Exhibit 4.1
================================================================================
POLYONE CORPORATION,
as Company
10 5/8% SENIOR NOTES DUE 2010
------------------------------
INDENTURE
Dated as of May 6, 2003
------------------------------
THE BANK OF NEW YORK,
as Trustee
================================================================================
CROSS-REFERENCE TABLE
INDENTURE
TIA SECTION REFERENCE SECTION
--------------------- -------
310(a)(1)................................................................................... 7.10
(a)(2).................................................................................. 7.10
(a)(3).................................................................................. N.A.
(a)(4).................................................................................. N.A.
(a)(5).................................................................................. 7.10
(b)..................................................................................... 7.08, 7.10
(c)..................................................................................... N.A.
311(a)...................................................................................... 7.11
(b)..................................................................................... 7.11
(c)..................................................................................... N.A.
312(a)...................................................................................... 2.05
312(b)...................................................................................... 11.03
312(c)...................................................................................... 11.03
313(a)...................................................................................... 7.06
(b)(1).................................................................................. N.A.
(b)(2).................................................................................. 7.06, 7.07
(c)..................................................................................... 7.06, 11.02
(d)..................................................................................... 7.06
314(a)...................................................................................... 4.03, 4.04
(b)..................................................................................... N.A.
(c)(3).................................................................................. N.A.
(d)..................................................................................... N.A.
314(e)...................................................................................... 11.05
315(a)...................................................................................... 7.01
(b)..................................................................................... 7.05
(c)..................................................................................... 7.01
(d)..................................................................................... 7.01
(e)..................................................................................... 6.11
316(a) (last sentence)...................................................................... 2.09
(a)(1)(A)............................................................................... 6.05
(a)(1)(B)............................................................................... 6.04
(a)(2).................................................................................. N.A.
(b)..................................................................................... 6.07
317(a)(1)................................................................................... 6.08
(a)(2).................................................................................. 6.09
(b)..................................................................................... 2.04
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions...........................................................................1
Section 1.02. Other Definitions....................................................................31
Section 1.03. Incorporation by Reference of Trust Indenture Act....................................32
Section 1.04. Rules of Construction................................................................32
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating......................................................................33
Section 2.02. Execution and Authentication.........................................................34
Section 2.03. Registrar and Paying Agent...........................................................35
Section 2.04. Paying Agent to Hold Money in Trust..................................................35
Section 2.05. Holder Lists.........................................................................36
Section 2.06. Transfer and Exchange................................................................36
Section 2.07. Replacement Notes....................................................................43
Section 2.08. Outstanding Notes....................................................................44
Section 2.09. Treasury Notes.......................................................................44
Section 2.10. Temporary Notes......................................................................44
Section 2.11. Cancellation.........................................................................45
Section 2.12. Payment of Interest; Defaulted Interest..............................................45
Section 2.13. CUSIP or ISIN Numbers................................................................45
Section 2.14. Additional Interest..................................................................46
Section 2.15. Issuance of Additional Notes.........................................................46
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee...................................................................47
Section 3.02. Selection of Notes to Be Redeemed....................................................47
Section 3.03. Notice of Redemption.................................................................47
Section 3.04. Effect of Notice of Redemption.......................................................48
Section 3.05. Deposit of Redemption Price..........................................................48
Section 3.06. Notes Redeemed in Part...............................................................49
Section 3.07. Optional Redemption..................................................................49
Section 3.08. Mandatory Redemption.................................................................50
-i-
PAGE
Section 3.09. Offer To Purchase by Application of Excess Proceeds..................................50
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.....................................................................52
Section 4.02. Maintenance of Office or Agency......................................................53
Section 4.03. Reports..............................................................................53
Section 4.04. Compliance Certificate...............................................................54
Section 4.05. Taxes................................................................................54
Section 4.06. Stay, Extension and Usury Laws.......................................................55
Section 4.07. Corporate Existence..................................................................55
Section 4.08. [Intentionally omitted]..............................................................55
Section 4.09. Limitation on Debt...................................................................55
Section 4.10. Limitation on Restricted Payments....................................................60
Section 4.11. Limitation on Liens..................................................................64
Section 4.12. Limitation on Asset Sales............................................................66
Section 4.13. Limitation on Payment Restrictions Affecting Restricted Subsidiaries.................69
Section 4.14. Limitation on Affiliate Transactions.................................................71
Section 4.15. Designation of Restricted and Unrestricted Subsidiaries..............................73
Section 4.16. Limitation on Company's Business.....................................................74
Section 4.17. Guarantees by Restricted Subsidiaries................................................74
Section 4.18. Repurchase at the Option of Holders Upon a Change of Control.........................75
Section 4.19. Covenant Suspension..................................................................78
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation and Sale of Assets.............................................79
Section 5.02. Successor Corporation Substituted....................................................81
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default....................................................................82
Section 6.02. Acceleration.........................................................................84
Section 6.03. Other Remedies.......................................................................85
Section 6.04. Waiver of Past Defaults..............................................................85
Section 6.05. Control by Majority..................................................................85
Section 6.06. Limitation on Suits..................................................................85
-ii-
PAGE
Section 6.07. Rights of Holders to Receive Payment.................................................86
Section 6.08. Collection Suit by Trustee...........................................................86
Section 6.09. Trustee May File Proofs of Claim.....................................................86
Section 6.10. Priorities...........................................................................87
Section 6.11. Undertaking for Costs................................................................87
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee....................................................................88
Section 7.02. Rights of Trustee....................................................................89
Section 7.03. Individual Rights of Trustee.........................................................91
Section 7.04. Trustee's Disclaimer.................................................................91
Section 7.05. Notice of Defaults...................................................................91
Section 7.06. Reports by Trustee to Holders........................................................91
Section 7.07. Compensation and Indemnity...........................................................92
Section 7.08. Replacement of Trustee...............................................................93
Section 7.09. Successor Trustee by Merger, etc.....................................................94
Section 7.10. Eligibility; Disqualification........................................................94
Section 7.11. Preferential Collection of Claims Against Company....................................95
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.............................95
Section 8.02. Legal Defeasance and Discharge.......................................................95
Section 8.03. Covenant Defeasance..................................................................96
Section 8.04. Conditions to Legal or Covenant Defeasance...........................................96
Section 8.05. Deposited Cash and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions.........................................................98
Section 8.06. Repayment to Company.................................................................98
Section 8.07. Reinstatement........................................................................99
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes..................................................99
Section 9.02. With Consent of Holders of Notes....................................................100
Section 9.03. Compliance with Trust Indenture Act.................................................102
Section 9.04. Revocation and Effect of Consents...................................................102
Section 9.05. Notation on or Exchange of Notes....................................................102
-iii-
PAGE
Section 9.06. Trustee to Sign Amendments, etc.....................................................103
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01. Satisfaction and Discharge..........................................................103
Section 10.02. Deposited Cash and U.S. Government Obligations to be Held in Trust;
Other Miscellaneous Provisions..................................................104
Section 10.03. Repayment to Company................................................................104
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls........................................................105
Section 11.02. Notices.............................................................................105
Section 11.03. Communication by Holders of Notes with Other Holders of Notes.......................106
Section 11.04. Certificate and Opinion as to Conditions Precedent..................................106
Section 11.05. Statements Required in Certificate or Opinion.......................................107
Section 11.06. Rules by Trustee and Agents.........................................................107
Section 11.07. No Personal Liability of Directors, Officers, Employees and Stockholders............107
Section 11.08. Governing Law.......................................................................108
Section 11.09. No Adverse Interpretation of Other Agreements.......................................108
Section 11.10. Successors..........................................................................108
Section 11.11. Severability........................................................................108
Section 11.12. Consent to Jurisdiction and Service of Process......................................108
Section 11.13. Counterpart Originals...............................................................109
Section 11.14. Table of Contents, Headings, etc....................................................109
Exhibit A-- FORM OF NOTE
Exhibit B-- FORM OF CERTIFICATE OF TRANSFER
Exhibit C-- FORM OF CERTIFICATE OF EXCHANGE
Exhibit D-- FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED
INVESTOR
Exhibit E-- FORM OF NOTATION OF GUARANTEE
-iv-
This INDENTURE, dated as of May 6, 2003, is by and between
POLYONE CORPORATION, an Ohio corporation (the "Company"), and THE BANK OF NEW
YORK, a New York banking corporation, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the
10 5/8% Senior Notes due 2010:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires,
"144A Global Note" means the Global Note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold in reliance on Rule 144A.
"Accounts Receivable Subsidiary" means a Wholly Owned
Subsidiary that is formed solely for the purpose of, and that engages in no
activities other than in connection with the financing of accounts receivable
and that is designated by the Board of Directors (as provided below) as an
Accounts Receivable Subsidiary and:
(a) no portion of the Debt or any other obligations
(contingent or otherwise) of which:
(1) is guaranteed by the Company or any Restricted
Subsidiary (excluding Guarantees (other than the principal of,
and interest on, Debt) pursuant to Standard Securitization
Undertakings);
(2) is recourse to or obligates the Company or any
Restricted Subsidiary in any way other than pursuant to
Standard Securitization Undertakings; or
(3) subjects any Property of the Company or any
Restricted Subsidiary, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings;
(b) with which neither the Company nor any Restricted
Subsidiary has any material contract, agreement, arrangement or
understanding other than on terms no
-2-
less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons that are not Affiliates
of the Company, other than fees payable in the ordinary course of
business in connection with servicing accounts receivable of such
entity; and
(c) to which neither the Company nor any Restricted Subsidiary
has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating
results other than pursuant to Standard Securitization Undertakings.
Any designation of a Subsidiary as an Accounts Receivable
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors giving effect to the
designation and an Officers' Certificate certifying that the designation
complied with the preceding conditions and was permitted by this Indenture;
provided that no such filing shall be required to give effect to the designation
of PolyOne Funding Corporation as an Accounts Receivable Subsidiary.
"Acquired Debt" means, with respect to any specified Person,
(i) Debt of any other Person existing at the time such other Person is merged
with or into or became a Subsidiary of such specified Person, including, without
limitation, Debt Incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person
and (ii) Debt secured by a Lien encumbering any asset acquired by such specified
Person.
"Additional Assets" means:
(a) any Property (other than cash, Temporary Cash Investments,
securities and Capital Stock) to be owned by the Company or any
Restricted Subsidiary and used or useful in a Permitted Business;
(b) Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary from any Person other than the
Company or an Affiliate of the Company; or
(c) Capital Stock of a Person that at such time is a
Restricted Subsidiary;
provided, however, that, in the case of clauses (b) and (c), such Restricted
Subsidiary is primarily engaged in a Permitted Business.
"Additional Interest" means the Liquidated Damages payable
pursuant to Section 4 of the Registration Rights Agreement.
-3-
"Additional Notes" means any Notes (other than Initial Notes
and Exchange Notes) issued under this Indenture in accordance with Sections
2.02, 2.15 and 4.09 hereof, as part of the same series as the Initial Notes or
as an additional series.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise. The terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, co-registrar, Paying Agent or
additional paying agent.
"Applicable Procedures" means, with respect to any transfer,
redemption or exchange of or for beneficial interests in any Global Note, the
rules and procedures of the Depositary, Euroclear and Clearstream that apply to
such transfer, redemption or exchange.
"Asset Sale" means any sale, lease (other than an operating
lease entered into in the ordinary course of business), transfer, issuance or
other disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction (each
referred to for the purposes of this definition as a "disposition"), of
(a) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or any
Restricted Subsidiary), or
(b) any other Property of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or
such Restricted Subsidiary,
other than, in the case of clause (a) or (b) above,
(1) any disposition by a Restricted Subsidiary to the Company
or by the Company or a Restricted Subsidiary to a Restricted
Subsidiary;
(2) any disposition that constitutes a Permitted Investment or
Restricted Payment permitted by Section 4.10 hereof;
(3) any disposition effected in compliance with the first
paragraph of Section 5.01 hereof;
-4-
(4) any disposition or series of related dispositions of
Property with an aggregate Fair Market Value and for net proceeds of
less than $10.0 million;
(5) sales, transfers or other distributions of Property,
including Capital Stock of Restricted Subsidiaries, for consideration
at least equal to the Fair Market Value of the Property sold or
disposed of, but only if the consideration received consists of Capital
Stock of a Person that becomes a Restricted Subsidiary engaged in, or
Property (other than cash, except to the extent used as a bona fide
means of equalizing the value of the Property involved in the swap
transaction) of a nature or type that are used in, a business having
Property of a nature or type, or engaged in a business similar or
related to the nature or type of the Property, or businesses of, the
Company and its Restricted Subsidiaries existing on the date of such
sale or other disposition;
(6) the creation of any Lien;
(7) any disposition of Property pursuant to a foreclosure;
(8) any disposition of cash or Temporary Cash Investments;
(9) any disposition of Capital Stock or Property of an
Unrestricted Subsidiary;
(10) grants of licenses to use the Company's or any Restricted
Subsidiary's patents, trade secrets, know-how and technology entered
into in the ordinary course of business to the extent that such
licenses do not prohibit the licensor from using the patent, trade
secrets, know-how or technology;
(11) the sale or discount, in each case without recourse, of
receivables arising in the ordinary course of business, but only in
connection with the compromise or collection thereof;
(12) any disposition (including a disposition in exchange for
a promissory note or Capital Stock in such Accounts Receivable
Subsidiary) of Receivables and Related Assets to an Accounts Receivable
Subsidiary in connection with any Receivables Facility; and
(13) any release of any intangible claims or rights in
connection with a lawsuit, dispute or other controversy.
"Average Life" means, as of any date of determination, with
respect to any Debt or Preferred Stock, the quotient obtained by dividing
-5-
(a) the sum of the product of (i) the number of years (rounded
to the nearest one-twelfth of one year) from the date of determination
to the dates of each successive scheduled principal payment of such
Debt or redemption or similar payment with respect to such Preferred
Stock multiplied by (ii) the amount of such payment by
(b) the sum of all such payments.
"Bank Obligations" means, without duplication, the Obligations
of the Company under the Senior Credit Facility and Hedging Obligations in
respect of the Senior Credit Facility.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
U.S. federal or state law.
"Board of Directors" means the Board of Directors of the
Company.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the applicable Person to have been
duly adopted by the Board of Directors of such Person and to be in full force
and effect on the date of such certification, and delivered to the Trustee.
"Business Day" means each day that is not a Saturday, Sunday
or a day on which commercial banks are authorized or required by law to close in
New York City.
"Capital Lease Obligations" means any obligation under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of Debt represented by such obligation
shall be the capitalized amount of such obligations determined in accordance
with GAAP; and the Stated Maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
For purposes of Section 4.11 hereof, a Capital Lease Obligation shall be deemed
secured by a Lien on the Property being leased.
"Capital Markets Debt" means any Debt that is a security
(other than syndicated commercial loans) that is eligible for resale in the
United States pursuant to Rule 144A or outside the United States pursuant to
Regulation S or a security (other than syndicated commercial loans) that is sold
or subject to resale pursuant to a registration statement under the Act. As of
the Issue Date, the Company's Capital Markets Debt includes its 6.875%
Debentures, issued under the indenture dated as of December 1, 1995, among NBD
Bank, as trustee, and The Geon Company, 7.5% Debentures, issued under the
indenture dated as of December 1, 1995, among NBD Bank, as trustee, and The Geon
Company, 9.35% Senior Notes, issued under the indenture dated as of September
15, 1991, among Ameritrust Company National Association, as trustee, and M.A.
▇▇▇▇▇ Company, 8.875% Senior Notes, is-
-6-
sued under the indenture dated as of April 23, 2002 among The Bank of New York,
as trustee, and the Company, and medium term notes, issued under the indenture
dated as of November 9, 1996, among NBD Bank, as trustee, and M.A. ▇▇▇▇▇
Company.
"Capital Stock" means, with respect to any Person, any shares
or other equivalents (however designated) of any class of corporate stock or
partnership interests or any other participations, rights, warrants, options or
other interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate cash
proceeds received by the Company from the issuance or sale (other than to a
Restricted Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or any such Restricted Subsidiary for the
benefit of their employees) by the Company of its Capital Stock (other than
Disqualified Stock), including upon the exercise of warrants, options or other
rights, or warrants, options or other rights to purchase its Capital Stock
(other than Disqualified Stock) after the Issue Date, net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Change of Control" means the occurrence of any of the
following events:
(1) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 50% or more of the total voting
power of all Voting Stock of the Company;
(2) Continuing Directors shall cease to constitute at least a
majority of the directors constituting the Board of Directors;
(3) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act);
(4) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any of
the outstanding Capital Stock of the Com-
-7-
pany is converted into or exchanged for cash, securities or other
Property, other than any such transaction where the Capital Stock of
the company outstanding immediately prior to such transaction is
converted into or exchanged from Capital Stock (other than Disqualified
Stock) of the surviving or transferee Person representing at least a
majority of the voting power of all Capital Stock of such surviving or
transferee Person immediately after giving effect to such issuance; or
(5) the adoption by the stockholders of the Company of a plan
or proposal for the liquidation or dissolution of the Company.
"Clearstream" means Clearstream Banking S.A. and any successor
thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the U.S. Securities and Exchange
Commission.
"Commodity Price Protection Agreement" means, in respect of a
Person, any forward contract, commodity swap agreement, commodity option
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in commodity prices.
"Consolidated Interest Coverage Ratio" means, as of any date
of determination, the ratio of:
(a) the aggregate amount of EBITDA for the most recent four
consecutive fiscal quarters ending prior to such determination date to
(b) Consolidated Interest Expense for such four fiscal
quarters;
provided, however, that
(1) if
(A) since the beginning of such period the Company or
any Restricted Subsidiary has Incurred any Debt that remains
outstanding or Repaid any Debt; or
(B) the transaction giving rise to the need to
calculate the Consolidated Interest Coverage Ratio is an
Incurrence or Repayment of Debt;
Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such
Incurrence or Repayment as if such Debt was Incurred or Repaid
on the first day of such period, provided that, in the
-8-
event of any such Repayment of Debt, EBITDA for such
period shall be calculated on a pro forma basis as if
the Company or such Restricted Subsidiary had not
earned any interest income actually earned during
such period in respect of the funds used to Repay
such Debt, and
(2) if
(A) since the beginning of such
period the Company or any Restricted
Subsidiary shall have made any Asset Sale or
an Investment (by merger or otherwise) in
any Restricted Subsidiary (or any Person
which becomes a Restricted Subsidiary) or an
acquisition of Property which constitutes
all or substantially all of an operating
unit of a business;
(B) the transaction giving rise to
the need to calculate the Consolidated
Interest Coverage Ratio is such an Asset
Sale, Investment or acquisition which
constitutes all or substantially all of an
operating unit of a business; or
(C) since the beginning of such
period any Person (that subsequently became
a Restricted Subsidiary or was merged with
or into the Company or any Restricted
Subsidiary since the beginning of such
period) shall have made such an Asset Sale,
Investment or acquisition which constitutes
all or substantially all of an operating
unit of a business;
then EBITDA for such period shall be calculated after giving
pro forma effect to such Asset Sale, Investment or acquisition
as if such Asset Sale, Investment or acquisition had occurred
on the first day of such period.
If any Debt bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Debt shall be calculated as
if the base interest rate in effect for such floating rate of interest on the
date of determination had been the applicable base interest rate for the entire
period (taking into account any Interest Rate Agreement applicable to such Debt
if such Interest Rate Agreement has a remaining term in excess of 12 months). In
the event the Capital Stock of any Restricted Subsidiary is sold during the
period, the Company shall be deemed, for purposes of clause (1) above, to have
Repaid during such period the Debt of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer liable for
such Debt after such sale.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not in-
-9-
cluded in such total interest expense, and, to the extent Incurred by the
Company or its Restricted Subsidiaries,
(a) interest expense attributable to leases constituting part
of a Sale and Leaseback Transaction and to Capital Lease Obligations;
(b) amortization of debt discount and debt issuance cost,
including commitment fees;
(c) capitalized interest;
(d) non-cash interest expense;
(e) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing;
(f) net costs associated with Hedging Obligations (including
amortization of fees);
(g) Disqualified Stock Dividends (other than to the extent
paid in Capital Stock (other than Disqualified Stock));
(h) Preferred Stock Dividends (other than to the extent paid
in Capital Stock (other than Disqualified Stock));
(i) interest accruing on any Debt of any other Person to the
extent such Debt is Guaranteed by the Company or any Restricted
Subsidiary; and
(j) without duplication, commissions, discounts, yield and
other fees and charges Incurred or paid in connection with any
Receivables Facility that are payable by the Company to any Person
other than the Company and its Restricted Subsidiaries.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its consolidated Restricted Subsidiaries
calculated by including (1) the equity of the Company and its consolidated
Restricted Subsidiaries in the net income of any Person that is not a Restricted
Subsidiary for such period only up to the aggregate amount of cash distributed
by such Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in clause
(a) below), and (2) the pro rata share of the Company and its consolidated
Restricted Subsidiaries in the net loss of any such Person other than an
Unrestricted Subsidiary for such period; provided, however, that there shall not
be included in such Consolidated Net Income:
-10-
(a) any net income (loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions, directly or
indirectly, to the Company, except that:
(1) subject to the exclusion contained in clause (d) below,
the equity of the Company and its consolidated Restricted Subsidiaries
in the net income of any such Restricted Subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other
distribution to another Restricted Subsidiary, to the limitation
contained in this clause); and
(2) the pro rata share of the Company and its consolidated
Restricted Subsidiaries of a net loss of any such Restricted Subsidiary
for such period shall be included in determining such Consolidated Net
Income;
(b) any gain or loss realized upon the sale or other disposition of
any Property of the Company or any of its consolidated Subsidiaries
(including pursuant to any Sale and Leaseback Transaction) that is not sold
or otherwise disposed of in the ordinary course of business;
(c) any after-tax items classified as extraordinary gain or loss;
(d) the cumulative effect of a change in accounting principles; and
(e) any non-cash compensation expense realized for grants of
performance shares, stock options or other rights to officers, directors
and employees of the Company or any Restricted Subsidiary, provided that
such shares, options or other rights can be redeemed at the option of the
holder only for Capital Stock of the Company (other than Disqualified
Stock).
Notwithstanding the foregoing, for purposes of Section 4.10 hereof only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of Property from Unrestricted Subsidiaries
to the Company or a Restricted Subsidiary to the extent such dividends,
repayments or transfers increase the amount of Restricted Payments permitted
under such covenant pursuant to clause (a)(iii)(D) thereof.
"Consolidated Net Tangible Assets" of a Person and its
Subsidiaries means the sum of the Tangible Assets of such Person and its
Subsidiaries after deducting all current liabilities and eliminating
intercompany items, all determined in accordance with GAAP, including
appropriate deductions for any minority interest in Tangible Assets of such
Subsidiar-
-11-
ies after deducting all current liabilities of such Subsidiaries as determined
in accordance with GAAP.
"Continuing Director" means, during any period of two
consecutive years after the Issue Date, any Person who:
(i) at the beginning of any two-year period was a member of
the Board of Directors on the Issue Date; or
(ii) was nominated for election or elected to the Board of
Directors with the affirmative vote of at least a majority of the
directors then still in office who were either members of the Board of
Directors at the beginning of such period or whose nomination for
election was previously so approved, including new members of the Board
of Directors designated in or provided for in an agreement approved by
at least a majority of such members.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.02 hereof, or such other address
as to which the Trustee may give notice to the Company.
"Currency Exchange Protection Agreement" means, in respect of
a Person, any foreign exchange contract, currency swap agreement, futures
contract, currency option, synthetic cap or other similar agreement or
arrangement designed to protect such Person against fluctuations in currency
exchange rates.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"Debt" means, with respect to any Person on any date of
determination (without duplication):
(a) the principal of and premium (if any) in respect of:
(1) debt of such Person for money borrowed, and
(2) debt evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person
is responsible or liable;
(b) all Capital Lease Obligations of such Person;
(c) all obligations of such Person representing the
deferred purchase price of Property, all conditional sale obligations
of such Person and all obligations of such Person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
-12-
(d) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, bankers'
acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing
obligations (other than obligations described in (a) through
(c) above) entered into in the ordinary course of business of
such Person to the extent such letters of credit are not drawn
upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following
payment on the letter of credit);
(e) the amount of all obligations of such Person with
respect to the Repayment of any Disqualified Stock or, with
respect to any Subsidiary of such Person, any Preferred Stock
(measured, in each case, at the greater of its voluntary or
involuntary maximum fixed repurchase price or liquidation
value but excluding, in each case, any accrued dividends);
(f) all obligations of the type referred to in
clauses (a) through (e) above of other Persons and all
dividends of other Persons for the payment of which, in either
case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by
means of any Guarantee;
(g) all obligations of the type referred to in
clauses (a) through (f) above of other Persons secured by any
Lien on any Property of such Person (whether or not such
obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the Fair Market
Value of such Property and the amount of the obligation so
secured; and
(h) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
The amount of Debt outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Debt that does not require current payments of
interest and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other Debt,
provided that the amount of Debt represented by a Hedging Obligation shall be
equal to:
(1) zero if such Hedging Obligation has been Incurred
pursuant to clause (v), (vi) or (vii) of Section 4.09(b)
hereof; or
(2) the amount of such Hedging Obligation as
determined in accordance with GAAP if not Incurred pursuant to
such clauses.
Notwithstanding the foregoing, Debt shall not include (a) any
endorsements for collection or deposits in the ordinary course of business, (b)
any realization of a Permitted
-13-
Lien, and (c) Debt that has been defeased or satisfied in accordance with the
terms of the documents governing such Debt. With respect to any Debt denominated
in a foreign currency, for purposes of determining compliance with the
Incurrence of such Debt under Section 4.09 hereof, the amount of such Debt shall
be calculated based on the currency exchange rate in effect at the end of the
period for the most recent audited financial statements.
For purposes of this definition, the maximum fixed repurchase
price of any Disqualified Stock that does not have a fixed redemption, repayment
or repurchase price will be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were purchased on any date on
which Debt will be required to be determined pursuant to this Indenture at its
Fair Market Value if such price is based upon, or measured by, the fair market
value of such Disqualified Stock; provided, however, that if such Disqualified
Stock is not then permitted in accordance with the terms of such Disqualified
Stock to be redeemed, repaid or repurchased, the redemption, repayment or
repurchase price shall be the book value of such Disqualified Stock as reflected
in the most recent financial statements of such Person.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
substantially the form of Exhibit A hereto except that such Note shall not bear
the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depositary with respect to the Notes, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provisions of this Indenture.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable, in either case at the option of
the holder thereof) or otherwise:
(a) matures or is mandatorily redeemable pursuant to a sinking
fund obligation or otherwise;
(b) is or may become redeemable or repurchaseable at the
option of the holder thereof, in whole or in part; or
(c) is convertible or exchangeable at the option of the holder
thereof for Debt or Disqualified Stock;
-14-
on or prior to, in the case of clause (a), (b) or (c), the Stated Maturity of
the Notes; provided that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders the right to
require the Company to repurchase or redeem such Capital Stock upon the
occurrence of a Change of Control occurring prior to the Stated Maturity of the
Notes shall not constitute Disqualified Stock are no more favorable to the
holders of such Capital Stock than the provisions of this Indenture with respect
to a Change of Control and such Capital Stock specifically provides that the
Company will not repurchase or redeem any such Capital Stock pursuant to such
provisions prior to the Company's completing a Change of Control Offer.
"Disqualified Stock Dividends" means all dividends with
respect to Disqualified Stock of the Company held by Persons other than a Wholly
Owned Restricted Subsidiary. The amount of any such dividend shall be equal to
the quotient of such dividend divided by the difference between one and the
maximum statutory federal income tax rate (expressed as a decimal number between
1 and 0) then applicable to the Company.
"Distributable Joint Venture Cash Flow" means, for any period,
(i) the excess of the cash amount distributed to the Company or a Restricted
Subsidiary during such period by any Person that is not a Restricted Subsidiary
to the extent such cash amount was not included in Consolidated Net Income
pursuant to the first paragraph of the definition of "Consolidated Net Income"
minus (ii) the aggregate amount of all Investments made by the Company or any of
its Restricted Subsidiaries in such Person during such period.
"Distribution Compliance Period" means the 40-day distribution
compliance period as defined in Regulation S.
"EBITDA" means, for any period, an amount equal to, for the
Company and its consolidated Restricted Subsidiaries:
(a) the sum of Consolidated Net Income for such period, plus
the following to the extent reducing Consolidated Net Income for such
period:
(1) the provision for taxes based on income or
profits or utilized in computing net loss;
(2) Consolidated Interest Expense;
(3) depreciation;
(4) amortization of intangibles; and
-15-
(5) any other non-cash items (other than any such
non-cash item to the extent that it represents an accrual of
or reserve for cash expenditures in any future period);
(b) all non-cash items increasing Consolidated Net Income for
such period (other than any such non-cash item to the extent that it
will result in the receipt of cash payments in any future period); and
(c) Distributable Joint Venture Cash Flow.
Notwithstanding the foregoing clause (a), the provision for taxes and the
depreciation, amortization and non-cash items of a Restricted Subsidiary shall
be added to Consolidated Net Income to compute EBITDA only to the extent (and in
the same proportion) that the net income of such Restricted Subsidiary was
included in calculating Consolidated Net Income.
"Equity Offering" means an offering of Capital Stock of the
Company (other than Disqualified Stock) that generates gross proceeds to the
Company of at least $25.0 million.
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of
the Euroclear systems, and any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means Notes issued in the Registered Exchange
Offer pursuant to Section 2.06(c) hereof as evidence of the same continuing Debt
of the Company under, and in exchange for, any Notes.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Fair Market Value" means, with respect to any Property, the
price that could be negotiated in an arm's-length free market transaction
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value shall be
determined, if such Property has a Fair Market Value in excess of $25.0 million,
by a majority of the Board of Directors and evidenced by a Board Resolution,
dated within 30 days of the relevant transaction, delivered to the Trustee.
"Foreign Subsidiary" means a Subsidiary incorporated or
otherwise organized or existing under the laws of a jurisdiction other than the
United States of America, any state thereof or any territory or possession of
the United States of America.
-16-
"GAAP" means generally accepted accounting principles in the
United States of America, which are in effect on the Issue Date.
"Global Note Legend" means the legend set forth in Section
2.06(d)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Global Notes" means the global Notes in the form of Exhibit A
hereto issued in accordance with Article 2 hereof.
"Guarantee" means any obligation, contingent or otherwise, of
any Person guaranteeing any Debt of any other Person and any obligation, direct
or indirect, contingent or otherwise, of such Person:
(a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt of such other Person, or
(b) entered into for the purpose of assuring in any other
manner the obligee against loss in respect thereof (in whole or in
part);
provided, however, that the term "Guarantee" shall not include:
(1) endorsements for collection or deposit in the
ordinary course of business, or
(2) a contractual commitment by one Person to invest
in another Person for so long as such Investment is reasonably
expected to constitute a Permitted Investment under clause (a)
or (b) of the definition of "Permitted Investment."
The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means any Person Guaranteeing any obligation.
"Hedging Obligation" of any Person means any obligation of
such Person pursuant to any Interest Rate Agreement, Currency Exchange
Protection Agreement, Commodity Price Protection Agreement or any other similar
agreement or arrangement.
"Holder" means a Person in whose name a Note is registered.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by merger, conversion, exchange or
otherwise), extend, assume, Guarantee or become liable in respect of such Debt
or other obligation or the recording, as required pursuant to GAAP or otherwise,
of any such Debt or obligation on the balance sheet of such Person (and
"Incurrence" and "Incurred" shall have meanings correlative to the foregoing);
-17-
provided, however, that a change in GAAP that results in an obligation of such
Person that exists at such time, and is not theretofore classified as Debt,
becoming Debt shall not be deemed an Incurrence of such Debt; provided further,
however, that any Debt or other obligations of a Person existing at the time
such Person becomes a Restricted Subsidiary (whether by merger, consolidation,
acquisition or otherwise) shall be deemed to be Incurred by such Restricted
Subsidiary at the time it becomes a Restricted Subsidiary; and provided further,
however, that solely for purposes of determining compliance with Section 4.09
hereof, amortization of debt discount shall not be deemed to be the Incurrence
of Debt.
"Indenture" means this instrument, as originally executed or
as it may from time to time be supplemented or amended in accordance with
Article 9 hereof.
"Independent Financial Advisor" means an investment banking
firm of national standing or any third-party appraiser of national standing,
provided that such firm or appraiser is not an Affiliate of the Company.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" means $300,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
"Interest Payment Dates" shall have the meaning set forth in
paragraph 1 of the Note.
"Interest Rate Agreement" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate option agreement, interest rate future agreement or
other similar agreement designed to protect against fluctuations in interest
rates.
"Investment" by any Person means any direct or indirect loan
(other than advances and extensions of credit and receivables in the ordinary
course of business that are recorded as accounts receivable on the balance sheet
of such Person), advance or other extension of credit or capital contribution
(by means of transfers of cash or other Property to others or payments for
Property or services for the account or use of others, or otherwise) to, or
Incurrence of a Guarantee of any obligation of, or purchase or acquisition of
Capital Stock, bonds, notes, debentures or other securities or evidence of Debt
issued by, any other Person. For purposes of Sections 4.10 and 4.15 hereof and
the definitions of "Restricted Payment" and "Unrestricted Subsidiary," the term
"Investment" shall include the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net as-
-18-
sets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary (proportionate to the Company's equity investment in such
Unrestricted Subsidiary) of an amount (if positive) equal to:
(a) the Company's "Investment" in such Subsidiary at the time
of such redesignation; less
(b) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets
of such Subsidiary at the time of such redesignation.
In determining the amount of any Investment made by transfer of any Property
other than cash, such Property shall be valued at its Fair Market Value at the
time of such Investment.
"Investment Grade Rating" means a rating of both Baa3 or
higher (or the equivalent) by ▇▇▇▇▇'▇ and BBB- or higher (or the equivalent) by
S&P.
"Investment Grade Status" shall be deemed to have been reached
on the date that the Notes have an Investment Grade Rating from both Rating
Agencies.
"Issue Date" means the date on which the Initial Notes are
initially issued.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien (other than liens created in connection
with a Receivables Facility), charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Initial Notes for use by
such Holders in connection with the Registered Exchange Offer.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any
successor to the rating agency business thereof.
"Net Available Cash" from any Asset Sale means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but
-19-
excluding the portion of any such deferred payment constituting interest and any
other consideration received in the form of assumption by the acquiring Person
of Debt or other obligations relating to the Property that is the subject of
such Asset Sale or received in any other non-cash form), in each case net of:
(a) all legal, title, accounting and recording tax expenses,
transfer taxes, commissions and other fees and expenses Incurred
(including, without limitation, brokerage commissions and accounting,
legal and investment banking expenses, fees and sales commissions), and
all U.S. federal, state, provincial, foreign and local taxes required
to be accrued as a liability under GAAP, as a consequence of such Asset
Sale;
(b) all payments made on or in respect of any Debt that is
secured by any Property subject to such Asset Sale, in accordance with
the terms of any Lien upon such Property, or which must by its terms,
or in order to obtain a necessary consent to such Asset Sale, or by
applicable law, be repaid out of the proceeds from such Asset Sale;
(c) all distributions and other payments required to be made
to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Sale;
(d) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities
associated with the Property disposed of in such Asset Sale and
retained by the Company or any Restricted Subsidiary after such Asset
Sale, including, without limitation, pension and other postemployment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such
Asset Sale; and
(e) payments of unassumed liabilities (not constituting Debt)
relating to the Property sold at the time of, or within 30 days after,
the date of such sale.
"Notes" means any 10 5/8% unsecured senior notes issued by the
company under this Indenture.
"Note Custodian" means, with respect to the Notes issuable in
whole or in part in global form, the Person specified in Section 2.03 hereof as
custodian with respect to the Notes, any and all successors thereto appointed as
custodian hereunder and having become such pursuant to the applicable provisions
of this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Debt and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or Incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
-20-
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
"Officer" means the Chief Executive Officer, the Chief
Operating Officer, the President, the Chief Financial Officer, the Chief Legal
Officer, the Treasurer, the Controller or the Secretary or the Assistant
Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers of the Company, at least one of whom shall be the principal executive
officer, principal financial officer, treasurer or controller of the Company,
and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"OxyVinyls Guarantee" means the Guarantee by the Company of
obligations up to $42.3 million in respect of borrowings by Oxy Vinyls, LP from
Occidental Petroleum Corporation pursuant to the Guaranty and Reimbursement
Agreement, dated as of April 30, 1999 among The Geon Company and Occidental
Petroleum Corporation, as in effect on the Issue Date, which agreement may be
terminated upon the attainment of cumulative EBITDA of $636.0 million by Oxy
Vinyls, LP.
"Pari Passu Debt" means any Debt of the Company or a
Subsidiary Guarantor that is not subordinated to the Notes or such Subsidiary
Guarantor's Guarantee of the Notes, as the case may be.
"Participant" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream.
"Payment Default" means, with respect to any Debt, a failure
to pay the principal of such Debt at its Stated Maturity after giving effect to
any applicable grace period provided in the instrument(s) governing such Debt.
"Permitted Business" means the business of developing,
manufacturing and/or selling, and providing research and development, marketing
and/or services and support for, chemical-based and formulated products and
related organic and inorganic materials and any business reasonably related,
incidental, complementary or ancillary thereto.
"Permitted Investment" means any Investment by the Company or
a Restricted Subsidiary in:
-21-
(a) the Company or any Restricted Subsidiary (including any
non-wholly owned Restricted Subsidiary) or any Person that will, upon
the making of such Investment, become a Restricted Subsidiary, provided
that the primary business of such Restricted Subsidiary is a Permitted
Business;
(b) any Person if as a result of such Investment such Person
is merged or consolidated with or into, or transfers or conveys all or
substantially all its Property to, the Company or a Restricted
Subsidiary;
(c) cash and Temporary Cash Investments;
(d) receivables owing to the Company or a Restricted
Subsidiary, if created or acquired in the ordinary course of business;
(e) payroll, travel, commission and similar advances to cover
matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(f) loans and advances to employees, officers or directors
made in the ordinary course of business consistent with past practices
of the Company or such Restricted Subsidiary, as the case may be,
provided that such loans and advances do not exceed $3.0 million at any
one time outstanding;
(g) loans or advances to customers or suppliers in the
ordinary course of business;
(h) stock, obligations or other securities received in
settlement or good faith compromises of debts created in the ordinary
course of business and owing to the Company or a Restricted Subsidiary
or in satisfaction of judgments;
(i) any Person to the extent such Investment represents the
non-cash portion of the consideration received in connection with an
Asset Sale consummated in compliance with Section 4.12 hereof;
(j) prepaid expenses, negotiable instruments held for
collection, lease, utility, workers' compensation, performance and
other similar deposits provided to third parties in the ordinary course
of business;
(k) any assets or Capital Stock of any Person made out of the
net cash proceeds of the substantially concurrent sale of Capital Stock
of the Company (other than Disqualified Stock);
-22-
(l) Interest Rate Agreements, Currency Exchange Protection
Agreements and Commodity Price Protection Agreements, in each case to
the extent such obligations Incurred thereunder may be Incurred
pursuant to clause (b) of Section 4.09 hereof;
(m) existence on the Issue Date and any extensions or
replacements thereof on terms no less favorable and in an amount no
greater than exist on the Issue Date;
(n) an Accounts Receivable Subsidiary that is reasonably
necessary or reasonably advisable to effect a Receivables Facility,
including, without limitation, the payment of Receivables Fees;
(o) any Person to the extent that the consideration for such
Investment consists of Capital Stock (other than Disqualified Stock) of
the Company; and
(p) other Investments made for Fair Market Value that do not
exceed $25.0 million in the aggregate outstanding at any one time and
any return on which shall not have been included in the calculation of
the amount of Restricted Payments under clause (a)(iii)(D)(1) of
Section 4.10 hereof.
"Permitted Refinancing Debt" means any Debt that Refinances
any other Debt, including any successive Refinancings, so long as
(a) such Debt is in an aggregate principal amount (or if
Incurred with original issue discount, an aggregate issue price) not in
excess of the sum of:
(1) the aggregate principal amount (or if Incurred
with original issue discount, the aggregate accreted value)
then outstanding of the Debt being Refinanced, and
(2) an amount necessary to pay any fees and expenses,
including premiums and defeasance costs, related to such
Refinancing;
(b) the Average Life of such Debt is equal to or greater than
the Average Life of the Debt being Refinanced;
(c) the Stated Maturity of such Debt is no earlier than the
Stated Maturity of the Debt being Refinanced; and
(d) the new Debt shall not be senior in right of payment to
the Debt that is being Refinanced;
provided, however, that Permitted Refinancing Debt shall not include:
-23-
(1) Debt of a Subsidiary that is not a Subsidiary Guarantor
that Refinances Debt of the Company or a Subsidiary Guarantor; or
(2) Debt of the Company or a Restricted Subsidiary that
Refinances Debt of an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including
any limited liability company), association, partnership, joint venture, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Predecessor Note" of any particular Note means every previous
Note evidencing all or a portion of the same Debt as that evidenced by such
particular Note; and for the purposes of this definition, any Note authenticated
and delivered under Section 2.07 hereof in lieu of a lost, destroyed or stolen
Note shall be deemed to evidence the same Debt as the lost, destroyed or stolen
Note.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any voluntary
or involuntary liquidation or dissolution of such Person, over shares of any
other class of Capital Stock issued by such Person.
"Preferred Stock Dividends" means all dividends with respect
to Preferred Stock of Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Restricted Subsidiary. The amount of any such dividend
shall be equal to the quotient of such dividend divided by the difference
between one and the maximum statutory federal income rate (expressed as a
decimal number between 1 and 0) then applicable to the issuer of such Preferred
Stock.
"Private Placement Legend" means the legend set forth in
Section 2.06(d)(i) hereof to be placed on all Notes issued under this Indenture
except as otherwise permitted by the provisions of this Indenture.
"pro forma" means, with respect to any calculation made or
required to be made pursuant to the terms hereof, a calculation performed in
accordance with Article 11 of Regulation S-X promulgated under the Securities
Act.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock in, and other securities of,
any other Person. For purposes of any calculation required pursuant to this
Indenture, the value of any Property shall be its Fair Market Value.
"Purchase Money Debt" means Debt:
-24-
(a) consisting of the deferred purchase price of Property,
conditional sale obligations, obligations under any title retention
agreement, other purchase money obligations and obligations in respect
of industrial revenue bonds, in each case where the maturity of such
Debt does not exceed the anticipated useful life of the Property being
financed, and
(b) Incurred to finance the acquisition, construction or lease
by the Company or a Restricted Subsidiary of such Property, including
additions and improvements thereto;
provided, however, that such Debt is Incurred within 180 days after the
acquisition, construction or lease of such Property by the Company or such
Restricted Subsidiary.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Rating Agencies" mean Moody's and S&P.
"Receivables and Related Assets" means any accounts receivable
(whether now existing or arising thereafter) of the Company or any Restricted
Subsidiary, and any assets related thereto, including all collateral securing
such accounts receivable, all contracts and contract rights and all Guarantees
or other obligations in respect of such accounts receivable, proceeds of such
accounts receivable and other assets which are customarily transferred or in
respect of which security interests are customarily granted in connection with
receivables financing facilities or arrangements.
"Receivables Facility" means one or more receivables financing
facilities or arrangements, as amended or modified from time to time, pursuant
to which the Company or any Restricted Subsidiary sells (including a sale in
exchange for a promissory note or Capital Stock of an Accounts Receivable
Subsidiary) its accounts receivable to an Accounts Receivable Subsidiary.
"Receivables Fees" means distributions or payments made
directly or by means of discounts with respect to any participation interests
issued or sold in connection with, and other fees paid to a Person that is not
the Company or a Restricted Subsidiary in connection with, any Receivables
Facility.
"Refinance" means, in respect of any Debt, to refinance,
extend, renew, refund, repay, prepay, repurchase, redeem, defease or retire, or
to issue other Debt, in exchange or replacement for, such Debt. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Registered Exchange Offer" has the meaning set forth in the
Registration Rights Agreement.
-25-
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the date hereof, among the Company and the initial
purchasers named therein, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any Additional Notes, one or
more registration rights agreements between the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the date specified on the face of the Note.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Note" means the Global Note in the form
of Exhibit A hereto bearing the Global Note Legend and the Private Placement
Legend and deposited with and registered in the name of the Depositary or its
nominee that will be issued in a denomination equal to the outstanding principal
amount of the Notes initially sold in reliance on Rule 903.
"Repay" means, in respect of any Debt, to repay, prepay,
repurchase, redeem, legally defease or otherwise retire such Debt. "Repayment"
and "Repaid" shall have correlative meanings. For purposes of Section 4.12 and
the definition of "Consolidated Interest Coverage Ratio," Debt shall be
considered to have been Repaid only to the extent the related loan commitment,
if any, shall have been permanently reduced in connection therewith.
"Responsible Officer," shall mean, when used with respect to
the Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Restricted Definitive Note" means one or more Definitive
Notes bearing the Private Placement Legend.
"Restricted Global Notes" means the 144A Global Note and the
Regulation S Global Note.
"Restricted Payment" means:
(a) any dividend or distribution (whether made in cash,
securities or other Property) declared or paid on or with respect to
any shares of Capital Stock of the
-26-
Company or any Restricted Subsidiary (including any payment in
connection with any merger or consolidation with or into the Company or
any Restricted Subsidiary), except for any dividend or distribution
that is made solely to the Company or a Restricted Subsidiary (and, if
such Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,
to the other shareholders of such Restricted Subsidiary on a pro rata
basis or on a basis that results in the receipt by the Company or a
Restricted Subsidiary of dividends or distributions of greater value
than it would receive on a pro rata basis) or any dividend or
distribution payable solely in shares of Capital Stock (other than
Disqualified Stock) of the Company, and except for pro rata dividends
or other distributions made by a Subsidiary that is not a Wholly Owned
Subsidiary to minority stockholders;
(b) the purchase, repurchase, redemption, acquisition or
retirement for value of any Capital Stock of the Company or any
Restricted Subsidiary (other than from the Company or a Restricted
Subsidiary) or any securities exchangeable for or convertible into any
such Capital Stock, including the exercise of any option to exchange
any Capital Stock (other than for or into Capital Stock of the Company
that is not Disqualified Stock);
(c) the purchase, repurchase, redemption, acquisition or
retirement for value, prior to the date for any scheduled maturity,
sinking fund or amortization or other installment payment, of any
Subordinated Obligation (other than the purchase, repurchase or other
acquisition of any Subordinated Obligation purchased in anticipation of
satisfying a scheduled maturity, sinking fund or amortization or other
installment obligation, in each case due within one year of the date of
acquisition); or
(d) any Investment (other than Permitted Investments) in any
Person.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
"Rule 904" means Rule 904 promulgated under the Securities
Act.
"S&P" means Standard & Poor's Ratings Services or any
successor to the rating agency business thereof.
-27-
"Sale and Leaseback Transaction" means any direct or indirect
arrangement relating to Property now owned or hereafter acquired whereby the
Company or a Restricted Subsidiary transfers such Property to another Person and
the Company or a Restricted Subsidiary leases it from such Person other than
leases between the Company and a Wholly Owned Restricted Subsidiary or between
Wholly Owned Restricted Subsidiaries.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means the Debt represented by the
Three-Year Credit Agreement, to be entered into on or before the Issue Date,
among the Company, the lenders party thereto and Citicorp North America, Inc.,
as administrative agent, including any notes, guarantees, collateral and
security documents (including mortgages, pledge agreements and other security
arrangements), instruments and agreements executed in connection therewith, and
in each case as amended or refinanced from time to time, including any agreement
or agreements extending the maturity of, or refinancing (including increasing
the amount of borrowings or other Debt outstanding or available to be borrowed
thereunder), all or any portion of the Debt under such agreement, and any
successor or replacement agreement or agreements with the same or any other
agent, creditor, lender or group of creditors or lenders.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission.
"Standard Securitization Undertakings" means (a) for the
purposes of the Receivables Facility entered into on or before the Issue Date,
the representations, warranties, covenants and indemnities contained in the
documentation related thereto, and (b) for all other purposes, representations,
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary that are reasonably customary in receivables financing
facilities, including, without limitation, servicing of the obligations
thereunder.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Debt of the Company
(whether outstanding on the Issue Date or thereafter Incurred) that is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement to that effect.
-28-
"Subsidiary" means, in respect of any Person, any corporation,
company (including any limited liability company), association, partnership,
joint venture or other business entity of which a majority of the total voting
power of the Voting Stock or other interests (including partnership interests)
is at the time owned or controlled, directly or indirectly, by:
(a) such Person;
(b) such Person and one or more Subsidiaries of such Person;
or
(c) one or more Subsidiaries of such Person;
provided, however, that notwithstanding the foregoing, such entity is not a
Subsidiary of such Person if (i) such entity's financial results are not
consolidated with the financial results of such Person in accordance with GAAP
and (ii) any other Person (or such other Person and one or more of such other
Person's Subsidiaries, or one or more of such other Person's Subsidiaries) has
to power to control by contract or otherwise the board of directors or
equivalent governing body of, or otherwise controls, such entity.
"SunBelt Guarantee" means the Guarantee by the Company of
obligations under the Guaranteed Secured Senior Notes due 2017, Series G of
SunBelt Chlor Alkali Partnership pursuant to a Guarantee dated December 22, 1997
by the Company, as in effect on the Issue Date, terminating on December 22, 2017
or satisfaction of such obligations, whichever is earlier.
"Surviving Person" means the surviving Person in a merger or
formed by a consolidation and, for purposes of Section 5.01 hereof, a Person to
whom all or substantially all of the Property of the Company or a Subsidiary
Guarantor is sold, transferred, assigned, leased, conveyed or otherwise
disposed.
"Tangible Assets" of any Person means, at any date, the gross
value as shown by the accounting books and records of such Person of all its
Property, both real and personal, less the net book value of (i) all its
licenses, patents, patent applications, copyrights, trademarks, trade names,
goodwill, non-compete agreements or organizational expenses and other like
intangibles, (ii) unamortized Debt discount and expense, (iii) all reserves for
depreciation, obsolescence, depletion and amortization of its properties and
(iv) all other Property reserves which in accordance with GAAP should be
provided in connection with the business conducted by such Person.
"Temporary Cash Investments" means:
(a) Investments in U.S. Government Obligations, in each case
maturing within 365 days of the date of acquisition thereof;
-29-
(b) Investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 90 days of the date
of acquisition thereof issued or guaranteed by a bank or trust company
organized under the laws of the United States of America or any state
or the District of Columbia or any U.S. branch of a foreign bank
having, at the date of acquisition thereof, combined capital, surplus
and undivided profits aggregating in excess of $250.0 million and whose
long-term debt is rated "A-3" or "A-" or higher according to Moody's or
S&P (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436
under the Securities Act));
(c) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in clause (a)
entered into with:
(1) a bank meeting the qualifications described in
clause (b) above, or
(2) any primary government securities dealer
reporting to the Market Reports Division of the Federal
Reserve Bank of New York;
(d) Investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a corporation (other than
an Affiliate of the Company) organized and in existence under the laws
of any state or jurisdiction of the United States of America with a
rating at the time as of which any Investment therein is made of "P-1"
(or higher) according to ▇▇▇▇▇'▇ or "A-1" (or higher) according to S&P
(or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436
under the Securities Act));
(e) direct obligations (or certificates representing an
ownership interest in such obligations) of any state of the United
States of America or any foreign country recognized by the United
States or any political subdivision of any such state, province or
foreign country, as the case may be (including any agency or
instrumentality thereof), for the payment of which the full faith and
credit of such state is pledged and which are not callable or
redeemable at the issuer's option, provided that:
(1) the long-term debt of such state, province or
country is rated "A-3" or "A-" or higher according to ▇▇▇▇▇'▇
or S&P (or such similar equivalent rating by at least one
"nationally recognized statistical rating organization" (as
defined in Rule 436 under the Securities Act)), and
(2) such obligations mature within 180 days of the
date of acquisition thereof;
-30-
(f) with respect to the Company or a Foreign Subsidiary,
obligations of foreign obligors (including foreign sovereign nations)
correlative in type, maturity and rating to those set forth in clauses
(a) through (e) above; and
(g) Investments in money market funds which invest
substantially all of their assets in securities of the types described
in clauses (a) through (f) above.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Unrestricted Definitive Notes" means one or more Definitive
Notes that do not and are not required to bear the Private Placement Legend.
"Unrestricted Global Notes" means one or more Global Notes, in
the form of Exhibit A attached hereto, that do not and are not required to bear
the Private Placement Legend and are deposited with and registered in the name
of the Depositary or its nominee.
"Unrestricted Subsidiary" means:
(a) any Subsidiary of the Company that is designated after the
Issue Date as an Unrestricted Subsidiary as permitted or required
pursuant to Section 4.15 hereof and is not thereafter redesignated as a
Restricted Subsidiary as permitted pursuant thereto;
(b) any Subsidiary of an Unrestricted Subsidiary; and
(c) any Accounts Receivable Subsidiary.
So long as the Company and its Subsidiaries are not subject to
the Specified Covenants, all Unrestricted Subsidiaries, other than any Accounts
Receivable Subsidiary, shall be Restricted Subsidiaries.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of any Person means all classes of Capital
Stock or other interests (including partnership interests) of such Person then
outstanding and normally entitled
-31-
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.
"Wholly Owned Restricted Subsidiary" means, at any time, a
Restricted Subsidiary all the Voting Stock of which (except directors'
qualifying shares and shares required by applicable law to be held by a Person
other than the Company or a Restricted Subsidiary) is at such time owned,
directly or indirectly, by the Company and its other Wholly Owned Subsidiaries.
Section 1.02. Other Definitions.
Defined
Term in Section
---- ----------
"Acceleration Notice"..................................... 6.02
"Affiliate Transaction"................................... 4.14
"Allocable Excess Proceeds"............................... 4.12
"Asset Sale Offer"........................................ 4.12
"Authentication Order".................................... 2.02
"Change of Control Offer"................................. 4.18
"Change of Control Payment................................ 4.18
"Change of Control Payment Date".......................... 4.18
"Change of Control Purchase Price"........................ 4.18
"Covenant Defeasance"..................................... 8.03
"Covenant Suspension Event"............................... 4.19
"DTC"..................................................... 2.03
"Event of Default"........................................ 6.01
"Excess Proceeds"......................................... 4.12
"Legal Defeasance"........................................ 8.02
"losses".................................................. 7.07
"Offer Amount"............................................ 3.09
"Offer Period"............................................ 3.09
"Paying Agent"............................................ 2.03
"Permitted Liens"......................................... 4.11
"Purchase Date"........................................... 3.09
"Registrar"............................................... 2.03
"Required Filing Dates"................................... 4.03
"Security Register"....................................... 4.18
"Specified Covenants"..................................... 4.19
-32-
Section 1.03. Incorporation by Reference of Trust Indenture Act.
(a) Whenever this Indenture refers to a provision of the TIA,
the portion of such provision required to be incorporated herein for
this Indenture to be qualified under the TIA is incorporated by
reference in and made a part of this Indenture.
(b) The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor on the indenture securities" means the Company and
any successor obligor upon the Notes.
(c) All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by Commission rule under the TIA
and not otherwise defined herein have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires,
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined herein
has the meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in
the plural include the singular;
(v) all references in this instrument to designated
"Articles," "Sections" and other subdivisions are to the
designated Articles, Sections and subdivisions of this
instrument as originally executed;
-33-
(vi) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other
subdivision;
(vii) "including" means "including without
limitation";
(viii) provisions apply to successive events and
transactions; and
(ix) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by the
Commission from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating.
(A) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, which is
hereby incorporated in and expressly made part of this Indenture. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage in addition to those set forth on Exhibit A. Each Note shall be dated the
date of its authentication. The Notes shall be in denominations of $1,000 and
integral multiples thereof. The terms and provisions contained in the Notes
shall constitute, and are hereby expressly made, a part of this Indenture and
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(B) FORM OF NOTES. Notes shall be issued initially in global
form and shall be substantially in the form of Exhibit A attached hereto
(including the Global Note Legend thereon and the "Schedule of Exchanges of
Interests in the Global Note" attached thereto). Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend thereon and without the "Schedule of Exchanges of Interests
in the Global Note" attached thereto). Each Global Note shall represent such of
the outstanding Notes as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Notes from time
to time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions and transfers of interests
therein. Any endorsement of a Global Note to reflect the amount of any increase
or decrease in the aggregate principal amount of outstanding Notes represented
-34-
thereby shall be made by the Trustee, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
(C) BOOK-ENTRY PROVISIONS. This Section 2.01(c) shall only
apply to Global Notes deposited with the Trustee, as custodian for the
Depositary. Participants and Indirect Participants shall have no rights under
this Indenture with respect to any Global Note held on their behalf by the
Depositary or by the Trustee as the custodian for the Depositary or under such
Global Note, and the Depositary shall be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Participants or Indirect Participants, the Applicable Procedures or the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Note.
(D) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The
provisions of the "Operating Procedures of the Euroclear System" and "Terms and
Conditions Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in Global Notes that are held by Participants
through Euroclear or Clearstream.
Section 2.02. Execution and Authentication.
(a) One Officer shall sign the Notes for the Company by manual
or facsimile signature.
(b) If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
(c) A Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence that
the Note has been authenticated under this Indenture.
(d) The Trustee shall, upon a written order of the Company
signed by an Officer (an "Authentication Order"), authenticate Notes for
original issue.
(e) The Trustee may appoint an authenticating agent acceptable
to the Company to authenticate Notes. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with Holders or an Affiliate of the Company or any of
their respective Subsidiaries.
-35-
(f) The Company may issue Additional Notes from time to time
after the offering of the Initial Notes. The issuance of Additional Notes will
be subject to the provisions of Section 4.09 hereof. The Initial Notes and any
Additional Notes subsequently issued under this Indenture shall be treated as a
single class for all purposes under this Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase.
Section 2.03. Registrar and Paying Agent.
(a) The Company shall maintain an office or agency where Notes
may be presented for registration of transfer or for exchange ("Registrar") and
an office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
(b) The Company initially appoints The Depository Trust
Company ("DTC") to act as Depositary with respect to the Global Notes.
(c) The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes, and the Trustee hereby initially agrees so to act.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent shall, and the Company shall require each
Paying Agent other than the Trustee to agree in writing that the Paying Agent
shall hold in trust for the benefit of the Holders or the Trustee all money held
by the Paying Agent for the payment of principal, premium, if any, or interest
and Additional Interest, if any, on the Notes, and shall notify the Trustee of
any default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by the
Paying Agent to the Trustee. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company or a Subsidiary) shall have no
further liability for the money. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for the Notes.
-36-
Section 2.05. 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 all Holders and shall otherwise comply with TIA ss.312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
five Business Days before each Interest Payment Date, and at such other times as
the Trustee may request in writing, a list in such form and as of such date or
such shorter time as the Trustee may allow, as the Trustee may reasonably
require of the names and addresses of the Holders and the Company shall
otherwise comply with TIA ss.312(a).
Section 2.06. Transfer and Exchange.
(A) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (1) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary, (2) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee; or (3) an Event of Default entitling the Holders to accelerate shall
have occurred and be continuing and the Registrar has received a written request
from the Depositary to issue Definitive Notes. Upon the occurrence of any of the
preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in
denominations of $1,000 or integral multiples thereof and in such names as the
Depositary shall instruct the Trustee in writing. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu
of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a); however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b) or (c) hereof.
(B) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE
GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either
-37-
clause (i) or (ii) below, as applicable, as well as one or more of the other
following clauses, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend.
Beneficial interests in any Unrestricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Notes. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i) above,
the transferor of such beneficial interest must deliver to the
Registrar (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing
information regarding the Participant account to be credited with such
increase. Upon consummation of a Registered Exchange Offer by the
Company in accordance with Section 2.06(c) hereof, the requirements of
this Section 2.06(b)(ii) shall be deemed to have been satisfied upon
receipt by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the Holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(c) hereof.
(iii) Transfer of Beneficial Interests in a Restricted Global
Note to Another Restricted Global Note. A beneficial interest in any
Restricted Global Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another
Restricted Global Note if the transfer complies with the requirements
of Section 2.06(b)(ii) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Global Note, then
the transferor must deliver a cer-
-38-
tificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any Holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Registered Exchange Offer in accordance with the
Registration Rights Agreement and the Holder of the beneficial
interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a broker-dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof; or
(2) if the Holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this clause (D), if the
Registrar and the Company so request or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the re-
-39-
strictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to clause (B) or (D)
above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred pursuant to clause (B) or (D) above.
(v) Transfer or Exchange of Beneficial Interests in
Unrestricted Global Notes for Beneficial Interests in Restricted Global
Notes Prohibited. Beneficial interests in an Unrestricted Global Note
cannot be exchanged for, or transferred to Persons who take delivery
thereof in the form of, a beneficial interest in a Restricted Global
Note.
(C) REGISTERED EXCHANGE OFFER. Upon the occurrence of the
Registered Exchange Offer in accordance with the Registration Rights Agreement,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes
tendered for acceptance by Persons that certify in the applicable Letters of
Transmittal that (x) they are not broker-dealers, (y) they are not participating
in a distribution of the Exchange Notes and (z) they are not affiliates (as
defined in Rule 144) of the Company, and accepted for exchange in the Registered
Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly.
(D) LEGENDS. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by clause (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
(OR THEREIN) MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR
-40-
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS. THE HOLDER HEREOF, BY ITS
ACCEPTANCE OF THIS SECURITY, AGREES FOR THE BENEFIT OF THE
ISSUER THAT THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE THERETO UNDER RULE 144(k) UNDER THE
SECURITIES ACT WHICH IS APPLICABLE TO THIS SECURITY (THE
"RESALE RESTRICTION TERMINATION DATE") OTHER THAN (1) TO THE
ISSUER OR ITS SUBSIDIARIES, (2) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE
MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, IN EACH CASE TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER
ON THE REVERSE OF THIS SECURITY IF THIS SECURITY IS NOT IN
BOOK-ENTRY FORM), (3) TO A NON-"U.S. PERSON" IN AN "OFFSHORE
TRANSACTION" (AS SUCH TERMS ARE DEFINED IN REGULATION S UNDER
THE SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY IF THIS SECURITY IS NOT IN BOOK-ENTRY FORM), (4)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING THE
EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, IF
AVAILABLE, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, SUBJECT TO EACH OF THE
FOREGOING CASES TO ANY REQUIREMENT OF LAW THAT THE DISPOSITION
OF ITS PROPERTY OR THE PROPERTY OF SUCH INVESTOR ACCOUNT OR
ACCOUNTS BE AT ALL TIMES WITHIN ITS OR THEIR CONTROL, AND
SUBJECT TO THE RIGHT OF THE ISSUER OR THE TRUSTEE FOR THE
SECURITIES PRIOR TO ANY SUCH SALE, PLEDGE OR OTHER TRANSFER
PURSUANT TO CLAUSE (4) ABOVE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR
-41-
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON REQUEST OF THE HOLDER ON OR AFTER THE
RESALE RESTRICTION TERMINATION DATE."
(B) Notwithstanding the foregoing, any Global Note
issued pursuant to clause (b)(iv) or (c) to this Section 2.06
(and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE
IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(E) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such
time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been
redeemed, repurchased or cancelled in whole and not in part,
-42-
each such Global Note shall be returned to or retained and cancelled by
the Trustee in accordance with Section 2.11 hereof. At any time prior
to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for
Definitive Notes, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be
made on such Global Note by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased
accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect
such increase.
(f) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and, upon receipt of an Authentication Order in
accordance with Section 2.02, the Trustee shall authenticate Global
Notes and Definitive Notes upon the Company's order or at the
Registrar's request.
(ii) No service charge shall be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company 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
exchange or transfer pursuant to Sections 2.10, 3.06, 4.12, 4.18 and
9.05 hereof).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such registration
of transfer or exchange.
(iv) Neither the Registrar nor the Company shall be required
(A) to issue, to register the transfer of or to exchange any Notes
during a period beginning at the opening of business 15 days before the
day of any selection of Notes for redemption under Section 3.02 hereof
and ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Note so selected for
redemption in whole or in part, except the unredeemed portion of any
Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest
Payment Date.
(v) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose
-43-
name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06
to effect a registration of transfer or exchange may be submitted by
facsimile.
(viii) The Trustee is hereby authorized to enter into a letter
of representations with the Depositary in the form provided by the
Company and to act in accordance with such letter.
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or if a
Holder of a Note claims that any Note has been destroyed, lost or stolen and
each of the Trustee and the Company receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon receipt of an Authentication Order, shall authenticate a replacement Note
if the Trustee's and the Company's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note had
become or is about to become due and payable, the Company, in its discretion,
may, instead of issuing a new Note, pay such Note, upon satisfaction of the
conditions set forth in the preceding paragraph.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies of any Holder with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Notes.
-44-
Section 2.08. Outstanding Notes.
(a) The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note; however, Notes held by the
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(b) hereof.
(b) If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser in whose hands such Note
is a legal, valid and binding obligation of the Company.
(c) If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases
to accrue.
(d) If the Paying Agent holds, on a redemption date or
maturity date, money sufficient to pay Notes payable on that date, then on and
after that date such Notes shall be deemed to be no longer outstanding and shall
cease to accrue interest.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, amendment, supplement, waiver
or consent, Notes owned by the Company, or by any Affiliate of the Company,
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Notes that the Trustee
knows are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
Until certificates representing Notes are ready for delivery,
the Company may prepare and the Trustee, upon receipt of an Authentication
Order, shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate Definitive Notes in exchange for temporary
Notes. Until such exchange, holders of temporary Notes shall be entitled to the
same rights, benefits and privileges as definitive Notes.
-45-
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes 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,
upon direction by the Company and no one else shall cancel all Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall dispose of such cancelled Notes in accordance with its customary
procedures (subject to the record retention requirements of the Exchange Act).
The Company may not issue new Notes to replace Notes that it has paid or
redeemed or that have been delivered to the Trustee for cancellation.
Section 2.12. Payment of Interest; Defaulted Interest.
Interest on any Note which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Note (or one or more Predecessor Notes) is being registered
at the close of business on the Regular Record Date for such interest payment.
If the Company defaults in a payment of interest or Additional
Interest, if any, on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
Section 2.13. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use CUSIP numbers in
notices of redemption as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP numbers.
-46-
Section 2.14. Additional Interest.
If Additional Interest is payable by the Company pursuant to
the Registration Rights Agreement and paragraph 1 of the Notes, the Company
shall deliver to the Trustee a certificate to that effect stating (i) the amount
of such Additional Interest that is payable and (ii) the date on which such
interest is payable. Unless and until a Responsible Officer of the Trustee
receives such a certificate or instruction or direction from the Holders in
accordance with the terms of this Indenture, the Trustee may assume without
inquiry that no Additional Interest is payable. The foregoing shall not
prejudice the rights of the Holders with respect to their entitlement to
Additional Interest as otherwise set forth in this Indenture or the Notes and
pursuing any action against the Company directly or otherwise directing the
Trustee to take any such action in accordance with the terms of this Indenture
and the Notes. If the Company has paid Additional Interest directly to the
persons entitled to it, the Company shall deliver to the Trustee a certificate
setting forth the particulars of such payment.
Section 2.15. Issuance of Additional Notes.
The Company shall be entitled, subject to its compliance with
Section 4.09 hereof, to issue Additional Notes under this Indenture which shall
have identical terms as the Initial Notes issued on the date hereof, other than
with respect to the date of issuance and issue price and amount of interest
payable on the first payment date applicable thereto (and, if such Additional
Notes shall be issued in the form of Exchange Notes, other than with respect to
transfer restrictions). The Initial Notes issued on the date hereof, any
Additional Notes and all Exchange Notes issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture, including
without limitation, waivers, amendments, redemptions and offers to purchase.
With respect to any Additional Notes, the Company shall set
forth in a Board Resolution of its Board of Directors and an Officers'
Certificate, a copy of each of which shall be delivered to the Trustee, the
following information:
(a) the aggregate principal amount of such Additional Notes to
be authenticated and delivered pursuant to this Indenture;
(b) the issue price, the issue date and the CUSIP number of
such Additional Notes; and
(c) whether such Additional Notes shall be subject to
restrictions on transfer.
-47-
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof and paragraph 5 of the Notes, it
shall furnish to the Trustee, at least 45 days before a redemption date unless a
shorter notice shall be satisfactory to the Trustee, an Officers' Certificate
setting forth (i) the clause of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price. Any such notice may be cancelled at any
time prior to notice of such redemption being mailed to any Holder and shall, if
so canceled, be void and of no effect.
Section 3.02. Selection of Notes to Be Redeemed.
If fewer than all of the Notes are to be redeemed at any time,
the Trustee, in its sole discretion, shall select the Notes to be redeemed on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of partial redemption, the
particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or integral multiples
thereof. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address.
The notice shall identify the Notes to be redeemed (including
the CUSIP number) and shall state:
(a) the redemption date;
(b) the redemption price or, if the redemption is made
pursuant to Section 3.07(b), a calculation of the redemption price;
-48-
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest and Additional Interest, if any, on Notes
called for redemption cease to accrue on and after the redemption date;
(g) the paragraph of the Notes or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days, or such shorter
period allowed by the Trustee, prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in this Section 3.03.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional. Such notice, if mailed in the manner provided by Section 3.03,
shall be conclusively presumed to have been given whether or not the Holder
receives such notice.
Section 3.05. Deposit of Redemption Price.
On or before 11:00 a.m. Eastern time on any redemption date,
the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of, and accrued interest and Additional
Interest, if any, on, all Notes (or portions of Notes) to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest and
Additional Interest, if any, on, all Notes to be redeemed.
-49-
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest and Additional Interest,
if any, shall cease to accrue on the Notes or the portions of Notes called for
redemption, whether or not such Notes are presented for payment. If a Note is
redeemed on or after a Regular Record Date but on or prior to the related
Interest Payment Date, then any accrued and unpaid interest shall be paid to the
Person in whose name such Note was registered at the close of business on such
Regular Record Date. If any Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest and Additional Interest, if any, shall be paid
on the unpaid principal from the redemption date until such principal is paid,
and to the extent lawful on any interest not paid on such unpaid principal, in
each case at the rate provided in the Notes and in Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in paragraph (b), the Notes will not
be redeemable at the option of the Company prior to May 15, 2007. Beginning on
that date, the Notes will be redeemable at the option of the Company, in whole
or in part, at any time or from time to time, at the redemption prices
(expressed as a percentage of principal amount) set forth below, plus accrued
and unpaid interest thereon, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant Interest Payment Date), if redeemed during the twelve-month
period beginning on May 15 of the years indicated below:
REDEMPTION
YEAR PRICE
---- -----
2007................................................................... 105.313%
2008................................................................... 102.656%
2009 and thereafter.................................................... 100.000%
(b) In addition, at any time on or prior to May 15, 2006, the
Company may at its option on any one or more occasions redeem Notes (including
Additional Notes, if any) in an aggregate principal amount not to exceed 35% of
the aggregate principal amount of Notes (including Additional Notes, if any)
issued under this Indenture at a redemption price of 110.625% of the principal
amount, plus accrued and unpaid interest and Additional Interest, if
-50-
any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes
(including Additional Notes, if any) issued under this Indenture
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries); and
(2) the redemption occurs within 90 days of the date of the
closing of such Equity Offering.
Section 3.08. Mandatory Redemption.
The Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
Section 3.09. Offer To Purchase by Application of Excess Proceeds.
(a) In the event that, pursuant to Section 4.12 hereof, the
Company shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
(b) The Asset Sale Offer shall remain open for a period of at
least 20 Business Days following its commencement, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.12 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after a Regular Record Date and
on or before the related Interest Payment Date, any accrued and unpaid interest
and Additional Interest, if any, shall be paid to the Person in whose name a
Note is registered at the close of business on such Regular Record Date, and no
additional interest shall be payable to Holders who tender Notes pursuant to the
Asset Sale Offer.
Upon the commencement of the Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:
-51-
(i) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.12 hereof and the length of time the Asset
Sale Offer shall remain open;
(ii) the Offer Amount, the purchase price and the Purchase
Date;
(iii) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(iv) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest and Additional Interest, if any, after the
Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(vi) that Holders electing to have a Note purchased pursuant
to any Asset Sale Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, or transfer by book-entry transfer, to the
Company, the Depositary, or the Paying Agent at the address specified
in the notice prior to the expiration of the offer period;
(vii) that Holders shall be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(viii) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall
select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only
Notes in denominations of $1,000 or integral multiples thereof shall be
purchased); and
(ix) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officers' Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
ac-
-52-
cordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five Business Days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered by
such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from the
Company shall authenticate and mail or deliver such new Note to such Holder, in
a principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce the results of the Asset
Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Section 3.01 through Section 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest and Additional Interest, if any, on, the Notes on
the dates and in the manner provided in this Indenture and the Notes. Principal,
premium, if any, and interest and Additional Interest, if any, shall be
considered paid on the date due if the Paying Agent, if other than the Company
or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and interest and
Additional Interest, if any, then due. The Company shall pay Additional
Interest, if any, in the same manner, on the dates and in the amounts set forth
in the Registration Rights Agreement.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Additional Interest, if any, from time to time on
demand at the same rate to the extent lawful.
Interest shall be computed on the basis of a 360-day year of
twelve 30-day months.
-53-
Section 4.02. Maintenance of Office or Agency.
(a) The Company shall maintain an office or agency (which may
be an office or drop facility of the Trustee or an affiliate of the Trustee,
Registrar or co-registrar) where Notes may be presented or surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company 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 Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
(c) The Company hereby designates the Corporate Trust Office
of the Trustee as one such office, drop facility or agency of the Company in
accordance with Section 2.03.
Section 4.03. Reports.
(a) So long as the Notes are outstanding, whether or not the
Company is then subject to Section 13(a) or 15(d) of the Exchange Act, the
Company shall electronically file with the Commission, the annual reports,
quarterly reports and other periodic reports that the Company would be required
to file with the Commission pursuant to Section 13(a) or 15(d) if the Company
were so subject, and such documents shall be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by which the Company
would be required so to file such documents if the Company were so subject,
unless, in any case, if such filings are not then permitted by the Commission.
(b) If such filings with the Commission are not then permitted
by the Commission, or such filings are not generally available on the Internet
free of charge, the Company shall, within 15 days of each Required Filing Date,
transmit by mail to Holders of the Notes, as their names and addresses appear in
the Security Register, without cost to such Holders, and file with the Trustee
copies of the annual reports, quarterly reports and other periodic reports that
the Company would be required to file with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act if the Company were subject to such Section
13(a) or 15(d), and promptly upon written request, supply copies of such
documents to any prospective holder or beneficial owner at the Company's cost.
Delivery of such reports, information
-54-
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
(c) So long as any Notes remain outstanding and constitute
"restricted securities" under Rule 144, 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.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company and its Subsidiaries
have kept, observed, performed and fulfilled their obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge, each of the Company and
its Subsidiaries have, to the extent applicable, kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions of this Indenture (or, if a Default or Event of Default shall have
occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Company is taking or proposes to take
with respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest or Additional Interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) The Company shall comply with TIA sec.314(a)(2).
(c) The Company shall deliver to the Trustee, within 30 days
after the occurrence thereof, written notice in the form of an Officers'
Certificate of any event that with the giving of notice and the lapse of time
would become an Event of Default, its status and what action the Company is
taking or proposes to take with respect thereto.
Section 4.05. Taxes.
The Company shall pay or discharge or cause to be paid or
discharged, and shall cause each of its Restricted Subsidiaries to pay or
discharge or cause to be paid or discharged, prior to delinquency, all material
taxes, assessments, and governmental levies; provided that neither the Company
nor any such Restricted Subsidiary shall be required to pay or
-55-
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings or where the failure to effect such
payment is not adverse in any material respect to the Holders.
Section 4.06. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect (i)
its corporate existence, and the corporate, partnership or other existence of
each of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of the Company or any of its Restricted Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.
Section 4.08. [Intentionally omitted]
Section 4.09. Limitation on Debt.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Debt (including Acquired Debt),
except that the Company or a Subsidiary Guarantor may Incur Debt (including
Acquired Debt) if after giving effect to the Incurrence of such Debt and the
application of the proceeds thereof, (A) the Consolidated Interest Coverage
Ratio would be greater than 2.00 to 1.00 and (B) no Default or Event of Default
would occur as a consequence of such Incurrence or be continuing following such
Incurrence.
-56-
(b) The restrictions in clause (a) of this Section 4.09 shall
not apply to:
(i) Debt of the Company evidenced by the Notes and the
Exchange Notes issued in exchange for the Notes;
(ii) Debt of the Company under the Senior Credit Facility;
provided that, after giving effect to any such Incurrence, the
aggregate principal amount of all Debt Incurred pursuant to this clause
(ii) and then outstanding shall not exceed the greater of (A) $50.0
million, which amount shall be permanently reduced by the amount of Net
Available Cash used to Repay Debt under the Senior Credit Facility, and
not subsequently reinvested in Additional Assets or used to purchase
Notes or Repay other Debt, pursuant to Section 4.12 hereof, and (B) the
sum of (1) 50% of the book value of the inventory of the Company and
its Restricted Subsidiaries and (2) 85% of the accounts receivable of
the Company and its Restricted Subsidiaries, in each case determined on
a consolidated basis as of the most recently ended fiscal quarter of
the Company for which financial statements of the Company are
available;
(iii) Debt of the Company or a Restricted Subsidiary in
respect of Capital Lease Obligations and Purchase Money Debt, provided
that:
(A) the aggregate principal amount of such Debt does
not exceed the Fair Market Value (on the date of the
Incurrence thereof) of the Property acquired, constructed or
leased, and
(B) the aggregate principal amount of all Debt
Incurred and then outstanding pursuant to this clause (iii)
(together with all Permitted Refinancing Debt Incurred and
then outstanding in respect of Debt previously Incurred
pursuant to this clause (iii)) does not exceed $25.0 million;
(iv) Debt of the Company owing to and held by any Restricted
Subsidiary and Debt of a Restricted Subsidiary owing to and held by the
Company or any Restricted Subsidiary; provided, however, that any
subsequent issue or transfer of Capital Stock or other event that
results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of any such Debt (except to the
Company or a Restricted Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Debt by the issuer thereof;
(v) Debt under Interest Rate Agreements entered into by the
Company or a Restricted Subsidiary for the purpose of limiting interest
rate risk in the ordinary course of the financial management of the
Company or such Restricted Subsidiary and not for speculative purposes,
provided that the obligations under such agreements are directly
related to payment obligations on Debt otherwise permitted by this
Section 4.09;
-57-
(vi) Debt under Currency Exchange Protection Agreements
entered into by the Company or a Restricted Subsidiary for the purpose
of limiting currency exchange rate risks directly related to
transactions entered into by the Company or such Restricted Subsidiary
in the ordinary course of business and not for speculative purposes;
(vii) Debt under Commodity Price Protection Agreements entered
into by the Company or a Restricted Subsidiary in the ordinary course
of the financial management of the Company or such Restricted
Subsidiary and not for speculative purposes;
(viii) Debt in connection with (A) one or more standby letters
of credit issued by the Company or a Restricted Subsidiary in the
ordinary course of business and (B) other letters of credit, surety,
performance, appeal or similar bonds, bankers' acceptance, completion
guarantees or similar instruments issued in the ordinary course of
business of the Company or a Restricted Subsidiary, including letters
of credit or similar instruments pursuant to self-insurance and
workers' compensation obligations;
(ix) Debt of the Company or any Restricted Subsidiary arising
from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient
funds in the ordinary course of business or in respect of netting
services, overdraft protection and otherwise in connection with deposit
accounts; provided that such Debt is extinguished within three Business
Days of Incurrence of such Debt;
(x) Debt of the Company or any Restricted Subsidiary arising
from agreements for indemnification and purchase price adjustment
obligations Incurred or assumed in connection with the acquisition or
disposition of any Property including Capital Stock; provided that the
maximum assumable liability in respect of all such obligations shall at
no time exceed the gross proceeds actually received by the Company and
any Restricted Subsidiary, including the Fair Market Value of noncash
proceeds;
(xi) Debt of the Company to the extent the net proceeds
thereof are promptly deposited to defease the Notes under Article 8
hereof;
(xii) Guarantees in the ordinary course of business of the
obligations of suppliers, customers, franchisees and licensees of the
Company or any of its Restricted Subsidiaries;
(xiii) the Incurrence of Debt by Foreign Subsidiaries (not
including Debt Incurred pursuant to clause (xv) below) in an aggregate
principal amount outstanding at any one time not to exceed $25.0
million;
-58-
(xiv) Debt consisting of take-or-pay obligations on customary
business terms contained in supply agreements entered into in the
ordinary course of business;
(xv) Debt of the Company or a Restricted Subsidiary
outstanding on the Issue Date not otherwise described in clauses (i)
through (xiv) above;
(xvi) Debt of the Company or any Subsidiary Guarantor (not
including Debt under clause (xv) above) in an aggregate principal
amount outstanding at any one time not to exceed $25.0 million;
(xvii) the Guarantee by the Company or any Subsidiary
Guarantor of Debt of the Company or any Subsidiary Guarantor, so long
as in each case such Debt was Incurred pursuant to another provision of
this covenant and is otherwise permitted under this Indenture;
(xviii) the Guarantee by any Restricted Subsidiary that is not
a Subsidiary Guarantor of Debt of the Company or any Restricted
Subsidiary, so long as in each case such Debt was Incurred pursuant to
another provision of this Section 4.09(b) and the requirements of
Section 4.17 hereof are met; and
(xix) Permitted Refinancing Debt Incurred in respect of Debt
Incurred pursuant to clauses (b)(i) and (xv) of this Section 4.09.
(c) Notwithstanding anything to the contrary contained in this
Section 4.09,
(i) the Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Debt that is subordinated by its terms to any
other Debt of the Company or any Restricted Subsidiary unless such Debt
is subordinated by its terms to the Notes to at least the same extent
and for so long as it is subordinated to such other Debt;
(ii) the Company shall not, and shall not permit any
Subsidiary Guarantor of the Notes to, Incur any Debt pursuant to this
Section 4.09 if the proceeds thereof are used, directly or indirectly,
to Refinance any Subordinated Obligations unless such Debt shall be
subordinated to the Notes or any Guarantee of the Notes by such
Subsidiary to at least the same extent as such Subordinated
Obligations;
(iii) the Company shall not permit any Restricted Subsidiary
that is not a guarantor of the Notes to Incur any Debt pursuant to this
covenant if the proceeds thereof are used, directly or indirectly, to
Refinance any Debt of the Company or any Subsidiary which is a
guarantor of the Notes; and
-59-
(iv) accrual (1) of interest, accretion or amortization of
original issue discount and the payment of interest or dividends in the
form of additional Debt and (2) the payment on Disqualified Stock in
the form of additional shares of Disqualified Stock will not be deemed
to be an Incurrence of Debt or an issuance of Disqualified Stock, as
applicable, for purposes of this Section 4.09.
(d) For purposes of determining compliance with this Section
4.09, in the event that an item of Debt meets the criteria of more than one of
the categories of Debt described in clauses (b)(i) through (xix) above or is
entitled to be Incurred pursuant to clause (a) of this Section 4.09, the Company
shall, in its sole discretion, classify (or later reclassify, in whole or in
part, in its sole discretion) such item of Debt in any manner that complies with
this Section 4.09, provided that all outstanding Debt under the Senior Credit
Facility at the Issue Date shall be deemed to have been Incurred pursuant to
clause (b)(ii) of this Section 4.09.
(e) Debt permitted by this Section 4.09 need not be permitted
solely by reference to one provision permitting such Debt but may be permitted
in part by one such provision and in part by one or more other provisions of
this Section 4.09 permitting such Debt.
(f) For purposes of determining any particular amount of Debt
under this Section 4.09, Guarantees, Liens, obligations with respect to letters
of credit and other obligations supporting Debt otherwise included in the
determination of a particular amount will not be included.
(g) If obligations in respect of letters of credit are
Incurred pursuant to the Senior Credit Facility and are being treated as
Incurred pursuant to clause (b)(ii) of this Section 4.09 and the letters of
credit relate to other Debt, then such other Debt shall not be deemed to have
been Incurred.
(h) For purposes of determining compliance with any
dollar-denominated restriction on the Incurrence of Debt, with respect to any
Debt which is denominated in a foreign currency, the dollar-equivalent principal
amount of such Debt Incurred pursuant thereto shall be calculated based on the
relevant currency exchange rate in effect on the date that such Debt was
Incurred, and any such foreign denominated Debt may be Refinanced or
subsequently Refinanced in an amount equal to the dollar-equivalent principal
amount of such Debt on the date of such Refinancing whether or not such amount
is greater or less than the dollar-equivalent principal amount of the Debt on
the date of initial Incurrence.
-60-
Section 4.10. Limitation on Restricted Payments.
(a) The Company shall not make, and shall not permit any
Restricted Subsidiary to make, directly or indirectly, any Restricted Payment if
at the time of, and after giving effect to, such proposed Restricted Payment,
(i) a Default or Event of Default shall have occurred and be
continuing,
(ii) the Company could not Incur at least $1.00 of additional
Debt pursuant to clause (a) of Section 4.09 hereof, or
(iii) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made since the Issue Date (the
amount of any Restricted Payment, if made other than in cash, to be
based upon Fair Market Value at the time of such Restricted Payment)
would exceed an amount equal to the sum (without duplication) of:
(A) 50% of the aggregate amount of Consolidated Net
Income accrued during the period (treated as one accounting
period) from the Issue Date to the end of the most recent
fiscal quarter for which financial statements are available
(or if the aggregate amount of Consolidated Net Income for
such period shall be a deficit, minus 100% of such deficit),
plus
(B) 100% of Capital Stock Sale Proceeds, plus
(C) the sum of:
(1) the aggregate net cash proceeds received
by the Company or any Restricted Subsidiary from the
issuance or sale after the Issue Date of convertible
or exchangeable Debt or Disqualified Stock that has
been converted into or exchanged for Capital Stock
(other than Disqualified Stock) of the Company, and
(2) the aggregate amount by which Debt of
the Company or any Restricted Subsidiary is reduced
on the Company's consolidated balance sheet on or
after the Issue Date upon the conversion or exchange
of any Debt issued or sold on or prior to the Issue
Date that is convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Company,
excluding, in the case of clause (1) or (2),
-61-
(x) any such Debt or Disqualified Stock issued or sold to the
Company or a Subsidiary of the Company or an employee stock
ownership plan or trust established by the Company or any such
Subsidiary for the benefit of their employees, and
(y) the aggregate amount of any cash or other Property
distributed by the Company or any Restricted Subsidiary upon
any such conversion or exchange,
plus
(D) an amount equal to the sum of:
(1) the net reduction in Investments in any Person
other than the Company or a Restricted Subsidiary resulting
from dividends, Repayments of loans or advances or other
transfers of Property or any other disposition or Repayment of
such Investments, in each case to the Company or any
Restricted Subsidiary from such Person, and
(2) the portion (proportionate to the Company's
equity interest in such Unrestricted Subsidiary) of the Fair
Market Value of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided, however, that the foregoing sum shall not exceed, in
the case of any Person, the amount of Investments previously
made (and treated as a Restricted Payment for purposes of
clause (a)(iii) above) by the Company or any Restricted
Subsidiary in such Person.
(b) Notwithstanding the foregoing limitation, the Company may:
(i) pay dividends or distributions on its Capital Stock within 60 days
of the declaration thereof if, on the declaration date, such dividends or
distributions could have been paid in compliance with this Indenture; provided,
however, that at the time of such payment of such dividend or distribution, no
other Default or Event of Default shall have occurred and be continuing (or
result therefrom); provided further, however, that such dividends or
distributions shall be included in the calculation of the amount of Restricted
Payments pursuant to clause (a)(iii) above;
(ii) purchase, repurchase, redeem, legally defease, acquire or retire
for value any (i) Capital Stock of the Company, any Restricted Subsidiary or any
joint venture, or (ii) Subordinated Obligations, in exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company
-62-
or an employee stock ownership plan or trust established by the Company or any
such Subsidiary for the benefit of their employees); provided, however, that
(A) such purchase, repurchase, redemption, legal defeasance,
acquisition or retirement shall be excluded in the calculation of the
amount of Restricted Payments pursuant to clause (a)(iii) above, and
(B) the Capital Stock Sale Proceeds from such exchange or sale
shall be excluded from (and shall not have been included in) the
calculation pursuant to clause (a)(iii)(B) above;
(iii) purchase, repurchase, redeem, legally defease, acquire or retire
for value any Subordinated Obligations in exchange for, or out of the proceeds
of the substantially concurrent sale of, Permitted Refinancing Debt; provided,
however, that such purchase, repurchase, redemption, legal defeasance,
acquisition or retirement shall be excluded in the calculation of the amount of
Restricted Payments pursuant to clause (a)(iii) above;
(iv) repurchase, redeem or retire for value any Capital Stock of the
Company or any of its Subsidiaries from current or former employees of the
Company or any of its Subsidiaries (or permitted transferees of such current or
former employees), pursuant to the terms of agreements (including employment
agreements, employee stock options or restricted stock agreements) or plans (or
amendments thereto) approved by the Board of Directors under which such
individuals purchase or sell, or are granted the option to purchase or sell,
shares of such Capital Stock; provided, however, that
(A) the aggregate amount of such repurchases shall not exceed
$5.0 million in any calendar year, and
(B) at the time of such repurchase, no Default or Event of
Default shall have occurred and be continuing (or result therefrom);
provided further, however, that such repurchases shall be included in the
calculation of the amount of Restricted Payments pursuant to clause (a)(iii)
above;
(v) purchase, repurchase, redeem, legally defease, acquire or retire
for value any Subordinated Obligations from Net Available Cash to the extent
permitted by Section 4.12 hereof; provided, however, that such purchase,
repurchase, redemption, legal defeasance, acquisition or retirement for value
shall be excluded in the calculation of the amount of Restricted Payments
pursuant to clause (a)(iii) above;
-63-
(vi) purchase or redeem any Subordinated Obligations or Disqualified
Stock, to the extent required by the terms of such Debt or such Disqualified
Stock, as applicable, following a Change of Control; provided, however, that the
Company has made a Change of Control Offer and has purchased all Notes tendered
in connection with that Change of Control Offer; provided further, however, that
such purchase or redemption shall be included in the calculation of the amount
of Restricted Payments pursuant to clause (a)(iii) above;
(vii) make Restricted Payments in an amount not to exceed $25.0 million
in the aggregate, provided that such Restricted Payments shall be excluded from
the calculation of the amount of Restricted Payments pursuant to clause (a)(iii)
above;
(viii) purchase, repurchase, redeem, acquire or retire for value any
Capital Stock of the Company upon the exercise of warrants, options or similar
rights if such Capital Stock constitutes all or a portion of the exercise price
or are surrendered in connection with satisfying any federal or state income tax
obligation, including, without limitation, upon a cashless exercise of such
warrants, options or other rights; provided, however, that such purchase,
repurchase, redemption, acquisition or retirement shall be included in the
calculation of the amount of Restricted Payments pursuant to clause (a)(iii)
above;
(ix) make cash payments in lieu of the issuance of fractional shares in
connection with reverse-stock splits or the exercise of warrants, options or
other securities convertible into or exchangeable for Capital Stock of the
Company; provided, however, that such payments shall be included in the
calculation of the amount of Restricted Payments pursuant to clause (a)(iii)
above;
(x) purchase or acquire shares of the Company's Capital Stock in
open-market purchases for matching contributions to any employees of the Company
or its Subsidiaries pursuant to any employee stock purchase plan, deferred
compensation plans or other benefit plans; provided, however, that such purchase
or acquisition shall be excluded in the calculation of the amount of Restricted
Payments pursuant to clause (a)(iii) above;
(xi) purchase, repurchase, redeem, acquire or retire for nominal value
preferred stock purchase rights issued in connection with any shareholder rights
plan that may be adopted by the Company; provided, however, that such purchase,
repurchase, redemption, acquisition or retirement shall be included in the
calculation of the amount of Restricted Payments pursuant to clause (a)(iii)
above; and
(xii) make required payments that are Restricted Payments pursuant to
the SunBelt Guarantee and the OxyVinyls Guarantee pursuant to the terms thereof
in ef-
-64-
fect on the Issue Date; provided, however, that any such payments shall
be included in the calculation of the amount of Restricted Payments
pursuant to clause (a)(iii) above.
Section 4.11. Limitation on Liens.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, Incur or suffer to exist any Lien (other than any
Permitted Lien) on Property now owned or hereafter acquired to secure Debt
without making, or causing such Restricted Subsidiary to make, effective
provision for securing the Notes (and, if the Company so determines, any other
Debt of the Company which is not subordinate to the Notes or of such Restricted
Subsidiary) equally and ratably with such Debt as to such Property so long as
such Debt is so secured.
"Permitted Liens" means:
(a) Liens in respect of Debt existing at the Issue Date (other
than Liens securing the Senior Credit Facility);
(b) Liens on Property existing at the time of acquisition
thereof;
(c) so long as the Company is subject to the Specified
Covenants, Liens to secure Debt permitted to be Incurred under clause
(b)(iii) of Section 4.09 hereof; provided that any such Lien may not
extend to any Property of the Company or any Restricted Subsidiary,
other than the Property acquired, constructed or leased with the
proceeds of such Debt and any improvements or accessions to such
Property;
(d) Liens on Property of a Person existing at the time such
Person is merged into or consolidated with the Company or any
Restricted Subsidiary;
(e) Liens on Property of the Company or any Restricted
Subsidiary in favor of the United States of America, any state thereof
or any instrumentality of either to secure certain payments pursuant to
any contract or statute;
(f) Liens to secure Debt Incurred for the purpose of financing
all or any part of the purchase price or the cost of construction or
improvement of the Property subject to such Liens, and securing only
the Property so purchased, constructed or improved and proceeds
thereof;
(g) Liens for taxes or assessments or other governmental
charges or levies, Liens imposed by law, such as mechanics' and
materialmen's Liens, for sums not due or sums being contested in good
faith and with respect to which adequate reserves are being maintained,
to the extent required by GAAP, and Liens securing reimbursement
obligations with respect to trade letters of credit, bankers'
acceptances and sight drafts
-65-
Incurred in the ordinary course of business which encumber documents
and other Property relating to such trade letters of credit, bankers'
acceptances and sight drafts;
(h) Liens to secure obligations under workers' compensation
laws or similar legislation, including Liens with respect to judgments
which are not currently dischargeable;
(i) Liens created by or resulting from any litigation or other
proceedings which is being contested in good faith by appropriate
proceedings, including Liens arising out of judgments or awards against
the Company or any Restricted Subsidiary with respect to which the
Company or such Restricted Subsidiary is in good faith prosecuting an
appeal or proceedings for review or for which the time to make an
appeal has not yet expired; or final unappealable judgment Liens which
are satisfied within 15 days of the date of judgment; or Liens Incurred
by the Company or any Restricted Subsidiary for the purpose of
obtaining a stay or discharge in the course of any litigation or other
proceeding to which the Company or such Restricted Subsidiary is a
party;
(j) so long as the Company is subject to all of the Specified
Covenants, Liens to secure obligations under the Senior Credit Facility
in an amount not to exceed the greater of (A) the amount of obligations
then permitted to be Incurred under the Senior Credit Facility pursuant
to clause (b)(ii) of Section 4.09 hereof and for purposes of this
clause (j) deeming all of the Debt at any time outstanding under the
Senior Credit Facility to have been Incurred under such clause (b)(ii)
and (B) 10% of Consolidated Net Tangible Assets at the time of such
determination;
(k) so long as the Company is subject to all of the Specified
Covenants, Liens to secure Debt permitted to be Incurred pursuant to
clause (b)(xiii) of Section 4.09 hereof and for purposes of this clause
(k) deeming all Debt of Foreign Subsidiaries at any time outstanding to
have been Incurred pursuant to clause (b)(xiii) of Section 4.09 hereof;
(l) so long as the Company is subject to all of the Specified
Covenants, Liens not otherwise permitted by clauses (a) through (k)
securing Debt or other obligations permitted under this Indenture at
any time outstanding not to exceed $10.0 million; and
(m) Liens to secure any extension, renewal or Refinancing (or
successive extensions, renewals or Refinancings), in whole or in part,
of any Debt secured by Liens referred to in the foregoing clauses (a)
to (j) so long as such Liens do not extend to any other Property and
the Debt so secured is not increased.
-66-
In addition to the foregoing, so long as the Company is not
subject to the Specified Covenants, the Company or any Restricted Subsidiary may
Incur a Lien to secure Debt or enter into a Sale and Leaseback Transaction (as
defined in clause (d) of Section 4.19 hereof), without equally and ratably
securing the Notes, if after giving pro forma effect to the Incurrence of such
Debt (and the receipt and application of proceeds thereof) or the securing of
outstanding Debt the sum (without duplication) of (a) the amount of Debt of the
Company and its Subsidiaries subject to a Lien (other than Permitted Liens), and
(b) the Attributable Value (as defined in clause (d) of Section 4.19 hereof) of
Sale and Leaseback Transactions entered into under clause (c)(i) of Section 4.19
hereof does not exceed 10% of Consolidated Net Tangible Assets of the Company at
the time of such determination.
In addition, if on and after the Issue Date any Capital
Markets Debt of the Company or any Subsidiary or the SunBelt Guarantee becomes
secured by a Lien, then the Company will cause the Notes to be secured equally
and ratably by a Lien on the same Property as such Lien for so long as such
Capital Markets Debt or SunBelt Guarantee remains secured.
Section 4.12. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale unless:
(i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property subject to such Asset Sale;
(ii) at least 75% of the consideration paid to the Company or
such Restricted Subsidiary in connection with such Asset Sale is in the
form of cash or Temporary Cash Investments; and
(iii) the Company delivers an Officers' Certificate to the
Trustee certifying that such Asset Sale complies with the foregoing
clauses (i) and (ii).
Solely for the purposes of clause (a)(ii) above, the following
will be deemed to be cash:
(A) the assumption by the purchaser of liabilities of the
Company or any Restricted Subsidiary (other than contingent liabilities
or liabilities that are by their terms subordinated to the Notes or any
Guarantee thereof by a Subsidiary) as a result of which the Company and
the Restricted Subsidiaries are no longer obligated with respect to
such liabilities, and
-67-
(B) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such purchaser to the
extent they are converted or monetized by the Company or such
Restricted Subsidiary into cash within 90 days of receipt (to the
extent of the cash received).
(b) The Net Available Cash (or any portion thereof) from Asset
Sales may be applied by the Company or a Restricted Subsidiary, to the extent
the Company or such Restricted Subsidiary elects (or is required by the terms of
any Debt):
(i) to permanently Repay (and to correspondingly reduce
commitments with respect thereto in the case of revolving borrowings)
(1) Bank Obligations, (2) other Debt outstanding on the Issue Date
(other than Debt subordinated by its terms to the Notes) with a Stated
Maturity prior to the maturity of the Notes of the Company or (3) Debt
of any Restricted Subsidiary that is not a Subsidiary Guarantor;
(ii) to reinvest in Additional Assets (including by means of
an Investment in Additional Assets by a Restricted Subsidiary with Net
Available Cash received by the Company or another Restricted
Subsidiary); or
(iii) a combination of the Repayments and reinvestments
permitted by the foregoing clauses (i) and (ii).
(c) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within 365 days from the date of the
receipt of such Net Available Cash or that is not segregated from the general
funds of the Company for investment in identified Additional Assets in respect
of a project that shall have been commenced, and for which binding contractual
commitments have been entered into, prior to the end of such 365-day period and
that shall not have been completed or abandoned shall constitute "Excess
Proceeds;" provided, however, that the amount of any Net Available Cash that
ceases to be so segregated as contemplated above and any Net Available Cash that
is segregated in respect of a project that is abandoned or completed shall also
constitute "Excess Proceeds" at the time any such Net Available Cash ceases to
be so segregated or at the time the relevant project is so abandoned or
completed, as applicable; provided further, however, that the amount of any Net
Available Cash that continues to be segregated for investment and that is not
actually reinvested within 540 days from the date of the receipt of such Net
Available Cash shall also constitute "Excess Proceeds."
(d) When the aggregate amount of Excess Proceeds exceeds $25.0
million, the Company will be required to make an offer to purchase (the "Asset
Sale Offer") the Notes and other Pari Passu Debt outstanding with similar
provisions requiring an offer to purchase such Debt with such proceeds, which
offer shall be in the amount of the Allocable Excess Proceeds (as defined
below), on a pro rata basis according to principal amount, at a purchase price
equal to 100% of the principal amount thereof, plus accrued and unpaid interest
and Ad-
-68-
ditional Interest, if any, to the Purchase Date (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date), in accordance with the procedures (including
prorating in the event of oversubscription) set forth in this Indenture. To the
extent that any portion of the amount of Excess Proceeds remains after
compliance with the preceding sentence and provided that all Holders of Notes
have been given the opportunity to tender their Notes for purchase in accordance
with this Indenture, the Company or such Restricted Subsidiary may use such
remaining amount for any purpose not restricted by this Indenture and the amount
of Excess Proceeds will be reset to zero.
(e) The term "Allocable Excess Proceeds" shall mean the
product of:
(i) the Excess Proceeds, and
(ii) a fraction,
(A) the numerator of which is the aggregate principal
amount of the Notes outstanding on the date of the Asset Sale
Offer, and
(B) the denominator of which is the sum of the
aggregate principal amount of the Notes outstanding on the
date of the Asset Sale Offer and the aggregate principal
amount of other Debt of the Company outstanding on the date of
the Asset Sale Offer that is pari passu in right of payment
with the Notes and subject to terms and conditions in respect
of Asset Sales similar in all material respects to this
Section 4.12 and requiring the Company to make an offer to
purchase such Debt at substantially the same time as the Asset
Sale Offer.
(f) Within five business days after the Company is obligated
to make an Asset Sale Offer as described in the preceding paragraph, the Company
shall send a written notice, by first-class mail, to the Holders of Notes,
accompanied by such information regarding the Company and its Subsidiaries as
the Company in good faith believes will enable such Holders to make an informed
decision with respect to such Asset Sale Offer. Such notice shall state, among
other things, the purchase price and the Purchase Date, which shall be, subject
to any contrary requirements of applicable law, a Business Day no earlier than
30 days nor later than 60 days from the date such notice is mailed.
(g) The Company will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with any repurchase of Notes pursuant to this
Section 4.12. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.12, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.12 by virtue
thereof.
-69-
Section 4.13. Limitation on Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual restriction on the right of any Restricted Subsidiary to:
(i) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, or pay any Debt or
other obligation owed, to the Company or any other Restricted
Subsidiary,
(ii) make any loans or advances to the Company or any other
Restricted Subsidiary or
(iii) transfer any of its Property to the Company or any other
Restricted Subsidiary.
(b) The foregoing limitations will not apply:
(i) with respect to clauses (a)(i), (ii) and (iii), to:
(A) restrictions in effect on the Issue Date,
including, without limitation, restrictions pursuant to the
Notes, this Indenture and the Senior Credit Facility
(including any Exchange Notes and Guarantees of the Notes and
Exchange Notes);
(B) restrictions imposed by indentures governing
other Pari Passu Debt that the Company Incurs (and, if such
Debt is Guaranteed, by the Guarantors of such Debt); provided
that the restrictions imposed by such indentures of the type
covered by clauses (a)(i), (ii) and (iii) are no more
restrictive taken as a whole than the restrictions imposed by
this Indenture;
(C) restrictions relating to Debt of a Restricted
Subsidiary and existing at the time it became a Restricted
Subsidiary if such restriction was not created in connection
with or in anticipation of the transaction or series of
transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company;
(D) restrictions existing under or by reason of
applicable law, rule, regulation or order;
(E) restrictions on cash or other deposits or net
worth imposed by leases or other agreements entered into in
the ordinary course of business;
-70-
(F) customary provisions in joint venture or similar
agreements or other arrangements with minority investors in
Restricted Subsidiaries; provided, however, that such
encumbrance or restriction is applicable only to such
Restricted Subsidiary; and provided, further, that (i) in the
case of joint ventures existing on the Issue Date, the
encumbrance or restriction is no more onerous than those
existing on the Issue Date and (ii) in all other cases, (a)
the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary
in comparable agreements and (b) the Company determines that
any such encumbrance or restriction will not materially affect
the ability of the Company to make any anticipated payments of
principal or interest on the Notes;
(G) customary restrictions contained in asset sale
agreements, stock sale agreements and other similar agreements
limiting the transfer, disposition or distribution of such
Property pending the closing of such sale, including any
restriction imposed with respect to such Restricted Subsidiary
pursuant to an agreement to dispose of all or substantially
all the Capital Stock or Property of such Restricted
Subsidiary;
(H) customary restrictions imposed on the transfer of
copyrighted or patented materials or other intellectual
property and customary provisions in agreements that restrict
the assignment of such agreements or any rights thereunder;
and
(I) restrictions imposed by any amendments,
modifications, restatements, renewals, increases, supplements,
refundings or replacements of the contracts, instruments or
obligations referred to in clauses (A) through (H) above;
provided that the restrictions imposed by such amendments,
modifications, restatements, renewals, increases, supplements,
refundings or replacements covered by clauses (a)(i), (ii) and
(iii) are no more restrictive taken as a whole than the
restrictions imposed by this Indenture or, in the case of the
Refinancing of Debt Incurred pursuant to clauses (A) through
(C) above, such restriction is no less favorable taken as a
whole to the Holders of Notes than those under the agreement
evidencing the Debt so Refinanced;
(ii) with respect to clause (a)(iii) only, to restrictions:
(A) relating to Debt that is permitted to be Incurred
and secured without also securing the Notes or any Guarantee
thereof by a Subsidiary pursuant to Section 4.09 and Section
4.11 hereof that limit the right of the debtor to dispose of
the Property securing such Debt;
-71-
(B) encumbering Property at the time such Property
was acquired by the Company or any Restricted Subsidiary, so
long as such restriction relates solely to the Property so
acquired and was not created in connection with or in
anticipation of such acquisition;
(C) resulting from customary provisions restricting
subletting or assignment of leases or customary provisions in
other agreements that restrict assignment of such agreements
or rights thereunder; or
(D) imposed under any Purchase Money Debt or Capital
Lease Obligation in the ordinary course of business with
respect only to the Property the subject thereof.
Section 4.14. Limitation on Affiliate Transactions.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into or
suffer to exist any transaction or series of related transactions (including the
purchase, sale, transfer, assignment, lease, conveyance or exchange of any
Property or the rendering of any service) with, or for the benefit of, any
Affiliate of the Company (an "Affiliate Transaction"), unless:
(i) the terms of such Affiliate Transaction are not
materially less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could be
obtained in a comparable arm's-length transaction with a
Person that is not an Affiliate of the Company;
(ii) if such Affiliate Transaction involves aggregate
payments or value in excess of $10.0 million, the Board of
Directors (including at least a majority of the disinterested
members of the Board of Directors) approves such Affiliate
Transaction and, in its good faith judgment, believes that
such Affiliate Transaction complies with clause (a)(i) of this
Section as evidenced by a Board Resolution promptly delivered
to the Trustee; and
(iii) if such Affiliate Transaction involves
aggregate payments or value in excess of $25.0 million, the
Company obtains a written opinion from an Independent
Financial Advisor to the effect that the consideration to be
paid or received in connection with such Affiliate Transaction
is fair, from a financial point of view, to the Company and
its Restricted Subsidiaries, taken as a whole.
(b) Notwithstanding the foregoing limitation, the Company or
any Restricted Subsidiary may enter into or suffer to exist the following
Affiliate Transactions:
-72-
(i) any transaction or series of transactions between the
Company and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries in the ordinary course of business;
(ii) any Restricted Payment permitted to be made pursuant to
Section 4.10 hereof or any Permitted Investment;
(iii) the payment of compensation (including awards or grants
in cash, securities or other payments) for the personal services of
officers and directors of the Company or any of the Restricted
Subsidiaries, so long as the Board of Directors in good faith shall
have approved the terms thereof and deemed the services theretofore or
thereafter to be performed for such compensation to be fair
consideration therefor;
(iv) payments in the ordinary course of business pursuant to
employment agreements, collective bargaining agreements, employee
benefit plans, or arrangements for officers or directors, including
health and life insurance plans, deferred compensation plans,
directors' and officers' indemnification agreements and retirement or
savings plans, stock option, stock ownership and similar plans;
(v) loans and advances to officers and directors (or
guarantees of third-party loans to officers or directors) made in the
ordinary course of business; provided that such loans and advances do
not exceed $2.0 million in the aggregate at any one time outstanding;
(vi) the issuance or sale of any Capital Stock (other than
Disqualified Capital Stock) of the Company;
(vii) any agreement or arrangement as in effect on the Issue
Date or any amendment to any such agreement or arrangement (so long as
such amendment is not disadvantageous to the Holders of the Notes in
any material respect) or any transaction contemplated thereby;
(viii) transactions with customers, clients, suppliers,
marketers, distributors or purchasers or sellers of goods or services,
in each case which are in the ordinary course of business and
consistent with industry practice and otherwise in compliance with the
terms of this Indenture, and which are fair to the Company or its
Restricted Subsidiaries, as applicable, in the reasonable determination
of the Board of Directors and are on terms not materially less
favorable to the Company or such Restricted Subsidiary, as the case may
be, than those that could be obtained in a comparable arm's-length
transaction with a Person that is not an Affiliate of the Company; and
(ix) sales (including a sale in exchange for a promissory note
or Capital Stock of an Accounts Receivable Subsidiary) of Receivables
and Related Assets and
-73-
the provision of billing, collection and other services in connection
therewith, in each case to such Accounts Receivable Subsidiary in
connection with any Receivables Facility.
Section 4.15. Designation of Restricted and Unrestricted Subsidiaries.
(a) The Board of Directors may designate any Subsidiary of the
Company to be an Unrestricted Subsidiary if:
(i) the Subsidiary to be so designated does not own any
Capital Stock or Debt of, or own or hold any Lien on any Property of,
the Company or any other Restricted Subsidiary; and
(ii) either:
(A) the Subsidiary to be so designated has total
assets of $1,000 or less,
(B) an amount equal to the value of the Subsidiary's
Capital Stock held by the Company would be permitted to be
made as a Permitted Investment or as a Restricted Payment
under Section 4.10 hereof; or
(C) such designation is effective immediately upon
such entity becoming a Subsidiary of the Company.
(b) Unless so designated as an Unrestricted Subsidiary, any
Person that becomes a Subsidiary of the Company (other than an Accounts
Receivable Subsidiary) will be classified as a Restricted Subsidiary; provided,
however, that such Subsidiary shall not be designated a Restricted Subsidiary
and shall be automatically classified as an Unrestricted Subsidiary if either of
the requirements set forth in clauses (x) and (y) of the second immediately
following paragraph will not be satisfied after giving pro forma effect to such
classification or if such Person is a Subsidiary of an Unrestricted Subsidiary.
Except as provided in clause (a) of this Section 4.15, no
Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary. In
addition, neither the Company nor any Restricted Subsidiary shall at any time be
directly or indirectly liable for any Debt that provides that the holder thereof
may (with the passage of time or notice or both) declare a default thereon or
cause the payment thereof to be accelerated or payable prior to its Stated
Maturity upon the occurrence of a default with respect to any Debt, Lien or
other obligation of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary); provided that the
Company or any Restricted Subsidiary may pledge Capital Stock or Property of any
Unrestricted Subsidiary on a nonrecourse basis as long as the pledgee has no
claim whatsoever against the Company or any Restricted Subsidiary other than
-74-
to obtain that pledged Capital Stock or Property. Upon designation of a
Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this
Section 4.15, such Restricted Subsidiary shall, by execution and delivery of a
supplemental indenture in form satisfactory to the Trustee, be released from any
Guarantee of the Notes previously made by such Restricted Subsidiary.
The Board of Directors may designate any Unrestricted
Subsidiary (other than an Accounts Receivable Subsidiary) to be a Restricted
Subsidiary if, immediately after giving pro forma effect to such designation,
(x) the Company could Incur at least $1.00 of additional Debt
pursuant to clause (a) of Section 4.09 hereof, and
(y) no default or Event of Default shall have occurred and be
continuing or would result therefrom.
Any such designation or redesignation by the Board of
Directors will be evidenced to the Trustee by filing with the Trustee a
resolution of the Board of Directors giving effect to such designation or
redesignation and an Officers' Certificate that:
(1) certifies that such designation or redesignation complies
with the foregoing provisions, and
(2) gives the effective date of such designation or
redesignation,
such filing with the Trustee to occur within 45 days after the end of the fiscal
quarter of the Company in which such designation or redesignation is made (or,
in the case of a designation or redesignation made during the last fiscal
quarter of the Company's fiscal year, within 90 days after the end of such
fiscal year).
Section 4.16. Limitation on Company's Business.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, engage in any business other
than Permitted Businesses.
Section 4.17. Guarantees by Restricted Subsidiaries.
(a) The Company will not permit any Restricted Subsidiary
that is not then a Guarantor of the Notes, directly or indirectly, to Guarantee
or secure the payment of any other Debt of the Company or any of its Restricted
Subsidiaries unless such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to the Indenture providing for a full and
unconditional Guarantee of the payment of the Notes by such Restricted
Subsidiary; provided that this paragraph shall not be applicable to:
-75-
(1) any Guarantee of any Restricted Subsidiary that existed at
the time such Person became a Restricted Subsidiary and was not
Incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary;
(2) any Guarantee arising under or in connection with
performance bonds, indemnity bonds, surety bonds and letters of credit
or bankers' acceptances;
(3) Permitted Liens; or
(4) to the extent permitted under Section 4.09 hereof,
Guarantees of Debt of a Restricted Subsidiary that is a Foreign
Subsidiary by a Restricted Subsidiary that is a Foreign Subsidiary.
If the Guaranteed Debt is subordinated in right of payment to the Notes or any
such Guarantee of the Notes, as applicable, pursuant to a written agreement to
that effect, the Guarantee of such Guaranteed Debt must be subordinated in right
of payment to such Guarantee of the Notes to at least the extent that the
Guaranteed Debt is subordinated to the Notes.
(b) Any such Subsidiary Guarantee will be released upon:
(1) the sale of the Capital Stock of the applicable Subsidiary
Guarantor in accordance with the terms of this Indenture such that it
is no longer a Subsidiary of the Company,
(2) the sale of all or substantially all of the assets of such
Subsidiary Guarantor in accordance with the terms of this Indenture,
(3) the release of the Subsidiary Guarantor of liability on
the Guarantee the issuance of which caused such Restricted Subsidiary
to be required to become a Subsidiary Guarantor, or
(4) the applicable Subsidiary Guarantor's becoming an
Unrestricted Subsidiary in accordance with the terms of this Indenture,
so long as in the case of clause (b)(1), (2), (3), or (4), any Guarantee or
security of payment by such Subsidiary Guarantor of Debt of the Company or any
of its other Restricted Subsidiaries (other than the Notes or any Subsidiary
Guarantee) is fully and unconditionally released prior thereto or simultaneously
therewith.
Section 4.18. Repurchase at the Option of Holders Upon a Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of
-76-
Control Offer") at an offer price, in cash (the "Change of Control Purchase
Price"), equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest, if any, thereon to the date of purchase (the "Change of
Control Payment") on a date that is not more than 90 days after the occurrence
of such Change of Control (the "Change of Control Payment Date"); provided,
however, that, notwithstanding the occurrence of a Change of Control, the
Company shall not be obligated to purchase the Notes pursuant to a Change of
Control Offer in the event that it has mailed the notice to exercise its rights
to redeem all of the Notes under Section 3.07 at any time prior to the
occurrence of a Change of Control Offer.
Within 30 days following any Change of Control, unless the
Company has mailed a redemption notice with respect to all of the outstanding
Notes in accordance with Section 3.07, the Company shall:
(i) cause a notice of the Change of Control Offer to be sent
at least once to the Dow ▇▇▇▇▇ News Service or similar business news
service in the United States and
(ii) send, with a copy to the Trustee, or, at the Company's
request the Trustee shall send, by first-class mail, to each Holder, at
such Holder's address appearing in the securities register maintained
in respect of the Notes by the Registrar (the "Security Register"), a
notice stating:
(A) that a Change of Control has occurred and a
Change of Control Offer is being made pursuant to this Section
4.18 and that all Notes timely tendered will be accepted for
payment;
(B) the Change of Control Purchase Price and the
Change of Control Payment Date, which shall be, subject to any
contrary requirements of applicable law, a Business Day no
later than 90 days after the occurrence of a Change of
Control;
(C) the circumstances and relevant facts regarding
the Change of Control; and
(D) the procedures that Holders must follow in order
to tender their Notes (or portions thereof) for payment, and
the procedures that Holders must follow in order to withdraw
an election to tender Notes (or portions thereof) for payment.
The Company will comply, to the extent applicable, 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 the Notes as a result of a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.18, the Company will
comply
-77-
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section 4.18 by virtue of such
compliance.
(b) On the Change of Control Payment Date, the Company shall,
to the extent lawful,
(i) accept for payment all Notes or portions thereof validly
tendered and not withdrawn pursuant to the Change of Control Offer;
(ii) deposit with the applicable Paying Agent (or, if the
Company or any of its Restricted Subsidiaries is acting as the Paying
Agent, segregate and hold in trust) an amount equal to the aggregate
Change of Control Payments in respect of all Notes or portions thereof
so tendered; and
(iii) deliver or cause to be delivered to the Trustee, the
Notes so accepted with an Officers' Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the
Company.
The Paying Agent shall promptly mail or deliver to each Holder
of Notes validly tendered the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be transferred by
book-entry) to each Holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided that each new
Note will be in a principal amount of $1,000 or an integral multiple thereof.
(c) If the Change of Control Payment Date is on or after a
Regular Record Date and on or before the related Interest Payment Date, any
accrued and unpaid interest and Additional Interest, if any, will be paid to the
Person in whose name a Note is registered, at the close of business on such
Regular Record Date, and no additional interest will be payable to Holders who
tender pursuant to the Change of Control Offer.
(d) The provisions described above that require the Company to
make a Change of Control Offer following a Change of Control will be applicable
whether or not any other provisions of this Indenture are applicable. Except as
described above with respect to a Change of Control, this Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction that does not involve a Change of
Control.
(e) The Company will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes a Change of
Control Offer at the same or higher purchase price, at the same times and
otherwise in substantial compliance with the requirements applicable to a Change
of Control Offer otherwise required to be made by the
-78-
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
Section 4.19. Covenant Suspension.
(a) During any period of time that (i) the Notes have
Investment Grade Ratings from both Rating Agencies and (ii) no Default or Event
of Default has occurred and is continuing under this Indenture (the occurrence
of the events described in the foregoing clauses (i) and (ii) being collectively
referred to as a "Covenant Suspension Event"), the Company and its Restricted
Subsidiaries will not be subject to Sections 4.09, 4.10, 4.12, 4.13, 4.14, 4.15,
4.16 and 5.01(a)(iv) (collectively, the "Specified Covenants"). Upon the
occurrence of a Covenant Suspension Event, the amount of Excess Proceeds shall
be set at zero.
(b) If, after a Covenant Suspension Event, either of the
Rating Agencies withdraws its rating or downgrades the ratings assigned to the
Notes below the required Investment Grade Ratings such that both Rating Agencies
at such time shall not have assigned to the Notes an Investment Grade Rating or
a Default or Event of Default occurs and is continuing, then the Company and the
Restricted Subsidiaries will thereafter again be subject to the Specified
Covenants and compliance with the Specified Covenants with respect to Restricted
Payments made after the time of such withdrawal, downgrade, Default or Event of
Default will be calculated in accordance with the terms of Section 4.10 as
though such Section had been in effect during the entire period of time from the
Issue Date; provided, however, that there will not be deemed to have occurred a
Default or Event of Default with respect to the Specified Covenants during the
time that the Company and its Restricted Subsidiaries were not subject to the
Specified Covenants (or upon termination of the suspension period or after that
time based solely on events that occurred during the suspension period).
(c) In addition, so long as the Company and the Restricted
Subsidiaries are not subject to the Specified Covenants, the Company will not,
and will not permit any of its Subsidiaries, to enter into any Sale and
Leaseback Transaction (except for a period not exceeding 36 months) unless (1)
the Company or such Subsidiary would be entitled to Incur a Lien to secure Debt
in an amount equal to the Attributable Value of the Sale and Leaseback
Transaction in accordance with Section 4.11 without equally and ratably securing
the Notes; or (2) the Company or the Subsidiary applies or commits to apply
within 120 days an amount equal to the net proceeds of the Property sold
pursuant to the Sale and Leaseback Transaction to the redemption of the Notes or
to the redemption or Repayment of Company Debt which is pari passu to the Notes.
(d) So long as the Company is not subject to the Specified
Covenants, the following definitions apply with respect to the covenant
described in clause (c) of this Section 4.19 and, to the extent used therein, in
the third paragraph under Section 4.11:
-79-
"Attributable Value" means, as to any particular lease under
which any Person is at the time liable and at any date as of which the amount
thereof is to be determined, the total net amount of rent required to be paid by
such Person under such lease during the initial term thereof as determined in
accordance with GAAP, discounted from such initial term date to the date of
determination at a rate per annum equal to the discount rate which would be
applicable to a Capital Lease Obligation with a like term in accordance with
GAAP. The net amount of rent required to be paid under any such lease for any
such period shall be the lesser of: (1) the aggregate amount of rent payable by
the lessee with respect to such period after excluding amounts required to be
paid on account of insurance, taxes, assessments, utility, operating and labor
costs and similar charges and (2) in the case of any lease which is terminable
by the lessee upon the payment of a penalty, the net amount calculated pursuant
to (1) but adjusted to also include the amount of such penalty and to exclude
any rent which would otherwise be required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Capital Lease Obligations" of any Person means the
obligations to pay rent or other amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal Property of such
Person which are required to be classified and accounted for as a capital lease
or a liability on the face of a balance sheet of such Person in accordance with
GAAP, and the amount of such obligations shall be the capitalized amount thereof
in accordance with GAAP and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Sale and Leaseback Transaction" means with respect to any
Person an arrangement with any bank, insurance company or other lender or
investor (or pool thereof) or to which lender or investor (or pool thereof) is a
party, providing for the leasing by such Person or any of its Subsidiaries of
any Property or asset of such Person or any of its Subsidiaries which has been
or is being sold or transferred by such Person or such Subsidiary more than 270
days after the acquisition thereof or the completion of construction or
commencement of operation thereof to such lender or investor or to any Person to
whom funds have been or are to be advanced by such lender or investor on the
security of such Property or asset.
ARTICLE 5.
SUCCESSORS
Section 5.01. Merger, Consolidation and Sale of Assets.
(a) The Company shall not merge or consolidate with or into
any other Person or sell, transfer, assign, lease, convey or otherwise dispose
of (or permit any Restricted Subsidiary to sell, transfer, assign, lease, convey
or otherwise dispose of) all or substantially
-80-
all of the Company's Property (determined on a consolidated basis for the
Company and its Restricted Subsidiaries) in any one transaction or series of
transactions unless:
(i) the Company shall be the Surviving Person in such merger
or consolidation, or the Surviving Person (if other than the Company)
formed by such merger or consolidation or to which such sale, transfer,
assignment, lease, conveyance or other disposition is made shall be an
entity organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(ii) the Surviving Person (if other than the Company)
expressly assumes, by supplemental indenture in form satisfactory to
the Trustee, executed and delivered to the Trustee by such Surviving
Person, the due and punctual payment of the principal of, and premium,
if any, and interest on all the Notes, and the due and punctual
performance and observance of all the covenants and conditions of this
Indenture to be performed by the Company;
(iii) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (iii) and clauses (iv) and (v)
below, any Debt that becomes an obligation of the Surviving Person or
any Restricted Subsidiary as a result of such transaction or series of
transactions as having been Incurred by the Surviving Person or such
Restricted Subsidiary at the time of such transaction or series of
transactions), no Default or Event of Default shall have occurred and
be continuing;
(iv) immediately after giving effect to such transaction or
series of transactions on a pro forma basis, the Company or the
Surviving Person, as the case may be, would be able to Incur at least
$1.00 of additional Debt under clause (a) of Section 4.09 hereof; and
(v) the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each
stating that such transaction and the supplemental indenture, if any,
with respect thereto comply with this Section 5.01 and that all
conditions precedent herein provided for relating to such transaction
have been satisfied.
(b) The Company shall not permit any Subsidiary Guarantor to
merge or consolidate with or into any other Person (other than a merger of a
Wholly Owned Restricted Subsidiary into the Company or such Subsidiary
Guarantor) or sell, transfer, assign, lease, convey or otherwise dispose of all
or substantially all its Property in any one transaction or series of
transactions unless:
(i) the Surviving Person (if not such Subsidiary Guarantor)
formed by such merger or consolidation or to which such sale, transfer,
assignment, lease, con-
-81-
veyance or other disposition is made shall be an entity organized and
existing under the laws of the United States of America, any State
thereof or the District of Columbia;
(ii) the Surviving Person (if other than such Subsidiary
Guarantor) expressly assumes, by supplemental indenture providing for a
Subsidiary Guarantee in form satisfactory to the Trustee, executed and
delivered to the Trustee by such Surviving Person, the due and punctual
performance and observance of all the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee;
(iii) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (iii) and clause (iv) below, any
Debt that becomes an obligation of the Surviving Person, the Company or
any Restricted Subsidiary as a result of such transaction or series of
transactions as having been Incurred by the Surviving Person, the
Company or such Restricted Subsidiary at the time of such transaction
or series of transactions), no Default or Event of Default shall have
occurred and be continuing; and
(iv) the Company shall deliver, or cause to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each
stating that such transaction and such Subsidiary Guarantee, if any,
with respect thereto comply with this Section 5.01 and that all
conditions precedent herein provided for relating to such transaction
have been satisfied.
The foregoing provisions (other than clause (iii)) shall not apply to (1) a
consolidation or merger of any Subsidiary Guarantor with and into the Company or
any other Subsidiary Guarantor, so long as the Company (in the case of any
transaction involving the Company) or a Subsidiary Guarantor survives such
consolidation or merger, or (2) any transactions which constitute Asset Sales if
the Company has complied with Section 4.12 hereof.
Section 5.02. Successor Corporation Substituted.
The Surviving Person shall succeed to, and be substituted for,
and may exercise every right and power of the Company under this Indenture (or
of the Subsidiary Guarantor under the Subsidiary Guarantee, as the case may be),
but the predecessor Company in the case of:
(a) a sale, transfer, assignment, conveyance or other
disposition (unless such sale, transfer, assignment, conveyance or other
disposition is of all the assets of the Company as an entirety or virtually as
an entirety); or
(b) a lease;
-82-
shall not be released from any of the obligations or covenants under this
Indenture, including with respect to the payment of the Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
Each of the following constitutes an "Event of Default" with
respect to the Notes:
(i) failure to make the payment of any interest or Additional
Interest, if any, on the Notes when the same becomes due and payable,
and such failure continues for a period of 30 days;
(ii) failure to make the payment of any principal of, or
premium, if any, on, any of the Notes when the same becomes due and
payable at its Stated Maturity, upon acceleration, redemption, optional
redemption, required repurchase or otherwise;
(iii) failure to comply with the provisions of Section 5.01
hereof;
(iv) failure to comply with any other covenant or agreement in
the Notes or in this Indenture (other than a failure that is the
subject of the foregoing clauses (i), (ii) or (iii)) and such failure
continues for 30 days after written notice is given to the Company as
provided below;
(v) the occurrence of a default under any mortgage, indenture
or instrument under which there may be issued or by which there may be
secured or evidenced any Debt by the Company or any of its Restricted
Subsidiaries (or any Debt Guaranteed by the Company or any of its
Restricted Subsidiaries if the Company or a Restricted Subsidiary does
not perform its payment obligations under such Guarantee within any
grace period provided for in the documentation governing such
Guarantee), whether such Debt or Guarantee exists on the Issue Date or
is thereafter created, which default (a) constitutes a Payment Default
or (b) results in the acceleration of such Debt prior to its Stated
Maturity, and in each case, the principal amount of any such Debt,
together with the principal amount of any other such Debt under which
there has been a Payment Default or that has been so accelerated,
aggregates $25.0 million or more without such Debt or Guarantee having
been discharged or such acceleration having been rescinded or annulled,
as applicable, within a period of ten days of the date of such Payment
Default or acceleration, as applicable;
-83-
(vi) any final judgment or judgments for the payment of money
in an unsecured aggregate amount (net of any amounts covered by
insurance where coverage has not been disclaimed or denied) in excess
of $25.0 million (or its foreign currency equivalent at the time) that
shall be rendered against the Company or any Restricted Subsidiary and
that shall not be waived, satisfied or discharged for any period of 60
consecutive days during which a stay of enforcement shall not be in
effect after such judgment becomes non-appealable;
(vii) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary insolvency proceeding;
(B) consents to the entry of an order for relief
against it in an involuntary insolvency proceeding;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its Property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency; provided, however, that the liquidation of any Significant
Subsidiary into another Restricted Subsidiary or the Company other than
as part of a credit reorganization, shall not constitute an Event of
Default under this clause (vii);
(viii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary or for any substantial part of its
Property;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
Property;
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary; or
(D) grants any similar relief under any foreign laws;
and in each such case the order or decree remains unstayed and in
effect for 90 days;
(ix) any Guarantee by a Significant Subsidiary of the Notes
ceases to be in full force and effect (other than in accordance with
the terms of such Guarantee or this
-84-
Indenture) or any such Significant Subsidiary Guarantor denies or
disaffirms its obligations under its Guarantee.
A Default under clause (iv) is not an Event of Default until
the Trustee or the Holders of not less than 25% in aggregte principal amount of
the Notes then outstanding notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default."
Section 6.02. Acceleration.
If an Event of Default with respect to the Notes (other than
those of the type described in Section 6.01(vii) or (viii) with respect to the
Company) shall have occurred and be continuing, the Trustee may, and the Trustee
upon the request of Holders of 25% in principal amount of the outstanding Notes
shall, or the Holders of at least 25% in principal amount of outstanding Notes
may, declare the principal of all the Notes, together with all accrued and
unpaid interest, premium, if any, and Additional Interest, if any, to be due and
payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that such notice is a notice of acceleration
(the "Acceleration Notice"), and the same shall become immediately due and
payable.
In case of an Event of Default specified in Section (vii) or
(viii) of Section 6.01 hereof with respect to the Company, such amount with
respect to all the Notes will become due and payable immediately without any
declaration or other act on the part of the Trustee or the Holders of the Notes.
Holders may not enforce this Indenture or the Notes except as provided in this
Indenture.
At any time after a declaration of acceleration with respect
to the Notes, but before a judgment or decree based on acceleration is obtained
by the Trustee, the Holders of a majority in principal amount of the Notes then
outstanding (by notice to the Trustee) may rescind and annul that declaration
and its consequences if:
(a) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction;
(b) all existing Defaults and Events of Default have been
cured or waived except nonpayment of principal of or interest on the
Notes that has become due solely by such declaration of acceleration;
(c) to the extent the payment of such interest is lawful,
interest (at the same rate specified in the Notes) on overdue
installments of interest and overdue payments of principal which has
become due otherwise than by such declaration of acceleration has been
paid;
-85-
(d) the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its reasonable expenses,
disbursements and advances; and
(e) in the event of the cure or waiver of an Event of Default
of the type described in Section 6.01(vii) or (viii), the Trustee has
received an Officers' Certificate and Opinion of Counsel that such
Event of Default has been cured or waived.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest and Additional Interest, if any, on the Notes or to enforce
the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
The Holders of a majority in principal amount of the Notes may
waive by consent (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Notes) any then
existing or potential Default, and its consequences, except a default in the
payment of the principal of or interest on any Notes. When a Default or Event of
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.
Section 6.05. Control by Majority.
Subject to Section 7.01, Section 7.02(f) (including the
Trustee's receipt of the security or indemnification described therein) and
Section 7.07, in case an Event of Default shall occur and be continuing, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Notes.
Section 6.06. Limitation on Suits.
No Holder will have any right to institute any proceeding with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any remedy hereunder, unless:
-86-
(a) such Holder has previously given to the Trustee written
notice of a continuing Event of Default,
(b) Holders of at least 25% in aggregate principal amount of
the Notes then outstanding have made a written request and offered
indemnity satisfactory to the Trustee to institute such proceeding as
trustee, and
(c) the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Notes then outstanding a
direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days.
A Holder may not use this Indenture to affect, disturb or
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture
(including, without limitation, Section 6.06), the right of any Holder to
receive payment of principal, premium, if any, and interest and Additional
Interest, if any, on the Notes held by such Holder, on or after the respective
due dates expressed in the Notes (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(i) or (ii)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, and interest and Additional Interest,
if any, then due and owing (together with interest on overdue principal and, to
the extent lawful, interest) 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.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to 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
the Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its Property and shall be
entitled and empowered to participate as a member, voting or otherwise, of any
official committee of creditors appointed in such matter and shall be entitled
and empowered to collect, receive and distribute any money or other Property
payable or deliverable on any such
-87-
claims and any Custodian in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof. To the extent that
any such compensation, expenses and advances of the Trustee and its agents and
counsel, and any other amounts due the Trustee under Section 7.07 hereof out of
the estate in any such proceeding, shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, moneys, securities and any other Properties that the Holders may
be entitled to receive in such proceeding whether in liquidation or any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest and Additional Interest, if
any, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for principal, premium, if
any, and interest and Additional Interest, if any, respectively; and
Third: to the Company or, to the extent the Trustee collects
any money from any Subsidiary Guarantor, to such Subsidiary Guarantor
or to such other party as a court of competent jurisdiction shall
direct.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the
-88-
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 the Company, a suit by a Holder pursuant to Section 6.07 hereof or a
suit by Holders of more than 10% in principal amount of the then outstanding
Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) In case an Event of Default which the Trustee has, or is
deemed to have, notice hereunder shall have occurred and be 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
such Person's own affairs.
(b) Except during the continuance of an Event of Default,
(1) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein or otherwise
verify the contents thereof).
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts;
-89-
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b) and (c) of this Section.
(e) Except for information provided by the Trustee concerning
the Trustee, the Trustee shall have no responsibility for any
information in any prospectus or other disclosure material distributed
with respect to the Notes.
Section 7.02. Rights of Trustee
Subject to Section 7.01:
(a) The Trustee may conclusively rely upon 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 any such document. Any facsimile signature of any Person on a
document required or permitted in this Indenture to be delivered to the
Trustee shall constitute a legal, valid and binding execution thereof
by such Person.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of
Counsel. The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(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 that it believes to be authorized or within
the rights or powers conferred upon it by this Indenture unless the
Trustee's conduct constitutes negligence, willful misconduct or bad
faith.
-90-
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(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
or direction of any of the Holders unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event
which is in fact such a Default or Event of Default is received by a
Responsible Officer of the Trustee at the Corporate Trust Office of the
Trustee from the Company or the Holders of 25% in aggregate principal
amount of the outstanding Notes, and such notice references the
specific Default or Event of Default, the Notes and this Indenture and,
in the absence of any such notice, the Trustee may conclusively assume
that no such Default or Event of Default exists.
(h) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received
by it hereunder except as otherwise agreed in writing with the Company.
(i) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties
hereunder.
(j) The Trustee shall have no duty to inquire as to the
performance of the Company's covenants herein.
(k) The Trustee's immunities and protections from liability
and its right to indemnification in connection with the performance of
its duties under this Indenture shall extend to the Trustee's officers,
directors, agents, attorneys and employees. Such immunities and
protections and right to indemnification, together with the Trustee's
right to compensation, shall survive the Trustee's resignation or
removal, the defeasance or discharge of this Indenture and final
payment of the Notes.
(l) The right of the Trustee to take the actions permitted by
this Indenture shall not be construed as an obligation or duty to do
so.
(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
-91-
may be signed by any person authorized to sign an Officers'
Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as Trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs unless such Default
or Event of Default has since been cured. Except in the case of a Default or
Event of Default in payment of principal of, premium, if any, or interest or
Additional Interest, if any, on, any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders.
Section 7.06. Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with May 15, 2004,
and for so long as Notes remain outstanding, the Trustee shall mail to the
Holders a brief report dated as of such reporting date that complies with TIA
Section 313(a) (but if no event described in TIA Section 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
-92-
A copy of each report at the time of its mailing to the
Holders shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange and any delisting thereof.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation for its acceptance of this Indenture and services hereunder as the
Company and the Trustee shall agree in writing. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (in its capacity as
Trustee) or any predecessor Trustee (in its capacity as Trustee) against any and
all losses, claims, damages, penalties, fines, liabilities or expenses,
including incidental and out-of-pocket expenses and reasonable attorneys' fees
("losses") incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim, and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel if the Trustee
has been reasonably advised by counsel that there may be one or more legal
defenses available to it that are different from or additional to those
available to the Company and in the reasonable judgment of such counsel it is
advisable for the Trustee to engage separate counsel, and the Company shall pay
the reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld. The Company need not reimburse any expense or indemnify against any
loss incurred by the Trustee through the Trustee's own willful misconduct, gross
negligence or bad faith.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture, the resignation or
removal of the Trustee and payment in full of the Notes.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Notes on all money or Property
held or collected by the Trustee, except that held in trust to pay principal,
premium, if any, and interest and Additional Interest,
-93-
if any, on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(vii) or (viii) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
Section 7.08. Replacement of Trustee.
The Trustee shall comply with TIA Section 313(b) to the extent
applicable.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time upon 30 days
prior notice to the Company and be discharged from the trust hereby created by
so notifying the Company. The Holders of a majority in principal amount of the
then outstanding Notes may remove the Trustee by so notifying the Trustee and
the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof or
TIA Section 310;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its Property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent
-94-
jurisdiction at the expense of the Company in the case of the Trustee for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder who has
been a Holder for at least six months, fails to comply with Section 7.10, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. Subject to the Lien provided for in Section 7.07 hereof,
the retiring Trustee shall promptly transfer all property held by it as Trustee
to the successor Trustee. Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
Subject to Section 7.10, if the Trustee consolidates, merges
or converts into, or transfers all or substantially all of its corporate trust
business to, another corporation or banking association, the successor
corporation or banking association without any further act shall, if such
successor corporation or banking association is otherwise eligible hereunder, be
the successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
Person organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50,000,000 (or a wholly-owned subsidiary of a bank or trust company, or
of a bank holding company, the principal subsidiary of which is a bank or trust
company having a combined capital and surplus of at least $50,000,000) as set
forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
-95-
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to 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
therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at its option and at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding Notes
on the date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance") and each Guarantor shall be released from all of its obligations
under its Guarantee. For this purpose, Legal Defeasance means that the Company
shall be deemed to have paid and discharged the entire Debt represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a), (b), (c) and (d) below, and to have satisfied all its other
obligations under the Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, or interest and Additional Interest, if any,
on such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article 2 and Sections 4.01 and 4.02 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article 8. If the
Company exercises under Section 8.01 hereof the option applicable to this
Section 8.02, subject to the satisfaction of the conditions set forth in Section
8.04 hereof, payment of the Notes may not be accelerated because of an Event of
Default. Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
-96-
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Sections 4.09 through 4.18
hereof, and the operation of Section 5.01(a)(iii) and (iv) and Section 5.01(b)
hereof, with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant
Defeasance") and each Guarantor shall be released from all of its obligations
under its Guarantee with respect to such covenants in connection with such
outstanding Notes and the Notes 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 Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, 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 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. If the Company exercises under Section 8.01
hereof the option applicable to this Section 8.03, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, payment of the Notes may not
be accelerated because of an Event of Default specified in clause (v) or (vi),
clause (vii) or (viii) (but in the case of (vii) and (viii) of Section 6.01
hereof, with respect to Significant Subsidiaries only) and clause (ix) of
Section 6.01 hereof or because of the Company's failure to comply with clauses
(a)(iii) and (iv) and clause (b) of Section 5.01.
Section 8.04. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes.
Legal Defeasance or Covenant Defeasance may be exercised only
if:
(a) the Company deposits, or causes to be deposited,
irrevocably in trust with the Trustee for the benefit of the Holders,
cash or U.S. Government Obligations, or any combination thereof, for
the payment of principal, premium, if any, and interest and Additional
Interest, if any, on the Notes to maturity or redemption, as the case
may be;
(b) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent certified public accountants
expressing their opinion that
-97-
the payments of principal, premium, if any, and interest and Additional
Interest, if any, when due and without reinvestment on the deposited
U.S. Government Obligations plus any deposited money without investment
will provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the Notes to
maturity or redemption, as the case may be;
(c) 91 days pass after the deposit is made and during the
91-day period no Default described in Section 6.01(vii) or (viii)
occurs and is continuing at the end of the period with respect to the
Company or any other Person making such deposit;
(d) no Default or Event of Default has occurred and is
continuing on the date of such deposit and after giving effect thereto;
(e) such deposit does not constitute a default under any other
material agreement or instrument binding on the Company;
(f) in the case of Legal Defeasance, the Company delivers to
the Trustee an Opinion of Counsel stating that:
(1) the Company has received from the Internal
Revenue Service a private letter ruling; or
(2) since the date of this Indenture there has been a
change in any applicable U.S. federal income tax law,
to the effect, in either case, that, and based thereon, such Opinion of
Counsel shall confirm that, the Holders of the Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result
of such Legal Defeasance and will be subject to U.S. federal income tax
(including withholding tax) on the same amounts, in the same manner and
at the same time as would have been the case if such Legal Defeasance
had not occurred;
(g) in the case of Covenant Defeasance, the Company delivers
to the Trustee an Opinion of Counsel to the effect that the Holders of
the Notes will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to U.S. federal income tax (including withholding tax) on the
same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred; and
(h) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance
have been complied with as required by the Indenture.
-98-
Section 8.05. Deposited Cash and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of all sums due and to become due thereon
in respect of principal, premium, if any, and interest and Additional Interest,
if any, but such cash and securities need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any cash or U.S. Government Obligations held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent certified public accountants of recognized international
standing expressed in a written certification thereof delivered to the Trustee
(which may be the certification delivered under Section 8.04(b) hereof), are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company.
Any cash or U.S. Government Obligations deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal, premium, if any, or interest or Additional Interest,
if any, on any Note and remaining unclaimed for two years after such principal,
premium, if any, or interest or Additional Interest, if any, has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder shall thereafter,
as an unsecured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such cash and
securities, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in The New York Times and The Wall Street Journal (national
edition), notice that such cash and securities remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days from the date of
such notification or
-99-
publication, any unclaimed balance of such cash and securities then remaining
shall be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any cash or
U.S. Government Obligations in accordance with Section 8.02 or 8.03 hereof, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Notes shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02 or
8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply
all such cash and securities in accordance with Section 8.02 or 8.03 hereof, as
the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest or Additional Interest, if any, on,
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders to receive such payment from the cash
and securities held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder to:
(a) cure any ambiguity, omission, defect or inconsistency;
(b) provide for the assumption by a Surviving Person of the
obligations of the Company under this Indenture;
(c) evidence the assumption by a Surviving Person of the
obligations of the Company to any such Holder and covenants for the
protection of any such Holder;
(d) provide for uncertificated Notes in addition to or in
place of certificated Notes (provided that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code,
or in a manner such that the uncertificated Notes are described in
Section 163(f)(2)(B) of the Code);
(e) provide for any Guarantee with respect to the Notes or to
release any Guarantee of the Notes as provided or permitted under this
Indenture;
-100-
(f) make any change that does not adversely affect the rights
of any such Holder;
(g) provide for the issuance of Additional Notes in accordance
with this Indenture;
(h) comply with any requirement of the Commission in
connection with the qualification of this Indenture under the TIA or
other applicable trust indenture legislation;
(i) add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power conferred in this Indenture
upon the Company; and
(j) modify or amend this Indenture to permit the qualification
of indenture supplements hereto.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture and the Notes with the
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding voting as a single class (including consents obtained
in connection with a tender offer or exchange offer for the Notes), and, subject
to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default
(except a continuing Default or Event of Default in the payment of principal,
premium, if any, or interest or Additional Interest, if any, on the Notes) or
compliance with any provision of this Indenture or the Notes (except for certain
covenants and provisions of this Indenture which cannot be amended without the
consent of each Holder) may be waived with the consent of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
voting as a single class (including consents obtained in connection with a
tender offer or exchange offer for the Notes).
Without the consent of each Holder, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment or waiver;
(b) reduce the rate of or extend the time for payment of
interest and Additional Interest, if any, on any Note;
(c) reduce the principal of or extend the Stated Maturity of
any Note;
(d) make any Note payable in money other than that stated in
the Note;
-101-
(e) impair the right of any Holder to receive payment of
principal of premium, if any, and interest and Additional Interest, if
any, on such Holder's Notes on or after the due dates therefor, or to
institute suit for the enforcement of any payment on or with respect to
such Holder's Notes;
(f) subordinate the Notes to any other obligation of the
Company;
(g) release any security interest that may have been granted
in favor of the Holders other than pursuant to the terms of such
security interest;
(h) reduce the premium payable upon the redemption of any Note
or change the time at which any Note may be redeemed, as described in
Section 3.07 hereof;
(i) reduce the premium payable upon a Change of Control or, at
any time after a Change of Control has occurred, change the time at
which the Change of Control Offer relating thereto must be made or at
which the Notes must be repurchased pursuant to such Change of Control
Offer;
(j) at any time after the Company is obligated to make an
Asset Sale Offer with the Excess Proceeds from Asset Sales, change the
time at which such Asset Sale Offer must be made or at which the Notes
must be repurchased pursuant thereto;
(k) make any change to this Indenture or the Notes that would
result in the Company being required to make any withholding or
deduction from payments made under or with respect to the Notes;
(l) make any change in the provisions of this Article 9 which
require the consent of each Holder; or
(m) release any Subsidiary from its obligations under its
Guarantee of the Notes or this Indenture other than pursuant to the
terms of this Indenture relating to the release of Guarantors of the
Notes.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Persons entitled to consent to any
supplemental indenture. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 120 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
-102-
It shall not be necessary for the consent of the Holders under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Company shall mail to the Holder of each Note
affected thereby to such Holder's address appearing in the Security Register a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a
single class may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental indenture that complies with
the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion thereof that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder or subsequent Holder may revoke the
consent as to its Note or portion thereof if the Trustee receives written notice
of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall, upon receipt
of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
-103-
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
In executing any amended or supplemental indenture, the Trustee shall be
entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon an Officers' Certificate and an Opinion of Counsel
stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture and that such amended or supplemental
indenture is the legal, valid and binding obligation of the Company enforceable
against it in accordance with its terms, subject to customary exceptions, and
that such amended or supplemental indenture complies with the provisions hereof
(including Section 9.03).
ARTICLE 10.
SATISFACTION AND DISCHARGE
Section 10.01. Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of
further effect, except as to surviving rights of registration of transfer or
exchange of the Notes, as to all Notes issued hereunder, when:
(a) either:
(i) all Notes that have been previously authenticated
(except lost, stolen or destroyed Notes that have been
replaced or paid and Notes for whose payment money has
previously been deposited in trust or segregated and held in
trust by the Company and is thereafter repaid to the Company
or discharged from the trust) have been delivered to the
Trustee for cancellation; or
(ii) all Notes that have not been previously
delivered to the Trustee for cancellation (A) have become due
and payable or (B) will become due and payable at their
maturity within one year or (C) are to be called for
redemption within one year under arrangements satisfactory to
the Trustee for the giving of a notice of redemption by the
Trustee, and the Company has irrevocably deposited or caused
to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders, cash in U.S. dollars,
non-callable U.S. Government Obligations, or a combination
thereof, in such amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and
discharge the entire Debt on the Notes not previously
delivered to the Trustee for cancellation for principal,
premium, if any, and interest and Additional Interest, if any,
on the Notes to the date of deposit, in the case of Notes that
have
-104-
become due and payable, or to the Stated Maturity
or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all
other sums payable by it under this Indenture; and
(c) the Company delivers to the Trustee an Officers'
Certificate and Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction
and discharge of this Indenture have been satisfied.
Section 10.02. Deposited Cash and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 10.03 hereof, all cash and non-callable
U.S. Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
10.02, the "Trustee") pursuant to Section 10.01 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest and Additional Interest, if any, but such cash and securities need not
be segregated from other funds except to the extent required by law.
Section 10.03. Repayment to Company.
Any cash or non-callable U.S. Government Securities deposited
with the Trustee or any Paying Agent, or then held by the Company, in trust for
the payment of the principal of, premium, if any, or interest or Additional
Interest, if any, on, any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest or Additional Interest, if any, has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder shall
thereafter, as an unsecured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such cash and securities, and all liability of the Company as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in The New York Times and The Wall Street
Journal (national edition), notice that such cash and securities remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such cash and securities then remaining will be repaid to the Company.
-105-
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the provision required by the TIA shall control.
Section 11.02. Notices.
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next-day delivery, to the other's address:
If to the Company:
PolyOne Corporation
▇▇▇▇▇ ▇▇-▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ Day
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
The Bank of New York
Corporate Trust Administration
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
-106-
All notices and communications (other than those sent to the
Trustee) shall be deemed to have been duly given at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next-day delivery. All notices and communications to the
Trustee shall be deemed duly given and effective only upon receipt.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next-day delivery to such Holder's address
shown on the Security Register. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 11.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under any provision of this Indenture (except for the first
issuance of Notes), the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been complied
with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been complied
with.
-107-
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate (other than certificates provided pursuant to
Section 4.04 hereof) or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA
Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
such Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
With respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator, Affiliate or
holder of Capital Stock of the Company will have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of, or by reason of, such obligations. Each Holder of
Notes, by accepting a Note, waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. This waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the Commission that such a waiver is against public policy.
-108-
Section 11.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 11.10. Successors.
All covenants and agreements of the Company in this Indenture
and the Notes shall bind its successors. All covenants and agreements of the
Trustee in this Indenture shall bind its successors.
Section 11.11. Severability.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 11.12. Consent to Jurisdiction and Service of Process.
(a) The Company irrevocably consents to the jurisdiction of
the courts of the State of New York and the courts of the United States of
America located in the Borough of Manhattan, City and State of New York over any
suit, action or proceeding with respect to this Indenture or the transactions
contemplated hereby. The Company waives any objection that it may have to the
venue of any suit, action or proceeding with respect to this Indenture or the
transactions contemplated hereby in the courts of the State of New York or the
courts of the United States of America, in each case, located in the Borough of
Manhattan, City and State of New York, or that such suit, action or proceeding
brought in the courts of the State of New York or the United States of America,
in each case, located in the Borough of Manhattan, City and State of New York
was brought in an inconvenient court and agrees not to plead or claim the same.
(b) The Company irrevocably appoints CT Corporation System as
its authorized agent in the State of New York upon which process may be served
in any such suit or proceeding, and agrees that service of process upon such
agent, and written notice of said ser-
-109-
vice to CT Corporation System, by the person serving the same to the address
provided in Section 11.02, shall be deemed in every respect effective service of
process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action as may be necessary to maintain such
designation and appointment of such agent in full force and effect for a period
of 10 years from the date of this Indenture.
Section 11.13. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 11.14. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings in
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[Signatures on following page]
SIGNATURES
Dated as of May 6, 2003
COMPANY:
POLYONE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
TRUSTEE:
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Treasurer
EXHIBIT A
================================================================================
(Face of Note)
10 5/8% SENIOR NOTES DUE 2010
CUSIP _____________
No. $_____________
POLYONE CORPORATION
promises to pay to CEDE & CO., INC. or registered assigns, the principal sum of
($ ) on May 15, 2010.
Interest Payment Dates: May 15 and November 15, commencing November 15, 2003.
Record Dates: May 1 and November 1.
Dated: ______________, 2003.
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officer.
POLYONE CORPORATION
By:
-------------------------------
Name:
Title:
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------------------
Authorized Signatory
Dated: _____________, 2003
A-2
(Back of Note)
10 5/8% SENIOR NOTES DUE 2010
[Insert the Global Note Legend, if applicable pursuant to the terms of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the terms of the
Indenture]
[Insert the following legend if the Notes are issued with original issue
discount: FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT. FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS NOTE, THE ISSUE PRICE IS
$[ ], THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $[ ], THE ISSUE DATE IS [ ]
AND THE YIELD TO MATURITY IS [ ]% PER ANNUM.]
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. PolyOne Corporation, an Ohio corporation (the
"Company"), promises to pay interest on the principal amount of this Note at 10
5/8% per annum until maturity and shall pay Additional Interest, if any, as
provided in Section 5 of the Registration Rights Agreement. The Company shall
pay interest semi-annually on May 15 and November 15 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; provided, however, that if there is no existing
Default in the payment of interest, and if this Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided, further, that the first Interest Payment Date shall be the first
of May 15 and November 15 to occur after the date of issuance, unless such May
15 or November 15 occurs within one calendar month of such date of issuance, in
which case the first Interest Payment Date shall be the second of May 15 and
November 15 to occur after the date of issuance. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time at a rate that is 1%
per annum in excess of the interest rate then in effect under the Indenture and
this Note; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Additional Interest, if any, from time to time at the same rate to the extent
lawful. Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons in whose name this Note (or one
or more Predeces-
A-3
sor Notes) is registered at the close of business on the May 1 or November 1
next preceding the Interest Payment Date, even if such Notes are cancelled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
shall be payable as to principal, premium, if any, and interest and Additional
Interest, if any, at the office or agency of the Company maintained for such
purpose or may be made by check mailed to the registered address of the Holders.
Additionally, at the option of the Company, payment of principal, premium, if
any, and interest and Additional Interest, if any, may be made by wire transfer
of immediately available funds to the Holders that shall have provided wire
transfer instructions to the Company or the Paying Agent. Such payment shall be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New
York, the Trustee under the Indenture, shall act as Paying Agent and Registrar.
The Company may change any Paying Agent or Registrar without notice to any
Holder. The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of May 6, 2003 ("Indenture") among the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code Sections 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such
terms, and Holders are referred to the Indenture and the TIA for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company unlimited in aggregate
principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in paragraph (b), the Notes will not
be redeemable at the option of the Company prior to May 15, 2007. Beginning on
May 15, 2007, the Notes will be redeemable at the option of the Company, in
whole or in part, at the redemption prices set forth below, plus accrued and
unpaid interest and Additional Interest, if any, on the Notes redeemed to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date). The
following prices are for Notes redeemed during the 12-month period commencing on
May 15 of the years set forth below, and are expressed as percentages of
principal amount:
A-4
REDEMPTION
YEAR PRICE
----------
2007................................................... 105.313%
2008................................................... 102.656%
2009 and thereafter.................................... 100.000%
Notwithstanding the foregoing, at any time on or prior to May
15, 2006, the Company may at its option on any one or more occasions redeem
Notes (including Additional Notes, if any) in an aggregate principal amount not
to exceed 35% of the aggregate principal amount of Notes (including Additional
Notes, if any) issued under the Indenture at a redemption price of 110.625% of
the principal amount, plus accrued and unpaid interest and Additional Interest,
if any, to the redemption date, with the net cash proceeds of one or more Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes
(including Additional Notes, if any) issued under the Indenture remains
outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries); and
(2) the redemption occurs within 90 days of the date of the
closing of such Equity Offering.
6. NOTICE OF REDEMPTION. Notice of redemption shall be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. On and after the redemption date, interest ceases to accrue
on Notes or portions thereof called for redemption.
7. MANDATORY REDEMPTION. The Company shall not be required to
make mandatory redemption or sinking fund payments with respect to the Notes.
8. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to a
Change of Control Offer at an offer price in cash equal to 101% of the aggregate
principal amount of the Notes repurchased, plus accrued and unpaid interest and
Additional Interest, if any, on the Notes repurchased to the purchase date
(subject to the right of Holders of record on the relevant record date to
receive interest to, but excluding, the Change of Control Payment Date).
(b) When the aggregate amount of Excess Proceeds exceeds $25.0
million, the Company will be required to make an Asset Sale Offer, which offer
shall be in the amount
A-5
of the Allocable Excess Proceeds (as defined below), on a pro rata basis
according to principal amount, at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to the purchase date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date), in accordance with the procedures (including prorating
in the event of oversubscription) set forth in this Indenture. To the extent
that any portion of the amount of Excess Proceeds remains after compliance with
the preceding sentence and provided that all Holders of Notes have been given
the opportunity to tender their Notes for purchase in accordance with the
Indenture, the Company or such Restricted Subsidiary may use such remaining
amount for any purpose not restricted by the Indenture and the amount of Excess
Proceeds will be reset to zero. Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
9. DENOMINATIONS, TRANSFER AND EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. This Note shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed hereon, and the aggregate principal
amount of Notes represented hereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. The transfer of
Notes may be registered and Notes may be exchanged as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not exchange or register the transfer of any Note or
portion of a Note selected for redemption, except for the unredeemed portion of
any Note being redeemed in part. Also, the Company need not exchange or register
the transfer of any Notes for a period of 15 days before a selection of Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may
be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Company and the Trustee may amend or supplement the Indenture
and the Notes with the consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, voting as a single
class (including consents obtained in connection with a tender offer or exchange
offer for the Notes), and, subject to Sections 6.04 and 6.07 of the Indenture,
any existing Default or Event of Default (except a continuing Default or Event
of Default in the payment of principal, premium, if any, interest or Additional
Interest, if any, on the Notes) or compliance with any provision of the
Indenture or the Notes (except for certain covenants and provisions of the
Indenture which cannot be amended without the consent of each Holder) may be
waived with the consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding, voting as a single class
(including consents obtained in
A-6
connection with a tender offer or exchange offer for the Notes). Without the
consent of any Holder, the Company and the Trustee may amend or supplement the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
to provide for the assumption by a Surviving Person of the obligations of the
Company under the Indenture, to evidence the assumption by a Surviving Person of
the obligations of the Company to the Holders of Notes and covenants for the
protection of the Holders of Notes, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to add Guarantees or additional
obligors with respect to the Notes or to release any Guarantee of the Notes as
provided or permitted under the Indenture to make any change that does not
adversely affect the legal rights under the Indenture of any such Holder, to
provide for the issuance of Additional Notes, to make any change to comply with
any requirement of the Commission in connection with qualification of the
Indenture under the TIA, to add to the covenants of the Company for the benefit
of the Holders of the Notes or to surrender any right or power conferred upon
the Company, or to modify or amend the Indenture to permit the qualification of
indenture supplements thereto.
12. DEFAULTS AND REMEDIES. Each of the following constitutes
an Event of Default with respect to the Notes: (i) failure to make the payment
of any interest or Additional Interest, if any, on the Notes when the same
becomes due and payable, and such failure continues for a period of 30 days;
(ii) failure to make the payment of any principal of, or premium, if any, on,
any of the Notes when the same becomes due and payable at its Stated Maturity,
upon acceleration, redemption, optional redemption, required repurchase or
otherwise; (iii) failure to comply with the provisions of Section 5.01 of the
Indenture; (iv) failure to comply with any other covenant or agreement in the
Notes or in the Indenture (other than a failure that is the subject of the
foregoing clause (i), (ii) or (iii)) and such failure continues for 30 days
after written notice is given to the Company as provided below; (v) the
occurrence of a default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any Debt by
the Company or any of its Restricted Subsidiaries (or any Debt Guaranteed by the
Company or any of its Restricted Subsidiaries if the Company or a Restricted
Subsidiary does not perform its payment obligations under such Guarantee within
any grace period provided for in the documentation governing such Guarantee),
whether such Debt or Guarantee exists on the Issue Date or is thereafter
created, which default (a) constitutes a Payment Default or (b) results in the
acceleration of such Debt prior to its Stated Maturity, and in each case, the
principal amount of any such Debt, together with the principal amount of any
other such Debt under which there has been a Payment Default or that has been so
accelerated, aggregates $25.0 million or more without such Debt or Guarantee
having been discharged or such acceleration having been rescinded or annulled,
as applicable, within a period of ten days of the date of such Payment Default
or acceleration, as applicable; (vi) any judgment or judgments for the payment
of money in an aggregate amount in excess of $25.0 million (or its foreign
currency equivalent at the time) that shall be rendered against the Company or
any Restricted Subsidiary and that shall not be waived, satisfied or discharged
for any period of 60 consecutive days during which a stay of enforcement shall
not be in effect after such judgment becomes non-appealable; (vii) certain
events of bankruptcy, insolvency or reorganization affecting the Company or any
of its Significant Subsidiaries; and
A-7
(viii) any Guarantee by a Significant Subsidiary of the Notes ceases to be
in full force and effect (other than in accordance with the terms of such
Guarantee or the Indenture) or any such Significant Subsidiary Guarantor denies
or disaffirms its obligations under its Guarantee.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable. Notwithstanding the foregoing,
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency described in the Indenture, all outstanding Notes shall become due
and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of at least a majority in aggregate principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to the payment
of principal or interest or Additional Interest) if it determines that
withholding notice is in their interest. The Holders of at least a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest or Additional
Interest on, or the principal of, the Notes. The Company is required to deliver
to the Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of Default
to deliver to the Trustee a statement specifying such Default or Event of
Default.
13. TRUSTEE DEALINGS WITH COMPANY. Subject to certain
limitations, the Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee.
14. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, Affiliate or holder of Capital Stock
of the Company as such, shall have any liability for any obligations of the
Company under the Indenture, the Notes or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability.
15. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder 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).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES
AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders
of Notes under the
A-8
Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes
that are Initial Notes shall have all the rights set forth in the Registration
Rights Agreement, dated as of May 6, 2003, between the Company and the parties
named on the signature pages thereto or, in the case of Additional Notes,
Holders of Restricted Global Notes and Restricted Definitive Notes shall have
the rights set forth in one or more registration rights agreements, if any,
among the Company and the other parties thereto, relating to rights given by the
Company to the purchasers of any Additional Notes.
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and has directed the Trustee to
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request
and without charge a copy of the Indenture. Requests may be made to:
PolyOne Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
19. GOVERNING LAW. The internal law of the State of New York
shall govern and be used to construe this Note without giving effect to
applicable principles of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
A-9
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.12 or 4.18 of the Indenture, check the box below:
[ ] Section 4.12
[ ] Section 4.18
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.12 or Section 4.18 of the Indenture, state
the amount you elect to have purchased: $ _______________________________
Date: ________________________ Your Signature:_______________________
_______________________________ (Sign exactly as your
name appears on the Note)
Tax Identification No.:
--------------------------
SIGNATURE GUARANTEE:
--------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution"
meeting the requirements of the
Registrar, which requirements include
membership or participation in the
Security Transfer Agent Medallion
Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition
to, or in substitution for, STAMP, all
in accordance with the Securities
Exchange Act of 1934, as amended.
A-10
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
---------------------------------------------------------------------------
(Insert assignee's social security or other tax I.D. no.)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------------
as agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: ________________________ Your Signature: __________________________
(Sign exactly as your name
appears on the face of
this Note)
Signature Guarantee: ____________________
A-11
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:
AMOUNT OF PRINCIPAL AMOUNT SIGNATURE OF
DECREASE IN AMOUNT OF INCREASE OF THIS GLOBAL NOTE AUTHORIZED SIGNATORY
PRINCIPAL AMOUNT IN PRINCIPAL AMOUNT FOLLOWING SUCH OF TRUSTEE OR
DATE OF EXCHANGE OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE DECREASE (OR INCREASE) NOTE CUSTODIAN
---------------- ------------------- ------------------- ---------------------- --------------
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
PolyOne Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
The Bank of New York
Corporate Trust Administration
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.:
Re: 10 5/8% Senior Notes due 2010
-----------------------------
Reference is hereby made to the Indenture, dated as of May 6,
2003 (the "Indenture"), among PolyOne Corporation, as issuer (the "Company"),
and The Bank of New York, as trustee. Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to ___________________________ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial
interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
B-1
2. [ ] Check if Transferee will take delivery of a beneficial
interest in the Regulation S Global Note or a Definitive Note pursuant to
Regulation S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(a) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed Transfer is being made prior to the
expiration of the Distribution Compliance Period, the Transfer is not being made
to a U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3. [ ] Check and complete if Transferee will take delivery of
a beneficial interest in a Definitive Note pursuant to any provision of the
Securities Act other than Rule 144A or Regulation S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
Subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
B-2
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D
under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global
Note or Restricted Definitive Notes and the requirements of the
exemption claimed, which certification is supported by (1) a
certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount
of Notes at the time of transfer of less than $250,000, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which
the Transferor has attached to this certification), to the effect that
such Transfer is in compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Definitive Notes and in the
Indenture and the Securities Act.
4. [ ] Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Note or of an Unrestricted Definitive Note:
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i)
The Transfer is being effected pursuant to and in compliance with an
exemption from the
B-3
registration requirements of the Securities Act other than Rule 144,
Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws
of any State of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of
the Indenture, the transferred beneficial interest or Definitive Note
will not be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
B-4
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
-------------------------------------
[Insert Name of Transferor]
By:
---------------------------------
Name:
Title:
Dated:
---------------------------
B-5
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE OF (a), (b) OR (c)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-6
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
PolyOne Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
The Bank of New York
Corporate Trust Administration
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.:
Re: 10 5/8% Senior Notes due 2010
-----------------------------
Reference is hereby made to the Indenture, dated as of May 6,
2003 (the "Indenture"), among PolyOne Corporation, as issuer (the "Company") and
The Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the "Exchange").
In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial
Interests in a Restricted Global Note for Unrestricted Definitive Notes or
Beneficial Interests in an Unrestricted Global Note:
(a) [ ] Check if Exchange is from beneficial interest in a
Restricted Global Note to beneficial interest in an Unrestricted Global
Note. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Note and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the beneficial interest in an Unrestricted
Global Note is being acquired in compliance with any applicable blue
sky securities laws of any state of the United States.
C-1
(b) [ ] Check if Exchange is from beneficial interest in a
Restricted Global Note to Unrestricted Definitive Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for
the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Note and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(c) [ ] Check if Exchange is from Restricted Definitive Note
to beneficial interest in an Unrestricted Global Note. In connection
with the Owner's Exchange of a Restricted Definitive Note for a
beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Note
to Unrestricted Definitive Note. In connection with the Owner's
Exchange of a Restricted Definitive Note for an Unrestricted Definitive
Note, the Owner hereby certifies (i) the Unrestricted Definitive Note
is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer
restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend
are not required in order to maintain compliance with the Securities
Act and (iv) the Unrestricted Definitive Note is being acquired in
compliance with any applicable blue sky securities laws of any state of
the United States.
2. Exchange of Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes for Restricted Definitive Notes or
Beneficial Interests in Restricted Global Notes:
(a) [ ] Check if Exchange is from beneficial interest in a
Restricted Global Note to Restricted Definitive Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note
is being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of
the
C-2
Indenture, the Restricted Definitive Note issued will continue to be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the
Indenture and the Securities Act.
(b) [ ] Check if Exchange is from Restricted Definitive Note
to beneficial interest in a Restricted Global Note. In connection with
the Exchange of the Owner's Restricted Definitive Note for a beneficial
interest in the [CIRCLE ONE] 144A Global Note, Regulation S Global Note
with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account
without transfer and (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Restricted Definitive
Note and pursuant to and in accordance with the Securities Act, and in
compliance with any applicable blue sky securities laws of any state of
the United States. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global
Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
----------------------------------------------
[Insert Name of Transferor]
By:
------------------------------------------
Name:
Title:
Dated:
---------------------------------------
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
PolyOne Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
The Bank of New York
Corporate Trust Administration
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.:
Re: 10 5/8% Senior Notes due 2010
-----------------------------
Reference is hereby made to the Indenture, dated as of May 6,
2003 (the "Indenture"), among PolyOne Corporation, as issuer (the "Company") and
The Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein 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 the Notes or any
interest therein, we will do so only (A) to the Company or any Subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of a principal amount of Notes, at the time of transfer
of less than $250,000, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to the provi-
D-1
sions of Rule 144(k) under the Securities Act or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to provide
to any Person purchasing the Definitive Note from us in a transaction meeting
the requirements of clauses (A) through (E) of this paragraph a notice advising
such purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment. We have had access to such financial and other
information and have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we deem necessary
in connection with our decision to purchase the Notes.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion and are not acquiring the Notes with a view to any
distribution thereof in a transaction that would violate the Securities Act or
the securities laws of any state of the United States or any other applicable
jurisdiction.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. This letter shall be governed by,
and construed in accordance with, the laws of the State of New York.
--------------------------------------------
[Insert Name of Accredited Investor]
By:
--------------------------------------
Name:
Title:
Dated:
--------------------------------------
D-2
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture), jointly and severally, unconditionally
guarantees, to the extent set forth in the Indenture and subject to the
provisions in the Indenture, dated as of May 6, 2003 (the "Indenture"), among
POLYONE CORPORATION, as issuer (the "Company") and THE BANK OF NEW YORK, as
trustee (the "Trustee"), (a) the due and punctual payment of the principal of,
premium, if any, and interest and Additional Interest, if any, on the Notes,
whether at maturity, by acceleration, redemption or otherwise, the due and
punctual payment of interest on overdue principal and premium, if any, and, to
the extent permitted by law, interest and Additional Interest, if any, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of the Indenture and (b)
in case of any extension of time of payment or renewal of any Notes or any of
such other obligations, that the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
Stated Maturity, by acceleration or otherwise. The obligations of the Guarantors
to the Holders of Notes and to the Trustee pursuant to the Guarantee and the
Indenture are expressly set forth in Section 4.17 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Guarantee. This
Guarantee is subject to release as and to the extent set forth in Sections 4.17,
8.02 and 8.03 of the Indenture. Each Holder of a Note, by accepting the same
agrees to and shall be bound by such provisions.
[NAME OF GUARANTORS]
By:
-------------------------------------
Name:
Title:
E-1