners.
(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 Depository
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
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of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
ARTICLE THREE
REDEMPTION
3.1. NOTICES TO TRUSTEE.
If the Issuer elects to redeem Securities pursuant to Paragraph 5 of the
Securities, it shall notify the Trustee in writing of the Redemption Date, the
Redemption Price and the principal amount at maturity of the applicable
Securities to be redeemed. The Issuer shall give notice of redemption to the
Paying Agent and Trustee not less than 30 days but not more than 60 days before
the Redemption Date (unless a shorter notice shall be agreed to by the Trustee
in writing), together with an Officers' Certificate stating that such redemption
will comply with the conditions contained herein.
3.2. SELECTION OF SECURITIES TO BE REDEEMED.
In the event that less than all of the Securities are to be redeemed at
any time, selection of such Securities for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which such Securities are listed or, if such Securities are
not then listed on a national securities exchange, on a PRO RATA basis, by lot
or by such method as the Trustee shall deem fair and appropriate; PROVIDED,
HOWEVER, that no Securities of a principal amount at maturity of $1,000 or less
shall be redeemed in part; and PROVIDED, FURTHER, that if a partial redemption
is made with the Net Cash Proceeds of an Asset Sale or Equity Offering,
selection of the Securities or portions thereof for redemption shall be made by
the Trustee only on a PRO RATA basis or on as nearly a PRO RATA basis as is
practicable (subject to the procedures of the Depository), unless such method is
otherwise prohibited.
3.3. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date, the
Issuer shall mail a notice of redemption by first class mail, postage prepaid,
to each Holder whose Securities are to be redeemed at its registered address. At
the Issuer's request at least 45 days before a Redemption Date (unless a shorter
period shall be acceptable to the Trustee), the Trustee shall give the notice of
redemption in the Issuer's name and at the Issuer's expense. Each notice of
redemption shall identify the Securities to be redeemed and shall state:
(a) the Redemption Date;
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(b) the Redemption Price and the amount of accrued interest, if
any, to be paid;
(c) the name and address of the Paying Agent;
(d) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price plus accrued interest,
if any;
(e) that, unless the Issuer defaults in making the redemption
payment, Accreted Value or interest on Securities called for redemption
ceases to accrete or accrue, as the case may be, on and after the
Redemption Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price and accrued
interest, if any, upon surrender to the Paying Agent of the Securities
redeemed;
(f) if any Security is being redeemed in part, the portion of
the principal amount at maturity of such Security to be redeemed and
that, after the Redemption Date, and upon surrender of such Security, a
new Security or Securities in aggregate principal amount at maturity
equal to the unredeemed portion thereof will be issued;
(g) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount at maturity of
Securities to be redeemed and the aggregate principal amount at maturity
of Securities to be outstanding after such partial redemption;
(h) the Paragraph of the Securities pursuant to which the
Securities are to be redeemed; and
(i) the CUSIP or ISIN number, if any, printed on the Securities
being redeemed and a statement that no representation is made as to the
correctness or accuracy of the CUSIP or ISIN number, if any, listed in
such notice or printed on the Securities.
The notice, if mailed in a manner herein provided, shall be conclusively
presumed to have been given, whether or not the Holder receives such notice. In
any case, failure to give such notice by mail or any defect in the notice to the
Holder of any Security designated for redemption in whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security.
3.4. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Securities
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called for redemption shall be paid at the Redemption Price (which shall include
accrued interest thereon to the Redemption Date), but installments of interest,
the maturity of which is on or prior to the Redemption Date, shall be payable to
Holders of record at the close of business on the relevant Record Dates.
3.5. DEPOSIT OF REDEMPTION PRICE.
On or before 11:00 a.m.
New York time on the Redemption Date, the Issuer
shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
Redemption Price plus accrued interest, if any, of all Securities to be redeemed
on that date.
If the Issuer complies with the preceding paragraph, then, unless the
Issuer defaults in the payment of such Redemption Price plus accrued interest,
if any, Accreted Value on the Securities to be redeemed will cease to accrete
and interest on the Securities to be redeemed will cease to accrue, as
applicable, on and after the applicable Redemption Date, whether or not such
Securities are presented for payment.
3.6. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part only, the
Trustee shall upon written instruction from the Issuer authenticate for the
Holder a new Security or Securities in a principal amount at maturity equal to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
4.1. PAYMENT OF SECURITIES.
The Issuer shall pay the Accreted Value of, premium, if any, and
interest on the Securities in the manner provided in the Securities. An
installment of Accreted Value of, premium, if any, or interest on the Securities
shall be considered paid on the date it is due if the Trustee or Paying Agent
holds on that date U.S. Legal Tender designated for and sufficient to pay the
installment. If the Issuer or any Subsidiary of the Issuer acts as Paying Agent,
an installment of Accreted Value of, premium, if any, or interest shall be
considered paid on the date it is due if the entity acting as Paying Agent
complies with the second sentence of Section 2.4. Interest on the Securities
will be computed on the basis of a 360-day year comprised of twelve 30-day
months. As provided in Section 6.9, upon any bankruptcy or reorganization
procedure relative to the Issuer, the Trustee shall serve as Paying Agent, if
any, for the Securities.
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4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer shall maintain in the Borough of Manhattan, The City of New
York, the office or agency required under Section 2.3. The Issuer shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuer shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.2.
The Issuer may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Issuer will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Issuer hereby initially designates the Trustee at its address at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration, as such office of the Issuer in accordance with Section 2.3.
4.3. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (1) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
in Qualified Capital Stock of the Company) on or in respect of shares of the
Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company or any
warrants, rights or options to purchase or acquire shares of any class of such
Capital Stock of the Company; (3) make any principal payment on, purchase,
defease, redeem, prepay, decrease or otherwise acquire or retire for value,
prior to any scheduled final maturity, scheduled repayment or scheduled sinking
fund payment, any Indebtedness of the Company that is subordinate or junior in
right of payment to the Securities or any Guarantee (other than Indebtedness
described in clause (7) of the definition of "Permitted Indebtedness"); or (4)
make any Investment (other than Permitted Investments) (each of the foregoing
actions set forth in clauses (1), (2), (3) and (4) being referred to as a
"RESTRICTED PAYMENT"), if at the time of such Restricted Payment or immediately
after giving effect thereto:
(a) a Default or an Event of Default shall have occurred and be
continuing; or
(b) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.4;
or
(c) the aggregate amount of Restricted Payments (including such
proposed Restricted Payment) made subsequent to November 28, 2001 (the amount
expended for such
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purposes, if other than in cash, being the fair market value of such property as
determined reasonably and in good faith by the Board of Directors of the Company
whose determination shall be conclusive) shall exceed the sum of:
(i) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of such
loss) of the Company earned subsequent to November 28, 2001 and on or
prior to the date the Restricted Payment is made (the "REFERENCE DATE")
(treating such period as a single accounting period); plus
(ii) 100% of the aggregate Net Cash Proceeds and the fair market
value, as determined in good faith by the Board of Directors of the
Company, of property other than cash received by the Company from any
Person (other than a Subsidiary of the Company) from the issuance and
sale subsequent to November 28, 2001 and on or prior to the Reference
Date of Qualified Capital Stock of the Company (other than Excluded
Contributions); plus
(iii) without duplication of any amounts included in clause (c)(ii)
above, 100% of the aggregate Net Cash Proceeds of any equity
contribution received by the Company subsequent to November 28, 2001
from a holder of the Company's Capital Stock (other than Excluded
Contributions); plus
(iv) the amount by which Indebtedness of the Company or any of
its Restricted Subsidiaries is reduced on the Company's balance sheet
upon the conversion or exchange subsequent to November 28, 2001 of any
Indebtedness of the Company or any of its Restricted Subsidiaries
incurred after November 28, 2001 into or for Qualified Capital Stock;
plus
(v) without duplication, the sum of:
(a) the aggregate amount returned in cash on or with
respect to Investments (other than Permitted Investments)
made subsequent to November 28, 2001 whether through
interest payments, principal payments, dividends or other
distributions or payments;
(b) the net cash proceeds received by the Company or
any Restricted Subsidiary of the Company from the
disposition of all or any portion of such Investments (other
than to a Subsidiary of the Company); and
(c) upon redesignation of an Unrestricted Subsidiary
as a Restricted Subsidiary, the fair market value of such
Subsidiary (valued in each case as provided in the
definition of "Investment");
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PROVIDED, HOWEVER, that the sum of clauses (a), (b) and (c) above shall not
exceed the aggregate amount of all such Investments made by the Company or any
Restricted Subsidiary in the relevant Person or Unrestricted Subsidiary
subsequent to November 28, 2001.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph do not prohibit:
(1) the payment of any dividend or other distribution within 60
days after the date of declaration of such dividend or other
distribution if the dividend or other distribution would have been
permitted on the date of declaration;
(2) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any shares of Capital Stock of the
Company, either (a) solely in exchange for shares of Qualified Capital
Stock of the Company, or (b) through the application of net proceeds of
a substantially concurrent sale for cash (other than to a Subsidiary of
the Company) of shares of Qualified Capital Stock of the Company;
(3) if no Default or Event of Default shall have occurred and be
continuing, the acquisition of any Indebtedness of the Company that is
subordinate or junior in right of payment to the Securities or a
Guarantee either (a) solely in exchange for shares of Qualified Capital
Stock of the Company, or (b) through the application of net proceeds of
a substantially concurrent sale for cash (other than to a Subsidiary of
the Company) of (i) shares of Qualified Capital Stock of the Company, or
(ii) Refinancing Indebtedness;
(4) if no Default or Event of Default shall have occurred and be
continuing, repurchases by the Company or any Restricted Subsidiary of
the Company of securities of the Company from employees, directors or
consultants of the Company or any Subsidiaries of the Company or their
authorized representatives (a) upon the death, disability or termination
of employment of such employees, directors or consultants or to the
extent required pursuant to employee benefit plans, employment
agreements or consulting agreements or (b) pursuant to any other
agreements with such employees or directors of or consultants to the
Company or any Subsidiaries of the Company, in an aggregate amount not
to exceed $7.5 million in any calendar year (with unused amounts in any
calendar year being carried over to succeeding years subject to a
maximum of $15.0 million in any calendar year), PROVIDED that the
cancellation of Indebtedness owing to the Company or any Restricted
Subsidiary of the Company from such employees, directors or consultants
of the Company or any of its Restricted Subsidiaries in connection with
a repurchase of Capital Stock of the Company will not be deemed to
constitute a Restricted Payment under this Indenture;
(5) the declaration and payment of dividends to holders of any
class or series of Preferred Stock of the Company, provided that for the
most recently ended
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four full fiscal quarters for which internal financial statements are
available immediately preceding the date of issuance of such Preferred
Stock, after giving effect to such issuance on a PRO FORMA basis, the
Company would have been able to incur at least $1.00 of Indebtedness
(other than Permitted Indebtedness) pursuant to Section 4.4;
(6) the payment of dividends on the Company's Common Stock
following the first public offering of the Company's Common Stock after
the Issue Date, of up to 6% per annum of the net proceeds received by
the Company in such public offering (other than public offerings with
respect to the Company's Common Stock registered on Form S-8);
(7) the repurchase, retirement or other acquisition or
retirement for value of any securities of the Company in existence on
the Issue Date and from the Persons holding such securities on the Issue
Date which are not held by Apollo or any of its Affiliates or members of
management of the Company and its Subsidiaries on the Issue Date
(including any equity interests issued in respect of any such securities
constituting equity interests as a result of a stock split,
recapitalization, merger, combination, consolidation or similar
transaction); PROVIDED, HOWEVER, that the Company shall be permitted to
make Restricted Payments under this clause only if after giving effect
thereto, the Company would be permitted to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.4;
(8) other Restricted Payments in an aggregate amount not to
exceed $15.0 million;
(9) if no Default or Event of Default shall have occurred and be
continuing, payments or distributions to dissenting stockholders
pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of this Indenture applicable to mergers, consolidations and
transfers of all or substantially all of the property and assets of the
Company;
(10) Investments that are made with Excluded Contributions;
(11) any payments made to consummate the Transactions pursuant to
or contemplated by the Merger Agreement and any other agreement related
to the Recapitalization in effect on the closing date of the
Recapitalization, in each case, as such agreements or documents are in
effect on the Issue Date as amended from time to time so long as such
amendment is in the good faith judgment of the Board of Directors of the
Company not more disadvantageous to the Holders of the Securities in any
material respect than such agreements or documents as in effect on the
Issue Date;
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(12) repurchases of Capital Stock deemed to occur upon the
exercise of stock options, warrants or other convertible securities, to
the extent such Capital Stock represents a portion of the consideration
for such exercise;
(13) the acquisition of any shares of Disqualified Capital Stock
of the Company either (a) solely in exchange for shares of Disqualified
Capital Stock of the Company or (b) through the application of the net
proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Disqualified Capital Stock of
the Company;
(14) any purchase or redemption of Indebtedness that ranks junior
to the Securities utilizing any Net Cash Proceeds remaining after the
Company has complied with the requirements of the covenants described
under Sections 4.16 and 4.17;
(15) the payment of dividends, other distributions or amounts by
the Company to any direct or indirect parents of the Company in amounts
required to pay the tax obligations of the Company and its Subsidiaries
and the tax obligations of any direct or indirect parents of the Company
attributable to the Company and its Subsidiaries; PROVIDED that (x) the
amount of dividends paid pursuant to this clause (15) to enable any
direct or indirect parents of the Company to pay Federal and state
income taxes at any time shall not exceed the amount of such Federal and
state income taxes actually owing by any direct or indirect parents of
the Company at such time for the respective period and (y) any refunds
received by any direct or indirect parents of the Company attributable
to the Company and its Subsidiaries shall promptly be returned by such
direct or indirect parents to the Company;
(16) if no Default or Event of Default shall have occurred and be
continuing, payments by the Company of cash, in lieu of the issuance of
fractional shares upon the exercise of warrants or upon the conversion
or exchange of, or issuance of Capital Stock in lieu of cash dividends
on, any Capital Stock of the Company or any Restricted Subsidiary, which
in the aggregate do not exceed $3.0 million; and
(17) the declaration and payment of dividends to the holders of
the Company's Capital Stock with the gross proceeds received by the
Company from the sale of the Securities on the Issue Date.
In determining the aggregate amount of Restricted Payments made subsequent to
November 28, 2001, in accordance with clause (c) of the immediately preceding
paragraph, amounts expended pursuant to clauses (1), (2), (4), (5), (6), (7),
(8), (9), (14) and (16) shall be included in such calculation.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment complies with this
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Indenture and setting forth in reasonable detail the basis upon which the
required calculations were computed, which calculations may be based upon the
Company's latest available internal quarterly financial statements.
4.4. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "INCUR") any Indebtedness
(other than Permitted Indebtedness); PROVIDED, HOWEVER, that if no Default or
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, (i) the Company may
incur Indebtedness (including, without limitation, Acquired Indebtedness) if on
the date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof, the Company's Consolidated Fixed Charge Coverage Ratio is
greater than 2.0 to 1.0 and (ii) any Restricted Subsidiary of the Company may
incur Indebtedness (including, without limitation, Acquired Indebtedness) if on
the date of the incurrence of such Indebtedness, after giving effect to the
incurrence thereof, such Restricted Subsidiary's Consolidated Fixed Charge
Coverage Ratio is greater than 2.0 to 1.0.
4.5. CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each such Restricted Subsidiary and the rights
(charter and statutory) and material franchises of the Company and each of its
Restricted Subsidiaries; PROVIDED, HOWEVER, that neither the Company nor any
Restricted Subsidiary shall be required to preserve any such right or franchise
or in the case of any Restricted Subsidiary, its existence, if (in each case)
the Board of Directors of the Company shall determine that the loss thereof is
not, and will not be, adverse in any material respect to the Holders.
4.6. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of its Subsidiaries or
upon the income, profits or property of it or any of its Restricted Subsidiaries
and (b) all lawful claims for labor, materials and supplies which, in each case,
if unpaid, might by law become a material liability or Lien upon the property of
it or any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that the 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, (i) the applicability or
validity is being contested in good faith
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by appropriate proceedings and for which appropriate provision has been made or
(ii) where the failure to effect such payment or discharge is not adverse in any
material respect to the Holders.
4.7. MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall cause all material properties owned by or leased
by it or any of its Restricted Subsidiaries used or useful to the conduct of its
business or the business of any of its Restricted Subsidiaries, taken as a
whole, to be maintained and kept in normal condition, repair and working order
and supplied with all necessary equipment and shall cause to be made all
repairs, renewals, replacements, and betterments thereof, all as in its judgment
may be necessary, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section 4.7 shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the use, operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Board of Directors of the Company or any such Restricted
Subsidiary desirable in the conduct of the business of the Company or any such
Restricted Subsidiary, and if such discontinuance or disposal is not adverse in
any material respect to the Holders; PROVIDED FURTHER that nothing in this
Section 4.7 shall prevent the Company or any of its Restricted Subsidiaries from
discontinuing or disposing of any properties to the extent otherwise permitted
by this Indenture.
(b) The Company shall maintain, and shall cause its Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are, in the Company's reasonable judgment,
customarily carried by similar businesses of similar size, including property
and casualty loss, workers' compensation and interruption of business insurance.
4.8. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Issuer and each Guarantor, if any, shall deliver to the
Trustee, within 120 days after the close of each fiscal year of the Issuer, an
Officers' Certificate stating that a review of the activities of the Issuer or
the applicable Guarantor has been made under the supervision of the signing
Officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge,
the Issuer or the applicable Guarantor during such preceding fiscal year has
kept, observed, performed and fulfilled each and every such covenant and no
Default or Event of Default occurred during such year and at the date of such
certificate there is no Default or Event of Default that has occurred and is
continuing or, if such signers do know of such Default or Event of Default, the
certificate shall describe its status with particularity. The applicable
Officers' Certificate shall
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also notify the Trustee should either of the Issuer or any Guarantor elect to
change the manner in which it fixes its fiscal year end.
(b) The annual financial statements delivered pursuant to Section 4.10
shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Issuer has violated any
provisions of Article Four, Five or Six of this Indenture insofar as they relate
to accounting matters or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Issuer shall promptly deliver to the Trustee, in the event that
any Officer becomes aware of any Default or Event of Default in the performance
of any covenant, agreement or condition contained in this Indenture, an
Officers' Certificate specifying the Default or Event of Default and describing
its status with particularity.
(d) The Issuer shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of the original issue
discount (including daily rates and accrual periods) accrued on outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
4.9. COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States, all states and municipalities thereof, and of
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, in respect of the conduct of their
respective businesses and the ownership of their respective properties, except
for such noncompliances as would not in the aggregate have a material adverse
effect on the financial condition or results of operations of the Company and
its Subsidiaries taken as a whole.
4.10. REPORTS TO HOLDERS.
Whether or not required by the rules and regulations of the Commission,
so long as any Securities are outstanding, the Company shall file a copy of the
following information and reports with the Commission for public availability
(unless the Commission will not accept such a filing) and shall furnish to the
Holders of Securities and to securities analysts and prospective investors, upon
their written request:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company
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were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" that
describes the financial condition and results of operations of the
Company and its consolidated Subsidiaries and, with respect to the
annual information only, a report thereon by the Company's certified
independent accountants; and
(ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such
reports, in each case within the time periods specified in the
Commission's rules and regulations.
In addition, following the consummation of the Exchange Offer, whether
or not required by the rules and regulations of the Commission, the Company
shall file a copy of all such information and reports with the Commission for
public availability within the time periods specified in the Commission's rules
and regulations (unless the Commission will not accept such a filing) and make
such information available to securities analysts and prospective investors upon
written request to the Company.
In addition, for so long as any Securities remain outstanding, the
Company shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
4.11. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Issuer and each Guarantor, if any, covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive such
Issuer or such Guarantor from paying all or any portion of the Accreted Value
of, premium, if any, and/or interest on the Securities or the Guarantee of any
such Guarantor as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture, and (to the extent that it may lawfully do so) each hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
4.12. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "AFFILIATE
TRANSACTION"), other than (x) Affiliate Transactions permitted under paragraph
(b) below and (y) Affiliate Transactions on terms that are no less favorable
than those that could reasonably
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have been obtained in a comparable transaction at such time on an arm's-length
basis from a Person that is not an Affiliate of the Company or such Restricted
Subsidiary. All Affiliate Transactions (and each series of related Affiliate
Transactions which are similar or part of a common plan) involving aggregate
payments or other property with a fair market value in excess of $2.0 million
shall be approved by the Board of Directors of the Company or such Restricted
Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Restricted Subsidiary of the Company enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
an aggregate fair market value of more than $10.0 million, the Company or such
Restricted Subsidiary, as the case may be, shall, prior to the consummation
thereof, obtain a favorable opinion as to the fairness of such transaction or
series of related transactions to the Company or the relevant Restricted
Subsidiary, as the case may be, from a financial point of view, from an
Independent Financial Advisor and file the same with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to:
(i) reasonable fees and compensation paid to and indemnity
provided on behalf of, officers, directors, employees or consultants of
the Company or any Restricted Subsidiary of the Company as determined in
good faith by the Company's Board of Directors;
(ii) transactions exclusively between or among the Company and
any of its Restricted Subsidiaries or exclusively between or among such
Restricted Subsidiaries, PROVIDED such transactions are not otherwise
prohibited by this Indenture;
(iii) any agreement as in effect or entered into as of the Issue
Date or any amendment thereto or any transaction contemplated thereby
(including pursuant to any amendment thereto) in any replacement
agreement thereto so long as any such amendment or replacement agreement
is not more disadvantageous to the Holders in any material respect than
the original agreement as in effect on the Issue Date;
(iv) Restricted Payments and Permitted Investments permitted by
this Indenture;
(v) transactions in which the Company or any of its Restricted
Subsidiaries, as the case may be, delivers to the Trustee a letter from
an Independent Financial Advisor stating that such transaction is fair
to the Company or such Restricted Subsidiary from a financial point of
view or meets the requirements of the first sentence of paragraph (a)
above;
(vi) the issuance of securities or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock
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options and stock ownership plans or similar employee benefit plans
approved by Board of Directors of the Company in good faith and loans to
employees of the Company and its Subsidiaries which are approved by the
Board of Directors of the Company in good faith;
(vii) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case on ordinary
business terms and otherwise in compliance with the terms of this
Indenture, which are fair to the Company or its Restricted Subsidiaries,
in the reasonable determination of the Board of Directors of the Company
or the senior management thereof, or are on terms at least as favorable
as could reasonably have been obtained at such time from an unaffiliated
party;
(viii) fees payable to Apollo pursuant to the Management Agreement
as in effect on the Issue Date or pursuant to any amendment, restatement
or replacement thereof to the extent that such amendment, restatement or
replacement does not provide for any fees or other payments in excess of
those set forth in the Management Agreement as in effect on the Issue
Date;
(ix) any contribution to the capital of the Company by any
Permitted Holder or any sales of Capital Stock of the Company to any
Permitted Holder; and
(x) any tax-sharing agreement or arrangement and payments
pursuant thereto among the Company and its Subsidiaries and any other
Person with which the Company or its Subsidiaries is required or
permitted to file a consolidated tax return or with which the Company or
any of its Restricted Subsidiaries is or could be part of a consolidated
group for tax purposes in amounts not otherwise prohibited by this
Indenture.
4.13. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries (other than a Restricted Subsidiary that has executed a
Guarantee) to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (a) pay dividends or make any other
distribution on or in respect of its Capital Stock (it being understood that the
priority of any Preferred Stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on
Common Stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock); (b) make loans or advances or to pay any
Indebtedness or other obligation owed to the Company or any other Restricted
Subsidiary of the Company; or (c) transfer any of its property or assets to the
Company or any other Restricted Subsidiary of the Company, except for such
encumbrances or restrictions existing under or by reason of:
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(i) applicable law, rule, regulation, order, grant or
governmental permit;
(ii) this Indenture, the Existing Holdings Indenture, the
Existing Holdings Notes, the Existing Compass Minerals Indenture and the
Existing Compass Minerals Notes and the guarantees thereof, if any;
(iii) the Credit Agreement;
(iv) customary non-assignment provisions of any contract, license
or any lease of any Restricted Subsidiary of the Company;
(v) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired;
(vi) agreements existing or entered into on the Issue Date to the
extent and in the manner such agreements are in effect on the Issue
Date;
(vii) purchase money obligations for property acquired in the
ordinary course of business or Capitalized Lease Obligations that impose
restrictions of the nature discussed in clause (c) above on the property
so acquired;
(viii) contracts for the sale of assets, including, without
limitation, customary restrictions with respect to a Restricted
Subsidiary of the Company pursuant to an agreement that has been entered
into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Restricted Subsidiary;
(ix) secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 4.4 and 4.15 that limit the right of the debtor to
dispose of the assets securing such Indebtedness;
(x) customary provisions in joint venture agreements and other
similar agreements entered into in the ordinary course of business;
(xi) customary net worth and restrictions on transfer, assignment
or subletting provisions contained in leases and other agreements
entered into by the Company or any Restricted Subsidiary;
(xii) any restriction in any agreement or instrument of a
Receivables Subsidiary governing a Qualified Receivables Transaction;
(xiii) any agreement governing Indebtedness incurred to Refinance
the Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clauses (i) through (xii) above; PROVIDED, HOWEVER, that
the provisions relating to such encumbrance
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or restriction contained in any such Indebtedness, taken as a whole, are
no less favorable to the Company in any material respect as determined
by the Board of Directors of the Company in its reasonable and good
faith judgment than the provisions relating to such encumbrance or
restriction contained in agreements referred to in such clauses; or
(xiv) any agreement governing Indebtedness permitted to be
incurred pursuant to Section 4.4; PROVIDED that either (y) the
provisions relating to such encumbrance or restriction contained in such
Indebtedness, taken as a whole, are no less favorable to the Company in
any material respect as determined by the Board of Directors of the
Company in its reasonable and good faith judgment than the provisions
contained in the Credit Agreement, the Existing Compass Minerals
Indenture, the Existing Holdings Indenture or in this Indenture, in each
case, as in effect on the Issue Date or (z) any encumbrance or
restriction contained in such Indebtedness does not prohibit (except
upon a default or event of default thereunder) the payment of dividends
in an amount sufficient, as determined by the Board of Directors of the
Company in its reasonable and good faith judgment, to make scheduled
payments of cash interest on the Securities.
4.14. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES.
The Company shall not permit any Restricted Subsidiary of the Company,
directly or indirectly, to Guarantee any Indebtedness of the Company (other than
Indebtedness and other obligations under the Credit Agreement), unless (i) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for an unsecured senior subordinated
Guarantee of payment of the Securities by such Restricted Subsidiary, which
Guarantee shall be subordinated to any Indebtedness under the Credit Agreement
to the same extent that the Securities are subordinated to the Guarantee under
the Credit Agreement and (ii) such Restricted Subsidiary waives and will not in
any manner whatsoever claim or take the benefit or advantage of any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Guarantee so long as any Securities remain outstanding.
Notwithstanding the foregoing, any such Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of the Company, of all of the Company's and each
Restricted Subsidiaries' Capital Stock in, or all or substantially all the
assets of, such Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by this Indenture), (ii) the release or discharge of the guarantee,
if any, which resulted in the creation of such Guarantee, except a discharge or
release by or as a result of payment under
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such guarantee or (iii) the designation of such Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with the provisions of this Indenture.
4.15. LIMITATION ON LIENS.
The Company shall not, directly or indirectly, create, incur, assume or
permit or suffer to exist any Liens of any kind against or upon any property or
assets of the Company whether owned on the Issue Date or acquired after the
Issue Date, or any proceeds therefrom, or assign or otherwise convey any right
to receive income or profits therefrom unless:
(a) in the case of Liens securing Indebtedness that is expressly
subordinate or junior in right of payment of the Securities, the
Securities are secured by a Lien on such property, assets or proceeds
that is senior in priority to such Liens; and
(b) in all other cases, the Securities are equally and ratably
secured, except for the following Liens which are expressly permitted:
(i) Liens existing as of the Issue Date;
(ii) Liens securing Senior Debt, including, without
limitation, Indebtedness (including any guarantee) incurred by the
Company under the Credit Agreement;
(iii) Liens securing the Securities;
(iv) Liens in favor of the Company;
(v) Liens securing Refinancing Indebtedness which is
incurred to Refinance any Indebtedness (including, without
limitation, Acquired Indebtedness) which has been secured by a Lien
permitted under this Indenture and which has been incurred in
accordance with the provisions of this Indenture; PROVIDED,
HOWEVER, that such Liens:
(a) are no less favorable to the Holders and are not
more favorable to the lienholders with respect to such Liens
than the Liens in respect of the Indebtedness being
Refinanced; and
(b) do not extend to or cover any property or assets
of the Company not securing the Indebtedness so Refinanced;
and
(vi) Permitted Liens.
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4.16. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (the "CHANGE OF CONTROL OFFER"), and
shall purchase, on a Business Day (the "CHANGE OF CONTROL PAYMENT DATE") as
described below, all or a portion of the then outstanding Securities at a
purchase price equal to 101% of the Accreted Value thereof, plus accrued and
unpaid interest, if any, thereon to the Change of Control Payment Date. The
Change of Control Offer shall remain open for at least 20 Business Days and
until the close of business on the Change of Control Payment Date.
Notwithstanding the occurrence of a Change of Control, the Company shall not be
obligated to repurchase the Securities pursuant to this Section 4.16 in the
event that the Company has exercised its right to redeem all the Securities
under the terms of Article III of this Indenture and paragraph 5 of the
Securities.
(b) Prior to the mailing of the notice referred to below, but in any
event within 60 days following any Change of Control, the Company covenants to:
(i) repay in full and terminate all commitments under
Indebtedness under the Credit Agreement and offer to repay in full and
terminate all commitments under all Indebtedness under the Credit
Agreement and all other Senior Debt, the terms of which require
repayment upon a Change of Control or offer to repay in full and
terminate all commitments under all Indebtedness under the Credit
Agreement and all such other Senior Debt and to repay the Indebtedness
owed to (and terminate all commitments of) each lender which has
accepted such offer; or
(ii) obtain the requisite consents under the Credit Agreement and
all such other Senior Debt to permit the repurchase of the Securities as
provided below.
The Company shall first comply with the covenant in the immediately preceding
sentence before it shall be required to repurchase Securities pursuant to the
provisions described below. The Company's failure to comply with the covenant
described in the second preceding sentence (and any failure to send the notice
referred to in clause (c) below because the same is prohibited by the second
preceding sentence) may (with notice and lapse of time) constitute an Event of
Default described in clause (iii) of Section 6.1 but shall not constitute an
Event of Default described in clause (ii) of Section 6.1.
(c) Within 60 days following the date upon which a Change of Control
occurs (the "CHANGE OF CONTROL DATE"), the Company shall send, by first class
mail, a notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. The notice to the Holders shall
contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Change of Control Offer. Such notice shall
state:
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(i) that the Change of Control Offer is being made pursuant to
this Section 4.16 and that all Securities tendered and not withdrawn
will be accepted for payment;
(ii) the purchase price (including the amount of accrued
interest) and the Change of Control Payment Date, which shall be a
Business Day, that is not earlier than 30 days or later than 60 days
from the date such notice is mailed, other than as may be required by
law;
(iii) that any Security not tendered will continue to accrete
Accreted Value or accrue interest, as the case may be;
(iv) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrete Accreted Value or accrue interest,
as the case may be, after the Change of Control Payment Date;
(v) that Holders electing to have a Security purchased pursuant
to a Change of Control Offer will be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third
Business Day prior to the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the second Business Day prior
to the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount at maturity of the Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Security purchased;
(vii) that Holders electing to have their Securities purchased
only in part will be issued new Securities in a principal amount at
maturity equal to the unpurchased portion of the Securities surrendered;
and
(viii) the circumstances and relevant facts regarding such Change
of Control.
The Company shall not be required to make a Change of Control Offer upon
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.16 applicable to a Change of Control Offer made by the Company
and purchases all Securities validly tendered and not withdrawn under such
Change of Control Offer.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer,
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(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
purchase price plus accrued interest, if any, of all Securities so tendered and
(iii) deliver to the Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price plus accrued interest,
if any, and upon written order of the Company the Trustee shall promptly
authenticate and mail to such Holders new Securities equal in principal amount
to any unpurchased portion of the Securities surrendered. Any Securities not so
accepted shall be promptly mailed by the Company to the Holder thereof. For
purposes of this Section 4.16, the Trustee shall act as the Paying Agent.
Any amounts remaining with the Paying Agent after the purchase of
Securities pursuant to a Change of Control Offer shall be returned by the
Trustee to the Company.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.16, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.16 by virtue thereof.
4.17. LIMITATION ON ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(i) the Company or the applicable Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at
least equal to the fair market value of the assets sold or otherwise
disposed of (as determined in good faith by the Company's senior
management or, in the case of an Asset Sale in excess of $5.0 million,
the Board of Directors of the Company);
(ii) at least 75% of the consideration received by the Company or
the Restricted Subsidiary, as the case may be, from such Asset Sale
shall be in the form of (x) cash or Cash Equivalents, (y) properties and
assets to be owned by the Company or any of its Restricted Subsidiaries
and used in a Permitted Business or (z) Capital Stock in one or more
Persons engaged in a Permitted Business that are or thereby become
Restricted Subsidiaries of the Company, and, in each case, such
consideration is received at the time of such disposition; PROVIDED that
the amount of (a) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Securities) that are assumed by the transferee of
any
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such assets, and (b) any notes or other securities received by the
Company or any such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash within
180 days after such Asset Sale (to the extent of the cash received)
shall be deemed to be cash for the purposes of this provision only; and
(iii) upon the consummation of an Asset Sale, the Company shall
apply, or cause such Restricted Subsidiary to apply, the Net Cash
Proceeds relating to such Asset Sale within 390 days of receipt thereof
either:
(A) to prepay any Senior Debt or Indebtedness of a
Restricted Subsidiary and, in the case of any Senior Debt or
Indebtedness of a Restricted Subsidiary under any revolving credit
facility, effect a permanent reduction in the availability under
such revolving credit facility (or effect a permanent reduction in
availability under such revolving credit facility regardless of the
fact that no prepayment is required);
(B) to make an Investment (x) in properties and assets
that replace the properties and assets that were the subject of
such Asset Sale, (y) in properties and assets that will be used by
the Company or a Restricted Subsidiary in a Permitted Business or
(z) permitted by clause (1) of the definition of Permitted
Investments (collectively, "REPLACEMENT ASSETS"); or
(C) a combination of prepayment and investment permitted
by the foregoing clauses (iii)(A) and (iii)(B).
Pending the final application of the Net Cash Proceeds, the Company and
its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise
invest such Net Cash Proceeds in any manner not prohibited by this Indenture.
On the 391st day after an Asset Sale or such earlier date, if any, as
the senior management or the Board of Directors of the Company or of such
Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to
such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the
next preceding paragraph (each, a "NET PROCEEDS OFFER TRIGGER DATE"), such
aggregate amount of Net Cash Proceeds which have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B)
and (iii)(C) of the next preceding paragraph (each a "NET PROCEEDS OFFER
AMOUNT") shall be applied by the Company or such Restricted Subsidiary to make
an offer to purchase (the "NET PROCEEDS OFFER") on a date (the "NET PROCEEDS
OFFER PAYMENT DATE") not less than 30 nor more than 60 days following the
applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata
basis, that amount of Securities equal to the Net Proceeds Offer Amount at a
price equal to 100% of the Accreted Value of the Securities to be purchased,
plus accrued and unpaid interest thereon, if any, to the date of purchase;
PROVIDED, HOWEVER, that if the Company
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is required by the terms of any Senior Subordinated Debt, such Net Proceeds
Offer may be made ratably to purchase the Securities and such other Indebtedness
of the Company that ranks PARI PASSU with the Securities.
If at any time any non-cash consideration received by the Company or any
Restricted Subsidiary of the Company, as the case may be, in connection with any
Asset Sale is converted into or sold or otherwise disposed of for cash (other
than interest received with respect to any such non-cash consideration), then
such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder as of the date of such conversion or disposition and the Net Cash
Proceeds thereof shall be applied in accordance with this Section.
The Company may defer the Net Proceeds Offer until there is an aggregate
unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million
resulting from one or more Asset Sales (at which time, the entire unutilized Net
Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall
be applied as required pursuant to the second preceding paragraph).
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.1, which
transaction does not constitute a Change of Control, the successor corporation
shall be deemed to have sold the properties and assets of the Company and its
Restricted Subsidiaries not so transferred for purposes of this Section, and
shall comply with the provisions of clause (iii) of this Section with respect to
such deemed sale as if it were an Asset Sale. In addition, the fair market value
of such properties and assets of the Company or its Restricted Subsidiaries
deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this
Section 4.17.
Notice of each Net Proceeds Offer pursuant to this Section 4.17 shall be
mailed or caused to be mailed, by first class mail, by the Company within 25
days following the applicable Net Proceeds Offer Trigger Date to all Holders at
their last registered addresses, with a copy to the Trustee. A Net Proceeds
Offer shall remain open for a period of 20 Business Days or such longer period
as may be required by law. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Net Proceeds Offer and shall state the following terms:
(i) that Holders may elect to have their Securities purchased by
the Company either in whole or in part (subject to proration as
hereinafter described in the event the Net Proceeds Offer is
oversubscribed) in integral multiples of $1,000 principal amount at
maturity, at the applicable purchase price;
(ii) that the Net Proceeds Offer is being made pursuant to this
Section 4.17 and that all Securities tendered will be accepted for
payment; PROVIDED, HOWEVER, that if the principal amount of Securities
tendered in the Net Proceeds Offer exceeds the
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aggregate amount of the Net Proceeds Offer Amount, the Company shall
select the Securities to be purchased on a PRO RATA basis (based on
amounts tendered) (with such adjustments as may be deemed appropriate by
the Company so that only Securities in denominations of $1,000 principal
amount at maturity, or integral multiples thereof, shall be purchased);
(iii) the purchase price (including the amount of accrued
interest, if any) and the purchase date (which shall be no earlier than
30 days nor later than 60 days from the Net Proceeds Offer Trigger Date,
other than as may be required by applicable law);
(iv) that any Security not tendered will continue to accrete
Accreted Value or accrue interest, as the case may be;
(v) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the Net Proceeds
Offer shall cease to accrue interest after the Net Proceeds Offer
Payment Date;
(vi) that Holders electing to have a Security purchased pursuant
to the Net Proceeds Offer will be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the Net
Proceeds Offer Payment Date;
(vii) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the second Business Day prior
to the Net Proceeds Offer Payment Date, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security purchased; and
(viii) that Holders whose Securities are purchased only in part
will be issued new Securities in a principal amount at maturity equal to
the unpurchased portion of the Securities surrendered.
On or before the Net Proceeds Offer Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the Net
Proceeds Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient
to pay the purchase price, plus accrued interest, if any, of all Securities to
be purchased and (iii) deliver to the Trustee Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to the Holders of
Securities so accepted payment in an amount equal to the purchase price, plus
accrued interest, if any, thereon set forth in the notice of such Net Proceeds
Offer. Any Security not so accepted
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shall be promptly mailed by the Company to the Holder thereof. For purposes of
this Section 4.17, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Securities pursuant to a Net
Proceeds Offer shall be returned by the Trustee to the Company. To the extent
that the aggregate amount of the Securities tendered pursuant to a Net Proceeds
Offer is less than the Net Proceeds Offer Amount, the Company may use such
excess Net Proceeds Offer Amount for general corporate purposes or for any other
purposes not prohibited by this Indenture. Upon completion of any such Net
Proceeds Offer, the Net Proceeds Offer Amount shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.17, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.17 by virtue thereof. The provisions of this
Section and other provisions contained in this Indenture relating to the
Company's obligation to make a Net Proceeds Offer may be waived or modified with
the written consent of the Holders of a majority in principal amount at maturity
of the Securities.
4.18. PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT.
The Issuer and the Guarantors, if any, shall not incur or suffer to
exist Indebtedness that is senior in right of payment to the Securities or any
Guarantee, if any, and subordinate in right of payment by its terms to any other
Indebtedness of the Issuer or such Guarantor, as the case may be.
ARTICLE FIVE
SUCCESSOR CORPORATION
5.1. MERGER, CONSOLIDATION AND SALE OF ASSETS.
(a) The Company shall not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless:
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(i) either (a) the Company shall be the surviving or continuing
corporation, partnership, trust or limited liability company or (b) the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person which acquires by sale,
assignment, transfer, lease, conveyance or other disposition the
properties and assets of the Company and of the Company's Restricted
Subsidiaries substantially as an entirety (the "SURVIVING ENTITY"):
(x) shall be a corporation, partnership, trust or limited
liability company organized and validly existing under the laws of
the United States or any State thereof or the District of Columbia;
and
(y) shall expressly assume, by supplemental indenture (in
form and substance reasonably satisfactory to the Trustee),
executed and delivered to the Trustee, the due and punctual payment
of the principal of, and premium, if any, and interest on all of
the Securities and the performance of every covenant of the
Securities and this Indenture on the part of the Company to be
performed or observed;
(ii) immediately after giving effect to such transaction on a PRO
FORMA basis and the assumption contemplated by clause (a)(i)(y) above
(including giving effect to any Indebtedness and Acquired Indebtedness
incurred or anticipated to be incurred in connection with or in respect
of such transaction), the Company or such Surviving Entity, as the case
may be, shall be able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) pursuant to Section 4.4;
(iii) immediately before and immediately after giving effect to
such transaction on a PRO FORMA basis and the assumption contemplated by
clause (a)(i)(y) above (including, without limitation, giving effect to
any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred or repaid and any Lien granted or to be released in connection
with or in respect of the transaction), no Default or Event of Default
shall have occurred or be continuing; and
(iv) the Company or the Surviving Entity, as the case may be,
shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with the applicable provisions of
this Indenture and that all conditions precedent in this Indenture
relating to such transaction have been satisfied.
Notwithstanding the foregoing, (i) the merger of the Company with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction shall be permitted and (ii) the merger of any Restricted
Subsidiary of the Company into the Company
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or the transfer, lease, conveyance or other disposition of all or substantially
all of the assets of a Restricted Subsidiary of the Company to the Company shall
be permitted so long as the Company delivers to the Trustee an Officers'
Certificate stating that the purpose of such merger, transfer, lease, conveyance
or other disposition is not to consummate a transaction that would otherwise be
prohibited by clause (iii) of this Section 5.1(a).
(b) For purposes of the foregoing paragraph (a), the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries of the Company the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
(c) Each Guarantor, if any (other than any Guarantor whose Guarantee is
to be released in accordance with the terms of such Guarantee and this Indenture
in connection with any transaction complying with the provisions of Section
4.17), shall not, and the Company shall not cause or permit any Guarantor to,
consolidate with or merge with or into any Person other than the Company or any
other Guarantor unless:
(i) the Person formed by or surviving any such consolidation or
merger (if other than the Guarantor) or to which such sale, lease,
conveyance or other disposition shall have been made is a corporation,
partnership or limited liability company organized and validly existing
under the laws of the United States, any State thereof, the District of
Columbia or the jurisdiction in which such Guarantor is organized;
(ii) such Person expressly assumes by supplemental indenture all
of the obligations of the Guarantor on its Guarantee;
(iii) immediately after giving effect to such transaction on a PRO
FORMA basis, no Default or Event of Default shall have occurred and be
continuing; and
(iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a PRO FORMA basis, the Company
could satisfy the provisions of clause (ii) of Section 5.1(a)
Any merger or consolidation of a Guarantor with and into the Company (with the
Company being the surviving entity) or another Guarantor that is a Wholly Owned
Restricted Subsidiary of the Company need only comply with clause (iv) of
Section 5.1(a).
5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1 in
which the Company or any
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Guarantor, as applicable, is not the continuing corporation, the successor
Person formed by such consolidation or into which the Company or such Guarantor
is merged or to which such conveyance, lease or transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company or such Guarantor under this Indenture and the Securities or any
Guarantee, as applicable, with the same effect as if such Surviving Entity had
been named as such.
ARTICLE SIX
DEFAULT AND REMEDIES
6.1. EVENTS OF DEFAULT.
Each of the following shall be an "EVENT OF DEFAULT":
(i) the failure to pay interest on any Securities when the same
becomes due and payable and the default continues for a period of 30
days (whether or not such payment shall be prohibited by Article Ten or
Article Twelve);
(ii) the failure to pay the principal on any Securities, when
such principal becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase
Securities tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer) (whether or not such payment shall be prohibited by
Article Ten or Article Twelve);
(iii) a default by the Company or any Restricted Subsidiary of the
Company in the observance or performance of any other covenant or
agreement contained in this Indenture, which default continues for a
period of 30 days after the Company receives written notice specifying
the default (and demanding that such default be remedied) from the
Trustee or from the Holders of at least 25% of the outstanding principal
amount at maturity of the Securities;
(iv) the failure to pay at final stated maturity (giving effect
to any applicable grace periods and any extensions thereof) the
principal amount of any Indebtedness of the Company or the Indebtedness
of any Significant Subsidiaries of the Company, or the acceleration of
the final stated maturity of any such Indebtedness by the holders
thereof, if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at final stated maturity or which
has been accelerated, exceeds $10.0 million or more at any time;
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(v) one or more judgments in an aggregate amount in excess of
$10.0 million (exclusive of amounts covered by insurance other than
self-insurance) shall have been rendered against the Company or any of
its Significant Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable;
(vi) the Company or any of its Significant Subsidiaries (i)
commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (ii) consents to the entry of a judgment, decree or
order for relief against it in an involuntary case or proceeding under
any Bankruptcy Law, (iii) consents to the appointment of a custodian of
it or for substantially all of its property, (iv) consents to or
acquiesces in the institution of a bankruptcy or an insolvency
proceeding against it, (v) makes a general assignment for the benefit of
its creditors or (vi) takes any corporate action to authorize or effect
any of the foregoing; or
(vii) a court of competent jurisdiction enters a judgment, decree
or order for relief in respect of the Company or any of its Significant
Subsidiaries in an involuntary case or proceeding under any Bankruptcy
Law, which shall (i) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any of its Significant Subsidiaries, (ii) appoint a Custodian
of the Company or any of its Significant Subsidiaries or for
substantially all of any of its property or (iii) order the winding-up
or liquidation of its affairs; and such judgment, decree or order shall
remain unstayed and in effect for a period of 60 consecutive days.
If, pursuant to clause (iii) above, the Holders of at least 25% of the then
outstanding principal amount at maturity of Securities notify the Company as
specified in such clause, such Holders shall similarly notify the Trustee. Any
notice given pursuant to clause (iii) above or the immediately preceding
sentence shall be given by registered or certified mail, return receipt
requested.
6.2. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (vi) or (vii) of Section 6.1 above with respect to the Company) shall
occur and be continuing, the Trustee or the Holders of at least 25% in principal
amount at maturity of outstanding Securities may declare the Accreted Value of,
and accrued and unpaid interest, if any, on all the Securities to be due and
payable by notice in writing to the Issuer and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"ACCELERATION NOTICE"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Agreement,
shall become immediately due and payable upon the first to occur of an
acceleration under the Credit Agreement or five (5) Business Days after receipt
by the Company and the Representative under the Credit Agreement of
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such Acceleration Notice (but only if such Event of Default is then continuing).
If an Event of Default specified in clause (vi) or (vii) of Section 6.1 above
with respect to the Company occurs and is continuing, then all unpaid Accreted
Value of, and accrued and unpaid interest, if any, on all of the outstanding
Securities shall IPSO FACTO become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount at maturity of the Securities may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of Accreted Value, premium, if any, or interest, if
any, that has become due solely because of the acceleration, (iii) to the extent
the payment of such interest is lawful, interest on overdue installments of
interest, if any, and overdue Accreted Value and premium, if any, which has
become due otherwise than by such declaration of acceleration has been paid,
(iv) if the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its expenses, disbursements and advances, and any
other amounts due to the Trustee under Section 7.7 and (v) in the event of the
cure or waiver of an Event of Default of the type described in clause (vi) or
(vii) of Section 6.1, the Trustee shall have received an Officers' Certificate
and an Opinion of Counsel that such Event of Default has been cured or waived.
No such rescission shall affect any subsequent Default or Event of Default or
impair any right consequent thereto.
6.3. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
Accreted Value of, premium, if any, 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 to the
extent permitted by law.
6.4. WAIVER OF PAST DEFAULTS.
Subject to Sections 2.9, 6.2, 6.7 and 9.2, the Holders of not less than
a majority in principal amount at maturity of the outstanding Securities by
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default or Event of Default in the payment of Accreted
Value of, premium, if any, or interest, if any, on any Security as specified in
clauses (i) and (ii) of Section 6.1. The Company shall deliver to the Trustee an
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Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. When a Default
or Event of Default is waived, it is cured and ceases.
6.5. CONTROL BY MAJORITY.
The Holders of not less than a majority in aggregate principal amount at
maturity of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. Subject to Section 7.1, however, the Trustee
may refuse to follow any direction that conflicts with any law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of another Securityholder, or that may involve the Trustee in personal
liability.
6.6. LIMITATION ON SUITS.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holder or Holders of at least 25% in principal amount at
maturity of the outstanding Securities make a written request to the
Trustee to pursue the remedy;
(iii) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 45-day period the Holder or Holders of a
majority in principal amount at maturity of the outstanding Securities
do not give the Trustee a direction which, in the opinion of the
Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
6.7. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of Accreted Value of, premium, if any, and interest,
if any, on a Security, on or after the respective due dates expressed in such
Security, 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
the Holder.
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6.8. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal, premium, if any, or
interest specified in clause (i) or (ii) of Section 6.1 occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Issuer or any other obligor on the Securities for
the whole amount of Accreted Value of, premium, if any, and accrued interest, if
any, and fees remaining unpaid, together with interest on overdue Accreted Value
and premium, if any, and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, if any, in each case at the rate
PER ANNUM borne by the Securities and such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due to the Trustee under Section 7.7.
6.9. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
to the Trustee under Section 7.7) and the Securityholders allowed in any
judicial proceedings relating to the Issuer, its creditors or its property and
shall be entitled and empowered to participate as a member, voting or otherwise,
of any official committee appointed for such matter, to collect and receive any
monies or other securities or property payable or deliverable upon the
conversion or exchange of the Securities or upon any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Securityholder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.7. Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
6.10. PRIORITIES.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.7;
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Second: to Holders for interest accrued on the Securities,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities for interest, if any;
Third: to Holders for Accreted Value and premium, if any,
due and unpaid on the Securities, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Securities for principal; and
Fourth: to the Issuer or to the Guarantors, if any, as their
respective interests may appear.
The Trustee, upon prior notice to the Issuer, may fix a record date
and payment date for any payment to Securityholders pursuant to this Section
6.10.
6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, or a suit by a Holder or Holders of more than 10% in
principal amount at maturity of the outstanding Securities.
6.12. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then, and in every such case, subject to any
determination in such proceeding, the Issuer, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Issuer, Trustee and the Holders shall
continue as though no such proceeding had been instituted.
6.13. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or wrongfully taken Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or
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remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
ARTICLE SEVEN
TRUSTEE
7.1. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as are
specifically set forth herein or in the TIA and no duties, covenants,
responsibilities or obligations shall be implied in this Indenture
against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates (including
Officers' Certificates) or opinions (including Opinions of Counsel)
furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture, but need not verify the contents thereof.
(c) Notwithstanding anything to the contrary herein, the Trustee may
not be relieved from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1.
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(iii) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
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(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 7.1.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) In the absence of bad faith, negligence or willful misconduct on
the part of the Trustee, the Trustee shall not be responsible for the
application of any money by any Paying Agent other than the Trustee.
7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and an Opinion of Counsel, which shall
conform to the provisions of Section 13.5. The Trustee shall not be
liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee may consult with counsel and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request,
order or direction of any of the
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Holders pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate
(including any Officers' Certificate), statement, instrument, opinion
(including any Opinion of Counsel), notice, request, direction, consent,
order, bond, debenture, or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit and, if the Trustee shall determine
to make such further inquiry or investigation, it shall be entitled,
upon reasonable notice to the Issuer, to examine the books, records, and
premises of the Issuer, personally or by agent or attorney at the sole
cost of the Company and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation.
(h) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as duties.
(j) The Trustee shall not be charged with knowledge of any
Default or Event of Default, of the identity of any Restricted
Subsidiary or the existence of any Change of Control or Asset Sale
unless either (i) a Responsible Officer shall have actual knowledge
thereof or (ii) the Trustee shall have received written notice thereof
from either of the Issuer or any Holder.
(k) Delivery of reports, information and documents to the
Trustee under Section 4.10 is for informational purposes only and the
Trustee's receipt of the foregoing shall not constitute constructive
notice of any information contained therein or determinable from
information contained therein, including the Issuer's compliance with
any of the covenants hereunder.
(l) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee
in each of its capacities hereunder, and each agent, custodian and other
Person employed to act hereunder.
(m) The Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed by
any person authorized to sign an Officers' Certificate, including any
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person specified as so authorized in any such certificate previously
delivered and not superseded.
7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Issuer, its
Subsidiaries (including any Guarantors) or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
7.4. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as
to the validity or adequacy of this Indenture, any Guarantee or the Securities,
it shall not be accountable for the Issuer's use of the proceeds from the
Securities, and it shall not be responsible for any statement of the Issuer in
this Indenture or any document issued in connection with the sale of Securities
or any statement in the Securities other than the Trustee's certificate of
authentication. The Trustee makes no representations with respect to the
effectiveness or adequacy of this Indenture.
7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and the
Trustee receives actual notice of such Default or Event of Default, the Trustee
shall mail to each Securityholder notice of the uncured Default or Event of
Default within 90 days after such Default or Event of Default occurs. Except in
the case of a Default or an Event of Default in payment of Accreted Value of,
premium, if any, or interest on, if any, any Security, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or the Net Proceeds Offer Payment Date
pursuant to a Net Proceeds Offer, the Trustee may withhold the notice if and so
long as the Board of Directors, the executive committee, or a trust committee of
directors and/or Responsible Officers, of the Trustee in good faith determines
that withholding the notice is in the interest of the Securityholders.
7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15, beginning with the first May 15
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to each Securityholder a brief report
dated as of such date that complies with TIA Section 313(a). The Trustee also
shall comply with TIA Sections 313(b), 313(c) and 313(d).
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A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Issuer and filed with the Commission and each securities
exchange, if any, on which the Securities are listed.
The Issuer shall notify the Trustee if the Securities become listed on
any securities exchange or of any delisting thereof and the Trustee shall comply
with TIA Section 313(d).
7.7. COMPENSATION AND INDEMNITY.
The Issuer shall pay to the Trustee, from time to time, such
compensation for its services hereunder as the Issuer 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 Issuer shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including reasonable fees and expenses of counsel) incurred or
made by it in addition to the compensation for its services, except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence, bad faith or willful misconduct. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents and counsel.
The Issuer shall indemnify the Trustee and its agents, employees,
officers, stockholders and directors for, and hold them harmless against, any
loss, liability or expense (including reasonable attorneys' fees and expenses)
incurred by them except for such actions to the extent caused by any negligence,
bad faith or willful misconduct on their part, arising out of or in connection
with the acceptance or administration of this trust including the cost and
expense of enforcing this Indenture and the Securities against the Issuer
(including this Section 7.7) including the reasonable costs and expenses of
defending themselves against or investigating any claim (whether asserted by the
Issuer, any Holder or any other Person) or liability in connection with the
exercise or performance of any of the Trustee's rights, powers or duties
hereunder. The Trustee shall notify the Issuer promptly of any claim asserted
against the Trustee or any of its agents, employees, officers, stockholders and
directors for which it may seek indemnity, PROVIDED that any failure to so
notify the Issuer shall not relieve the Issuer of its indemnity obligations
hereunder. The Issuer may, subject to the approval of the Trustee, defend the
claim and the Trustee shall cooperate in the defense. The Trustee and its
agents, employees, officers, stockholders and directors subject to the claim may
have separate counsel and the Issuer shall pay the reasonable fees and expenses
of such counsel; PROVIDED, HOWEVER, that the Issuer will not be required to pay
such fees and expenses if, subject to the approval of the Trustee, it assumes
the Trustee's defense and there is no conflict of interest between the Issuer
and the Trustee and its agents, employees, officers, stockholders and directors
subject to the claim in connection with such defense as reasonably determined by
the Trustee. The Issuer need not pay for any settlement made without its written
consent, which consent will not be unreasonably withheld, delayed or
conditioned. The Issuer need not reimburse
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any expense or indemnify against any loss or liability to the extent incurred by
the Trustee through its negligence, bad faith or willful misconduct.
To secure the Issuer's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Securities against all money or property
held or collected by the Trustee, in its capacity as Trustee. The obligations of
the Issuer under this Section shall not be subordinated except with respect to
assets or money held in trust to pay principal of, premium, if any, or interest
on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (vi) or (vii) of Section 6.1 occurs, such expenses
and the compensation for such services shall be paid to the extent allowed under
any Bankruptcy Law.
Notwithstanding any other provision in this Indenture, the foregoing
provisions of this Section 7.7 shall survive the satisfaction and discharge of
this Indenture or the appointment of a successor Trustee.
7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign at any time by so notifying the Issuer in
writing. The Holders of a majority in principal amount at maturity of the
outstanding Securities may remove the Trustee by so notifying the Issuer and the
Trustee and may appoint a successor Trustee. The Issuer may remove the Trustee
if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuer shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount at
maturity of the Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Issuer.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.7, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 7.7, the resignation
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or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee at the Issuer's
expense, the Issuer or the Holders of at least 10% in principal amount at
maturity of the outstanding Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8,
the Issuer's and the Guarantors' obligations under Section 7.7 shall continue
for the benefit of the retiring Trustee.
7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; PROVIDED that such
corporation shall be otherwise qualified and eligible under this Article Seven.
7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the requirement
of TIA Sections 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. In addition, if the Trustee is a
corporation included in a bank holding company system, the Trustee,
independently of the bank holding company, shall meet the capital requirements
of TIA Section 310(a)(2). The Trustee shall comply with TIA Section 310(b);
PROVIDED, HOWEVER, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Issuer are
outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Issuer
and any other obligor of the Securities.
7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER.
The Trustee, in its capacity as Trustee hereunder, shall comply with
TIA Section 311(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated.
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ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
8.1. TERMINATION OF THE ISSUER'S OBLIGATIONS.
The Issuer may terminate its obligations under the Securities and this
Indenture, except those obligations referred to in the penultimate paragraph of
this Section 8.1, if all Securities previously authenticated and delivered
(other than destroyed, lost or stolen Securities which have been replaced or
paid or Securities for whose payment U.S. Legal Tender has theretofore been
deposited with the Trustee or the Paying Agent in trust or segregated and held
in trust by the Issuer and thereafter repaid to the Issuer, as provided in
Section 8.5) have been delivered to the Trustee for cancellation and the Issuer
has paid all sums payable by them hereunder, or if:
(i) either (i) pursuant to Article Three, the Issuer shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of the redemption of all of the Securities in accordance with the
provisions hereof or (ii) all Securities have otherwise become due and
payable hereunder;
(ii) the Issuer shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders of that purpose, U.S. Legal Tender in such amount
as is sufficient without consideration of reinvestment of such interest,
to pay Accreted Value of, premium, if any, and interest, if any, on the
outstanding Securities to maturity or redemption; PROVIDED that the
Trustee shall have been irrevocably instructed to apply such U.S. Legal
Tender to the payment of said Accreted Value, premium, if any, and
interest, if any, with respect to the Securities;
(iii) no Default or Event of Default with respect to this
Indenture or the Securities shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit (other
than a Default or Event of Default resulting from the incurrence of
Indebtedness all or a portion of the proceeds of which will be used to
defease the Securities pursuant to this Article Eight concurrently with
such incurrence) and such deposit will not result in a breach or
violation of, or constitute a default under, any other instrument or
agreement (including, without limitation, the Credit Agreement) to which
either the Issuer or any Restricted Subsidiary is bound is a party or by
which either is bound;
(iv) the Issuer shall have paid all other sums payable by it
hereunder; and
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(v) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for or relating to the termination of the Issuer's
obligations under the Securities and this Indenture have been complied
with. Such Opinion of Counsel shall also state that such satisfaction
and discharge does not result in a default under the Credit Agreement or
any other material agreement or instrument then known to such counsel
that binds or affects the Issuer.
Subject to the next sentence and notwithstanding the foregoing
paragraph, the Issuer's obligations in Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2,
7.7, 8.5 and 8.6 shall survive until the Securities are no longer outstanding
pursuant to the last paragraph of Section 2.8. After the Securities are no
longer outstanding, the Issuer's obligations in Sections 7.7, 8.5 and 8.6 shall
survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Issuer's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
8.2. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.
(a) The Issuer may, at its option by Board Resolutions of the Board of
Directors of the Issuer, at any time, elect to have either paragraph (b) or (c)
below applied to all outstanding Securities upon compliance with the conditions
set forth in Section 8.3.
(b) Upon the Issuer's exercise under paragraph (a) hereof of the option
applicable to this paragraph (b), the Issuer shall, subject to the satisfaction
of the conditions set forth in Section 8.3, be deemed to have been discharged
from its obligations with respect to all outstanding Securities on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For
this purpose, Legal Defeasance means that the Issuer shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding
Securities, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.4 and the other Sections of this Indenture referred to in
(i) and (ii) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Issuer, shall execute proper instruments acknowledging the same), except
for the following provisions, which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Section 8.4, and as more fully
set forth in such Section, payments in respect of the Accreted Value of,
premium, if any, and interest, if any, on such Securities when such payments are
due, (ii) the Company's obligations with respect to such Securities under
Article Two and Section 4.2, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company's obligations in connection
therewith and (iv) this Article Eight. Subject to compliance with this Article
Eight, the Issuer may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
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(c) Upon the Issuer's exercise under paragraph (a) hereof of the option
applicable to this paragraph (c), the Issuer shall, subject to the satisfaction
of the conditions set forth in Section 8.3, be released from its obligations, if
any, under the covenants contained in Sections 4.3 and 4.4 and Sections 4.12
through 4.18 and Article Five with respect to the outstanding Securities on and
after the date the conditions set forth below are satisfied (hereinafter,
"COVENANT DEFEASANCE"), and the Securities shall thereafter be deemed not
"OUTSTANDING" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "OUTSTANDING" for all other purposes
hereunder (it being understood that such Securities shall not be deemed
outstanding for accounting purposes). For this purpose, such Covenant Defeasance
means that, with respect to the outstanding Securities, 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 not constitute a Default or an Event
of Default under Section 6.1(iii), but, except as specified above, the remainder
of this Indenture and such Securities shall be unaffected thereby. In addition,
upon the Issuer's exercise under paragraph (a) hereof of the option applicable
to this paragraph (c), subject to the satisfaction of the conditions set forth
in Section 8.3 hereof, Sections 6.1(iii), 6.1(iv) and 6.1(v) shall not
constitute Events of Default.
8.3. CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2(b) or 8.2(c) to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Issuer must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, U.S. Legal Tender or non-callable
U.S. Government Obligations or a combination thereof which through the
scheduled payment of principal, premium, if any, and interest in respect
thereof in accordance with their terms, will provide, not later than one
day before the due date of any payment on the Securities, U.S. Legal
Tender, or a combination thereof, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on
the Securities on the stated date for payment thereof or on the
applicable redemption date, as the case may be;
(ii) in the case of an election under Section 8.2(b), the Issuer
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (a) the
Issuer has received from, or there has been published by, the Internal
Revenue Service a ruling or (b) since the date of the execution of this
Indenture, there has been a change in the applicable federal income tax
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law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(iii) in the case of an election under Section 8.2(c), the Issuer
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders
of the Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(iv) 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 resulting from the incurrence of Indebtedness all or a portion
of the proceeds of which will be used to defease the Securities pursuant
to this Article Eight concurrently with such incurrence) or insofar as
Sections 6.1(vi) and 6.1(vii) hereof are concerned, at any time in the
period ending on the 91st day after the date of such deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under this
Indenture (other than a Default or Event of Default resulting from the
incurrence of Indebtedness all or a portion of the proceeds of which
will be used to defease the Securities pursuant to this Article Eight
concurrently with such incurrence), the Credit Agreement 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;
(vi) the Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuer with the
intent of preferring the Holders over any other creditors of the Issuer
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Issuer or others;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent hereunder provided for or relating to the Legal Defeasance or
the Covenant Defeasance have been complied with; and
(viii) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that assuming no intervening bankruptcy or
insolvency of the Company between the date of deposit and the 91st day
following the deposit and that no Holder is an insider of the Company,
after the 91st day following the deposit, the trust funds
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will not be subject to the effect of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law.
Notwithstanding the foregoing, the Opinion of Counsel required by clause
(ii) above of this Section 8.3 need not be delivered if all Securities not
theretofore delivered to the Trustee for cancellation (i) have become due and
payable, (ii) will become due and payable on the Maturity Date within one year
or (iii) are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.
8.4. APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to this Article Eight,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of
Accreted Value of, premium, if any, and interest, if any, on the Securities.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.3 hereof or the Accreted
Value, premium, if any, and interest received, if any, in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of the outstanding Securities.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon the Issuer's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.3 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
8.5. REPAYMENT TO THE ISSUER.
The Trustee and the Paying Agent shall pay to the Issuer upon request
any money held by them for the payment of Accreted Value, premium, if any, or
interest, if any, that remains unclaimed for two years; PROVIDED that the
Trustee or such Paying Agent, before being required to make any payment, may at
the expense of the Issuer cause to be published once in a newspaper of general
circulation in The City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing any unclaimed balance of such money then remaining will be repaid to the
Issuer. After payment to the Issuer, Holders entitled to such money must look to
the Issuer for payment as general creditors unless an applicable law designates
another Person.
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8.6. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender
or U.S. Government Obligations in accordance with this Article Eight by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Issuer's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Eight until such time as the Trustee or Paying Agent is permitted
to apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with this Article Eight; PROVIDED that if the Issuer has made any payment of
interest on, premium, if any, or principal of any Securities because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the U.S. Legal
Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
9.1. WITHOUT CONSENT OF HOLDERS.
Subject to Section 9.4, the Issuer and the Trustee, together, may amend
or supplement this Indenture or the Securities without notice to or consent of
any Securityholder:
(i) to cure any ambiguity, defect or inconsistency, so long as
such change does not, in the good faith determination of the Board of
Directors of the Company, adversely affect the rights of any of the
Holders in any material respect. In formulating its determination on
such matters, the Board of Directors of the Company will be entitled to
rely on such evidence as it deems appropriate;
(ii) to evidence the succession in accordance with Article Five
of another Person to the Company and the assumption by any such
successor of the covenants of the Company herein and in the Securities;
(iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(iv) to make any other change that does not adversely affect the
rights of any Securityholders hereunder in any material respect;
(v) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
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(vi) to add or release any Guarantor pursuant to the terms of
this Indenture; or
(vii) to provide for issuance of the Exchange Notes, which will
have terms substantially identical in all material respects to the
Initial Notes (except that the transfer restrictions contained in the
Initial Notes will be modified or eliminated, as appropriate), and which
will be treated together with any outstanding Initial Notes, as a single
issue of securities, PROVIDED that for purposes of this clause (vii),
the terms Initial Notes and Exchange Notes, shall include any other
Securities issued in accordance with clause (iii) of the fourth
paragraph of Section 2.2 or Securities issued in exchange therefor which
are identical in all material respects to such Securities (except that
the transfer restrictions on the Securities issued in exchange for
Securities issued in accordance with clause (iii) of the fourth
paragraph of Section 2.2 shall be modified or eliminated, as
appropriate);
PROVIDED that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.1.
9.2. WITH CONSENT OF HOLDERS.
Subject to Sections 6.7 and 9.4, the Issuer and the Trustee, together,
with the written consent of the Holder or Holders of at least a majority in
aggregate principal amount at maturity of the outstanding Securities, may amend
or supplement this Indenture or the Securities without notice to any other
Securityholders. Subject to Sections 6.7 and 9.4, the Holder or Holders of a
majority in aggregate principal amount at maturity of the outstanding Securities
may waive compliance by the Issuer with any provision of this Indenture or the
Securities without notice to any other Securityholder. Without the consent of
each Securityholder affected, however, no amendment, supplement or waiver,
including a waiver pursuant to (and to the extent provided in) Section 6.4, may:
(i) reduce the amount of Securities whose Holders must consent
to an amendment, supplement or waiver;
(ii) reduce the rate of or change or have the effect of changing
the time for payment of interest, including default interest, on any
Security;
(iii) reduce the principal or Accreted Value of or change or have
the effect of changing the fixed maturity of any Security, or change the
date on which any Securities may be subject to redemption or reduce the
redemption price therefor;
(iv) make any Securities payable in money other than that stated
in the Securities;
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(v) make any change in provisions of this Indenture protecting
the right of each Holder to receive payment of Accreted Value of,
premium, if any, and interest, if any, on such Security on or after the
due date thereof or to bring suit to enforce such payment, or permitting
Holders of a majority in principal amount at maturity of the Securities
to waive Defaults or Events of Default;
(vi) modify or change any provision of this Indenture or the
related definitions affecting the subordination or ranking of the
Securities in a manner which adversely affects the Holders;
(vii) amend, change or modify in any material respect the
obligation of the Issuer to make and consummate a Change of Control
Offer in the event of a Change of Control which has occurred or modify
any of the provisions or definitions with respect thereto after a Change
of Control has occurred; or
(viii) make any changes in Section 6.4, 6.7 or this Section 9.2.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Issuer shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Issuer to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
9.3. EFFECT ON SENIOR DEBT.
No amendment of, or supplement or waiver to, this Indenture shall
adversely affect the rights of any holder of Senior Debt or Guarantor Senior
Debt under Article Ten or Twelve, as the case may be, without the consent of
such holder (or any Representative thereof, or other Person or Persons,
authorized to give such consent).
9.4. COMPLIANCE WITH TIA.
From the date on which this Indenture is qualified under the TIA, every
amendment, waiver or supplement of this Indenture or the Securities or any
Guarantee shall comply with the TIA as then in effect.
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9.5. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of his Security by notice to the Trustee or the
Issuer received before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount at
maturity of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
The Issuer may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(i) through (vii) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; PROVIDED that any such waiver
shall not impair or affect the right of any Holder to receive payment of
principal of, premium, if any, and interest on a Security, on or after the
respective due dates expressed in such Security, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
9.6. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Issuer may require the Holder of the Security to deliver it to the Trustee.
The Issuer shall provide the Trustee with an appropriate notation on the
Security about the changed terms and cause the Trustee to return it to the
Holder at the Issuer's expense. Alternatively, if the Issuer or the Trustee so
determines, the Issuer in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or issue a new Security shall not affect the
validity and effect of such amendment, supplement or waiver.
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9.7. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; PROVIDED that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each complying with Sections
13.4 and 13.5 and stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article Nine is authorized or permitted by
this Indenture and constitutes the legal, valid and binding obligations of the
Issuer enforceable in accordance with its terms. Such Opinion of Counsel shall
be at the expense of the Issuer.
ARTICLE TEN
SUBORDINATION OF SECURITIES
10.1. SECURITIES SUBORDINATED TO SENIOR DEBT.
Anything herein to the contrary notwithstanding, the Issuer, for itself
and its successors, and each Holder, by his, her or its acceptance of
Securities, agrees that the payment of all Obligations owing to the Holders in
respect of the Securities is subordinated, to the extent and in the manner
provided in this Article Ten, to the prior payment in full in cash or Cash
Equivalents of all Obligations on all existing and future Senior Debt (including
the Obligations with respect to the Company's guarantee of the Credit Agreement
and with respect to the Existing Holdings Notes).
This Article Ten shall constitute a continuing offer to all Persons who
become holders of, or continue to hold, Senior Debt, and such provisions are
made for the benefit of the holders of Senior Debt and such holders are made
obligees hereunder and any one or more of them may enforce such provisions.
10.2. SUSPENSION OF PAYMENT WHEN SENIOR DEBT IS IN DEFAULT.
(a) Unless Section 10.3 shall be applicable, if any default occurs and
is continuing in the payment when due, whether at maturity, upon any redemption,
by declaration or otherwise, of any principal of, premium, if any, liquidated
damages, if any, or other Obligations with respect to, any Designated Senior
Debt of the Issuer (a "PAYMENT DEFAULT"), then no payment or distribution of any
kind or character shall be made by or on behalf of the Issuer or any other
Person on its behalf with respect to any Obligations on the Securities or to
purchase, repurchase, redeem or otherwise acquire or retire any of the
Securities for cash or property or otherwise or set aside any funds or make any
deposit with the Trustee for any such purpose (collectively, "PAY THE
SECURITIES") until such Payment Default shall have been cured or
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waived or shall have ceased to exist or such Senior Debt as to which such
Payment Default relates shall have been paid in full in cash or Cash
Equivalents, after which the Issuer shall (subject to other provisions of this
Article Ten) resume making any and all required payments in respect of the
Securities, including any missed payments.
(b) Unless Section 10.3 shall be applicable, if any other event of
default (other than a Payment Default) occurs and is continuing with respect to
any Designated Senior Debt of the Issuer (as such event of default is defined in
the instrument creating or evidencing such Designated Senior Debt) permitting
the holders of such Designated Senior Debt then outstanding to accelerate the
maturity thereof (a "NON-PAYMENT DEFAULT") and if the Representative for such
Designated Senior Debt gives written notice of the event of default to the
Trustee (a "PAYMENT BLOCKAGE NOTICE"), then neither the Issuer nor any other
Person on its behalf shall pay the securities until the earliest to happen of
(i) the date on which all Non-payment Defaults are cured or waived (so long as
no other Non-payment Default or Payment Default exists), (ii) the 180th day
after the date on which the applicable Payment Blockage Notice was received,
unless the maturity of any Designated Senior Debt has been accelerated or (iii)
the date on which the Trustee receives notice from the Representative for such
Designated Senior Debt rescinding the Payment Blockage Notice, unless the
maturity of any Designated Senior Debt has been accelerated. Notwithstanding
anything herein to the contrary, no Payment Blockage Notice may be delivered
unless and until 360 consecutive days have elapsed since the delivery of the
immediately prior Payment Blockage Notice. For all purposes of this Section
10.2(b), no event of default which existed or was continuing on the date of the
delivery of any Payment Blockage Notice with respect to the Designated Senior
Debt shall be, or be made, the basis for the commencement of a second Payment
Blockage Notice by the Representative of such Designated Senior Debt whether or
not within a period of 360 consecutive days, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days
(however, any subsequent action, or any breach of any financial covenants for a
period commencing after the date of delivery of such initial Payment Blockage
Notice, that, in either case, would give rise to an event of default pursuant to
any provisions under which an event of default previously existed or was
continuing shall constitute a new event of default for this purpose).
(c) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by the
foregoing provisions of this Section 10.2, such payment shall be held for the
benefit of, and shall be paid over or delivered to, the holders of Senior Debt
(PRO RATA to such holders on the basis of the respective amount of Senior Debt
held by such holders) or their respective Representatives, as their respective
interests may appear. The Trustee shall be entitled to rely on information
regarding amounts then due and owing on the Senior Debt, if any, received from
the holders of Senior Debt (or their Representatives) or, if such information is
not received from such holders or their Representatives, from the Issuer and
only amounts included in the information provided to the Trustee shall be paid
to the holders of Senior Debt.
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Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Section 6.2 or to pursue any rights or
remedies hereunder; PROVIDED that all Senior Debt thereafter due or declared to
be due shall first be paid in full in cash or Cash Equivalents before the
Holders are entitled to receive any payment of any kind or character with
respect to Obligations on the Securities.
10.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR DEBT ON
DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE ISSUER.
(a) Upon any payment or distribution of assets of the Issuer of any
kind or character, whether in cash, property or securities, to creditors upon
any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Issuer or
in a total or partial bankruptcy, reorganization, insolvency, receivership or
other similar proceeding relating to the Issuer or its respective properties,
whether voluntary or involuntary, all Obligations due or to become due upon all
existing and future Senior Debt shall first be paid in full in cash or Cash
Equivalents before any payment or distribution of any kind or character is made
on account of any Obligations on the Securities, or for the acquisition of any
of the Securities for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, to which the Holders of the Securities
or the Trustee under this Indenture would be entitled, except for the provisions
hereof, shall be paid by the Issuer or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders or by the Trustee under this Indenture if received by them,
directly to the holders of Senior Debt (PRO RATA to such holders on the basis of
the respective amounts of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash or Cash
Equivalents after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Senior Debt.
(b) To the extent any payment of Senior Debt (whether by or on behalf
of the Issuer, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then, if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person, the Senior Debt or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
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(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Holder when such
payment or distribution is prohibited by this Section 10.3, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt (PRO RATA to such holders on the
basis of the respective amount of Senior Debt held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, for application to the payment of Senior Debt
remaining unpaid until all such Senior Debt has been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.
(d) The consolidation of the Issuer with, or the merger of the Issuer
with or into, another corporation or the liquidation or dissolution of the
Issuer following the conveyance or transfer of all or substantially all of its
assets, to another corporation upon the terms and conditions provided in Article
Five and as long as permitted under the terms of the Senior Debt shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume such Issuer's obligations
hereunder in accordance with Article Five.
10.4. PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION.
Nothing contained in this Article Ten or elsewhere in this Indenture
shall prevent (i) the Issuer, except under the conditions described in Sections
10.2 and 10.3, from making payments at any time for the purpose of making
payments of principal of, premium, if any, and interest on the Securities, or
from depositing with the Trustee any moneys for such payments, or (ii) in the
absence of actual knowledge by the Trustee that a given payment would be
prohibited by Section 10.2 or 10.3, the application by the Trustee of any moneys
deposited with it for the purpose of making such payments of principal of,
premium, if any, and interest on, the Securities to the Holders entitled thereto
unless at least one Business Day prior to the date upon which such payment would
otherwise become due and payable a Responsible Officer shall have actually
received the written notice provided for in the first sentence of Section
10.2(b) or in Section 10.7 (PROVIDED that, notwithstanding the foregoing, the
Holders receiving any payments made in contravention of Section 10.2 and/or 10.3
(and the respective such payments) shall otherwise be subject to the provisions
of Section 10.2 and Section 10.3). The Issuer shall give prompt written notice
to the Trustee of any dissolution, winding-up, liquidation or reorganization of
the Issuer, although any delay or failure to give any such notice shall have no
effect on the subordination provisions contained herein.
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10.5. HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of all Senior
Debt, the Holders of the Securities shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of cash, property or
securities of the Issuer applicable to the Senior Debt until the Securities
shall be paid in full; and, for the purposes of such subrogation, no such
payments or distributions to the holders of the Senior Debt by or on behalf of
the Issuer, or by or on behalf of the Holders by virtue of this Article Ten,
which otherwise would have been made to the Holders shall, as between the Issuer
and the Holders, be deemed to be a payment by the Issuer to or on account of the
Senior Debt, it being understood that the provisions of this Article Ten are and
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior Debt, on the other hand.
10.6. OBLIGATIONS OF THE ISSUER UNCONDITIONAL.
Nothing contained in this Article Ten or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Issuer, its
creditors other than the holders of Senior Debt, and the Holders, the obligation
of the Issuer, which is absolute and unconditional, to pay to the Holders the
principal of, premium, if any, and any interest on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Issuer other than the holders of the Senior Debt, nor shall anything herein
or therein prevent the Holder of any Security or the Trustee on its behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Issuer received upon the exercise of any such remedy.
10.7. NOTICE TO TRUSTEE.
The Issuer shall give prompt written notice to a Responsible Officer of
the Trustee at its address set forth in Section 13.2 of any fact known to the
Issuer which would prohibit the making of any payment to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article Ten,
although any delay or failure to give any such notice shall have no effect on
the subordination provisions contained herein. Regardless of anything to the
contrary contained in this Article Ten or elsewhere in this Indenture, the
Trustee shall not be charged with knowledge of the existence of any default or
event of default with respect to any Senior Debt or of any other facts which
would prohibit the making of any payment to or by the Trustee unless and until
the Trustee shall have received notice in writing from the Issuer, or from a
holder of Senior Debt or a Representative therefor, and, prior to the receipt of
any such written notice, the Trustee shall be entitled to assume (in the absence
of actual knowledge to the contrary) that no such facts exist (PROVIDED that,
notwithstanding the foregoing, the Holders receiving any payments made in
contravention of Section 10.2 and/or 10.3 (and the respective such payments)
shall otherwise be subject to the provisions of Section 10.2 and Section 10.3).
The Trustee shall be entitled to rely on the delivery to it of any notice
pursuant
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to this Section 10.7 to establish that such notice has been given by a holder of
Senior Debt (or a Representative therefor). If the Trustee shall not have
received, at least one Business Day prior to the date upon which by the terms
hereof any such monies may become payable for any purpose, the notice provided
for in this Section, then anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
monies and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary which may be received by it
with one Business Day prior to such date (PROVIDED that, notwithstanding the
foregoing, the Holders receiving any payments made in contravention of Section
10.2 and/or 10.3 (and the respective such payments) shall otherwise be subject
to the provisions of Section 10.2 and Section 10.3).
In the event that the Trustee determines in good faith that any evidence
is required with respect to the right of any Person as a holder of Senior Debt
to participate in any payment or distribution pursuant to this Article Ten, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amounts of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Ten, 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.
10.8. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Issuer referred to in
this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which any
insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, assignee for the
benefit of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or the Holders of the Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other Indebtedness of the
Issuer or its Restricted Subsidiaries, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Ten.
10.9. TRUSTEE'S RELATION TO SENIOR DEBT.
The Trustee and any agent of the Issuer or the Trustee shall be entitled
to all the rights set forth in this Article Ten with respect to any Senior Debt
which may at any time be held by it in its individual or any other capacity to
the same extent as any other holder of Senior Debt and nothing in this Indenture
shall deprive the Trustee or any such agent of any of its rights as such holder.
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With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Ten, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Debt, the distribution may be made and the notice may be given
to their Representative, if any.
10.10. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE ISSUER OR
HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Issuer or by any act or
failure to act, in good faith, by any such holder, or by any noncompliance by
the Issuer with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or any Holder of a Security, without
incurring responsibility to the Trustee or the Holders of the Securities and
without impairing or releasing the subordination provided in this Article Ten or
the obligations hereunder of the Holders of the Securities to the holders of the
Senior Debt, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt, or otherwise amend or supplement in any manner Senior Debt, or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the payment or collection of Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Issuer and any other
Person.
10.11. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
SECURITIES.
Each Holder of Securities by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action as may be
necessary or appropriate to effectuate, as between the holders of Senior Debt
and the Holders of Securities, the subordination provided in this Article Ten,
and appoints the Trustee its attorney-in-fact for such purposes, including, in
the event of any dissolution, winding-up, liquidation or reorganization of the
Issuer (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and/or assets of the
Issuer, the filing of a claim for the unpaid balance of its Securities and
accrued interest in the form required in those proceedings.
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If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Debt or their
Representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt or their Representative to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Senior Debt or their Representative to vote in respect of the claim of any
Holder in any such proceeding.
10.12. THIS ARTICLE TEN NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium, if
any, or interest on the Securities by reason of any provision of this Article
Ten will not be construed as preventing the occurrence of an Event of Default.
10.13. TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article Ten will apply to amounts due to the Trustee in
its capacity as such pursuant to other sections of this Indenture.
ARTICLE ELEVEN
GUARANTEE OF SECURITIES
11.1. UNCONDITIONAL GUARANTEE.
Subject to the provisions of this Article Ten, each Guarantor, if any,
upon the execution and delivery of a Guarantee pursuant to Section 4.14, shall
hereby, jointly and severally, unconditionally and irrevocably guarantee (such
guarantee to be referred to herein as the "GUARANTEE") to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Securities or the obligations of the Issuer or any other
Guarantors to the Holders or the Trustee hereunder or thereunder, that: (a) the
Accreted Value of, premium, if any, and interest, if any, on the Securities
shall be duly and punctually paid in full when due, whether at maturity, upon
redemption at the option of Holders pursuant to the provisions of the Securities
relating thereto, by acceleration or otherwise, and interest on the overdue
Accreted Value and (to the extent permitted by law) interest, if any, on the
Securities and all other obligations of the Issuer or the Guarantors to the
Holders or the Trustee hereunder or thereunder (including amounts due the
Trustee under Section 7.7 hereof) and all other obligations shall be promptly
paid in full or performed, all in accordance with the terms hereof and
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thereof; and (b) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, the same shall be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed, or failing performance of any other obligation
of the Issuer to the Holders under this Indenture or under the Securities, for
whatever reason, such Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under this
Indenture or the Securities shall constitute an event of default under the
Guarantees, and shall entitle the Holders of Securities to accelerate the
obligations of the Guarantors hereunder in the same manner and to the same
extent as the obligations of the Issuer.
Each Guarantor, if any, upon the execution and delivery of a Guarantee
pursuant to Section 4.14, shall hereby agree that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, any release of any other Guarantor,
if any, the recovery of any judgment against the Issuer, any action to enforce
the same, whether or not a Guarantee is affixed to any particular Security, or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor, if any, upon the execution
and delivery of a Guarantee pursuant to Section 4.14, shall hereby waive the
benefit of diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of Issuer, any right to require a
proceeding first against the Issuer, protest, notice and all demands whatsoever
and covenants that its Guarantee shall not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
the Guarantees. Each Guarantee is a guarantee of payment and not of collection.
If any Holder or the Trustee is required by any court or otherwise to return to
the Issuer or to any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to such Issuer or such Guarantor, any amount
paid by such Issuer or such Guarantor to the Trustee or such Holder, each
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor, if any, upon the execution and delivery of a
Guarantee pursuant to Section 4.14, shall hereby further agree that, as between
it, on the one hand, and the Holders of Securities and the Trustee, on the other
hand, (a) subject to this Article Eleven, the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Six hereof for the
purposes of the Guarantees, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (b) in the event of any acceleration of such obligations
as provided in Article Six hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantors for the
purpose of the Guarantees.
No Affiliate, stockholder, officer, director, limited liability company
member or employee, past, present or future, of any Guarantor, as such, shall
have any personal liability under
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such Guarantor's Guarantee by reason of his, her or its status as such
Affiliate, stockholder, officer, director, limited liability company member or
employee.
11.2. LIMITATIONS ON GUARANTEES.
The obligations of any Guarantor under its Guarantee shall be limited to
the maximum amount which, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to its
contribution obligations under this Indenture, will result in the obligations of
such Guarantor under the Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law. Each Guarantor that makes a
payment or distribution under a Guarantee shall be entitled to a contribution
from each other Guarantor in an amount PRO RATA, based on the net assets of each
Guarantor, determined in accordance with GAAP.
11.3. EXECUTION AND DELIVERY OF GUARANTEE.
To further evidence the Guarantees set forth in Section 11.1, each
Guarantor, if any, upon the execution and delivery of a Guarantee pursuant to
Section 4.14, hereby agrees that a notation of its Guarantee, substantially in
the form of EXHIBIT E hereto, shall be endorsed on each Security authenticated
and delivered by the Trustee. The Guarantee of any Guarantor shall be executed
on behalf of such Guarantor by either manual or facsimile signature of two
Officers of such Guarantor, each of whom, in each case, shall have been duly
authorized to so execute by all requisite corporate action. The validity and
enforceability of any Guarantee shall not be affected by the fact that it is not
affixed to any particular Security.
Each Guarantor, if any, upon the execution and delivery of a Guarantee
pursuant to Section 4.14, hereby agrees that its Guarantee set forth in Section
11.1 shall remain in full force and effect notwithstanding any failure to
endorse on each Security a notation of such Guarantee.
If an Officer of a Guarantor whose signature is on this Indenture or a
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which such Guarantee is endorsed or at any time thereafter, such
Guarantor's Guarantee of such Security shall nevertheless be valid.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of each Guarantor.
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11.4. RELEASE OF A GUARANTOR.
(a) If no Default or Event of Default exists or would exist under this
Indenture, upon the sale or disposition of all of the Capital Stock of a
Guarantor by the Company or any Restricted Subsidiary of the Company, in a
transaction or series of related transactions that either (i) does not
constitute an Asset Sale or (ii) constitutes an Asset Sale and such Asset Sale
is not in violation of Section 4.17, or upon the consolidation or merger of a
Guarantor with or into any Person in compliance with Article Five (in each case,
other than to the Company or an Affiliate of the Company), or if any Guarantor
is dissolved or liquidated in accordance with this Indenture, such Guarantor's
Guarantee will be automatically discharged and such Guarantor shall be released
from all obligations under this Article Eleven without any further action
required on the part of the Trustee or any Holder. Any Guarantor not so released
or the entity surviving such Guarantor, as applicable, shall remain or be liable
under its Guarantee as provided in this Article Eleven.
(b) In addition, each such Guarantee will be automatically discharged
and the Guarantor party thereto shall be released from all obligations under
this Article Eleven without any further action on the part of the Trustee or any
Holder upon (i) the release or discharge of the guarantee which resulted in the
creation of such Guarantee under such Section 4.14, except a discharge or
release by or as a result of payment under such Guarantee or (ii) the
designation of such Guarantor as an Unrestricted Subsidiary in accordance with
the provisions of this Indenture. Any Guarantor not so released or the entity
surviving such Guarantor, as applicable, shall remain or be liable under its
Guarantee as provided in this Article Eleven.
(c) The obligations of each Guarantor will be automatically released
upon such Guarantor ceasing to be a subsidiary of the Issuer as a result of any
foreclosure on any pledge or security interest securing Obligations with respect
to the Credit Agreement or other exercise of remedies in respect thereof if such
Guarantor is released from its guarantee of Obligations with respect to the
Credit Agreement.
(d) The Trustee shall deliver an appropriate instrument evidencing the
release of a Guarantor upon receipt of a request by the Issuer or such Guarantor
accompanied by an Officers' Certificate and an Opinion of Counsel certifying as
to the compliance with this Section 11.4; PROVIDED, HOWEVER, that the legal
counsel delivering such Opinion of Counsel may rely as to matters of fact on one
or more Officers' Certificates of the Company.
The Trustee shall execute any documents reasonably requested by the
Issuer or a Guarantor in order to evidence the release of such Guarantor from
its obligations under its Guarantee endorsed on the Securities and under this
Article Eleven.
Except as set forth in Articles Four and Five and this Section 11.4,
nothing contained in this Indenture or in any of the Securities shall prevent
any consolidation or merger of a
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Guarantor with or into the Issuer or another Guarantor or shall prevent any sale
or conveyance of the property of a Guarantor as an entirety or substantially as
an entirety to the Issuer or another Guarantor.
11.5. WAIVER OF SUBROGATION.
Until this Indenture is discharged and all of the Securities are
discharged and paid in full, each Guarantor, upon the execution and delivery of
a Guarantee pursuant to Section 4.14, shall hereby irrevocably waive and agrees
not to exercise any claim or other rights which it may now or hereafter acquire
against the Issuer that arise from the existence, payment, performance or
enforcement of the Issuer's obligations under the Securities or this Indenture
and such Guarantor's obligations under its Guarantee and this Indenture, in any
such instance, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, and any right to
participate in any claim or remedy of the Holders against the Issuer, whether or
not such claim, remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Issuer, directly or indirectly, in cash or other property or by setoff or in any
other manner, payment or security on account of such claim or other rights. If
any amount shall be paid to any Guarantor in violation of the preceding sentence
and any amounts owing to the Trustee or the Holders of Securities under the
Securities, this Indenture, or any other document or instrument delivered under
or in connection with such agreements or instruments, shall not have been paid
in full, such amount shall have been deemed to have been paid to such Guarantor
for the benefit of, and held in trust for the benefit of, the Trustee or the
Holders and shall forthwith be paid to the Trustee for the benefit of itself or
such Holders to be credited and applied to the obligations in favor of the
Trustee or the Holders, as the case may be, whether matured or unmatured, in
accordance with the terms of this Indenture. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
11.5 is knowingly made in contemplation of such benefits.
11.6. IMMEDIATE PAYMENT.
Each Guarantor, upon the execution and delivery of a Guarantee pursuant
to Section 4.14, shall hereby agree to make immediate payment to the Trustee, on
behalf of the Holders or itself, of all Obligations due and owing or payable to
the respective Holders or the Trustee upon receipt of a demand for payment
therefor by the Trustee to such Guarantor in writing.
11.7. NO SETOFF.
Each payment to be made by a Guarantor hereunder in respect of the
Obligations shall be payable in the currency or currencies in which such
Obligations are denominated, and shall be made without setoff, counterclaim,
reduction or diminution of any kind or nature.
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11.8. OBLIGATIONS ABSOLUTE.
The obligations of each Guarantor hereunder are and shall be absolute
and unconditional and any monies or amounts expressed to be owing or payable by
each Guarantor hereunder which may not be recoverable from such Guarantor on the
basis of a Guarantee shall be recoverable from such Guarantor as a primary
obligor and principal debtor in respect thereof.
11.9. OBLIGATIONS CONTINUING.
The obligations of each Guarantor hereunder shall be continuing and
shall remain in full force and effect until all the obligations have been paid
and satisfied in full. Upon the execution and delivery of a Guarantee pursuant
to Section 4.14, each Guarantor shall hereby agree with the Trustee that it will
from time to time deliver to the Trustee suitable acknowledgments of its
continued liability hereunder and under any other instrument or instruments in
such form as counsel to the Trustee may advise and as will prevent any action
brought against it in respect of any default hereunder being barred by any
statute of limitations now or hereafter in force and, in the event of the
failure of a Guarantor so to do, it hereby irrevocably appoints the Trustee the
attorney and agent of such Guarantor to make, execute and deliver such written
acknowledgment or acknowledgments or other instruments as may from time to time
become necessary or advisable, in the judgment of the Trustee on the advice of
counsel, to fully maintain and keep in force the liability of such Guarantor
hereunder and under its Guarantee.
11.10. OBLIGATIONS NOT REDUCED.
The obligations of each Guarantor hereunder shall not be satisfied,
reduced or discharged solely by the payment of such principal, premium, if any,
interest, fees and other monies or amounts as may at any time prior to discharge
of this Indenture pursuant to Article Eight be or become owing or payable under
or by virtue of or otherwise in connection with the Securities or this
Indenture.
11.11. OBLIGATIONS REINSTATED.
The obligations of each Guarantor hereunder shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
which would otherwise have reduced the obligations of any Guarantor hereunder
(whether such payment shall have been made by or on behalf of the Issuer or by
or on behalf of a Guarantor) is rescinded or reclaimed from any of the Holders
upon the insolvency, bankruptcy, liquidation or reorganization of the Issuer or
any Guarantor or otherwise, all as though such payment had not been made. If
demand for, or acceleration of the time for, payment by the Issuer is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of such Issuer,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Guarantor as provided herein.
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11.12. OBLIGATIONS NOT AFFECTED.
The obligations of each Guarantor hereunder shall not be affected,
impaired or diminished in any way by any act, omission, matter or thing
whatsoever, occurring before, upon or after any demand for payment hereunder
(and whether or not known or consented to by any Guarantor or any of the
Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Holders or otherwise, including, without limitation:
(i) any limitation of status or power, disability, incapacity or
other circumstance relating to the Issuer or any other Person, including
any insolvency, bankruptcy, liquidation, reorganization, readjustment,
composition, dissolution, winding-up or other proceeding involving or
affecting such Issuer or any other Person;
(ii) any irregularity, defect, unenforceability or invalidity in
respect of any indebtedness or other obligation of the Issuer or any
other Person under this Indenture, the Securities or any other document
or instrument;
(iii) any failure of the Issuer, whether or not without fault on
its part, to perform or comply with any of the provisions of this
Indenture or the Securities, or to give notice thereof to a Guarantor;
(iv) the taking or enforcing or exercising or the refusal or
neglect to take or enforce or exercise any right or remedy from or
against the Issuer or any other Person or their respective assets or the
release or discharge of any such right or remedy;
(v) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Issuer or any other Person;
(vi) any change in the time, manner or place of payment of, or in
any other term of, any of the Securities, or any other amendment,
variation, supplement, replacement or waiver of, or any consent to
departure from, any of the Securities or this Indenture, including,
without limitation, any increase or decrease in the Accreted Value or
principal amount at maturity of or premium, if any, or interest on any
of the Securities;
(vii) any change in the ownership, control, name, objects,
businesses, assets, capital structure or constitution of the Issuer or a
Guarantor;
(viii) any merger or amalgamation of the Issuer or a Guarantor with
any Person or Persons;
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(ix) the occurrence of any change in the laws, rules, regulations
or ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any
of the Obligations or the obligations of a Guarantor under its
Guarantee; and
(x) any other circumstance, including release of a Guarantor
pursuant to Section 11.4 (other than by complete, irrevocable payment)
that might otherwise constitute a legal or equitable discharge or
defense of the Issuer under this Indenture or the Securities or of
another Guarantor in respect of its Guarantee hereunder;
PROVIDED, that the provisions of this Section 11.12 are not intended to affect
in any way any release of a Guarantor in accordance with the provisions of
Section 11.4.
11.13. WAIVER.
Without in any way limiting the provisions of Section 11.1 hereof, each
Guarantor, upon the execution and delivery of a Guarantee pursuant to Section
4.14, shall hereby waive notice of acceptance hereof, notice of any liability of
any Guarantor hereunder, notice or proof of reliance by the Holders upon the
obligations of any Guarantor hereunder, and diligence, presentment, demand for
payment on the Issuer, protest, notice of dishonor or non-payment of any of the
Obligations, or other notice or formalities to the Issuer or any Guarantor of
any kind whatsoever.
11.14. NO OBLIGATION TO TAKE ACTION AGAINST THE ISSUER.
Neither the Trustee nor any other Person shall have any obligation to
enforce or exhaust any rights or remedies or to take any other steps under any
security for the Obligations or against the Issuer or any other Person or any
property of such Issuer or any other Person before the Trustee is entitled to
demand payment and performance by any or all Guarantors of their liabilities and
obligations under their Guarantees or under this Indenture.
11.15. DEALING WITH THE ISSUER AND OTHERS.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
and without the consent of or notice to any Guarantor, may
(i) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Issuer or any
other Person;
(ii) take or abstain from taking security or collateral from the
Issuer or from perfecting security or collateral of the Issuer;
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(iii) release, discharge, compromise, realize, enforce or
otherwise deal with or do any act or thing in respect of (with or
without consideration) any and all collateral, mortgages or other
security given by the Issuer or any third party with respect to the
obligations or matters contemplated by this Indenture or the Securities;
(iv) accept compromises or arrangements from the Issuer;
(v) apply all monies at any time received from the Issuer or
from any security upon such part of the Obligations as the Holders may
see fit or change any such application in whole or in part from time to
time as the Holders may see fit; and
(vi) otherwise deal with, or waive or modify their right to deal
with, the Issuer and all other Persons and any security as the Holders
or the Trustee may see fit.
11.16. DEFAULT AND ENFORCEMENT.
If any Guarantor fails to pay in accordance with Section 11.6 hereof,
the Trustee may proceed in its name as trustee hereunder in the enforcement of
the Guarantee of any such Guarantor and such Guarantor's obligations thereunder
and hereunder by any remedy provided by law, whether by legal proceedings or
otherwise, and to recover from such Guarantor the obligations.
11.17. AMENDMENT, ETC.
No amendment, modification or waiver of any provision of this Indenture
relating to any Guarantor or consent to any departure by any Guarantor or any
other Person from any such provision will in any event be effective unless it is
signed by such Guarantor and the Trustee.
11.18. ACKNOWLEDGMENT.
Each Guarantor, upon the execution and delivery of a Guarantee pursuant
to Section 4.14, shall hereby acknowledge communication of the terms of this
Indenture and the Securities and shall hereby consent to and approves of the
same.
11.19. COSTS AND EXPENSES.
Each Guarantor shall pay on demand by the Trustee any and all costs,
fees and expenses (including, without limitation, legal fees on a solicitor and
client basis) incurred by the Trustee, its agents, advisors and counsel or any
of the Holders in enforcing any of their rights under any Guarantee.
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11.20. NO MERGER OR WAIVER; CUMULATIVE REMEDIES.
No Guarantee shall operate by way of merger of any of the obligations of
a Guarantor under any other agreement, including, without limitation, this
Indenture. No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, remedy, power or privilege hereunder or under
this Indenture or the Securities, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Securities preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges in the Guarantee and
under this Indenture, the Securities and any other document or instrument
between a Guarantor and/or the Issuer and the Trustee are cumulative and not
exclusive of any rights, remedies, powers and privilege provided by law.
11.21. SURVIVAL OF OBLIGATIONS.
Without prejudice to the survival of any of the other obligations of any
Guarantor hereunder, the obligations of each Guarantor under Section 11.1 shall
survive the payment in full of the Obligations under the Securities, but only if
and to the extent such payment is avoided, and in such case shall be enforceable
against such Guarantor to the same extent as prior to any such payment and
without regard to and without giving effect to any defense, right of offset or
counterclaim available to or which may be asserted by the Issuer or any
Guarantor.
11.22. GUARANTEE IN ADDITION TO OTHER OBLIGATIONS.
The Obligations of each Guarantor under its Guarantee and this Indenture
are in addition to and not in substitution for any other Obligations to the
Trustee or to any of the Holders in relation to this Indenture or the Securities
and any guarantees or security at any time held by or for the benefit of any of
them.
11.23. SEVERABILITY.
Any provision of this Article Eleven which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction
unless its removal would substantially defeat the basic intent, spirit and
purpose of this Indenture and this Article Eleven.
11.24. SUCCESSORS AND ASSIGNS.
Each Guarantee shall be binding upon and inure to the benefit of each
Guarantor and the Trustee and the other Holders and their respective successors
and permitted assigns, except
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that no Guarantor may assign any of its obligations hereunder or thereunder,
except as otherwise permitted in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF SUBSIDIARY GUARANTEES
12.1. GUARANTEE OBLIGATIONS SUBORDINATED TO GUARANTOR SENIOR DEBT.
Anything herein to the contrary notwithstanding, each of the Guarantors,
if any, for itself and its successors, and each Holder, by his, her or its
acceptance of Guarantees, agrees that the payment of all Obligations owing to
the Holders in respect of its Guarantee (collectively, as to any Guarantor, its
"GUARANTEE OBLIGATIONS") is subordinated, to the extent and in the manner
provided in this Article Twelve, to the prior payment in full in cash or Cash
Equivalents of all Obligations on all existing and future Guarantor Senior Debt
of such Guarantor (including the Obligations with respect to the Credit
Agreement).
This Article Twelve shall constitute a continuing offer to all Persons
who become holders of, or continue to hold, Guarantor Senior Debt, and such
provisions are made for the benefit of the holders of Guarantor Senior Debt and
such holders are made obligees hereunder and any one or more of them may enforce
such provisions.
12.2. SUSPENSION OF GUARANTEE OBLIGATIONS WHEN GUARANTOR SENIOR DEBT IS IN
DEFAULT.
(a) Unless Section 12.3 shall be applicable, if any payment default
occurs and is continuing with respect to any Guarantor Senior Debt, then no
payment of any kind or character shall be made by or on behalf of such Guarantor
or any other Person on its behalf with respect to any Guarantee Obligations or
to acquire any of the Securities for cash or property or otherwise and until
such payment default shall have been cured or waived or shall have ceased to
exist or such Guarantor Senior Debt shall have been discharged or paid in full
in cash or Cash Equivalents, after which such Guarantor shall (subject to the
other provisions of this Article Twelve) resume making any and all required
payments in respect of its obligations under its Guarantee, including any missed
payments.
(b) At any time while any Payment Blockage Notice is in existence,
neither any Guarantor nor any other Person on any Guarantor's behalf shall (x)
make any payment of any kind or character with respect to any Obligations on its
Guarantee or (y) acquire any of the Securities for cash or otherwise.
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(c) In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee or any Holder when such payment is prohibited by the
foregoing provisions of this Section 12.2, such payment shall be held for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Debt (PRO RATA to such holders on the basis of the respective amount of
Guarantor Senior Debt held by such holders) or their respective Representatives,
as their respective interests may appear. The Trustee shall be entitled to rely
on information regarding amounts then due and owing on the Guarantor Senior
Debt, if any, received from the holders of Guarantor Senior Debt (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from a Guarantor and only amounts included in the
information provided to the Trustee shall be paid to the holders of Guarantor
Senior Debt.
12.3. GUARANTEE OBLIGATIONS SUBORDINATED TO PRIOR PAYMENT OF ALL GUARANTOR
SENIOR DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF SUCH
GUARANTOR.
(a) Upon any payment or distribution of assets of any Guarantor of any
kind or character, whether in cash, property or securities, to creditors upon
any liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets of such Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar proceeding
relating to such Guarantor or its property, whether voluntary or involuntary,
all Obligations due or to become due upon all Guarantor Senior Debt shall first
be paid in full in cash or Cash Equivalents before any payment or distribution
of any kind or character is made on account of any Guarantee Obligations or for
the acquisition of any of the Securities for cash or property or otherwise. Upon
any such dissolution, winding-up, liquidation, reorganization, receivership or
similar proceeding, any payment or distribution of assets of such Guarantor of
any kind or character, whether in cash, property or securities, to which the
Holders or the Trustee under this Indenture would be entitled, except for the
provisions hereof, shall be paid by such Guarantor or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them, directly to the holders of Guarantor Senior Debt (PRO RATA to
such holders on the basis of the respective amounts of Guarantor Senior Debt
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of Guarantor Senior Debt remaining unpaid until all such
Guarantor Senior Debt has been paid in full in cash or Cash Equivalents after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of Guarantor Senior Debt.
(b) To the extent any payment of Guarantor Senior Debt (whether by or
on behalf of a Guarantor, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee
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in bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Guarantor
Senior Debt or part thereof originally intended to be satisfied shall be deemed
to be reinstated and outstanding as if such payment had not occurred.
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of any Guarantor of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or any Holder
when such payment or distribution is prohibited by this Section 12.3, such
payment or distribution shall be held for the benefit of, and shall be paid over
or delivered to, the holders of Guarantor Senior Debt (PRO RATA to such holders
on the basis of the respective amount of Guarantor Senior Debt held by such
holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Guarantor Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Guarantor Senior Debt remaining unpaid until all such Guarantor
Senior Debt has been paid in full in cash or Cash Equivalents, after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.
(d) The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
a Guarantor following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article Five and as long as permitted under the terms of the Guarantor Senior
Debt shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, assumes the
Guarantee of such Guarantor hereunder in accordance with Article Five.
12.4. PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION.
Nothing contained in this Article Twelve or elsewhere in this Indenture
shall prevent (i) any Guarantor, except under the conditions described in
Sections 12.2 and 12.3, from making payments at any time for the purpose of
making payments on Guarantee Obligations, or from depositing with the Trustee
any moneys for such payments, or (ii) in the absence of actual knowledge by the
Trustee that a given payment would be prohibited by Section 12.2 or 12.3, the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments on Guarantee Obligations to the Holders entitled thereto
unless at least one Business Day prior to the date upon which such payment would
otherwise become due and payable a Responsible Officer shall have actually
received the written notice provided for in the first sentence of Section
10.2(b) or in Section 12.7 (PROVIDED that, notwithstanding the foregoing, the
Holders receiving any payments made in contravention of Sections 12.2 and/or
12.3 (and the respective such payments) shall otherwise be subject to the
provisions of Section 12.2
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and Section 12.3). Each Guarantor shall give prompt written notice to the
Trustee of any dissolution, winding-up, liquidation or reorganization of such
Guarantor, although any delay or failure to give any such notice shall have no
effect on the subordination provisions contained herein.
12.5. HOLDERS OF GUARANTEE OBLIGATIONS TO BE SUBROGATED TO RIGHTS OF HOLDERS
OF GUARANTOR SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of all
Guarantor Senior Debt, the Holders of Guarantee Obligations of any Guarantor
shall be subrogated to the rights of the holders of Guarantor Senior Debt of
such Guarantor to receive payments or distributions of cash, property or
securities of such Guarantor applicable to such Guarantor Senior Debt until all
amounts owing on or in respect of the Guarantee Obligations shall be paid in
full; and, for the purposes of such subrogation, no such payments or
distributions to the holders of such Guarantor Senior Debt by or on behalf of
such Guarantor, or by or on behalf of the Holders by virtue of this Article
Twelve, which otherwise would have been made to the Holders shall, as between
such Guarantor and the Holders, be deemed to be a payment by such Guarantor to
or on account of such Guarantor Senior Debt, it being understood that the
provisions of this Article Twelve are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
Guarantor Senior Debt, on the other hand.
12.6. OBLIGATIONS OF THE GUARANTORS UNCONDITIONAL.
Nothing contained in this Article Twelve or elsewhere in this Indenture
or in the Guarantees is intended to or shall impair, as among the Guarantors,
their creditors other than the holders of Guarantor Senior Debt, and the
Holders, the obligation of the Guarantors, which is absolute and unconditional,
to pay to the Holders all amounts due and payable under the Guarantees as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Guarantors other than the holders of the Guarantor Senior Debt, nor shall
anything herein or therein prevent any Holder or the Trustee on its behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, in respect of cash, property or
securities of the Guarantors received upon the exercise of any such remedy.
12.7. NOTICE TO TRUSTEE.
Each Guarantor shall give prompt written notice to a Responsible Officer
of the Trustee at its address set forth in Section 13.2 of any fact known to
such Guarantor which would prohibit the making of any payment to or by the
Trustee in respect of the Guarantees pursuant to the provisions of this Article
Twelve, although any delay or failure to give any such notice shall have no
effect on the subordination provisions contained herein. Regardless of anything
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to the contrary contained in this Article Twelve or elsewhere in this Indenture,
the Trustee shall not be charged with knowledge of the existence of any default
or event of default with respect to any Guarantor Senior Debt or of any other
facts which would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received notice in writing from a Guarantor, or
from a holder of Guarantor Senior Debt or a Representative therefor, and, prior
to the receipt of any such written notice, the Trustee shall be entitled to
assume (in the absence of actual knowledge to the contrary) that no such facts
exist (PROVIDED that, notwithstanding the foregoing, the Holders receiving any
payments made in contravention of Section 12.2 and/or 12.3 (and the respective
such payments) shall otherwise be subject to the provisions of Section 12.2 and
Section 12.3). The Trustee shall be entitled to rely on the delivery to it of
any notice pursuant to this Section 12.7 to establish that such notice has been
given by a holder of Guarantor Senior Debt (or a Representative therefor). If
the Trustee shall not have received, at least one Business Day prior to the date
upon which by the terms hereof any such monies may become payable for any
purpose, the notice provided for in this Section, then anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such monies and to apply the same to the purpose for which they were
received and shall not be effected by any notice to the contrary which may be
received by it with one Business Day prior to such date (PROVIDED that,
notwithstanding the foregoing, the Holders receiving any payments made in
contravention of Section 12.2 and/or 12.3 (and the respective such payments)
shall otherwise be subject to the provisions of Section 12.2 and Section 12.3).
In the event that the Trustee determines in good faith that any evidence
is required with respect to the right of any Person as a holder of Guarantor
Senior Debt to participate in any payment or distribution pursuant to this
Article Twelve, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amounts of Guarantor Senior
Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Twelve, 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.
12.8. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of a Guarantor referred to in
this Article Twelve, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, dissolution, winding-up, liquidation, reorganization or similar
case or proceeding is pending, or upon a certificate of the trustee in
bankruptcy, liquidating trustee, receiver, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or the Holders, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the
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holders of the Guarantor Senior Debt and other Indebtedness of such Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article Twelve.
12.9. TRUSTEE'S RELATION TO GUARANTOR SENIOR DEBT.
The Trustee and any agent of a Guarantor or the Trustee shall be
entitled to all the rights set forth in this Article Twelve with respect to any
Guarantor Senior Debt which may at any time be held by it in its individual or
any other capacity to the same extent as any other holder of Guarantor Senior
Debt and nothing in this Indenture shall deprive the Trustee or any such agent
of any of its rights as such holder.
With respect to the holders of Guarantor Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Twelve, and no implied covenants
or obligations with respect to the holders of Guarantor Senior Debt shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Guarantor Senior Debt.
Whenever a distribution is to be made or a notice given to holders or
owners of Guarantor Senior Debt, the distribution may be made and the notice may
be given to their Representative, if any.
12.10. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE GUARANTORS
OR HOLDERS OF GUARANTOR SENIOR DEBT.
No right of any present or future holders of any Guarantor Senior Debt
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of any Guarantor
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by any Guarantor with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or otherwise be charged
with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or any Holder of a Security,
without incurring responsibility to the Trustee or the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Twelve or the obligations hereunder of the Holders of the Securities to the
holders of Guarantor Senior Debt, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Guarantor Senior Debt, or otherwise amend or supplement in
any manner Guarantor Senior Debt, or any instrument evidencing the same or any
agreement under which Guarantor Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Guarantor Senior Debt; (iii) release any Person liable in any manner
for
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the payment or collection of Guarantor Senior Debt; and (iv) exercise or refrain
from exercising any rights against the Guarantors and any other Person.
12.11. HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF GUARANTEE
OBLIGATIONS.
Each Holder of Guarantee Obligations by its acceptance of them
authorizes and expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate, as between the holders of
Guarantor Senior Debt and the Holders, the subordination provided in this
Article Twelve, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of credits or otherwise) tending towards liquidation of the business
and assets of any Guarantor, the filing of a claim for the unpaid balance under
its Guarantee Obligations and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Guarantor Senior Debt or
their Representative are or is hereby authorized to have the right to file and
are or is hereby authorized to file an appropriate claim for and on behalf of
the Holders of said Guarantee Obligations. Nothing herein contained shall be
deemed to authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Guarantee Obligations or the rights of any Holder thereof, or to
authorize the Trustee or the holders of Guarantor Senior Debt or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.
12.12. THIS ARTICLE TWELVE NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of or interest on
the Guarantees by reason of any provision of this Article Twelve will not be
construed as preventing the occurrence of an Event of Default.
12.13. TRUSTEE'S COMPENSATION NOT PREJUDICED.
Nothing in this Article Twelve will apply to amounts due to the Trustee
in its capacity as such pursuant to other sections of this Indenture.
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ARTICLE THIRTEEN
MISCELLANEOUS
13.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
13.2. NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Issuer or a Guarantor:
Salt Holdings Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
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if to the Trustee for presentation of Securities for payment or for
registration of transfer or exchange:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
The Issuer and the Trustee by written notice to each other such Person
may designate additional or different addresses for notices to such Person. Any
notice or communication to the Issuer and the Trustee, shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
answered back, if telecopied; and five (5) calendar days after mailing if sent
by registered or certified mail, postage prepaid (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee), except that, with respect to any mailing, notices to the Trustee
shall be deemed effective only upon receipt.
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a 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.
13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Issuer, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuer to the Trustee to take any
action under this Indenture, the Issuer shall furnish to the Trustee at the
request of the Trustee:
(i) an Officers' Certificate, in form and substance satisfactory
to the Trustee, stating that, in the opinion of the signers, all
conditions precedent to be performed or effected by the Issuer, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and
-129-
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, any and all such conditions precedent have been complied with.
13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.8, shall include:
(i) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with;
PROVIDED, HOWEVER, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee, Paying Agent or Registrar may make reasonable rules for its
functions.
13.7. LEGAL HOLIDAYS.
If a payment date is not a Business Day, payment may be made on the next
succeeding day that is a Business Day.
13.8. GOVERNING LAW.
THIS INDENTURE, THE SECURITIES AND ANY GUARANTEES WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Each of the parties hereto agrees to submit to the jurisdiction of the courts of
the State of New York in any action or proceeding arising out of or relating to
this Indenture, the Securities or any Guarantees.
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13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of any of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
13.10. NO RECOURSE AGAINST OTHERS.
No Affiliate, director, officer, employee, limited liability company
members or stockholder of the Company or any Subsidiary, as such, shall have any
liability for any obligations of the Issuer under the Securities or any
Guarantee or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Securities.
13.11. SUCCESSORS.
All agreements of the Issuer and the Guarantors, if any, in this
Indenture and the Securities and the Guarantees shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successor.
13.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each signed
copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
13.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture, the
Securities or the Guarantees shall be held invalid, illegal or unenforceable, in
any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the date first written above.
SALT HOLDINGS CORPORATION
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
-------------------------------
Name:
Title:
EXHIBIT A
[FORM OF INITIAL NOTE](a)
[FACE OF SECURITY]
SALT HOLDINGS CORPORATION
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION
1271 ET SEQ. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS NOTE, THE ISSUE PRICE IS $556.77. THE ISSUE
DATE OF THIS NOTE IS MAY 22, 2003 AND THE YIELD TO MATURITY IS 12%.
12% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2013
No. Principal Amount at Maturity: $
ISIN No.
CUSIP No.
SALT HOLDINGS CORPORATION, a Delaware corporation (the "COMPANY" or the
"ISSUER," which terms include any of its successors under the Indenture
hereinafter referred to), for value received promises to pay to or
registered assigns, the principal sum of ($ ) on June 1, 2013.
Interest Payment Dates: June 1 and December 1, commencing December 1,
2008.
Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
----------
(a) Add Private Placement Legend and, if appropriate, Global Security
Legend.
A-1
IN WITNESS WHEREOF, the Issuer has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
Dated:
SALT HOLDINGS CORPORATION
By:
-------------------------------
Name:
Title:
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the 12% Senior Subordinated Discount Notes Due 2013
described in the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK, as Trustee
By:
-------------------------------
Authorized Signatory
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[REVERSE OF SECURITY]
SALT HOLDINGS CORPORATION
12% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2013
1. INTEREST.
SALT HOLDINGS CORPORATION, a Delaware corporation (the "COMPANY" or the
"ISSUER," which terms include any of its successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate per annum shown above. Prior to June 1, 2008, interest
on this Security will accrue in the form of an increase in the Accreted Value of
the Notes, and no cash interest shall be paid. The Accreted Value of this
Security will increase from the date of issuance until June 1, 2008 at a rate of
12% per annum compounded semi-annually as provided in the definition of
"Accreted Value" in the Indenture such that the Accreted Value will equal the
principal amount at maturity on June 1, 2008. The Issuer will pay interest
semiannually on June 1 and December 1 of each year (the "INTEREST PAYMENT
DATE"), commencing December 1, 2008. Interest on this Security will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from and including June 1, 2008. Interest on this Security will be
computed on the basis of a 360-day year of twelve 30-day months.
The Issuer shall pay cash interest on overdue principal, and on overdue
premium, if any, and overdue interest, to the extent lawful, at the rate of
interest borne by this Security.
2. METHOD OF PAYMENT.
The Issuer shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
(including pursuant to an Exchange Offer (as defined in the Indenture)) after
such Record Date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer shall pay Accreted Value or principal, premium,
if any and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts ("U.S. LEGAL TENDER").
However, the Issuer may pay Accreted Value or principal, premium, if any, and
interest by wire transfer of federal funds, or interest by check payable in such
U.S. Legal Tender. The Issuer may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
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3. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York (the "TRUSTEE") will act as Paying Agent
and Registrar. The Issuer may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar or co-Registrar.
4. INDENTURE.
The Issuer issued the Securities under an Indenture, dated as of May 22,
2003 (the "INDENTURE"), between the Issuer and the Trustee. This Security is one
of a duly authorized issue of Securities of the Issuer designated as its 12%
Senior Subordinated Discount Notes Due 2013 (the "INITIAL NOTES"). Capitalized
terms herein are used as defined in the Indenture unless otherwise defined
herein. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of them. The Securities are general
obligations of the Issuer unlimited in amount, of which an aggregate principal
amount at maturity of $179,600,000 has been issued on the Issue Date.
5. OPTIONAL REDEMPTION.
The Issuer may redeem the Securities, in whole at any time or in part
from time to time, on and after June 1, 2008, upon not less than 30 nor more
than 60 days' notice, at the following redemption prices (expressed as
percentages of the principal amount at maturity thereof) if redeemed during the
twelve-month period commencing on June 1 of the years set forth below, plus, in
each case, accrued and unpaid interest thereon, if any, to the date of
redemption (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date):
Year Percentage
---- ----------
2008........................ 106.000%
2009........................ 104.000%
2010........................ 102.000%
2011 and thereafter......... 100.000%
The Issuer may redeem the Securities, at any time, or from time to time,
on or prior to June 1, 2006, by using the Net Cash Proceeds of one or more
Equity Offerings to redeem up to 35% in aggregate principal amount at maturity
of the Securities originally issued under the Indenture at a redemption price
equal to 112% of the Accreted Value thereof to the date of redemption; PROVIDED,
HOWEVER, that after any such redemption the aggregate principal
A-5
amount at maturity of the Securities outstanding must equal at least 65% of the
aggregate principal amount at maturity of the Securities originally issued under
the Indenture. In order to effect the foregoing redemption with the net cash
proceeds of any Equity Offering, the Issuer shall make such redemption not more
than 120 days after the consummation of any such Equity Offering.
In addition, at any time prior to June 1, 2008, upon the occurrence of a
Change of Control, the Issuer may redeem the Securities, in whole but not in
part, at a redemption price equal to the Accreted Value thereof plus the
Applicable Premium to the date of redemption. Notice of redemption of the
Securities pursuant to this paragraph shall be mailed to Holders of the
Securities not more than 30 days following the occurrence of a Change of
Control.
6. NOTICE OF REDEMPTION.
Notice of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at such Holder's registered address. Securities in
denominations of $1,000 principal amount at maturity may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 principal
amount at maturity or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000 principal amount at
maturity .
If any Security is to be redeemed in part only, the notice of redemption
that relates to such Security shall state the portion of the principal amount at
maturity thereof to be redeemed. A new Security in a principal amount at
maturity equal to the unredeemed portion thereof will be issued in the name of
the Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest will cease to accrue on Securities or portions thereof
called for redemption, subject to the provisions of the Indenture.
7. CHANGE OF CONTROL OFFER.
Upon the occurrence of a Change of Control, the Issuer will be required,
as and to the extent set forth in the Indenture, to offer to purchase all of the
outstanding Securities at a purchase price equal to 101% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, thereon to the date of
repurchase (subject to the right of Securityholders of record on the relevant
record date to receive interest due on the relevant interest payment date);
PROVIDED HOWEVER, that notwithstanding the occurrence of a Change of Control,
the Issuer shall not be obligated to repurchase the Securities pursuant to this
paragraph 7 in the event that the Issuer has exercised its right to redeem all
of the Securities under the terms of paragraph 5 hereof).
8. LIMITATION ON ASSET SALES.
The Issuer is, subject to certain conditions, obligated to make an offer
to purchase Securities at 100% of their Accreted Value, plus accrued and unpaid
interest, if any, thereon to the date of repurchase with certain Net Cash
Proceeds of certain sales or other dispositions of assets in accordance with the
Indenture.
A-6
9. REGISTRATION RIGHTS.
Pursuant to the Registration Rights Agreement, the Issuer will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Security shall have the right to exchange this Security for the Issuer's 12%
Senior Subordinated Discount Notes Due 2013 (the "EXCHANGE NOTES"), which shall
have been registered under the Securities Act, in like Accreted Value and
principal amount at maturity and having terms identical in all material respects
to the Initial Notes. The Holders of Securities shall be entitled to an increase
in the Accreted Value of the Securities or to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
10 DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in denominations
of $1,000 principal amount at maturity and integral multiples of $1,000
principal amount at maturity. A Holder shall register the transfer of or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities or portions thereof
selected for redemption, except the unredeemed portion of any security being
redeemed in part.
11. SUBORDINATION.
The Securities are unsecured obligations of the Issuer and subordinated
in right of payment, in the manner and to the extent set forth in the Indenture,
to the prior payment in full in cash of all Senior Debt of the Issuer, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on his
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
12. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
13. UNCLAIMED FUNDS.
If funds for the payment of Accreted Value or principal, premium, if
any, or interest remain unclaimed for two years, the Trustee and the Paying
Agent will repay the funds to the Issuer at its request. After that, all
liability of the Trustee and such Paying Agent with respect to such funds shall
cease.
A-7
14. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
The Issuer may be discharged from its obligations under the Indenture or
the Securities except for certain provisions thereof, and may be discharged from
obligations to comply with certain covenants contained in the Indenture and the
Securities upon satisfaction of certain conditions specified in the Indenture.
15. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture and the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount at maturity of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount at maturity of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture, the Securities and any Guarantee to, among other
things, cure any ambiguity, defect or inconsistency, provide for uncertificated
Securities in addition to or in place of certificated Securities or comply with
any requirements of the Commission in connection with the qualification of the
Indenture under the TIA, or make any other change that does not materially
adversely affect the rights of any Holder of a Security.
16. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other things, limit
the ability of the Company and its Restricted Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Company to the Company, to consolidate, merge or sell all or substantially all
of its assets or to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
17. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount at maturity of Securities
then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. Holders
of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities, unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount at maturity of the Securities then outstanding to
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Securities notice of certain continuing Defaults or
Events of Default if it determines that withholding notice is in their interest.
A-8
18. TRUSTEE DEALINGS WITH ISSUER.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Issuer, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
19. NO RECOURSE AGAINST OTHERS.
No Affiliate, stockholder, director, officer, employee or limited
liability company member of the Issuer or any of its Subsidiaries shall have any
liability for any obligation of the Issuer under the Securities or the Indenture
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Holder of a Security by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
20. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
21. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
22. GOVERNING LAW.
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to applicable principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
23. CUSIP AND ISIN NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
24. INDENTURE.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
A-9
The Issuer will furnish to any Holder of a Security upon written request
and without charge a copy of the Indenture which has the text of this Security
in larger type. Requests may be made to:
Salt Holdings Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇, Attn: Chief Financial Officer.
A-10
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ______________________________________agent to transfer
this Security on the books of the Issuer. The agent may substitute another to
act for him.
Dated: Signed:
------------------------ ----------------------------
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:
----------------------------------
Participant in a recognized
Signature Guarantee Medallion
Program (or other signature
guarantor program reasonably
acceptable to the Trustee)
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "SECURITIES ACT"), covering resales of this Security
(which effectiveness shall not have been suspended or terminated at the date of
the transfer) and (ii) May 22, 2005, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Security is being transferred:
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[CHECK ONE]
/ / (1) to the Issuer or a subsidiary thereof; or
/ / (2) pursuant to and in compliance with Rule 144A under the Securities Act;
or
/ / (3) to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
/ / (4) outside the United States to a "foreign person" in compliance
with Rule 904 of Regulation S under the Securities Act; or
/ / (5) pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
/ / (6) pursuant to an effective registration statement under the
Securities Act; or
/ / (7) pursuant to another available exemption from the registration
requirements of the Securities Act;
and unless the box below is checked, the undersigned confirms that such Security
is not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act of 1933, as amended (an "AFFILIATE"):
/ / The transferee is an Affiliate of the Issuer.
Unless one of the items is checked, the Trustee 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 that if box (3), (4), (5) or
(7) is checked, the Issuer or the Trustee may require, prior to registering any
such transfer of the Securities, in its sole discretion, such legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Issuer have reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
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If none of the foregoing boxes is checked, the Trustee or Registrar
shall not be obligated to register this Security in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.16 of the Indenture shall have
been satisfied.
Dated: Signed:
------------------------ ----------------------------
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:
----------------------------------
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuer as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
-----------------------------------------------
NOTICE: To be executed by an executive officer
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 / / Section 4.17 / /
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount: $____________
Dated: Signed:
------------------------ ----------------------------
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:
----------------------------------
Participant in a recognized
Signature Guarantee Medallion
Program (or other signature
guarantor program reasonably
acceptable to the Trustee)
A-14
EXHIBIT B
[FORM OF EXCHANGE NOTE](a)
[FACE OF SECURITY]
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTION
1271 ET SEQ. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS NOTE, THE ISSUE PRICE IS $556.77. THE ISSUE
DATE OF THIS NOTE IS MAY 22, 2003 AND THE YIELD TO MATURITY IS 12%.
SALT HOLDINGS CORPORATION
12% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2013
CUSIP No.
ISIN No.
No. Principal Amount at Maturity: $
SALT HOLDINGS CORPORATION, a Delaware corporation (the "COMPANY" or the
"ISSUER," which terms include any of its successors under the Indenture
hereinafter referred to), for value received promises to pay to or
registered assigns, the principal sum of ($ ), on June 1, 2013.
Interest Payment Dates: June 1 and December 1, commencing December 1,
2008.
Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
----------
(a) Add Private Placement Legend and, if appropriate, Global Security Legend.
B-1
IN WITNESS WHEREOF, the Issuer has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
Dated: SALT HOLDINGS CORPORATION
By:
------------------------------
Name:
Title:
B-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the 12% Senior Subordinated Discount Notes Due 2013
described in the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK, as Trustee
By:
-------------------------------
Authorized Signatory
B-3
[REVERSE OF SECURITY]
SALT HOLDINGS CORPORATION
12% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2013
1. INTEREST.
SALT HOLDINGS CORPORATION, a Delaware corporation (the "COMPANY" or the
"ISSUER," which terms include any of its successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate PER ANNUM shown above. Prior to June 1, 2008, interest
on this Security will accrue in the form of an increase in the Accreted Value of
the Notes, and no cash interest shall be paid. The Accreted Value of this
Security will increase from the date of issuance until June 1, 2008 at a rate of
12% per annum compounded semi-annually as provided in the definition of
"Accreted Value" in the Indenture such that the Accreted Value will equal the
principal amount at maturity on June 1, 2008. The Issuer will pay interest
semiannually on June 1 and December 1 of each year (the "INTEREST PAYMENT
DATE"), commencing December 1, 2008. Interest on this Security will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from and including June 1, 2008. Interest on this Security will be
computed on the basis of a 360-day year of twelve 30-day months.
The Issuer shall pay cash interest on overdue principal, and on overdue
premium, if any, and overdue interest, to the extent lawful, at the rate of
interest borne by this Security.
2. METHOD OF PAYMENT.
The Issuer shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are canceled on registration of transfer or registration of exchange
(including pursuant to an Exchange Offer (as defined in the Indenture)) after
such Record Date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Issuer shall pay Accreted Value or principal, premium,
if any and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts ("U.S. LEGAL TENDER").
However, the Issuer may pay Accreted Value or principal, premium, if any, and
interest by wire transfer of federal funds, or interest by check payable in such
U.S. Legal Tender. The Issuer may deliver any such interest payment to the
Paying Agent or to a Holder at the Holder's registered address.
B-4
3. PAYING AGENT AND REGISTRAR.
Initially, The Bank of New York (the "TRUSTEE") will act as Paying Agent
and Registrar. The Issuer may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar or co-Registrar.
4. INDENTURE.
The Issuer issued the Securities under an Indenture, dated as of May 22,
2003 (the "INDENTURE"), between the Issuer and the Trustee. This Security is one
of a duly authorized issue of Securities of the Issuer designated as its 12%
Senior Subordinated Discount Notes Due 2013 (the "INITIAL NOTES"). Capitalized
terms herein are used as defined in the Indenture unless otherwise defined
herein. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture until such time as the Indenture is qualified under the TIA, and
thereafter as in effect on the date on which the Indenture is qualified under
the TIA. Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and the TIA for a statement of them. The Securities are general
obligations of the Issuer unlimited in amount, of which an aggregate principal
amount at maturity of $179,600,000 has been issued on the Issue Date.
5. OPTIONAL REDEMPTION.
The Issuer may redeem the Securities, in whole at any time or in part
from time to time, on and after June 1, 2006, upon not less than 30 nor more
than 60 days' notice, at the following redemption prices (expressed as
percentages of the principal amount at maturity thereof) if redeemed during the
twelve-month period commencing on June 1 of the years set forth below, plus, in
each case, accrued and unpaid interest thereon, if any, to the date of
redemption (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date):
YEAR PERCENTAGE
---- ----------
2008........................ 106.000%
2009........................ 104.000%
2010........................ 102.000%
2011 and thereafter......... 100.000%
The Issuer may redeem the Securities, at any time, or from time to time,
on or prior to June 1, 2006, by using the Net Cash Proceeds of one or more
Equity Offerings to redeem up to 35% in aggregate principal amount at maturity
of the Securities originally issued under the Indenture at a redemption price
equal to 112% of the Accreted Value thereof to the date of redemption; PROVIDED,
HOWEVER, that after any such redemption the aggregate principal
B-5
amount at maturity of the Securities outstanding must equal at least 65% of the
aggregate principal amount at maturity of the Securities originally issued under
the Indenture. In order to effect the foregoing redemption with the net cash
proceeds of any Equity Offering, the Issuer shall make such redemption not more
than 120 days after the consummation of any such Equity Offering.
In addition, at any time prior to June 1, 2008, upon the occurrence of a
Change of Control, the Issuer may redeem the Securities, in whole but not in
part, at a redemption price equal to the Accreted Value thereof plus the
Applicable Premium to the date of redemption. Notice of redemption of the
Securities pursuant to this paragraph shall be mailed to Holders of the
Securities not more than 30 days following the occurrence of a Change of
Control.
6. NOTICE OF REDEMPTION.
Notice of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at such Holder's registered address. Securities in
denominations of $1,000 principal amount at maturity may be redeemed only in
whole. The Trustee may select for redemption portions (equal to $1,000 principal
amount at maturity or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000 principal amount at
maturity.
If any Security is to be redeemed in part only, the notice of redemption
that relates to such Security shall state the portion of the principal amount at
maturity thereof to be redeemed. A new Security in a principal amount at
maturity equal to the unredeemed portion thereof will be issued in the name of
the Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest will cease to accrue on Securities or portions thereof
called for redemption, subject to the provisions of the Indenture.
7. CHANGE OF CONTROL OFFER.
Upon the occurrence of a Change of Control, the Issuer will be required,
as and to the extent set forth in the Indenture, to offer to purchase all of the
outstanding Securities at a purchase price equal to 101% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, thereon to the date of
repurchase (subject to the right of Securityholders of record on the relevant
record date to receive interest due on the relevant interest payment date);
PROVIDED, HOWEVER, that notwithstanding the occurrence of a Change of Control,
the Issuer shall not be obligated to repurchase the Securities pursuant to this
paragraph 7 in the event that the Issuer has exercised its right to redeem all
of the Securities under the terms of paragraph 5 hereof).
8. LIMITATION ON ASSET SALES.
The Issuer is, subject to certain conditions, obligated to make an offer
to purchase Securities at 100% of their Accreted Value, plus accrued and unpaid
interest, if any, thereon to the date of repurchase with certain Net Cash
Proceeds of certain sales or other dispositions of assets in accordance with the
Indenture.
B-6
9. DENOMINATION, TRANSFER, EXCHANGE.
The Securities are in registered form, without coupons, in denominations
of $1,000 principal amount at maturity and integral multiples of $1,000
principal amount at maturity. A Holder shall register the transfer of or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. The Registrar
need not register the transfer of or exchange any Securities or portions thereof
selected for redemption, except the unredeemed portion of any security being
redeemed in part.
10. SUBORDINATION.
The Securities are unsecured obligations of the Issuer and subordinated
in right of payment, in the manner and to the extent set forth in the Indenture,
to the prior payment in full in cash of all Senior Debt of the Issuer, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on his
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
11. PERSONS DEEMED OWNERS.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
12. UNCLAIMED FUNDS.
If funds for the payment of Accreted Value or principal, premium, if
any, or interest remain unclaimed for two years, the Trustee and the Paying
Agent will repay the funds to the Issuer at its request. After that, all
liability of the Trustee and such Paying Agent with respect to such funds shall
cease.
13. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
The Issuer may be discharged from its obligations under the Indenture or
the Securities except for certain provisions thereof, and may be discharged from
obligations to comply with certain covenants contained in the Indenture and the
Securities upon satisfaction of certain conditions specified in the Indenture.
14. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture and the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount at maturity of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders
B-7
of a majority in aggregate principal amount at maturity of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Securities and any Guarantee to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the Commission in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not materially adversely affect the rights of any Holder of a Security.
15. RESTRICTIVE COVENANTS.
The Indenture contains certain covenants that, among other things, limit
the ability of the Company and its Restricted Subsidiaries to make restricted
payments, to incur indebtedness, to create liens, to sell assets, to permit
restrictions on dividends and other payments by Restricted Subsidiaries of the
Company to the Company, to consolidate, merge or sell all or substantially all
of its assets or to engage in transactions with affiliates. The limitations are
subject to a number of important qualifications and exceptions. The Company must
annually report to the Trustee on compliance with such limitations.
16. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount at maturity of Securities
then outstanding may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture. Holders
of Securities may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities, unless it has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount at maturity of the Securities then outstanding to
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Securities notice of certain continuing Defaults or
Events of Default if it determines that withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH ISSUER.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Issuer, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. NO RECOURSE AGAINST OTHERS.
No Affiliate, stockholder, director, officer, employee or limited
liability company member of the Issuer or any of its Subsidiaries shall have any
liability for any obligation of the Issuer under the Securities or the Indenture
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Holder of a Security by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
B-8
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
21. GOVERNING LAW.
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to applicable principles
of conflicts of laws to the extent that the application of the laws of another
jurisdiction would be required thereby.
22. CUSIP AND ISIN NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuer has caused CUSIP and ISIN numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
23. INDENTURE.
Each Holder, by accepting a Security, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
The Issuer will furnish to any Holder of a Security upon written request
and without charge a copy of the Indenture which has the text of this Security
in larger type. Requests may be made to: Salt Holdings Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇, Attn: Chief Financial Officer.
B-9
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ______________________________________agent to transfer
this Security on the books of the Issuer. The agent may substitute another to
act for him.
Dated: Signed:
------------------------ ----------------------------
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee: -----------------------------------
Participant in a recognized
Signature Guarantee Medallion
Program (or other signature
guarantor program reasonably
acceptable to the Trustee)
B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.16 or Section 4.17 of the Indenture, check the appropriate
box:
Section 4.16 / / Section 4.17 / /
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state the
amount: $___________
Dated: Signed:
----------------------- ----------------------------
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee: -----------------------------------
Participant in a recognized
Signature Guarantee Medallion
Program (or other signature
guarantor program reasonably
acceptable to the Trustee)
B-11
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
[Date]
Attention:
Re: Salt Holdings Corporation
12% Senior Subordinated Discount
Notes Due 2013 (the " Securities")
----------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of the Securities of Salt
Holdings Corporation (the "ISSUER"), we confirm that:
1. We have received a copy of the Offering Circular (the "OFFERING
CIRCULAR"), dated May 19, 2003, relating to the Securities and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated on pages (i) and
(ii) of the Offering Circular and in the section entitled "Transfer
Restrictions" of the Offering Circular, including the restrictions on
duplication and circulation of the Offering Circular.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Securities (as described in the Offering Circular) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "SECURITIES ACT").
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not be
offered or sold except as permitted in the following sentence. We agree, on our
own behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell or otherwise transfer any Securities prior to the
date which is two years after the original issuance of the Securities, and if
such transfer is in respect of any aggregate principal amount at maturity of
Securities of less than $100,000, also furnishes an opinion of counsel
acceptable to the Issuer that such transfer complies with the Securities Act, we
will do so only (i) to the Issuer or any of its subsidiaries, (ii) inside the
United States in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act), (iii) inside the United States to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes (or has furnished on
its behalf by a U.S. broker-dealer) to the Trustee (as
C-1
defined in the Indenture relating to the Securities), a signed letter containing
certain representations and agreements relating to the restrictions on transfer
of the Securities, (iv) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (v) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), or
(vi) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Securities
from us a notice advising such purchaser that resales of the Securities are
restricted as stated herein.
4. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Issuer such certification,
legal opinions and other information as the Trustee and the Issuer may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion, 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.
You and the Issuer 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 proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
By:
-------------------------------
Name:
Title:
C-2
EXHIBIT D
Form of Certificate To Be
Delivered in Connection with
Transfers Pursuant to Regulation S
----------------------------------
[Date]
Attention:
Re: Salt Holdings Corporation
12% Senior Subordinated Discount Notes
Due 2013 (the "Securities")
--------------------------------------
In connection with our proposed sale of $_________ aggregate principal
amount at maturity of the Securities, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Issuer 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.
D-1
Very truly yours,
[Name of Transferor]
By:
-------------------------------
Authorized Signature
D-2
EXHIBIT E
GUARANTEE
For value received, the undersigned hereby unconditionally guarantees,
as principal obligor and not only as a surety, to the Holder of this Security
the cash payments in United States dollars of Accreted Value of, premium, if
any, and interest, if any, on this Security in the amounts and at the times when
due and interest on the overdue Accreted Value, premium, if any, and interest,
if any, of this Security, if lawful, and the payment or performance of all other
obligations of the Issuer under the Indenture (as defined below) or the
Securities, to the Holder of this Security and the Trustee, all in accordance
with and subject to the terms and limitations of this Security, Article Ten of
the Indenture and this Guarantee. This Guarantee will become effective in
accordance with Article Ten of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Guarantee shall not be affected
by the fact that it is not affixed to any particular Security.
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Indenture dated as of May 22, 2003, between Salt
Holdings Corporation, a Delaware corporation (the "COMPANY" or the "ISSUER"),
and The Bank of New York, as trustee (the "TRUSTEE").
The obligations of the undersigned to the Holders of Securities and to
the Trustee pursuant to this Guarantee and the Indenture are expressly set forth
in Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Guarantee and all of the other provisions of the
Indenture to which this Guarantee relates.
The obligations of each Guarantor to the Holders and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth, and are
expressly subordinated and subject in right of payment to the prior payment in
full of all Guarantor Senior Debt of each Guarantor, to the extent and in the
manner provided Article Twelve of the Indenture.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY. The undersigned Guarantor hereby agrees
to submit to the jurisdiction of the courts of the State of New York in any
action or proceeding arising out of or relating to this Guarantee.
This Guarantee is subject to release upon the terms set forth in the
Indenture.
E-1
IN WITNESS WHEREOF, each Guarantor has caused its Guarantee to be duly
executed.
[ ]
By:
-------------------------------
Name:
Title:
E-2