Exhibit 22
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MEMC ELECTRONIC MATERIALS, INC.
Senior Subordinated Secured Notes Due 2007
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AMENDED AND RESTATED INDENTURE
Dated as of December 21, 2001
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CITIBANK, N.A.,
as Trustee
Citicorp USA, Inc.
as Collateral Agent
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ARTICLE 1
DEFINITION AND INCORPORATIONS BY REFERENCE
SECTION 1.01. Definitions.................................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act..........20
SECTION 1.03. Rules of Construction......................................21
ARTICLE 2
THE NOTES
SECTION 2.01. Notes Generally............................................21
SECTION 2.02. Execution and Authentication...............................22
SECTION 2.03. Legends....................................................23
SECTION 2.04. Registrar and Paying Agent.................................23
SECTION 2.05. Paying Agent to Hold Money in Trust........................24
SECTION 2.06. Holder Lists...............................................24
SECTION 2.07. Transfer and Exchange......................................25
SECTION 2.08. Replacement Notes..........................................26
SECTION 2.09. Outstanding Notes..........................................27
SECTION 2.10. Temporary Notes............................................27
SECTION 2.11. Cancellation...............................................27
SECTION 2.11. Defaulted Interest.........................................28
SECTION 2.12. CUSIP and "ISIN" Numbers...................................28
SECTION 2.14. Computation of Interest....................................28
ARTICLE 3
REDEMPTION AT THE OPTION OF THE ISSUER
SECTION 3.01. Optional Redemption........................................28
SECTION 3.02. Notices to Trustee.........................................28
SECTION 3.03. Selection of Notes To Be Redeemed..........................29
SECTION 3.04. Notice of Redemption.......................................29
SECTION 3.05. Effect of Notice of Redemption.............................30
SECTION 3.06. Deposit of Redemption Price................................30
SECTION 3.07. Notes Redeemed in Part.....................................30
SECTION 3.08. Notes Surrendered in Payment of Warrant Exercise Price.....30
ARTICLE 4
MANDATORY REDEMPTION
SECTION 4.01. Early Redemption Events....................................31
SECTION 4.02. Change of Control..........................................33
ARTICLE 5
AFFIRMATIVE COVENANTS
SECTION 5.01. Payment of Notes...........................................35
SECTION 5.02. Commission Reports, Financial Statements and Other
Information................................................35
SECTION 5.03. Compliance Certificate.....................................36
SECTION 5.04. Notices of Material Events.................................37
SECTION 5.05. Existence; Conduct of Business.............................38
SECTION 5.06. Payment of Obligations.....................................38
SECTION 5.07. Maintenance of Properties..................................38
SECTION 5.08. Insurance; Casualty and Condemnation.......................38
SECTION 5.09. Books and Records; Inspection and Audit Rights.............39
SECTION 5.10. Compliance with Laws.......................................39
SECTION 5.11. Additional Subsidiaries....................................39
SECTION 5.12. Further Assurances; Transfer of Joint Venture Stock........39
ARTICLE 6
NEGATIVE COVENANTS
SECTION 6.01. Indebtedness; Certain Equity Securities....................40
SECTION 6.02. Liens......................................................42
SECTION 6.03. Fundamental Changes and Successor Issuers..................43
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions..45
SECTION 6.05. Asset Sales................................................46
SECTION 6.06. Sale and Leaseback Transactions............................47
SECTION 6.07. Hedging Agreements.........................................47
SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness......47
SECTION 6.09. Transactions with Affiliates...............................48
SECTION 6.10. Restrictive Agreements.....................................49
SECTION 6.11. Amendment of Material Documents............................49
SECTION 6.12. Minimum Quarterly Consolidated EBITDA......................49
SECTION 6.13. Minimum Monthly Consolidated Backlog.......................50
SECTION 6.14. Minimum Monthly Consolidated Revenue.......................52
SECTION 6.15. Capital Expenditures.......................................54
ARTICLE 7
DEFAULTS AND REMEDIES
SECTION 7.01. Events of Default..........................................55
SECTION 7.02. Acceleration...............................................57
SECTION 7.03. Other Remedies.............................................57
SECTION 7.04. Waiver of Past Defaults or Covenants.......................58
SECTION 7.05. Control by Majority........................................58
SECTION 7.06. Limitation on Suits........................................58
SECTION 7.07. Rights of Holders to Receive Payment.......................59
SECTION 7.08. Collection Suit by Trustee.................................59
SECTION 7.09 Trustee May File Proofs of Claim...........................59
SECTION 7.10. Priorities.................................................59
SECTION 7.11 Undertaking for Costs......................................60
SECTION 7.12 Waiver of Stay or Extension Laws...........................60
ARTICLE 8
THE TRUSTEE
SECTION 8.01. Duties of Trustee..........................................60
SECTION 8.02. Rights of Trustee..........................................61
SECTION 8.03. Individual Rights of Trustee...............................62
SECTION 8.04. Trustee's Disclaimer.......................................63
SECTION 8.05. Notice of Defaults.........................................63
SECTION 8.06. Reports by Trustee to Holders..............................63
SECTION 8.07. Compensation and Indemnity.................................63
SECTION 8.08. Replacement of Trustee.....................................64
SECTION 8.09. Successor Trustee by Merger................................65
SECTION 8.10. Eligibility; Disqualification..............................65
SECTION 8.11. Preferential Collection of Claims Against the Issuer.......65
ARTICLE 9
DISCHARGE; DEFEASANCE
SECTION 9.01. Discharge of Liability on Notes; Defeasance................66
SECTION 9.02. Conditions to Defeasance...................................67
SECTION 9.03. Application of Trust Money.................................68
SECTION 9.04. Repayment to the Issuer....................................68
SECTION 9.05. Indemnity for Government Obligations.......................68
SECTION 9.06. Reinstatement..............................................68
ARTICLE 10
AMENDMENTS
SECTION 10.01. Without Consent of Holders.................................69
SECTION 10.02. With Consent of Holders....................................69
SECTION 10.03. Compliance with Trust Indenture Act........................70
SECTION 10.04. Revocation and Effect of Consents and Waivers..............70
SECTION 10.05. Notation on or Exchange of Notes...........................71
SECTION 10.06. Trustee to Sign Amendments.................................71
SECTION 10.07. Payment for Consent........................................71
ARTICLE 11
SECURITY; NOTE GUARANTEES
SECTION 11.01. Collateral and Guarantee Requirement.......................72
SECTION 11.02. Regarding the Collateral Agent.............................72
ARTICLE 12
SUBORDINATION
SECTION 12.01. Agreement to Subordinate...................................75
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.......................75
SECTION 12.03. Default on Revolver Obligations............................76
SECTION 12.04. Acceleration of Payment of Notes...........................77
SECTION 12.05. When Distribution Must Be Paid Over........................77
SECTION 12.06. Subrogation................................................77
SECTION 12.07. Relative Rights............................................77
SECTION 12.08. Subordination May Not Be Impaired by Issuer................77
SECTION 12.09. Rights of Trustee and Paying Agent.........................77
SECTION 12.10. Distribution or Notice to Representative...................78
SECTION 12.11. Article 12 Not To Prevent Events of Default or
Limit Right To Accelerate..................................78
SECTION 12.12. Trust Monies Not Subordinated..............................78
SECTION 12.13. Trustee Entitled To Rely...................................78
SECTION 12.14. Trustee To Effectuate Subordination........................79
SECTION 12.15. Trustee Not Fiduciary for Lenders under
Revolver Obligations.......................................79
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls...............................79
SECTION 13.02. Notices....................................................80
SECTION 13.03. Communication by Holders with Other Holders................80
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.........81
SECTION 13.05. Statements Required in Certificate or Opinion..............81
SECTION 13.06. When Notes Disregarded.....................................81
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar...............82
SECTION 13.08. Legal Holidays.............................................82
SECTION 13.09. GOVERNING LAW..............................................82
SECTION 13.10. No Recourse Against Others.................................82
SECTION 13.11. Successors.................................................82
SECTION 13.12. Multiple Originals.........................................82
SECTION 13.13. Table of Contents; Headings................................82
Schedule 1.01 Mortgaged Properties
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04 Existing Investments
Schedule 6.10 Existing Restrictions
Exhibit A - Form of Note
Exhibit B - Guarantee Agreement
Exhibit C - Indemnity, Subrogation and Contribution Agreement
Exhibit D - Pledge Agreement
Exhibit E - Security Agreement
AMENDED AND RESTATED INDENTURE dated as of December 21, 2001
among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Issuer"),
Citibank, N.A., a national banking association, as trustee (the "Trustee") and
(the "Issuer"), Citicorp USA, Inc., a Delaware corporation, as collateral agent
(the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Issuer, the Trustee and the Collateral Agent are
parties to the Indenture dated as of November 13, 2001 (the "Original
Indenture"), pursuant to which Notes have been issued to the Holders;
WHEREAS, the Indebtedness evidenced by the Notes is
subordinated in right of payment, to the extent and in the manner provided in
Article 12 of the Original Indenture, to the prior payment in full of certain
obligations which have been created pursuant to the Revolving Credit Agreement
dated as of November 13, 2001 (the "Original Revolving Credit Agreement"), among
the Issuer, the Lenders party thereto and Citicorp USA, Inc., as Administrative
Agent and Collateral Agent, together with certain security documents and other
ancillary documents executed in connection therewith (the Original Revolving
Credit Agreement, together with such security and ancillary documents, the
"Original Revolving Loan Documentation").
WHEREAS, as of the date hereof, the parties to the Original
Revolving Loan Documentation desire to terminate the Original Revolving Credit
Agreement, and replace the Original Revolving Loan Documentation with: (i) the
Revolving Credit Agreement (as defined herein); (ii) a guarantee agreement, a
security agreement, a pledge agreement and an indemnity, subrogation and
contribution agreement attached as exhibits to such Revolving Credit Agreement;
(iii) the Reimbursement Agreement (as defined herein); (iv) a guarantee
agreement, a security agreement, a pledge agreement and an indemnity,
subrogation and contribution agreement attached as exhibits to such
Reimbursement Agreement; and (v) other security documents and other ancillary
documents executed in connection therewith (the documents named in clauses
(i)-(v), collectively, together with any document executed as an amendment to,
restatement of, substitution for, or replacement of, any such document, the
"Revolving Loan Documentation").
WHEREAS, it is desirable to amend the Indenture in certain
respects to account for the execution of the Revolving Loan Documentation;
NOW THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree to amend and restate the
Original Indenture in its entirety as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Issuer's
Senior Subordinated Secured Notes Due 2007 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accrual Period" has the meaning provided in Section 1 of the
Notes.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
Notwithstanding the foregoing, no individual shall be deemed to be an Affiliate
of a Person solely by reason of his or her being an officer or director of such
Person.
"Blockage Notice" has the meaning provided in section
12.03(b).
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed.
"Capital Expenditures" means, for any period, without
duplication, (a) the additions to property, plant and equipment and other
capital expenditures of the Issuer and its consolidated Subsidiaries that are
(or would be) set forth in a consolidated statement of cash flows of the Issuer
for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Issuer and its consolidated Subsidiaries during such
period, provided that the term "Capital Expenditures" (i) shall be net of
landlord construction allowances, (ii) shall not include expenditures made in
connection with the repair or restoration of assets with insurance or
condemnation proceeds and (iii) shall not include the purchase price of
equipment to the extent consideration therefor consists of used or surplus
equipment being traded in at such time or the proceeds of a concurrent sale of
such used or surplus equipment, in each case in the ordinary course of business.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital lease obligations on a balance sheet of such Person
under GAAP, and the amount of such obligations shall be the capitalized amount
thereof determined in accordance with GAAP.
"Cash Equivalents" means any of the following: (a) any
investment in U.S Government Obligations; (b) investments in time deposit
accounts, certificates of deposit and money market deposits maturing not more
than one year from the date of acquisition thereof, bankers' acceptances with
maturities not exceeding one year and overnight bank deposits, in each case with
a bank or trust company that is organized under the laws of the United States of
America, any state thereof (including any foreign branch of any of the
foregoing) or any foreign country recognized by the United States of America
having capital, surplus and undivided profits aggregating in excess of
$250,000,000 (or the foreign currency equivalent thereof); (c) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (a) above or clause (e) below entered into with a
bank meeting the qualifications described in clause (b) above; (d) investments
in commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate of the Issuer)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America having at the time as
of which any investment therein is made one of the two highest ratings
obtainable from either ▇▇▇▇▇'▇ or S& P; (e) investments in securities with
maturities of six months or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States of
America, or by any foreign government or any state, commonwealth or territory or
by any political subdivision or taxing authority thereof, and, in each case,
having one of the two highest ratings obtainable from either S&P or ▇▇▇▇▇'▇; and
(f) investments in funds investing exclusively in cash and/or investments of the
types described in clauses (a) and (e) above.
"Change in Control" means (a) the failure by TPG to own (and
retain the right to vote), directly or indirectly, beneficially and of record,
Equity Interests in the Issuer representing greater than 30% of each of the
aggregate ordinary voting power and aggregate value represented by the issued
and outstanding Equity Interests in the Issuer; (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Exchange Act and the rules of the Commission
thereunder as in effect on the Issue Date), of Equity Interests representing a
greater percentage of either the aggregate ordinary voting power or the
aggregate value represented by the issued and outstanding Equity Interests of
the Issuer then owned, directly or indirectly, beneficially and of record, by
TPG; or (c) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Issuer by Persons who were neither (i) nominated
by the board of directors of the Issuer nor (ii) appointed by directors so
nominated.
"Change in Control Offer" has the meaning provided in Section
4.02.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all "Collateral", as defined in any
applicable Security Document.
"Collateral Agent" means the "Collateral Agent", as defined in
any applicable Security Document, in such capacity under the applicable Security
Document.
"Collateral and Guarantee Requirement" means the requirement
that:
(a) the Collateral Agent shall have received from the Issuer
and each Pledgor and Guarantor either (i) a counterpart of each of the Guarantee
Agreement, the Indemnity, Subrogation and Contribution Agreement, the Pledge
Agreement and the Security Agreement duly executed and delivered on behalf of
the Issuer and such Pledgor and Guarantor or (ii) in the case of any Person that
becomes a Domestic Subsidiary after the date hereof, a supplement to each of the
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement, the
Pledge Agreement and the Security Agreement, in each case in the form specified
therein, duly executed and delivered on behalf of such Domestic Subsidiary;
(b) all outstanding Equity Interests of the Issuer and each
Subsidiary owned directly by or directly on behalf of the Issuer or any Pledgor
and Guarantor, shall have been pledged pursuant to the Pledge Agreement (except
that the Pledgors and Guarantors shall not be required to pledge (i) more than
65% of the outstanding voting stock of any Foreign Subsidiary, (ii) the Equity
Interests in MEMC Southwest Inc. or (iii) Joint Venture Stock) and the
Collateral Agent shall have received certificates or other instruments
representing all such Equity Interests, together with stock powers or other
instruments of transfer with respect thereto endorsed in blank;
(c) all Indebtedness of the Issuer and each Subsidiary that is
owing to any Pledgor and Guarantor shall be evidenced by a promissory note and
shall have been pledged pursuant to the Pledge Agreement and the Collateral
Agent shall have received all such promissory notes, together with instruments
of transfer with respect thereto endorsed in blank;
(d) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably requested by
the Collateral Agent to be filed, registered or recorded to create the Liens
intended to be created by the Security Agreement and the Pledge Agreement
(including any supplements thereto), and perfect such Liens to the extent
required by, and with the priority required by, the Security Agreement and the
Pledge Agreement, shall have been filed, registered or recorded or delivered to
the Collateral Agent for filing, registration or recording;
(e) the Collateral Agent shall have received (i) counterparts
of a Mortgage with respect to each Mortgaged Property providing that the
Indenture Obligations shall be secured by a Lien on such Mortgaged Property,
signed on behalf of the record owner of such Mortgaged Property, (ii) a policy
or policies of title insurance issued by a nationally recognized title insurance
company, insuring the Lien of each such Mortgage as a valid first Lien on the
Mortgaged Property, described therein, free of any other Liens except as
expressly permitted by Section 6.02, together with such endorsements,
coinsurance and reinsurance as the Trustee or the Collateral Agent may
reasonably request, and (iii) such surveys, abstracts, appraisals, legal
opinions and other documents as the Trustee or the Collateral Agent may
reasonably request with respect to any such Mortgage or Mortgaged Property, as
the case may be; and
(f) the Issuer and each Pledgor and Guarantor shall have
obtained all material consents and approvals required to be obtained by it in
connection with the execution and delivery of all Security Documents (or
supplements thereto) to which it is a party, the performance of its obligations
thereunder and the granting by it of the Liens thereunder.
"Commission" means the Securities and Exchange Commission.
"Consolidated Backlog" for any calendar month means, as of any
measurement date, the sum total of wafers (as measured in millions of square
inches) which has been shipped in respect of bona fide sales to third party
customers during such month to (and including) such measurement date and
remaining shipments which are reasonably expected by the Issuer to be made in
respect of bona fide sales to third party customers from (but excluding) such
measurement date through the last calendar day of the month by the Issuer and
its consolidated Subsidiaries. Amounts expected to be shipped shall be evidenced
by third party customer orders including purchase orders, purchase order
releases pursuant to blanket purchase orders and/or customer buy plans
communicated by electronic data interchange communications, e-mail messages or
via telephone to an MEMC customer service representative or salesperson.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period (but excluding any minority interest, equity in income or
loss of joint ventures and royalty income) plus, (a) without duplication and to
the extent deducted in determining such Consolidated Net Income, the sum of (i)
consolidated interest expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and
amortization for such period, (iv) all extraordinary charges during such period
and (v) all other noncash expenses or losses of the Issuer or any of the
Subsidiaries for such period (excluding any such charge that constitutes an
accrual of or a reserve for cash charges for any future period), and minus (b)
without duplication and to the extent included in determining such Consolidated
Net Income, (i) any extraordinary gains for such period, (ii) all noncash items
increasing Consolidated Net Income for such period (excluding any items that
represent the reversal of any accrual of, or cash reserve for, anticipated cash
charges in any prior period), (iii) foreign currency gains, (iv) interest
income, (v) gains from the sale of assets or capital stock, (vi) income tax
benefit and (vii) any other income categories disclosed as non-operating
(income) expense not otherwise specified, all determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net
income or loss of the Issuer and the Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP, provided that there shall be
excluded from such net income or loss (a) the income of any Person (other than a
consolidated Subsidiary) in which any other Person (other than the Issuer or any
consolidated Subsidiary or any director holding qualifying shares in compliance
with applicable law) owns an Equity Interest, except to the extent of the amount
of dividends or other distributions actually paid to the Issuer or any of the
consolidated Subsidiaries by such Person during such period, and (b) the income
or loss of any Person accrued prior to the date on which it becomes a Subsidiary
or is merged into or consolidated with the Issuer or any consolidated Subsidiary
or the date on which such Person's assets are acquired by the Issuer or any
consolidated Subsidiary.
"Consolidated Revenue" means, for any month, net sales of the
Issuer and its consolidated Subsidiaries, determined in accordance with GAAP
consistently applied, plus net sales of 300 millimeter product (also referred to
as 300 millimeter sales contra) for that same period to the extent not otherwise
included, determined in accordance with GAAP consistently applied. Net sales
shall be computed net of any discounts, returns or allowances. Net sales shall
also exclude sales made by the Issuer or by a Subsidiary to any Affiliate of the
Issuer that is Controlled by the Issuer (other than Taisil Electronic Materials
Corporation) whether or not consolidated with the Issuer under GAAP.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. The terms "Controlling" and "Controlled" have meanings correlative
thereto.
"Corporate Trust Office" has the meaning provided in Section
2.04(a).
"covenant defeasance option" has the meaning provided in
Section 9.01(b).
"Conversion Shares" means the common stock of the Issuer
acquired upon conversion of the Cumulative Preferred Stock.
"Cumulative Preferred Stock" means the Issuer's Series A
Cumulative Convertible Preferred Stock, par value $0.01 per share, having the
rights, preferences, privileges and restrictions set forth in the Certificate of
Designations therefor filed with the Secretary of State of Delaware.
"Default" means any event or condition that constitutes an
Event of Default or that upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Definitive Note" means a certificated Note (bearing the
Restricted Notes Legend if the transfer of such Note is restricted by applicable
law).
"Domestic Subsidiary" means any Subsidiary of the Issuer other
than a Foreign Subsidiary or a Receivables Subsidiary.
"Early Redemption Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a Permitted Receivables Financing or a sale and leaseback
transaction) of any property or asset of the Issuer or any Subsidiary, including
any Equity Interest owned by it, other than (i) dispositions described in parts
(a) and (b) of Section 6.05 and (ii) other dispositions resulting in aggregate
Net Proceeds not exceeding $250,000 during any fiscal year of the Issuer; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Issuer or any Subsidiary, but only to the extent that
the Net Proceeds therefrom have not been applied to repair, restore or replace
such property or asset within 365 days after such event; or
(c) the incurrence by the Issuer or any Subsidiary of any
Indebtedness, other than Indebtedness permitted by Section 6.01; or
(d) the issuance of any Equity Interests by the Issuer other
than (i) the Warrant Shares and the Conversion Shares and (ii) pursuant to an
employee benefit plan in effect on the Issue Date or adopted after the Effective
Date with the consent of the Holders of a majority (by aggregate principal
amount) of the Notes;
provided that no receipt by MEMC Korea Company of Net Proceeds shall constitute
an Early Redemption Event unless and until (and only to the extent that) such
Net Proceeds, or a portion thereof, are actually paid or legally payable as a
dividend or distribution to the Issuer or any Pledgor and Guarantor.
"Early Redemption Offer" has the meaning provided in Section
4.01.
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, directives or
binding agreements issued, promulgated or entered into by or with any
Governmental Authority, relating in any way to the environment, the protection,
preservation or restoration of natural resources, the management (including
generation, use, handling, transportation, storage, treatment and disposal) of
Hazardous Materials, the Release or threatened Release of any Hazardous
Materials into the environment, or health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any costs, obligations, expenses, losses or other liability
in connection with personal injury, strict liability, damages, diminution of
value, investigation, monitoring, remediation, administrative oversight costs,
fines, penalties or indemnities) of the Issuer or any Subsidiary directly or
indirectly arising or resulting from or based upon (a) violation of any
Environmental Law, (b) the management, including generation, use, handling,
transportation, storage, treatment or disposal, of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the Release or threatened Release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is retained, assumed or
imposed with respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means, at any time, each trade or business
(whether or not incorporated) that would, at the time, be treated together with
Issuer or any of its Subsidiaries as a single employer under Title IV or Section
302 of ERISA or Section 412 of the Code.
"ERISA Event" means (a) any "reportable event" described in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than a "reportable event" not subject to the provision for 30-day
notice to the PBGC); (b) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived or the filing of an application
pursuant to Section 412(e) of the Code or Section 304 of ERISA for any extension
of an amortization period; (c) the provision or filing of a notice of intent to
terminate a Plan other than a standard termination within the meaning of Section
4041 of ERISA or the treatment of a Plan amendment as a distress termination
under Section 4041 of ERISA; (d) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (e) the incurrence by the Issuer or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (f) the receipt by the Issuer or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan under Section 4042 of ERISA or the occurrence or existence
of any other event or condition which might reasonably be expected to constitute
grounds for the termination of, the appointment of a trustee to administer, any
Plan other than in a standard termination within the meaning of Section 4041 of
ERISA or the imposition of any lien on the assets of the Issuer or any of its
Subsidiaries or ERISA Affiliates under ERISA, including as a result of the
operation of Section 4069 of ERISA; (g) the incurrence by the Issuer, any of its
Subsidiaries or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan or with
respect to the withdrawal from a Multiple Employer Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA
or by reason of the provisions of Section 4064 of ERISA upon the termination of
a Multiple Employer Plan; or (h) the receipt by the Issuer or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Issuer or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Event of Default" has the meaning provided in Section 7.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Issuer.
"Foreign Subsidiary" means any Subsidiary of the Issuer that
is not organized under the laws of the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America consistently applied.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation, provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee Agreement, attached
hereto as Exhibit B, among the Issuer, the Pledgors and Guarantors and the
Collateral Agent for the benefit of the Secured Parties.
"Hazardous Materials" means any substance, pollutant,
contaminant, chemical or other material (including petroleum or any fraction
thereof, asbestos or asbestos containing material, polychlorinated biphenyls and
urea formaldehyde foam insulation) or waste that is classified or regulated
under any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Holder" means the Person in whose name a Note is registered
on the Registrar's books.
"incorporated provision" has the meaning provided in Section
13.01.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding anything to the contrary in this paragraph, the term
"Indebtedness" shall not include (a) obligations under Hedging Agreements or (b)
agreements providing for indemnification, purchase price adjustments or similar
obligations incurred or assumed in connection with the acquisition or
disposition of assets or stock.
"Indemnity, Subrogation and Contribution Agreement" means the
Indemnity, Subrogation and Contribution Agreement, attached hereto as Exhibit C,
among the Issuer, the Pledgors and Guarantors and the Collateral Agent.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Indenture Obligations" has the meaning assigned in the
Security Agreement.
"Issue Date" means November 13, 2001.
"Issuer" means the party named as such in this Indenture until
a successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Issuer Benefit Plans" means each employee or director benefit
or compensation plan, arrangement or agreement, including pension, savings,
welfare, medical or life insurance, severance, fringe benefit, executive
compensation, deferred compensation, incentive, bonus and long-term performance
option and other equity-based compensation plans, arrangements or agreements,
including any "employee benefit plans" as defined in Section 3(3) of ERISA,
whether or not subject to ERISA, and each employment, retention, consulting,
change in control, termination or severance plan, program, arrangement or
agreement that was entered into or is maintained by or to which the Issuer or
any of its Subsidiaries contribute or is obligated to contribute or with respect
to which the Issuer or any of its Subsidiaries has any liability, direct or
indirect, contingent or otherwise, or otherwise providing benefits to any
current or former employee, officer or director of the Issuer or any of its
Subsidiaries.
"Issuer Order" means a written order of the Issuer signed by
two Officers specifying the amount of Notes to be authenticated and the date on
which they are to be authenticated.
"Italian Credit Agreement" means the euro55,000,000 Amended
and Restated Credit Agreement dated as of September 22, 2001 under which the
Italian Issuer is the borrower, together with any amendment of, restatement of,
substitution for, or replacement of such agreement.
"Italian Issuer" means MEMC Electronic Materials S.p.A., a
societa per azioni, or joint stock company, organized under the laws of the
Republic of Italy.
"Italian Notes" means, collectively, the euro55 million
(aggregate principal amount) Promissory Notes Due 2031 to be issued by the
Italian Issuer under the Italian Credit Agreement as contemplated under the
Restructuring Agreement.
"Joint Venture Stock" has the meaning assigned to such term in
Section 6.03(d).
"legal defeasance option" has the meaning provided in Section
9.01(b).
"lenders under the Revolver Obligations" (and derivations of
that phrase, including "lenders under such Revolver Obligations") mean
collectively (i) the "Lenders" who are parties to the Revolving Credit Agreement
and (ii) the "Fund Guarantors" who are parties to the Reimbursement Agreement.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, properties, financial condition,
contingent liabilities or prospects of the Issuer and the Pledgors and
Guarantors, taken as a whole, (b) the ability of the Issuer or the Pledgors and
Guarantors to perform their obligations under the Transaction Documents or (c)
any rights of or benefits available to the Holders under the Transaction
Documents.
"Material Indebtedness" means (i) any Revolver Obligations and
(ii) any Indebtedness, or obligations in respect of one or more Hedging
Agreements, of any one or more of the Issuer and the Subsidiaries in an
aggregate principal amount exceeding $2,500,000. For purposes of determining
Material Indebtedness pursuant to clause (ii) of the foregoing sentence, the
"principal amount" of the obligations of the Issuer or any Subsidiary in respect
of any Hedging Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Issuer or such Subsidiary
would be required to pay if such Hedging Agreement were terminated at such time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Indenture Obligations. Each Mortgage
shall be reasonably satisfactory in form and substance to the Collateral Agent.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by the Issuer or a Pledgor and
Guarantor and identified on Schedule 1.01, and includes each other parcel of
real property and improvements thereto with respect to which a Mortgage is
granted pursuant to Section 5.11 or 5.12.
"Multiple Employer Plan" means an employee benefit plan
described in Section 4063 of ERISA.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event, including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty or other insured damage, insurance proceeds in excess of
$250,000, and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses (including reasonable attorneys fees, underwriting
discounts and commissions and collection expenses) paid or payable by the Issuer
and the Subsidiaries to third parties in connection with such event, (ii) in the
case of a sale, transfer or other disposition of an asset (including pursuant to
a sale and leaseback transaction or a casualty or a condemnation or similar
proceeding), the amount of all payments required to be made by the Issuer and
the Subsidiaries as a result of such event to repay Indebtedness (other than
Revolver Obligations) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event, and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Issuer and the Subsidiaries, and (iv)
the amount of any reserves established by the Issuer and the Subsidiaries to
fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by the chief financial officer of the Issuer). Notwithstanding anything to
the contrary set forth above, the proceeds of any sale, transfer or other
disposition of Receivables or Related Property (or any interest therein)
pursuant to any Permitted Receivables Financing shall not be deemed to
constitute Net Proceeds except to the extent that such sale, transfer or other
disposition (a) is the initial sale, transfer or other disposition of
Receivables or Related Property (or any interest therein) in connection with the
establishment of such Permitted Receivables Financing or (b) occurs in
connection with an increase in the aggregate outstanding amount of such
Permitted Receivables Financing over the aggregate outstanding amount of such
Permitted Receivables Financing at the time of such initial sale, transfer or
other disposition.
"Notes" means the Issuer's Senior Subordinated Secured Notes
Due 2007 issued under this Indenture.
"Notice of Default' has the meaning provided in Section 7.01.
"Offer Amount" has the meaning provided in Section 4.01.
"Offer Period" has the meaning provided in Section 4.01.
"Officer" means the chairman of the board of directors, the
chief executive officer, the chief financial officer, the president or the
treasurer of the Issuer. "Officer" of a Pledgor and Guarantor has a correlative
meaning thereto.
"Officers' Certificate" means a certificate signed by two
Officers of each Person issuing such certification.
"Opinion of Counsel" means a written opinion (subject to
customary assumptions and exclusions) from legal counsel. The counsel may be an
employee of or counsel to the Issuer.
"Original Indenture" has the meaning provided in the preamble.
"Original Revolving Credit Agreement" has the meaning provided
in the preamble.
"Original Revolving Loan Documentation" has the meaning
provided in the preamble.
"Payment Blockage Period" has the meaning provided in Section
12.03(b).
"Paying Agent" has the meaning provided in Section 2.04(a).
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of
Annex 2 to the Security Agreement or any other form approved by the Issuer and
the Collateral Agent.
"Period End Date" has the meaning provided in Section 1 of the
Notes.
"Permitted Acquisition" means any acquisition (whether by
purchase, merger, consolidation or otherwise) by the Issuer or any consolidated
Subsidiary of all or substantially all the assets of, or all the Equity
Interests in, a Person or division or line of business of a Person if, at the
time of and immediately after giving effect thereto, (a) no Default has occurred
and is continuing or would result therefrom, (b) the principal business of such
Person shall be reasonably related to a business in which the Issuer and the
Subsidiaries were engaged on the Issue Date or into which they have entered
thereafter with the consent of the Holders of a majority (by aggregate principal
amount) of the Notes, (c) each Subsidiary formed for the purpose of or resulting
from such acquisition shall be or contemporaneously become, a Pledgor and
Guarantor and all of the Equity Interests of such Domestic Subsidiary shall be
owned directly by the Issuer or a consolidated Domestic Subsidiary and all
material actions required to be taken with respect to such acquired or newly
formed Domestic Subsidiary under Sections 5.11 and 5.12 shall have been taken
(or shall be taken contemporaneously with the closing of such acquisition or
within the time period set forth in Section 5.11), (d) the Issuer and the
Subsidiaries are in compliance, on a pro forma basis after giving effect to such
acquisition (without giving effect to any cost savings other than those actually
realized as of the date of such acquisition), with the covenants contained in
Sections 6.12, 6.13 and 6.14 recomputed as at the last day of the most recently
ended fiscal quarter or month, as the case may be, of the Issuer for which
financial statements are available, as if such acquisition (and any related
incurrence or repayment of Indebtedness, with any new Indebtedness being deemed
to be amortized over the applicable testing period in accordance with its terms)
had occurred on the first day of each relevant period for testing such
compliance and (e) the Issuer has delivered to the Collateral Agent an officers'
certificate to the effect set forth in parts (a), (b), (c) and (d) above,
together with all relevant financial information for the Person or assets to be
acquired and reasonably detailed calculations demonstrating satisfaction of the
requirement set forth in part (d) above.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes or other governmental
charges that are not yet due or are being contested in compliance with Section
5.06;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.06;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) Liens (other than Liens on Collateral) to secure the
performance of bids, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under part (j) of Section 7.01;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business and minor defects or irregularities in title that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Issuer or any Subsidiary;
(g) ground leases in respect of real property on which
facilities owned or leased by the Issuer or any of the Subsidiaries are located;
(h) any interest or title of a lessor under any lease
permitted by this Agreement;
(i) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods;
(j) leases or subleases granted to other Persons and not
interfering in any material respect with the business of the Issuer and the
Subsidiaries, taken as a whole; and
(k) licenses of intellectual property, including patents and
trademarks held by the Issuer or one of its Subsidiaries.
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America);
(b) investments in commercial paper maturing not more than one
year after the date of acquisition thereof and having, at such date of
acquisition, one of the two highest credit ratings obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing not more than one year after the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts and overnight bank deposits issued or offered by, any
commercial bank organized under the laws of the United States of America or any
State thereof or any foreign country recognized by the United States of America
that has a combined capital and surplus and undivided profits of not less than
$250,000,000 (or the foreign-currency equivalent thereof);
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in part (a) above or part (e) or
(f) below and entered into with a financial institution satisfying the criteria
described in part (c) above;
(e) securities issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof having maturities of not more than six months from the
date of acquisition thereof and, at the time of acquisition, having one of the
two highest credit ratings obtainable from S&P or from Moody's;
(f) securities issued by any foreign government or any
political subdivision of any foreign government or any public instrumentality
thereof having maturities of not more than six months from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest credit ratings obtainable from S&P or from Moody's; and
(g) investments in funds that invest solely in one or more
types of securities described in parts (a), (e) and (f) above.
"Permitted Receivables Financing" means any financing pursuant
to which (a) the Issuer or any Subsidiary sells, conveys or otherwise transfers
to a Receivables Subsidiary, in "true sale" transactions, and (b) such
Receivables Subsidiary sells, conveys or otherwise transfers to any other Person
or grants a security interest to any other Person in, any Receivables (whether
now existing or hereafter acquired) of the Issuer or any Subsidiary or any
undivided interest therein, and any assets related thereto (including all
collateral securing such Receivables), all contracts and all Guarantees or other
obligations in respect of such Receivables, proceeds of such Receivables and
other assets that are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving Receivables, provided that the board of directors of the
Issuer shall have determined in good faith that such Permitted Receivables
Financing is economically fair and reasonable to the Issuer and the
Subsidiaries, taken as a whole.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Issuer, any
of its Subsidiaries or any ERISA Affiliate is an "employer" as defined in
Section 3(5) of ERISA.
"Plan Asset Regulations" means the Department of Labor
regulation Section 2510.3-101, 29 C.F.R. s.2510.3-101.
"Pledge Agreement" means the Pledge Agreement, attached hereto
as Exhibit D, among the Issuer, the Pledgors and Guarantors and the Collateral
Agent for the benefit of the Secured Parties.
"Pledgors and Guarantors" means each Domestic Subsidiary, from
time to time.
"protected purchaser" has the meaning set forth in Section
2.08(a).
"Purchase Agreement" means the purchase agreement, dated as of
September 30, 2001, by and among TPG Partners III, L.P., T(3) Partners, L.P.,
T(3) Partners II, L.P, TPG Wafer Holdings LLC, E.ON AG, E.ON International
Finance B.V., ▇▇▇▇▇▇▇ Corporation, VEBA Zweite Verwaltungsgesellschaft mbH and
E.ON North America, Inc.
"Purchase Date" has the meaning provided in Section 4.01.
"Receivable" means the Indebtedness and payment obligations of
any Person to the Issuer or any of the Subsidiaries or acquired by the Issuer or
any of the Subsidiaries (including obligations constituting an account or
general intangible or evidenced by a note, instrument, contract, security
agreement, chattel paper or other evidence of indebtedness or security but
excluding intercompany obligations) arising from a sale of merchandise or the
provision of services by the Issuer or any Subsidiary or the Person from which
such Indebtedness and payment obligation were acquired by the Issuer or any of
the Subsidiaries, including (a) any right to payment for goods sold or for
services rendered and (b) the right to payment of any interest, sales taxes,
finance charges, returned check or late charges and other obligations of such
Person with respect thereto.
"Receivables Subsidiary" means a corporation or other entity
that is a newly formed, wholly owned, bankruptcy-remote, special purpose
subsidiary of the Issuer or any wholly owned Subsidiary (a) that engages in no
activities other than in connection with the financing of Receivables, all
proceeds thereof and all rights (contractual or other), collateral and other
assets relating thereto, and any business or activities incidental or related to
such business (including servicing of Receivables), (b) that is designated by
the board of directors of the Issuer (as provided below) as a Receivables
Subsidiary, (c) of which no portion of its Indebtedness or any other obligations
(contingent or otherwise) (i) is Guaranteed by the Issuer or any Subsidiary
(other than pursuant to Standard Securitization Undertakings), (ii) is recourse
to or obligates the Issuer or any Subsidiary in any way other than pursuant to
Standard Securitization Undertakings and other than any obligation to sell or
transfer Receivables or (iii) subjects any property or asset of the Issuer or
any Subsidiary, directly or indirectly, contingently or otherwise, to the
satisfaction thereof, (d) with which none of the Issuer or any Subsidiary has
any material contract, agreement, arrangement or understanding (except in
connection with a Permitted Receivables Financing), other than fees payable in
the ordinary course of business in connection with servicing Receivables, and
(e) to which none of the Issuer or any Subsidiary has any obligation to maintain
or preserve such entity's financial condition or cause such entity to achieve
certain levels of operating results. Upon any such designation, a Financial
Officer of the Issuer shall deliver a certificate to the Collateral Agent
certifying (a) the resolution of the board of directors of the Issuer giving
effect to such designation, (b) that, to the best of such officer's knowledge
and belief after consulting with counsel, such designation complied with the
foregoing conditions, (c) that after giving effect to such designation
(including any Indebtedness permitted to exist in connection with such
designation), the Issuer shall be in compliance, on a pro forma basis, with the
covenants set forth in Sections 6.12, 6.13 and 6.14 and (d) immediately after
giving effect to such designation, no Default shall have occurred and be
continuing.
"Registrar" has the meaning provided in Section 2.04(a).
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of November 13, 2001 between the Issuer, TPG Wafer Holdings
LLC and the parties identified as guarantors thereunder.
"Reimbursement Agreement" means the Reimbursement Agreement
dated as of December 21, 2001 among the Issuer, TPG Partners III, L.P.,
TCW/Crescent Mezzanine Partners, III, L.P. and Green Equity Investors III, L.P.,
as Fund Guarantors, and Citicorp USA, Inc., as Collateral Agent, together with
any amendment of, restatement of, substitution for, or replacement of, such
agreement.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Related Property" means, with respect to each Receivable:
(a) all the interest of the Issuer or any Subsidiary in the
goods, if any, sold and delivered to an obligor relating to the sale that gave
rise to such Receivable,
(b) all other security interests or Liens, and the interest of
the Issuer or any Subsidiary in the property subject thereto, from time to time
purporting to secure payment of such Receivable, together with all financing
statements signed by an obligor describing any collateral securing such
Receivable, and
(c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable,
in the case of parts (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise or pursuant to any obligations evidenced by a note,
instrument, contract, security agreement, chattel paper or other evidence of
Indebtedness or security and the proceeds thereof.
"Release" means any release, spill, emission, leaking,
dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching
or migration of any Hazardous Material in, on, onto or into the environment
(including ambient air, surface water, groundwater, land surface or subsurface
strata or within any building, structure, facility or fixture).
"Representative" means any trustee, agent or representative
(if any) for any of the lenders under the Revolver Obligations as identified to
the Trustee pursuant to written notice.
"Restricted Notes Legend" means the legend set forth in
Section 2.03(a) of this Indenture.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Issuer or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any Equity Interests in the Issuer or any Subsidiary or any
option, warrant or other right to acquire any such Equity Interests in the
Issuer or any Subsidiary.
"Restructuring Agreement" means the Restructuring Agreement
dated as of November 13, 2001, between the Issuer and TPG Wafer Holdings LLC.
"Revolver Obligations" means, collectively (i) the "Revolving
Credit Obligations" as such term is defined in the security agreement attached
as an Exhibit to the Revolving Credit Agreement and (ii) the "Reimbursement
Obligations" as such term is defined in the security agreement attached as an
Exhibit to the Reimbursement Agreement. For the avoidance of doubt, the term
"Revolver Obligations" shall include any substitution for, or replacement of,
the obligations identified in numbered clauses (i) and (ii) of this definition.
"Revolving Credit Agreement" means the Revolving Credit
Agreement dated as of December 21, 2001 among the Issuer, the Lenders party
thereto and Citicorp USA, Inc., as Administrative Agent and Collateral Agent,
together with any amendment of, restatement of, substitution for, or replacement
of, such agreement.
"Revolving Loan Documentation" has the meaning provided in the
preamble.
"S&P" means Standard & Poor's Rating Service.
"Secured Parties" has the meaning assigned to such term in the
Security Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, attached
hereto as Exhibit E, among the Issuer, the Pledgors and Guarantors and the
Collateral Agent for the benefit of the Secured Parties.
"Security Documents" means the Guarantee Agreement, the
Security Agreement, the Pledge Agreement, the Mortgages and each other security
agreement or other instrument or document executed and delivered pursuant to
Section 5.11 or 5.12 to secure any of the Indenture Obligations.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into at any time by the Issuer or
any Subsidiary that are reasonably customary in an accounts receivable
transaction.
"Stated Maturity" means, with respect to the Notes, the date
specified in the Notes as the fixed date on which the final payment of principal
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).
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Issuer.
"Successor Issuer" has the meaning provided in Section 6.03.
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C.ss.ss.77aaa-77bbbb) as in effect on the date hereof.
"TPG" means TPG Partners III, L.P. and its Affiliates,
provided that no such Affiliate shall be deemed a member of TPG to the extent it
ceases to be Controlled by, or under common Control with, TPG Partners III, L.P.
"Transaction Documents" means the Indenture, the Notes, the
Security Documents, the Restructuring Agreement and the Registration Rights
Agreement.
"Transfer Restricted Note" means any Definitive Note and any
other Note that bears or is required to bear the Restricted Notes Legend.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means any vice president, assistant vice
president or trust officer of the Trustee assigned by the Trustee to administer
its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"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.
"Warrant" means any of the warrants to acquire common stock of
the Issuer issued pursuant to the Restructuring Agreement.
"Warrant Exercise Price" means the aggregate exercise price
paid or to be paid in connection with the acquisition of common stock of the
Issuer upon any exercise of Warrants.
"Warrant Shares" means the common stock of the Issuer acquired
upon exercise of the Warrants.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the Commission.
"indenture securities" means the Notes issued hereunder and
the Guarantees issued pursuant to the Security Documents.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Issuer, the
Pledgors and Guarantors and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meanings assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP.
ARTICLE 2
The Notes
SECTION 2.01. Notes Generally.
(a) Initial Issuance. The Issuer originally issued the Notes
under the Original Indenture on November 13, 2001, for purchase by the initial
Holders in connection with the transactions described in the Restructuring
Agreement. The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is limited to $50,000,000 (subject to Sections
2.09 and 2.10 of this Indenture and subject to interest accrued and added to
such principal amount on any Period End Date).
(b) Form and Dating..The Notes and the Trustee's certificate
of authentication shall each be substantially in the form of Exhibit A hereto,
which is hereby incorporated in and expressly made a part of this Indenture.
Each Note shall be dated the date of its authentication. The Notes shall be
issuable only in registered form without interest coupons. Initially, all Notes
shall be issued in definitive, fully-certificated form. The Notes may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Issuer is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Issuer) and
shall have the Legends required pursuant to Section 2.03 of this Indenture.
SECTION 2.02. Execution and Authentication. (a) Two Officers,
one of whom shall be the chairman of the board of directors, the President, the
chief executive officer or the chief financial officer, shall sign the Notes for
the Issuer by manual or facsimile signature. If an Officer whose signature is on
a Note no longer holds that office at the time the Trustee authenticates the
Note, the Note shall be valid nevertheless.
(b) The Trustee shall authenticate and make available for
delivery Notes upon an Issuer Order and a Note shall not be valid until so
authenticated. The signature of a Trust Officer or an authenticating agent
appointed pursuant to part (c) of this Section 2.02 shall be conclusive evidence
that the Note has been authenticated under this Indenture.
(c) The Trustee may appoint an authenticating agent reasonably
acceptable to the Issuer to authenticate the Notes. Any such appointment shall
be evidenced by an instrument signed by a Trust Officer, a copy of which shall
be furnished to the Issuer. Unless limited by the terms of such 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 any
Registrar, Paying Agent or agent for service of notices and demands.
(d) In case the Issuer shall be consolidated with or merged
into any other Person, or shall convey, transfer, lease or otherwise dispose of
its properties and assets substantially as an entirety to any Person, and the
Successor Issuer resulting from such consolidation, or surviving such merger, or
which shall have received a conveyance, transfer, lease or other disposition as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Section 6.03, any of the Notes authenticated or delivered prior to
such transaction may, from time to time, at the request of the Successor Issuer,
be exchanged for other Notes executed in the name of the Successor Issuer with
such changes in phraseology and form as may be appropriate, but otherwise
identical to the Notes surrendered for such exchange and of like principal
amount; and the Trustee, upon Issuer Order of the Successor Issuer, shall
authenticate and deliver Notes as specified in such order for the purpose of
such exchange. If Notes shall at any time be authenticated and delivered in any
new name of a Successor Issuer pursuant to this Section 2.02(d) in exchange or
substitution for or upon registration of transfer of any Notes, such Successor
Issuer, at the option of the Holders but without expense to them, shall provide
for the exchange of all Notes at the time outstanding for Notes authenticated
and delivered in such new name.
SECTION 2.03. Legends.
(a) Restricted Note Legend. Except as permitted by part (c) of
this Section 2.03, each certificate evidencing the Notes (and all Notes issued
in exchange therefor or in substitution thereof) shall bear a legend in
substantially the following form (each defined term in the legend being defined
as such for purposes of the legend only):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION."
(b) Additional Legend for Definitive Notes. Each Definitive
Note shall bear the following legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS."
(c) Use and Removal of Legends. The Restricted Notes Legend
and the legend described in Section 2.03(b) shall be removed from a certificate
representing Notes if the securities represented thereby are sold pursuant to an
effective registration statement under the Securities Act or there is delivered
to the Issuer and the Registrar such satisfactory evidence, which may include an
Opinion of Counsel, as reasonably may be requested by the Issuer and the
Registrar, to confirm that neither such legend nor the restrictions on transfer
set forth therein are required to ensure that transfers of such securities will
not violate the registration and prospectus delivery requirements of the
Securities Act.
SECTION 2.04. Registrar and Paying Agent. (a) The Issuer shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where Notes
may be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Notes and of their transfer and exchange and shall retain copies
of all letters, notices and other written communications received in connection
with the transfer and exchange of Notes. The Issuer may have one or more
co-registrars and one or more additional paying agents. The term "Paying Agent"
includes any additional paying agent, and the term "Registrar" includes any
co-registrars. The Issuer initially appoints the Trustee at its principal
corporate trust office in the Borough of Manhattan, City of New York (the
"Corporate Trust Office") as Registrar, Paying Agent and agent for service of
demands and notices in connection with the Notes and this Indenture, until such
time as another Person is appointed as such.
(b) The Issuer shall enter into an appropriate agency
agreement with any Registrar or Paying Agent not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Issuer shall notify
the Trustee of the name and address of any such agent. If the Issuer fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 8.07. The
Issuer or any of its wholly owned Domestic Subsidiaries may act as Paying Agent
or Registrar.
(c) The Issuer may remove any Registrar or Paying Agent upon
written notice to such Registrar or Paying Agent and to the Trustee; provided,
however, that no such removal shall become effective until (i) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Issuer and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as Registrar or Paying Agent until the appointment of a
successor in accordance with clause (i) above. The Registrar or Paying Agent may
resign at any time upon written notice to the Issuer and the Trustee.
SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to
the Stated Maturity, the Issuer shall deposit with the Paying Agent (or if
either of the Issuer or a Domestic Subsidiary of the Issuer is acting as Paying
Agent, segregate and hold in trust for the benefit of the Persons entitled
thereto) a sum sufficient to pay the principal and interest then becoming due.
The Issuer 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 Holders or
the Trustee all money held by the Paying Agent for the payment of such principal
and interest and shall notify the Trustee of any default by the Issuer in making
any such payment. If the Issuer or a Domestic Subsidiary of the Issuer acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Issuer at any time may require a Paying Agent
to pay all money held by it to the Trustee and to account for any funds
disbursed by the Paying Agent. Upon complying with this Section, the Paying
Agent (if other than the Issuer or any Affiliate of the Issuer) shall have no
further liability for the money delivered to the Trustee.
SECTION 2.06. Holder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders. If the Trustee is not the Registrar, the
Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in
writing at least five Business Days before the Stated Maturity and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Holders.
SECTION 2.07. Transfer and Exchange.
(a) The parties hereto hereby acknowledge that, as of the date
hereof, the Notes have not been registered under the Securities Act or the
securities laws of any state or other jurisdiction. Accordingly, any Holders
from time to time, by their acceptance of the Notes issued hereunder (either
pursuant to the initial issuance or pursuant to a permitted transfer or
exchange), covenant and agree that neither the Notes nor any interest or
participation in them shall be offered, sold, assigned, transferred, pledged,
exchanged, encumbered or otherwise disposed of in the absence of such
registration, or unless such transaction is exempt from, or not subject to, such
registration.
(b) The Notes shall be transferable or exchangeable only upon
the surrender of a Note for registration of transfer or exchange and then only
in compliance with the provisions of this Section 2.07. When a Note is presented
to the Registrar with a request to register a transfer, the Registrar shall
register the transfer as requested if its requirements therefor (including, with
respect to Definitive Notes, the requirements set forth in the part (c) of this
Section 2.07) are met.
(c) When Definitive Notes are presented to the Registrar with
a request:
(i) to register the transfer of such Definitive Notes; or
(ii) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such
transaction are met; provided, however, that the Definitive
Notes surrendered for transfer or exchange:
(A) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably
satisfactory to the Issuer and the Registrar, duly
executed by the Holder thereof or his attorney duly
authorized in writing; and
(B) in the case of Transfer Restricted Notes, shall
be accompanied by such additional information and
documents as may be reasonably requested by the
Registrar to document compliance with the provisions
of Section 2.07 of the Indenture.
(d) To permit registration of transfers and exchanges, the
Issuer shall execute and, upon Issuer Order, the Trustee shall authenticate
Notes at the Registrar's request. No service charge shall be imposed for any
registration of transfer or exchange, but the Issuer may require payment of a
sum sufficient to pay all taxes, assessments or other governmental charges in
connection with any transfer or exchange pursuant to this Section.
(e) Prior to the due presentation for registration of transfer
of any Note, the Issuer, the Trustee, the Paying Agent, and the Registrar may
deem and treat the Person in whose name a Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of and
(subject to paragraph 2 of the Notes) interest, if any, on such Note and for all
other purposes whatsoever, whether or not such Note is overdue, and none of the
Issuer, the Trustee, the Paying Agent, or the Registrar shall be affected by
notice to the contrary. The Issuer shall not be required to make, and the
Registrar shall not be required to register, transfers or exchanges of Notes
selected for redemption (except, in the case of Notes to be redeemed in part,
the portion thereof not to be redeemed) or any Notes for a period of 15 days
before a selection of Notes to be redeemed.
(f) All Notes issued upon any transfer or exchange pursuant to
the terms of this Indenture will evidence the same debt and will be entitled to
the same benefits under this Indenture as the Notes surrendered upon such
transfer or exchange.
(g) The Registrar shall retain copies of all letters, notices
and other written communications received in connection with the transfer and
exchange of Notes pursuant to this Indenture. The Issuer shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable prior
written notice to the Registrar.
SECTION 2.08. Replacement Notes. (a) If a mutilated Note
is surrendered to the Registrar or if the Holder of a Note claims that the Note
has been lost, destroyed or wrongfully taken, the Issuer shall issue and, upon
Issuer Order, the Trustee shall authenticate a replacement Note if the
requirements of Section 8-405 of the Uniform Commercial Code are met, such that
the Holder (i) satisfies the Issuer or the Trustee within a reasonable time
after he has notice of such loss, destruction or wrongful taking and the
Registrar does not register a transfer prior to receiving such notification,
(ii) makes such request to the Issuer or the Trustee prior to the Note's being
presented for registration of Transfer to the Issuer by a protected purchaser as
defined in Section 8-303 of the Uniform Commercial Code (a "protected
purchaser") and (iii) satisfies any other reasonable requirements of the Issuer
or the Trustee. If required by the Trustee or the Issuer, such Holder shall
furnish an indemnity bond sufficient in the judgment of the Trustee to protect
the Issuer, the Trustee, the Paying Agent and the Registrar from any loss that
any of them may suffer if a Note is replaced. In the event any such mutilated,
lost, destroyed or wrongfully taken Note has become or is about to become due
and payable, the Issuer in its discretion may pay such Note instead of issuing a
new Note in replacement thereof.
(b) Upon the issuance of any replacement Note under this
Section 2.08, the Issuer may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed and any
other expenses (including the fees and expenses of the Trustee and the expenses
of the Issuer) in connection therewith.
(c) Every replacement Note issued pursuant to this Section
2.08 in exchange for any mutilated Note, or in lieu of any destroyed, lost or
stolen Note, shall constitute an original additional contractual obligation of
the Issuer and any other obligor upon the Notes, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.08 are exclusive and
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, lost, destroyed or wrongfully taken
Notes.
SECTION 2.09. Outstanding Notes. (a) Notes outstanding at
any time are all authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. Subject to Section 13.06, a Note does not cease to be
outstanding because the Issuer or an Affiliate of the Issuer holds the Note.
(b) If a Note is replaced pursuant to Section 2.08, it ceases
to be outstanding unless the Trustee and the Issuer receive proof satisfactory
to them that the replaced Note is held by a protected purchaser.
(c) If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or maturing, as the case may
be, and the Paying Agent is not prohibited from paying such money to the Holders
on that date pursuant to the terms of this Indenture, then on and after that
date such Notes (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.10. Temporary Notes. In the event that
Definitive Notes are to be issued under the terms of this Indenture, until such
Definitive Notes are ready for delivery, the Issuer may prepare and, upon Issuer
Order, the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the
Issuer considers appropriate for temporary Notes. Without unreasonable delay,
the Issuer shall prepare and, upon Issuer Order, the Trustee shall authenticate
Definitive Notes and deliver them in exchange for temporary Notes upon surrender
of such temporary Notes at the office or agency of the Issuer, without charge to
the Holder. Until so exchanged, the Holder of temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as a Holder of
definitive Notes.
SECTION 2.11. Cancellation. The Issuer at any time may
deliver Notes to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment or
cancellation and shall dispose of canceled Notes in accordance with its
customary procedures or deliver canceled Notes to the Issuer pursuant to written
direction by an Officer. The Issuer may not issue new Notes to replace Notes it
has redeemed, paid or delivered to the Trustee for cancellation for any reason
other than in connection with a transfer or exchange upon Issuer Order. The
Trustee shall not authenticate Notes in place of canceled Notes other than
pursuant to the terms of this Indenture.
SECTION 2.12. Defaulted Interest. If the Issuer defaults
in a payment of interest on the Notes, the Issuer shall pay the defaulted
interest (plus interest on such defaulted interest to the extent lawful) in any
lawful manner.
SECTION 2.13. CUSIP and "ISIN" Numbers. The Issuer in
issuing the Notes may use "CUSIP" and "ISIN" numbers (if then generally in use)
and, if so, the Trustee shall use "CUSIP" and "ISIN" 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 Issuer will promptly notify the Trustee of any
change in the "CUSIP" numbers.
SECTION 2.14. Computation of Interest. Interest on the
Notes shall accrue in the manner and at the Interest Rate provided in Section 1
of the Notes, and shall be computed on the basis of a year of 360 day year
comprised of twelve 30-day months. The interest to be accrued as provided in
Section 1 of the Notes shall be determined by the Paying Agent in accordance
with the terms of this Indenture and the Notes, and such determination shall be
prima facie evidence thereof absent manifest error.
ARTICLE 3
REDEMPTION AT THE OPTION OF THE ISSUER
SECTION 3.01. Optional Redemption. The Notes shall not be
redeemable at the option of the Issuer prior to November 13, 2005. On or after
such date, the Notes shall be redeemable at any time at the option of the
Issuer, in whole and not in part, on not less than 30 nor more than 60 days
prior notice, at the following redemption prices (expressed as percentages of
principal amount), plus accrued and unpaid interest to the redemption date, if
redeemed during the 12-month period commencing on November 13 of the years set
forth below.
Year Redemption Price
-------------------------------------------------------------------
2005.........................................................105.0%
2006.........................................................102.5%
SECTION 3.02. Notices to Trustee. If the Issuer elects to
redeem Notes pursuant to Section 3.01, it shall notify the Trustee in writing of
the redemption date and the principal amount of Notes to be redeemed.
The Issuer shall give each notice to the Trustee provided for
in this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Issuer to the effect that such redemption will comply with
the conditions herein. Any such notice may be canceled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.
SECTION 3.03. Selection of Notes To Be Redeemed. If fewer
than all the Notes are to be redeemed, the Trustee shall select the Notes to be
redeemed pro rata or by lot or by a method that the Trustee in its sole
discretion shall deem to be appropriate. The Trustee shall make the selection
from outstanding Notes not previously called for redemption. The Trustee may
select for redemption portions of the principal of Notes that have denominations
larger than $1,000. Notes and portions of them the Trustee selects shall be in
amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes called
for redemption. The Trustee shall notify the Issuer promptly of the Notes or
portions of Notes to be redeemed.
SECTION 3.04. Notice of Redemption. (a) At least 30 days
but not more than 60 days before a date for redemption of Notes, the Issuer
shall mail a notice of redemption by first-class mail to each Holder of Notes to
be redeemed at such Holder's registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest
to the redemption date;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(v) if fewer than all the outstanding Notes are to be
redeemed, the certificate numbers and principal amounts of the
particular Notes to be redeemed;
(vi) that, unless the Issuer defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Notes (or
portion thereof) called for redemption ceases to accrue on and after
the redemption date;
(vii) the CUSIP or ISIN number, if any, printed on the Notes
being redeemed; and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP or ISIN number, if any, listed in such notice or
printed on the Notes.
(b) At the Issuer's request, the Trustee shall give the notice
of redemption in the Issuer's name and at the Issuer's expense. In such event,
the Issuer shall provide the Trustee with the information required by this
Section.
SECTION 3.05. Effect of Notice of Redemption. Once notice
of redemption is mailed, Notes called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Notes shall be paid at the redemption price
stated in the notice, plus accrued interest, to the redemption date; provided,
however, that if the redemption date is after a regular record date and on or
prior to the related interest payment date, the accrued interest shall be
payable to the Holder of the redeemed Notes registered on the relevant record
date. Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.06. Deposit of Redemption Price. Prior to 10:00
a.m. on the redemption date, the Issuer shall deposit with the Paying Agent (or,
if either of the Issuer or a Domestic Subsidiary of the Issuer is the Paying
Agent, shall segregate and hold in trust) money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date other
than Notes or portions of Notes called for redemption that have been delivered
by the Issuer to the Trustee for cancellation. On and after the redemption date,
interest will cease to accrue on Notes or portions thereof called for redemption
so long as the Issuer has deposited with the Paying Agent funds sufficient to
pay the principal of, plus accrued and unpaid interest on, the Notes to be
redeemed, unless the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture. The Paying Agent shall promptly return
to the Issuer upon written request any money deposited with the Paying Agent by
the Issuer that is in excess of the amounts necessary to pay the redemption
price of and accrued interest on all Notes to be redeemed.
SECTION 3.07. Notes Redeemed in Part. Upon surrender of a
Note that is redeemed in part, the Issuer shall execute and, upon Issuer Order,
the Trustee shall authenticate for the Holder (at the Issuer's expense) a new
Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.08. Notes Surrendered in Payment of Warrant
Exercise Price. Under and pursuant to the terms of the Warrants, Holders shall
have the right to surrender one or more Notes and apply all or a portion of
their principal amount in payment of the Warrant Exercise Price. In the event
that the outstanding principal amount of such Notes shall be greater than the
Warrant Exercise Price so to be paid, the Issuer shall execute and, upon Issuer
Order, the Trustee shall authenticate for the Holder (at the Issuer's expense) a
new Note equal in principal amount to the portion of surrendered Notes not
applied in payment of the Warrant Exercise Price.
ARTICLE 4
MANDATORY REDEMPTION
SECTION 4.01. Early Redemption Events.
(a) In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Issuer or any Subsidiary in respect of any
Early Redemption Event, the Issuer shall (i) in the case of an event described
in part (a) or (b) of the definition of Early Redemption Event, apply all such
Net Proceeds, or (ii) in the case of an event described in part (c) or (d) of
the definition of Early Redemption Event, apply 75% of such Net Proceeds to
redeem Notes in an Early Redemption Offer pursuant to and subject to the
conditions of this Section 4.01; provided that, in the case of any event
described in clause (a) of the definition of the term "Early Redemption Event"
occurring on or prior to the six-month anniversary of the Issue Date (other than
the sale, transfer or other disposition of (i) Receivables in connection with a
Permitted Receivables Financing, or (ii) other assets of the Issuer or any
Subsidiary in connection with the incurrence of Indebtedness in respect of an
asset-backed financing entered into with the consent of the Holders of a
majority (by aggregate principal amount) of the Notes), if the Issuer shall
deliver to the Trustee a certificate of a Financial Officer to the effect that
no Default has occurred and is continuing, then no redemption shall be required
pursuant to this paragraph in respect of the Net Proceeds in respect of such
event until the six-month anniversary of the Issue Date; and further provided,
that the Issuer shall have no obligation to make such an Early Redemption Offer
unless so directed by the Holders of a majority, in aggregate principal amount,
of the Notes (in accordance with part (b) of this Section 4.01); and further
provided that, for so long as any Revolver Obligations are outstanding, an Early
Redemption Offer shall only be made to the extent of Net Proceeds remaining
following the repayment in full of such Revolver Obligations or to the extent
that the lenders of such Revolver Obligations provide their consent.
(b) Within 5 Business Days following the occurrence of an
Early Redemption Event that, pursuant to part (a) of this Section 4.01, requires
an Early Redemption Offer to be made, the Issuer shall mail a notice to each
Holder with a copy to the Trustee, stating that an Early Redemption Event has
occurred and requesting that the Holders of Notes provide their instructions as
to whether or not the Issuer should make an Early Redemption Offer. If the
Holders of a majority (by aggregate principal amount) of the Notes instruct the
Issuer to make an Early Redemption Offer within 10 days following the mailing of
the notice described in this part 4.01(b), the Issuer shall become obligated on
such 10th day to make an Early Redemption Offer, following the steps set forth
in parts (c) and (d) of this Section 4.01.
(c) In any Early Redemption Offer required pursuant to this
Section 4.01, the Issuer shall be required:
(i) FIRST, to purchase Notes tendered pursuant to an offer by
the Issuer to Holders for the Notes (the "Early Redemption Offer") at a
purchase price of 100% of their principal amount (without premium) plus
accrued and unpaid interest to the date of purchase in accordance with
the procedures (including prorating in the event of oversubscription)
set forth in Section 4.01(d); and
(ii) THEREAFTER, to the extent of Net Proceeds, if any,
remaining after the completion of the Early Redemption Offer in respect
of the Notes, provide funds to the Italian Issuer to permit redemption
of the Italian Notes in a similar offer made in respect of the Italian
Notes (an "Italian Redemption Offer"). If the aggregate redemption
price of Notes and Italian Notes tendered, pursuant to the Early
Redemption Offer and the Italian Redemption Offer, is less than the Net
Proceeds allotted to the purchase of the Notes and the Italian Notes,
the Issuer shall apply the remaining Net Proceeds for general corporate
purposes.
(d) Early Redemption Offer Procedure. (i) Promptly, and in any
event within ten (10) Business Days after the Issuer becomes obligated
to make an Early Redemption Offer, the Issuer shall be obligated to
deliver to the Trustee and send, by first-class mail to each Holder, a
written notice stating that the Holder may elect to have his Notes
purchased by the Issuer either in whole or in part (subject to
prorating as hereinafter described in the event the Early Redemption
Offer is oversubscribed) at the applicable purchase price. The notice
shall specify a purchase date not less than 30 days nor more than 60
days after the date of such notice (the "Purchase Date") and shall
contain such information concerning the business of the Issuer which
the Issuer in good faith believes will enable such Holders to make an
informed decision (which at a minimum shall include (A) the most
recently filed Annual Report on Form 10-K (including audited
consolidated financial statements) of the Issuer, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report
on Form 8-K of the Issuer filed subsequent to such Quarterly Report,
other than Current Reports describing Early Redemption Events otherwise
described in the offering materials (or corresponding successor
reports), (B) a description of material developments in the Issuer's
business subsequent to the date of the latest of such reports, and (C)
if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender Notes pursuant to the
Early Redemption Offer, together with the address referred to in clause
(iii) of this part 4.02(d).
(ii) Not later than the date upon which written notice of an
Early Redemption Offer is delivered to the Trustee as provided above,
the Issuer shall deliver to the Trustee an Officers' Certificate as to
(A) the amount of the Early Redemption Offer (the "Offer Amount"), (B)
the allocation of the Net Proceeds from the Early Redemption Events
pursuant to which such Early Redemption Offer is being made and (C) the
compliance of such allocation with the provisions of Section 4.01(a).
Not later than one Business Day before the Purchase Date, the Issuer
shall also irrevocably deposit with the Trustee or with a paying agent
(or, if the Issuer is acting as its own paying agent, segregate and
hold in trust) an amount equal to the Offer Amount with written
instructions for investment in cash or Cash Equivalents and to be held
for payment in accordance with the provisions of this Section. Upon the
expiration of the period for which the Early Redemption Offer remains
open (the "Offer Period"), the Issuer shall deliver to the Trustee for
cancellation the Notes or portions thereof that have been properly
tendered to and are to be accepted by the Issuer. The Trustee (or the
Paying Agent, if not the Trustee) shall, on the date of purchase, mail
or deliver payment to each tendering Holder in the amount of the
purchase price. In the event that the Offer Amount delivered by the
Issuer to the Trustee is greater than the purchase price of the Notes
tendered, the Trustee shall deliver the excess to the Issuer
immediately after the expiration of the Offer Period for application in
accordance with this Section 4.01.
(iii) Holders electing to have a Note purchased shall be
required to surrender the Note, with an appropriate form duly
completed, to the Issuer at the address specified in the notice at
least three Business Days prior to the Purchase Date. Holders shall be
entitled to withdraw their election if the Trustee or the Issuer
receives not later than one Business Day prior to the Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note or Notes which
were delivered by the Holder for purchase and a statement that such
Holder is withdrawing his election to have such Note or Notes
purchased. If at the expiration of the Offer Period the aggregate
principal amount of Notes included in the Early Redemption Offer
surrendered by holders thereof exceeds the Early Redemption Offer
Amount, the Issuer shall select the Notes to be purchased on a pro rata
basis. Holders whose Notes are purchased only in part will be issued
new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered.
(iv) The Issuer shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of
Notes pursuant to this Section. To the extent that the provisions of
any securities laws or regulations conflict with provisions of this
Section, the Issuer shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
SECTION 4.02. Change of Control. (a) Upon a Change of
Control each Holder shall have the right to require that the Issuer offer to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes at a purchase price in cash equal to 101% of the principal
amount thereof plus accrued and unpaid interest thereon to the date of purchase,
in accordance with the terms set forth in Section 4.02(b) (a "Change of Control
Offer"); provided, however, that the Issuer shall have no obligation to make
such a Change of Control Offer unless so instructed by the Holders of a
majority, in aggregate principal amount, of the Notes (in accordance with part
(b) of this Section 4.02), and further provided that notwithstanding the
occurrence of a Change of Control, the Issuer shall not be obligated to purchase
the Notes pursuant to this Section 4.02 in the event that the Issuer has
exercised its right to redeem all the Notes pursuant to Section 3.01 of this
Indenture.
(b) Within 5 Business Days following a Change of Control, the
Issuer shall mail a notice to each Holder with a copy to the Trustee, stating
that a Change of Control has occurred and requesting that the Holders of Notes
provide their instructions as to whether or not the Issuer should make a Change
of Control Offer. If, within 10 days following the mailing of the notice
described in this part 4.01(b), the Holders of a majority (by aggregate
principal amount) of the Notes instruct the Issuer to make a Change of Control
Offer, the Issuer shall become obligated on such 10th day to make a Change of
Control Offer, following the steps set forth in parts (c) - (h) of this Section
4.02.
(c) Promptly, and in any event within ten (10) Business Days
after the Issuer becomes obligated to make a Change of Control Offer, the Issuer
shall mail a notice to each Holder with a copy to the Trustee, which shall:
(i) state that a Change of Control has occurred and that each
Holder has the right to require the Issuer to purchase all or a portion
(equal to $1,000 or an integral multiple thereof) of such Holder's
Notes at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest thereon, to the date of
purchase;
(ii) describe the circumstances and relevant facts and
financial information regarding such Change of Control;
(iii) set forth the repurchase date (which repurchase date
shall be no earlier than 30 days (or such shorter time period as may be
permitted under applicable laws, rules and regulations) nor later than
60 days from the date such notice is mailed); and
(iv) set forth the instructions determined by the Issuer,
consistent with this Section, that a Holder must follow in order to
have its Notes purchased.
(d) Holders electing to have a Note purchased shall be
required to surrender the Note, with an appropriate form duly completed, to the
Issuer at the address specified in the notice at least three Business Days prior
to the purchase date. Holders shall be entitled to withdraw their election if
the Trustee or the Issuer receives not later than one Business Day prior to the
purchase date a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Note which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Note purchased. Holders whose Notes are purchased only in
part will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered.
(e) On the purchase date, all Notes purchased by the Issuer
under this Section shall be delivered to the Trustee for cancellation, and the
Issuer shall pay the purchase price plus accrued and unpaid interest, if any, to
the Holders entitled thereto.
(f) Notwithstanding the foregoing provisions of this Section,
the Issuer will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.02 applicable to a Change of Control Offer made by the Issuer and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
(g) In connection with any Change of Control Offer, the Issuer
shall deliver to the Trustee an Officers' Certificate stating that all
conditions precedent contained herein to the right of the Issuer to make such
offer have been complied with.
(h) The Issuer shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Indenture relating to Change of Control Offers,
the Issuer shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.
ARTICLE 5
AFFIRMATIVE COVENANTS
For so long as any Note is outstanding, the Issuer covenants
and agrees to the following provisions for the benefit of the Holders.
SECTION 5.01. Payment of Notes. The Issuer shall promptly
pay the principal of and interest on the Notes on the dates and in the manner
provided in the Notes and in this Indenture. Principal and interest shall be
considered paid on the date due if on such date the Trustee or the Paying Agent
holds in accordance with this Indenture money sufficient to pay all principal
and interest then due and the Trustee or the Paying Agent, as the case may be,
is not prohibited from paying such money to the Holders on that date pursuant to
the terms of this Indenture.
The Issuer shall pay interest on overdue principal at the
Interest Rate specified in the Notes, and it shall pay interest on accrued
interest at the same rate to the extent lawful. Notwithstanding anything to the
contrary contained in this Indenture, the Issuer may, to the extent they are
required to do so by law, deduct or withhold income or other similar taxes
imposed by the United States of America from principal or interest payments
hereunder.
SECTION 5.02. Commission Reports, Financial Statements and
Other Information. (a) The Issuer shall furnish to the Trustee and Holders:
(i) within 90 days after the end of each fiscal year of the
Issuer, its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by KPMG LLP or other independent public
accountants of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly, in all material respects, the consolidated financial condition
and results of operations of the Issuer and the Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;
(ii) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Issuer, its unaudited consolidated
balance sheet and related statements of operations, stockholders' equity and
cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
consolidated financial condition and results of operations of the Issuer and the
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(iii) prior to the commencement of each fiscal year of the
Issuer, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of projected
operations and cash flow as of the end of and for such fiscal year and setting
forth any material assumptions used for purposes of preparing such budget) and,
promptly when available, any significant revisions of such budget; and
(iv) copies of the Issuer's annual report and the information,
documents and other reports that are specified in Section 13 and 15(d) of the
Exchange Act (collectively, the "Required Information"), whether or not the
Issuer is subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, to be provided within 15 days after the Issuer files them with the
Commission (or would be required to file with the Commission); provided,
however, that if any of the Required Information is filed with the Commission,
the Issuer shall only be required to provide the Trustee copies of such Required
Information. In addition, the Issuer shall furnish to the Trustee, promptly upon
their becoming available, copies of the annual report to shareholders and any
other information provided by the Issuer to its public shareholders generally.
(b) The Issuer shall also provide such information as may,
from time to time, be necessary to comply with any applicable provisions of TIA
ss. 314(a).
(c) Delivery of such reports, information 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 Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 5.03. (a) Compliance Certificate. The Issuer
shall furnish the Trustee a certificate from the principal executive officer,
principal financial officer or principal accounting officer within 120 days
after the end of each fiscal year. Such certificate shall report on the Issuer's
compliance with the conditions and covenants of this Indenture, in a manner
satisfying the requirements of Section 314(a)(4) of the TIA, and shall include a
certification as to whether a Default has occurred and, if a Default has
occurred, specify the details thereof and any action taken or proposed to be
taken with respect thereto.
(b) Information Regarding Collateral.
(i) The Issuer will furnish to the Trustee and Collateral
Agent prompt written notice of any change (A) in the Issuer's or any Pledgor and
Guarantor's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (B) in the
location of the Issuer's or any Pledgor and Guarantor's chief executive office,
its principal place of business, any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such new
office or facility), (C) in the Issuer's or any Pledgor and Guarantor's
identity, jurisdiction of incorporation, or corporate structure or (D) in the
Issuer's or any Pledgor and Guarantor's Federal Taxpayer Identification Number.
The Issuer agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made, or will have been made
within any statutory period, under the Uniform Commercial Code or otherwise that
are required in order for the Collateral Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral for the benefit of the Secured Parties. The Issuer also
agrees promptly to notify the Collateral Agent and the Trustee if any material
portion of the Collateral is damaged or destroyed.
(ii) Each year, at the time of delivery of an annual
compliance certificate with respect to the preceding fiscal year pursuant to
part (a) of this Section 5.03, the Issuer shall deliver to the Collateral Agent
(with a copy to the Trustee) a certificate of a Financial Officer of the Issuer
(A) setting forth the information required pursuant to Section 2 of the
Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the Issue
Date or the date of the most recent certificate delivered pursuant to this
Section and (B) certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (A) above to the extent necessary to
protect and perfect the security interests under the Security Agreement for a
period of not less than 18 months after the date of such certificate (except as
noted therein with respect to any continuation statements to be filed within
such period).
SECTION 5.04. Notices of Material Events. (a) The Issuer
will furnish to the Trustee and the Collateral Agent written notice of the
following promptly upon any Financial Officer of the Issuer obtaining knowledge
thereof:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Issuer or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(iii) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Issuer and the
Subsidiaries in an aggregate amount exceeding $2,500,000; and
(iv) any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
(b) Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Issuer setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.05. Existence; Conduct of Business. The Issuer
will, and will cause each of the Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, contracts, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of the
business of the Issuer and its Subsidiaries, taken as a whole, provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03 or any sale of assets permitted under
Section 6.05; and further provided, that neither the Issuer nor any of its
Subsidiaries shall be obligated to maintain any of the foregoing in the event
that the board of directors of the Issuer adopts a resolution to the effect that
the maintenance of such asset is no longer necessary or desirable in the conduct
of the business of the Issuer and its Subsidiaries.
SECTION 5.06. Payment of Obligations. The Issuer will, and
will cause each of the Subsidiaries to, pay its Indebtedness and other
obligations, including Tax liabilities, before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings, (b) the Issuer or such
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP, (c) such contest effectively suspends collection of the
contested obligation and the enforcement of any Lien securing such obligation
and (d) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.07. Maintenance of Properties. The Issuer will,
and will cause each of the Subsidiaries to, keep and maintain all property
material to the conduct of the business of the Issuer and the Subsidiaries,
taken as a whole, in good working order and condition, ordinary wear and tear
excepted.
SECTION 5.08. Insurance; Casualty and Condemnation. (a)
The Issuer will, and will cause each of the Subsidiaries to, maintain, with
financially sound and reputable insurance companies insurance in such amounts
(with no greater risk retention) and against such risks as are customarily
maintained by companies of established repute engaged in the same or similar
businesses operating in the same or similar locations and all insurance required
to be maintained pursuant to the Security Documents. The Issuer will furnish to
the Trustee and the Collateral Agent, upon request in writing, information in
reasonable detail as to the insurance so maintained.
(b) The Issuer (i) will furnish to the Collateral Agent (with
a copy to the Trustee) prompt written notice of any casualty or other insured
damage to any material portion of any Collateral or the commencement of any
action or proceeding for the taking of any Collateral or any part thereof or
interest therein under power of eminent domain or by condemnation or similar
proceeding and (ii) will cause the Net Proceeds of any such event (whether in
the form of insurance proceeds, condemnation awards or otherwise) to be applied
in accordance with the applicable provisions of the Security Documents.
SECTION 5.09. Books and Records; Inspection and Audit
Rights. The Issuer will, and will cause each of the Subsidiaries to, keep proper
books of record and account in which full, true and correct entries are made of
all material dealings and transactions in relation to its business and
activities. The Issuer will, and will cause each of the Subsidiaries to, permit
any representatives designated by the Trustee or the Collateral Agent, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and at such reasonable intervals as may be reasonably
requested.
SECTION 5.10. Compliance with Laws. The Issuer will, and
will cause each of the Subsidiaries to, comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, would not
result in a Material Adverse Effect.
SECTION 5.11. Additional Subsidiaries. If any additional
Subsidiary is formed or acquired after the date hereof, the Issuer will, within
ten (10) Business Days after such Subsidiary is formed or acquired, (i) notify
the Trustee and Collateral Agent thereof, (ii) cause the Collateral and
Guarantee Requirement to be satisfied with respect to such Subsidiary (if it is
a Domestic Subsidiary) and with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned by or on behalf of the Issuer or any
Pledgor and Guarantor and (iii) cause such Subsidiary to deliver to the Trustee
a supplement to the Registration Rights Agreement, in the form specified
therein.
SECTION 5.12. Further Assurances; Transfer of Joint
Venture Stock. (a) Upon request of the Trustee or as otherwise necessary, the
Collateral Agent or the holders of a majority (by aggregate principal amount) of
the Notes, the Issuer will, and will cause each Pledgor and Guarantor to,
execute any and all further documents, statements, agreements and instruments,
and take all such further actions (including the filing and recording of
financing statements, fixture filings, mortgages, deeds of trust and other
documents) that may be required under any applicable law, or which the Trustee
or the Collateral Agent may reasonably request or as otherwise necessary, to
cause the Collateral and Guarantee Requirement to be and remain satisfied, all
at the expense of the Issuer and the Pledgors and Guarantors. The Issuer also
agrees to provide to the Trustee and the Collateral Agent, from time to time,
upon request evidence reasonably satisfactory to the Trustee and the Collateral
Agent as to the perfection and priority of the Liens created or intended to be
created by the Security Documents. Notwithstanding the foregoing, in no event
shall the Issuer or any Pledgor or Guarantor be required to ▇▇▇▇▇ ▇ ▇▇▇▇ on any
of the Texas Instruments Agreements (as defined in the Security Agreement).
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Issuer or any
Pledgor and Guarantor after the date hereof (other than assets constituting
Collateral under the Security Agreement or the Pledge Agreement that become
subject to the Lien of the Security Agreement or the Pledge Agreement upon
acquisition thereof), the Issuer will notify the Trustee, the Collateral Agent
and the Holders thereof, and, if requested by the Trustee, the Collateral Agent
or the Holders of a majority, by aggregate principal amount, of the outstanding
Notes, the Issuer will cause such assets to be subjected to a Lien securing the
Indenture Obligations and will take, and cause the Issuer and the Pledgors and
Guarantors to take, such actions as shall be necessary or reasonably requested
by the Trustee, the Collateral Agent or such Holders to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Pledgors and Guarantors.
(c) The Issuer will, and will cause each applicable Subsidiary
to, execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions that may be required under any
applicable law, or which the Trustee or the Holders of a majority, by aggregate
principal amount, of the Notes may reasonably request, to cause the transfer of
all the Equity Interest in MEMC Kulim Electronic Materials, Sdn. Bhd. no later
than seventy-five (75) Business Days after the date hereof.
ARTICLE 6
NEGATIVE COVENANTS
For so long as any Note is outstanding, the Issuer covenants
and agrees to the following provisions for the benefit of the Holders.
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The
Issuer will not, and will not permit any Subsidiary to, create, incur, assume or
permit to exist any Indebtedness, except:
(i) Indebtedness created hereunder, under the other
Transaction Documents or under the Revolving Loan Documentation and
Indebtedness evidenced by the Italian Notes;
(ii) Indebtedness existing on the Issue Date or incurred
pursuant to contractual loan commitments existing on the Issue Date and
set forth in Schedule 6.01 and extensions, renewals, refinancings and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or result in an earlier maturity
date or decreased weighted average life thereof;
(iii) Indebtedness of the Issuer to any Subsidiary and of any
Subsidiary to the Issuer or any other Subsidiary;
(iv) Guarantees by the Issuer and by any Subsidiary of
Indebtedness of the Issuer or any other Subsidiary, provided that
Guarantees by the Issuer or any Pledgor and Guarantor of Indebtedness
of any Subsidiary that is not a Pledgor and Guarantor shall be subject
to Section 6.04;
(v) Indebtedness of the Issuer or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations (provided that such
Indebtedness is incurred prior to or within 180 days after such
acquisition or the completion of such construction or improvement) and
any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals, refinancings and replacements of any
such Indebtedness that do not increase the outstanding principal amount
thereof, provided that the aggregate principal amount of Indebtedness
permitted by this clause (v) shall not exceed $5,000,000 at any time
outstanding;
(vi) Indebtedness of the Issuer or any Subsidiary in respect
of workers' compensation claims, self-insurance obligations,
performance bonds, surety, appeal or similar bonds and completion
guarantees provided by the Issuer and the Subsidiaries in the ordinary
course of their business, provided that upon the incurrence of
Indebtedness with respect to reimbursement type obligations regarding
workers' compensation claims, such obligations are reimbursed within 30
days following such drawing or incurrence;
(vii) In each case with any consent required under the
Revolving Loan Documentation (but only for so long as such Revolving
Loan Documentation is in effect), Indebtedness in respect of a
Permitted Receivables Financing, provided that the Net Proceeds
resulting from the sale, transfer or other disposition of Receivables
in connection with such Permitted Receivables Financing are applied in
accordance with Section 4.01;
(viii) Indebtedness of the Issuer or any Subsidiary that was
(A) Indebtedness of any other Person existing at the time such other
Person was merged with or became a Subsidiary, including Indebtedness
incurred in connection with, or in contemplation of, such other
Person's merging with or becoming a Subsidiary, and extensions,
renewals, refinancings and replacements of any such Indebtedness that
do not increase the outstanding principal amount thereof (or
commitments therefor) or result in an earlier maturity date or
decreased weighted average life thereof, provided that the aggregate
principal amount of Indebtedness permitted under this clause (viii)
shall not exceed $5,000,000 at any time outstanding;
(ix) non-interest bearing Indebtedness not for borrowed money,
in the nature of customer deposits; and
(x) other unsecured Indebtedness in an aggregate principal
amount not exceeding $5,000,000 at any time outstanding, provided that
the aggregate principal amount of Indebtedness of the Subsidiaries that
are not Pledgors and Guarantors permitted by this clause (x) shall not
exceed $5,000,000 at any time outstanding.
(b) The Issuer will not, and will not permit any Subsidiary
to, issue any preferred stock or other preferred Equity Interests, except that
(i) the Issuer may issue the Cumulative Preferred Stock; (ii) the Issuer may
issue preferred stock or other preferred Equity Interests of the Issuer that do
not require mandatory cash dividends or redemptions and do not provide for any
right on the part of the holder to require redemption, repurchase or repayment
thereof, in each case prior to the date that is 180 days after the Stated
Maturity and (iii) the Issuer or any Subsidiary may issue directors' qualifying
shares or shares required by applicable law to be held by a Person other than
the Issuer or any Subsidiary.
SECTION 6.02. Liens. The Issuer will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(i) Liens created hereunder, under the Security Documents,
under the Revolving Loan Documentation or to secure the Italian Notes;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Issuer or any
Subsidiary existing on the Issue Date and set forth in Schedule 6.02,
provided that (i) such Lien shall not apply to any other property or
asset of the Issuer or any Subsidiary and (ii) such Lien shall secure
only those obligations that it secures on the Issue Date and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof; any Lien existing on any property
or asset prior to the acquisition thereof by the Issuer or any
Subsidiary or existing on any property or asset of any Person that
becomes a Subsidiary after the Issue Date prior to the time such Person
becomes a Subsidiary, provided that (A) such Lien is not created in
contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary, as the case may be, (B) such Lien shall not
apply to any other property or assets of the Issuer or any Subsidiary
and (C) such Lien shall secure only those obligations that it secures
on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal
amount thereof;
(iv) Liens on fixed or capital assets acquired, constructed or
improved by the Issuer or any Subsidiary, provided that (A) such Liens
secure Indebtedness permitted by clause (v) of Section 6.01(a) , (B)
such security interests and the Indebtedness secured thereby are
incurred prior to or within 180 days after such acquisition or the
completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (D) such
security interests shall not apply to any other property or assets of
the Issuer or any Subsidiary;
(v) sales of Receivables and Related Property (or undivided
interests therein) permitted under Section 6.05(c) and Liens on
Receivables of a Receivables Subsidiary granted in connection with any
Permitted Receivables Financing;
(vi) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of setoff or similar
rights; and
(vii) statutory and common law Liens in favor of a landlord
under leases to which the Issuer or any Subsidiary is a party; and
(viii) Liens created in connection with extensions, renewals,
or replacements of any Liens referred to in clauses (i) through (vii)
above, provided that the principal amount of the obligation secured
thereby is not increased and that any such extension, renewal or
replacement is limited to the property originally encumbered thereby.
SECTION 6.03. Fundamental Changes and Successor Issuers.
(a) The Issuer will not, and will not permit any Subsidiary
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or liquidate or dissolve, except that, if
at the time thereof and immediately after giving effect thereto, no Default
shall have occurred and be continuing, the following transactions are permitted:
(i) any Person may merge with the Issuer in a transaction in
which the surviving entity is a corporation, partnership, limited
liability company or similar entity organized or existing under the
laws of the United States of America, any State thereof or the District
of Columbia, provided that if such surviving entity is not the Issuer,
such Person (the "Successor Issuer") must expressly assume, by a
supplemental indenture hereto, executed and delivered to the Trustee
all the obligations of the Issuer under the Transaction Documents; and
further provided that prior to the consummation of such transaction,
the Issuer must provide the Trustee with an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture comply with this Indenture;
(ii) any Person may merge with any Subsidiary in a transaction
in which the surviving entity is a Subsidiary; provided that if a
Pledgor and Guarantor is one of the parties in such a transaction, and
the surviving entity is not the Pledgor and Guarantor, the surviving
entity must be a corporation, partnership or limited liability company
organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia, and such surviving
entity must expressly assume, by execution of appropriate Transaction
Documents (or counterparts or supplements thereto), executed and
delivered to the Trustee and the Collateral Agent all the obligations
of such Pledgor and Guarantor under the applicable Transaction
Documents; and further provided that prior to the consummation of such
transaction, the Issuer must provide the Trustee and the Collateral
Agent with an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer complies with this
Indenture and the other Transaction Documents; and
(iii) any Subsidiary (other than a Pledgor and Guarantor) may
liquidate or dissolve if the Issuer determines in good faith that such
liquidation or dissolution is in the best interests of the Issuer and
is not materially disadvantageous to the Holders, provided that any
such merger involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also
permitted by Sections 6.04 and 6.08.
(b) The Issuer will not, and will not permit any of the
Subsidiaries (other than a Receivables Subsidiary) to, engage to any material
extent in any business other than businesses of the type conducted by the Issuer
and the Subsidiaries on the Issue Date and businesses reasonably related
thereto.
(c) No Receivables Subsidiary will engage in any business
other than the purchase and sale or other transfer of Receivables (or
participation interests therein) in connection with any Permitted Receivables
Financing, together with activities directly related thereto.
(d) The Issuer will not permit MEMC International, Inc. to
engage in any business or activity other than (i) the ownership of all of the
outstanding shares of capital stock of MEMC Korea Company, MEMC Kulim Electronic
Materials, Sdn. Bhd. and Taisil Electronic Materials Corporation owned by MEMC
International, Inc. on or after the Issue Date (the "Joint Venture Stock") and
activities incidental thereto, and (ii) miscellaneous payroll and benefits
activities relating to certain expatriate employees and certain management
employees in foreign locations of the Issuer and its Subsidiaries. MEMC
International, Inc. will not own or acquire any assets (other than the Joint
Venture Stock) or incur any liabilities (other than liabilities under the
Transaction Documents or the Revolving Loan Documentation, obligations under any
stock option plans or other benefit plans for management or employees of the
Issuer and its Subsidiaries, obligations under the shareholder or joint venture
agreements and related ancillary agreements with respect to MEMC Korea Company,
MEMC Kulim Electronic Materials, Sdn. Bhd. and/or Taisil Electronic Materials
Corporation, liabilities imposed by law, including tax liabilities, and other
liabilities incidental to its existence and permitted business and activities).
The Issuer will not permit MEMC International, Inc. to sell, transfer, lease or
otherwise dispose of any or all of the Joint Venture Stock other than the pledge
thereof contemplated by the Security Documents and the Revolving Loan
Documentation.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. The Issuer will not, and will not permit any of the Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any Equity
Interests in or evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments and Guarantees of Indebtedness of Foreign
Subsidiaries existing on the Issue Date and set forth on Schedule 6.04;
(c) investments by the Issuer and the Pledgors and Guarantors
in Equity Interests in their respective Subsidiaries that are Pledgors and
Guarantors and investments by Subsidiaries that are not Pledgors and Guarantors
in Equity Interests in their respective Subsidiaries; provided that any such
Equity Interests held by the Issuer or a Pledgor and Guarantor shall be pledged
pursuant to the Pledge Agreement (subject to the limitations applicable to
voting stock of a Foreign Subsidiary referred to in the definition of the term
"Collateral and Guarantee Requirement");
(d) loans or advances made by the Issuer to any Subsidiary and
made by any Subsidiary to the Issuer or any other Subsidiary provided that any
such loans and advances made by the Issuer or a Pledgor and Guarantor shall be
evidenced by a promissory note pledged pursuant to the Pledge Agreement;
(e) Guarantees constituting Indebtedness permitted by Section
6.01 of Indebtedness of the Issuer or any Pledgor and Guarantor;
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(g) Permitted Acquisitions, provided that the sum of all
consideration paid or otherwise delivered in connection with Permitted
Acquisitions (including the principal amount of any Indebtedness issued as
deferred purchase price and the fair market value of any other non-cash
consideration) plus the aggregate principal amount of all Indebtedness otherwise
incurred or assumed in connection with, or resulting from, Permitted
Acquisitions (including Indebtedness of any acquired Persons outstanding at the
time of the applicable Permitted Acquisition) shall not exceed, on a cumulative
basis subsequent to the Issue Date, $5,000,000;
(h) any investments in or loans to any other Person received
as noncash consideration for sales, transfers, leases and other dispositions
permitted by Section 6.05;
(i) Guarantees by the Issuer and the Subsidiaries of leases
entered into by any Subsidiary as lessee;
(j) extensions of credit in the nature of accounts receivable
or notes receivable in the ordinary course of business;
(k) investments in payroll, travel 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;
(l) loans or advances to employees made in the ordinary course
of business consistent with prudent business practice and not exceeding $500,000
in the aggregate outstanding at any one time;
(m) investments in or acquisitions of stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Issuer or any Subsidiary or in satisfaction of
judgments;
(n) investments in the form of Hedging Agreements permitted
under Section 6.07;
(o) investments by the Issuer or any Subsidiary in (i) the
capital stock of a Receivables Subsidiary and (ii) other interests in a
Receivables Subsidiary, in each case to the extent determined by the Issuer in
its judgment to be reasonably necessary in connection with or required by the
terms of the Permitted Receivables Financing;
(p) investments, loans, advances, guarantees and acquisitions
resulting from a foreclosure by the Issuer or any Subsidiary with respect to any
secured investment or other transfer of title with respect to any secured
investment in default;
(q) investments, loans, advances, guarantees and acquisitions
the consideration for which consists solely of shares of common stock of the
Issuer;
(r) investments in prepaid expenses, negotiable instruments
held for collection and lease, utility, workers' compensation, performance and
other similar deposits in the ordinary course of business; and
(s) other investments in an aggregate amount not to exceed
$2,500,000 at any time outstanding.
SECTION 6.05. Asset Sales. The Issuer will not, and will
not permit any of the Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest owned by it, nor will the
Issuer permit any of the Subsidiaries to issue any additional Equity Interest in
such Subsidiary, except:
(a) sales of inventory, used or surplus equipment and
Permitted Investments in the ordinary course of business and the periodic
clearance of aged inventory;
(b) sales, transfers and dispositions to the Issuer or a
Subsidiary, provided that any such sales, transfers or dispositions involving a
Subsidiary that is not a Pledgor and Guarantor shall be made in compliance with
Section 6.09;
(c) the Issuer and the Subsidiaries may sell, without recourse
(other than Standard Securitization Undertakings and retained interests),
Receivables to a Receivables Subsidiary, and any Receivables Subsidiary may sell
Receivables and Related Property or an undivided interest therein to any other
Person, pursuant to any Permitted Receivables Financing, and convert or exchange
Receivables and Related Property into or for notes receivable in connection with
the compromise or collection thereof; and
(d) sales, transfers and other dispositions of assets (other
than Equity Interests in a Subsidiary) that are not permitted by any other part
of this Section 6.05, provided that the aggregate fair market value of all
assets sold, transferred or otherwise disposed of in reliance upon this part (d)
shall not exceed $3,000,000 during any fiscal year of the Issuer; provided that
all sales, transfers, leases and other dispositions permitted hereby (other than
those permitted by part (b) above) shall be made for fair value and for
consideration of at least 80% cash or cash equivalents.
SECTION 6.06. Sale and Leaseback Transactions. The Issuer
will not, and will not permit any of the Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred, except for any such sale of any fixed or capital
assets that is made for cash consideration in an amount not less than the cost
of such fixed or capital asset and is consummated within 180 days after the
Issuer or such Subsidiary acquires or completes the construction of such fixed
or capital asset.
SECTION 6.07. Hedging Agreements. The Issuer will not, and
will not permit any of the Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Issuer or any Subsidiary is exposed in the
conduct of its business or the management of its liabilities.
SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness. (a) The Issuer will not, and will not permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any Restricted
Payment, except that (i) the Issuer may declare and pay dividends with respect
to its capital stock payable solely in additional shares of its capital stock,
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
capital stock and (iii) the Issuer may make Restricted Payments, not exceeding
$200,000 during any fiscal year, pursuant to and in accordance with stock option
plans or other benefit plans for directors, management or employees of the
Issuer and the Subsidiaries, including the redemption or purchase of capital
stock of the Issuer held by former directors, management or employees of the
Issuer or any Subsidiary following termination of their employment.
(b) The Issuer will not, and will not permit any Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of Indebtedness created under the Transaction
Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness permitted under
the Transaction Documents;
(iii) refinancings of Indebtedness to the extent such
Indebtedness is permitted by Section 6.01;
(iv) payment of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness; and
(v) payments in respect of any Permitted Receivables Facility.
SECTION 6.09.Transactions with Affiliates. The Issuer
will not, and will not permit any Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) transactions that are at prices and on terms and
conditions not less favorable to the Issuer or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b) transactions
between or among the Issuer and the Pledgors and Guarantors not involving any
other Affiliate, (c) to pay management, consulting and advisory fees to TPG or
its Affiliates pursuant to any financial advisory, financing, underwriting or
placement agreement or in respect of other investment banking activities,
including in connection with acquisitions or divestitures, (d) payments of fees
and expenses to TPG and its Affiliates in connection with the transactions
contemplated under the Restructuring Agreement, the Revolving Loan Documentation
and the Purchase Agreement, (e) any issuance of securities, or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans approved by
the board of directors of the Issuer, (f) the grant of stock options or similar
rights to officers, employees, consultants and directors of the Issuer pursuant
to plans approved by the board of directors of the Issuer and the payment of
amounts or the issuance of securities pursuant thereto, (g) loans or advances to
employees in the ordinary course of business consistent with prudent business
practice, but in any event not to exceed $500,000 in the aggregate outstanding
at any one time, and (h) any Restricted Payment permitted by Section 6.08.
SECTION 6.10. Restrictive Agreements. The Issuer will not,
and will not permit any Subsidiary to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Issuer or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Issuer or any other Subsidiary or to Guarantee Indebtedness of the Issuer
or any other Subsidiary, provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law, by any Transaction Document, by the
Revolving Loan Documentation or by the Italian Credit Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the Issue
Date and identified on Schedule 6.10 (but shall apply to any extension or
renewal of, or any amendment or modification if it expands the scope of, any
such restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) part (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Indenture if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (v) part (a) of the foregoing shall not apply
to customary provisions in leases, technology licenses, confidentiality
agreements and other contracts or agreements restricting the assignment thereof
and (vi) the foregoing shall not apply to restrictions or conditions imposed on
a Receivables Subsidiary in connection with a Permitted Receivables Financing.
SECTION 6.11. Amendment of Material Documents. (a) The
Issuer will not, and will not permit any Subsidiary to, amend, modify or waive
any of its rights under its certificate of incorporation, by-laws or other
organizational documents to the extent that such amendment, modification or
waiver would be adverse to the Holders.
The Issuer will not, and will not permit any Subsidiary to,
amend, modify or waive any of its rights under any Permitted Receivables
Financing to the extent that such amendment, modification or waiver would be
materially adverse to the Holders.
SECTION 6.12......Minimum Quarterly Consolidated EBITDA. The
Issuer will not permit Consolidated EBITDA for any fiscal quarter to be less
than the amount set forth opposite such fiscal quarter:
--------------------------------------------------------------------------------
QUARTER MINIMUM AMOUNT
--------------------------------------------------------------------------------
Fourth Quarter of 2001 negative $25.0 million
--------------------------------------------------------------------------------
First Quarter of 2002 negative $13.0 million
--------------------------------------------------------------------------------
Second Quarter of 2002 negative $10.0 million
--------------------------------------------------------------------------------
Third Quarter of 2002 Zero
--------------------------------------------------------------------------------
Fourth Quarter of 2002 $8.0 million
--------------------------------------------------------------------------------
First Quarter of 2003 $10 million
--------------------------------------------------------------------------------
Second Quarter of 2003 $16.0 million
--------------------------------------------------------------------------------
Third Quarter of 2003 $19.0 million
--------------------------------------------------------------------------------
Fourth Quarter of 2003 $25.0 million
--------------------------------------------------------------------------------
First Quarter of 2004 $27.0 million
--------------------------------------------------------------------------------
Second Quarter of 2004 $30.0 million
--------------------------------------------------------------------------------
Third Quarter of 2004 $33.0 million
--------------------------------------------------------------------------------
Fourth Quarter of 2004 $35.0 million
--------------------------------------------------------------------------------
First Quarter of 2005 $37.0 million
--------------------------------------------------------------------------------
Second Quarter of 2005 $40.0 million
--------------------------------------------------------------------------------
Third Quarter of 2005 $42.0 million
--------------------------------------------------------------------------------
Fourth Quarter of 2005 $44.0 million
--------------------------------------------------------------------------------
First Quarter of 2006 $46.0 million
--------------------------------------------------------------------------------
Second Quarter of 2006 $48.0 million
--------------------------------------------------------------------------------
Third Quarter of 2006 $50.0 million
--------------------------------------------------------------------------------
Fourth Quarter of 2006 $52.0 million
--------------------------------------------------------------------------------
First Quarter of 2007 $54.0 million
--------------------------------------------------------------------------------
Second Quarter of 2007 $56.0 million
--------------------------------------------------------------------------------
Third Quarter of 2007 $58.0 million
--------------------------------------------------------------------------------
Fourth Quarter of 2007 $60.0 million
--------------------------------------------------------------------------------
SECTION 6.13. Minimum Monthly Consolidated Backlog. The
Issuer will not permit Consolidated Backlog for any month to be less than the
amount set forth opposite such month. Consolidated Backlog for any month shall,
for the purposes of this Section 6.13, equal the arithmetic mean of the
Consolidated Backlog for such month measured as of the close of business on each
of the first five (5) Business Days in such month:
---------------------------------------------------------------
MONTH MINIMUM AMOUNT
---------------------------------------------------------------
December 2001 30.0 million square inches
---------------------------------------------------------------
January 2002 30.0 million square inches
---------------------------------------------------------------
February 2002 30.0 million square inches
---------------------------------------------------------------
March 2002 31.0 million square inches
---------------------------------------------------------------
April 2002 32.0 million square inches
---------------------------------------------------------------
May 2002 32.0 million square inches
---------------------------------------------------------------
June 2002 32.0 million square inches
---------------------------------------------------------------
July 2002 36.0 million square inches
---------------------------------------------------------------
August 2002 36.0 million square inches
---------------------------------------------------------------
September 2002 36.0 million square inches
---------------------------------------------------------------
October 2002 38.0 million square inches
---------------------------------------------------------------
November 2002 38.0 million square inches
---------------------------------------------------------------
December 2002 38.0 million square inches
---------------------------------------------------------------
January 2003 49.0 million square inches
---------------------------------------------------------------
February 2003 49.0 million square inches
---------------------------------------------------------------
March 2003 49.0 million square inches
---------------------------------------------------------------
April 2003 51.0 million square inches
---------------------------------------------------------------
May 2003 51.0 million square inches
---------------------------------------------------------------
June 2003 51.0 million square inches
---------------------------------------------------------------
July 2003 51.0 million square inches
---------------------------------------------------------------
August 2003 51.0 million square inches
---------------------------------------------------------------
September 2003 51.0 million square inches
---------------------------------------------------------------
October 2003 53.0 million square inches
---------------------------------------------------------------
November 2003 53.0 million square inches
---------------------------------------------------------------
December 2003 53.0 million square inches
---------------------------------------------------------------
January 2004 58.0 million square inches
---------------------------------------------------------------
February 2004 58.0 million square inches
---------------------------------------------------------------
March 2004 58.0 million square inches
---------------------------------------------------------------
April 2004 60.0 million square inches
---------------------------------------------------------------
May 2004 60.0 million square inches
---------------------------------------------------------------
June 2004 60.0 million square inches
---------------------------------------------------------------
July 2004 60.0 million square inches
---------------------------------------------------------------
August 2004 60.0 million square inches
---------------------------------------------------------------
September 2004 60.0 million square inches
---------------------------------------------------------------
October 2004 63.0 million square inches
---------------------------------------------------------------
November 2004 63.0 million square inches
---------------------------------------------------------------
December 2004 63.0 million square inches
---------------------------------------------------------------
January 2005 68.0 million square inches
---------------------------------------------------------------
February 2005 68.0 million square inches
---------------------------------------------------------------
March 2005 68.0 million square inches
---------------------------------------------------------------
April 2005 71.0 million square inches
---------------------------------------------------------------
May 2005 71.0 million square inches
---------------------------------------------------------------
June 2005 71.0 million square inches
---------------------------------------------------------------
July 2005 71.0 million square inches
---------------------------------------------------------------
August 2005 71.0 million square inches
---------------------------------------------------------------
September 2005 71.0 million square inches
---------------------------------------------------------------
October 2005 74.0 million square inches
---------------------------------------------------------------
November 2005 74.0 million square inches
---------------------------------------------------------------
December 2005 74.0 million square inches
---------------------------------------------------------------
January 2006 74.0 million square inches
---------------------------------------------------------------
February 2006 74.0 million square inches
---------------------------------------------------------------
March 2006 74.0 million square inches
---------------------------------------------------------------
April 2006 77.0 million square inches
---------------------------------------------------------------
May 2006 77.0 million square inches
---------------------------------------------------------------
June 2006 77.0 million square inches
---------------------------------------------------------------
July 2006 77.0 million square inches
---------------------------------------------------------------
August 2006 77.0 million square inches
---------------------------------------------------------------
September 2006 77.0 million square inches
---------------------------------------------------------------
October 2006 81.0 million square inches
---------------------------------------------------------------
November 2006 81.0 million square inches
---------------------------------------------------------------
December 2006 81.0 million square inches
---------------------------------------------------------------
January 2007 83.0 million square inches
---------------------------------------------------------------
February 2007 83.0 million square inches
---------------------------------------------------------------
March 2007 83.0 million square inches
---------------------------------------------------------------
April 2007 86.0 million square inches
---------------------------------------------------------------
May 2007 86.0 million square inches
---------------------------------------------------------------
June 2007 86.0 million square inches
---------------------------------------------------------------
July 2007 89.0 million square inches
---------------------------------------------------------------
August 2007 89.0 million square inches
---------------------------------------------------------------
September 2007 89.0 million square inches
---------------------------------------------------------------
October 2007 92.0 million square inches
---------------------------------------------------------------
November 2007 92.0 million square inches
---------------------------------------------------------------
December 2007 92.0 million square inches
---------------------------------------------------------------
SECTION 6.14. Minimum Monthly Consolidated Revenue. The
Issuer will not permit Consolidated Revenue for any month to be less than the
amount set forth opposite such month:
--------------------------------------------------------------------------------
MONTH MINIMUM AMOUNT
--------------------------------------------------------------------------------
January 2002 $34.0 million
--------------------------------------------------------------------------------
February 2002 $34.0 million
--------------------------------------------------------------------------------
March 2002 $34.0 million
--------------------------------------------------------------------------------
April 2002 $41.5 million
--------------------------------------------------------------------------------
May 2002 $41.5 million
--------------------------------------------------------------------------------
June 2002 $41.5 million
--------------------------------------------------------------------------------
July 2002 $46.0 million
--------------------------------------------------------------------------------
August 2002 $46.0 million
--------------------------------------------------------------------------------
September 2002 $46.0 million
--------------------------------------------------------------------------------
October 2002 $50.0 million
--------------------------------------------------------------------------------
November 2002 $51.0 million
--------------------------------------------------------------------------------
December 2002 $52.0 million
--------------------------------------------------------------------------------
January 2003 $52.0 million
--------------------------------------------------------------------------------
February 2003 $52.0 million
--------------------------------------------------------------------------------
March 2003 $52.0 million
--------------------------------------------------------------------------------
April 2003 $54.0 million
--------------------------------------------------------------------------------
May 2003 $54.0 million
--------------------------------------------------------------------------------
June 2003 $54.0 million
--------------------------------------------------------------------------------
July 2003 $55.0 million
--------------------------------------------------------------------------------
August 2003 $55.0 million
--------------------------------------------------------------------------------
September 2003 $55.0 million
--------------------------------------------------------------------------------
October 2003 $56.0 million
--------------------------------------------------------------------------------
November 2003 $56.0 million
--------------------------------------------------------------------------------
December 2003 $56.0 million
--------------------------------------------------------------------------------
January 2004 $61.0 million
--------------------------------------------------------------------------------
February 2004 $61.0 million
--------------------------------------------------------------------------------
March 2004 $61.0 million
--------------------------------------------------------------------------------
April 2004 $63.0 million
--------------------------------------------------------------------------------
May 2004 $63.0 million
--------------------------------------------------------------------------------
June 2004 $63.0 million
--------------------------------------------------------------------------------
July 2004 $65.0 million
--------------------------------------------------------------------------------
August 2004 $65.0 million
--------------------------------------------------------------------------------
September 2004 $65.0 million
--------------------------------------------------------------------------------
October 2004 $67.0 million
--------------------------------------------------------------------------------
November 2004 $67.0 million
--------------------------------------------------------------------------------
December 2004 $67.0 million
--------------------------------------------------------------------------------
January 2005 $70.0 million
--------------------------------------------------------------------------------
February 2005 $70.0 million
--------------------------------------------------------------------------------
March 2005 $70.0 million
--------------------------------------------------------------------------------
April 2005 $72.0 million
--------------------------------------------------------------------------------
May 2005 $72.0 million
--------------------------------------------------------------------------------
June 2005 $72.0 million
--------------------------------------------------------------------------------
July 2005 $74.0 million
--------------------------------------------------------------------------------
August 2005 $74.0 million
--------------------------------------------------------------------------------
September 2005 $74.0 million
--------------------------------------------------------------------------------
October 2005 $76.0 million
--------------------------------------------------------------------------------
November 2005 $76.0 million
--------------------------------------------------------------------------------
December 2005 $76.0 million
--------------------------------------------------------------------------------
January 2006 $78.0 million
--------------------------------------------------------------------------------
February 2006 $78.0 million
--------------------------------------------------------------------------------
March 2006 $78.0 million
--------------------------------------------------------------------------------
April 2006 $80.0 million
--------------------------------------------------------------------------------
May 2006 $80.0 million
--------------------------------------------------------------------------------
June 2006 $80.0 million
--------------------------------------------------------------------------------
July 2006 $82.0 million
--------------------------------------------------------------------------------
August 2006 $82.0 million
--------------------------------------------------------------------------------
September 2006 $82.0 million
--------------------------------------------------------------------------------
October 2006 $84.0 million
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November 2006 $84.0 million
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December 2006 $84.0 million
--------------------------------------------------------------------------------
January 2007 $86.0 million
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February 2007 $86.0 million
--------------------------------------------------------------------------------
March 2007 $86.0 million
--------------------------------------------------------------------------------
April 2007 $88.0 million
--------------------------------------------------------------------------------
May 2007 $88.0 million
--------------------------------------------------------------------------------
June 2007 $88.0 million
--------------------------------------------------------------------------------
July 2007 $90.0 million
--------------------------------------------------------------------------------
August 2007 $90.0 million
--------------------------------------------------------------------------------
September 2007 $90.0 million
--------------------------------------------------------------------------------
October 2007 $92.0 million
--------------------------------------------------------------------------------
November 2007 $92.0 million
--------------------------------------------------------------------------------
December 2007 $92.0 million
--------------------------------------------------------------------------------
SECTION 6.15. Capital Expenditures. The Issuer and its
Subsidiaries shall not incur or make Capital Expenditures in an amount exceeding
$15,000,000 during the fourth fiscal quarter of 2001, $45,000,000 during fiscal
year of 2002, $50,000,000 during fiscal year 2003, $55,000,000 during fiscal
year 2004, $55,000,000 during fiscal year 2005, $55,000,000 during fiscal year
2006 and $55,000,000 during fiscal year 2007.
ARTICLE 7
DEFAULTS AND REMEDIES
SECTION 7.01. Events of Default. Each of the following shall
constitute an "Event of Default", whether occurring voluntarily, involuntarily,
by operation of law, pursuant to any judgment, decree or order of any court or
in compliance with any order, rule or regulation of any or Governmental
Authority:
(a) the Issuer (i) shall fail to pay any principal of, or
interest on, any Note when and as the same becomes due and payable at its Stated
Maturity, upon required redemption or repurchase, upon declaration or otherwise,
or (ii) shall fail to redeem or purchase Notes when required pursuant to this
Indenture or the Notes;
(b) any representation or warranty made or deemed to be made
by or on behalf of the Issuer or any Pledgor or Guarantor in any Transaction
Document, or in any certificate or other document furnished pursuant to or in
connection with, any Transaction Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any material
respect when made or deemed made;
(c) the Issuer shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.04, Section 5.05 (with respect to
the existence of the Issuer) or in Article 6;
(d) the Issuer or any Pledgor and Guarantor shall fail to
observe or perform any covenant, condition or agreement contained in this
Indenture, in any Note or in any Security Document, as applicable (other than
those covenants, conditions and agreements specified in parts (a), (b) or (c) of
this Section 7.01) and such failure shall continue for 30 days after receipt of
a Notice of Default;
(e) the Issuer or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness when and as the same shall become due and payable
after giving effect to any applicable grace period with respect thereto;
(f) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity, provided that this part (i) shall not apply to
secured Indebtedness that become due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness and further
provided that this part (i) shall not apply to any Revolver Obligations that
becomes due, or subject to prepayment, repurchase, redemption or defeasance
prior to scheduled maturity, solely as a result of a Change of Control;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Issuer or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Issuer or any Subsidiary or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 45 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(h) the Issuer or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in part (g) of this Section 7.01, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Issuer or any Subsidiary
or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(i) the Issuer or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $2,500,000 (net of amounts covered by insurance as
to which the insurer has admitted liability in writing) shall be rendered
against the Issuer, any Subsidiary or any combination thereof and the same shall
remain undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Issuer or any
Subsidiary to enforce any such judgment;
(k) an ERISA Event shall have occurred that, in the opinion of
the Holders of a majority (by aggregate principal amount) of the Notes, when
taken together with all other ERISA Events that have occurred, could reasonably
be expected to result in a Material Adverse Effect;
(l) any Lien purported to be created under any Security
Document shall cease to be, or shall be asserted by the Issuer or any Pledgor
and Guarantor not to be, a valid and perfected Lien on Collateral having, in the
aggregate, a value in excess of $500,000, with the priority required by the
applicable Security Document, except (i) as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted hereunder or
under the Security Documents, (ii) any action taken by the Collateral Agent to
release any such Lien in compliance with the provisions of this Indenture or any
Security Agreement or (iii) as a result of the Collateral Agent's failure to
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under the Pledge Agreement; or
(m) any default or other event shall have occurred under any
document governing any Permitted Receivables Financing if the effect of such
default or other event is to cause the termination of such Permitted Receivables
Financing.
A Default under part (d) of this Section 7.01 shall not be an
Event of Default until (i) the Holders of at least a majority, by aggregate
principal amount, of the Notes notify the Issuer, the Collateral Agent and the
Trustee, and (ii) the Issuer or the relevant Pledgor and Guarantor, as
applicable, fails to cure such Default within the time period specified under
part (d). A notice given pursuant to clause (i) of the foregoing sentence must
be given in writing and must specify the Default, demand that it be remedied and
state that it constitutes a "Notice of Default".
SECTION 7.02. Acceleration.
(d) If an Event of Default (other than an Event of Default
specified in Section 7.01(g) or (h) with respect to the Issuer) occurs and is
continuing, the Trustee or the Holders of at least a majority by aggregate
principal amount of the Notes, by notice to the Issuer, may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default specified in Section 7.01(g) or (h)
with respect to the Issuer occurs, the principal of and interest on all the
Notes shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee, the Collateral Agent or any
Holders. The Holders of a majority in principal amount of the Notes by notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal or interest
that has become due solely because of acceleration. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
(e) In the event of a declaration of acceleration of the Notes
because an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in Section 7.01(e) or (f), the
declaration of acceleration of the Notes shall be automatically annulled if the
holders of any such Indebtedness have rescinded the declaration of acceleration
in respect of such Indebtedness within 30 days of the date of such acceleration
and if (i) the annulment of the acceleration of the Notes would not conflict
with any judgment or decree of a court of competent jurisdiction and (ii) all
existing Events of Default, except nonpayment of principal or interest on the
Notes that became due solely because of the acceleration of the Notes, have been
cured or waived.
SECTION 7.03. Other Remedies.
(a) If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal of
or interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
(b) 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 7.04. Waiver of Past Defaults or Covenants. The
Holders of a majority in principal amount of the Notes by notice to the Trustee
may waive, on behalf of the Holders of all of the Notes, any provision of any
covenant contained in this Indenture or any existing Default (or Event of
Default) and its consequences except (a) a Default in the payment of the
principal of or interest on a Note, (b) a Default arising from the failure to
redeem or purchase any Note when required pursuant to the terms of this
Indenture or (c) a Default in respect of a provision that under Section 10.02
cannot be amended without the consent of each Holder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right. A waiver shall become effective
upon receipt by the Trustee of such a notice signed by the Holders of a majority
in principal amount of the Notes.
SECTION 7.05. Control by Majority. The Holders of a majority
in principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 8.01, that the Trustee determines is prejudicial to the
rights of other Holders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action.
SECTION 7.06. Limitation on Suits.
(a) Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to this Indenture or the Notes unless:
(i) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(ii) the Holders of at least a majority, by aggregate
principal amount, of the Notes make a written request to the Trustee to
pursue the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable
security or indemnity satisfactory to it against any loss, liability or
expense;
(iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(v) the Holders of a majority in principal amount of the Notes
do not give the Trustee a direction inconsistent with the request
during such 60-day period.
(b) A Holder may not use this Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.
SECTION 7.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Notes held by such
Holder, on or after the respective due dates expressed or provided for in the
Notes, 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 7.08. Collection Suit by Trustee. If an Event of
Default specified in Section 7.01(a) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuer or any other obligor on the Notes for the whole amount then due and owing
(together with interest on overdue principal and (to the extent lawful) on any
unpaid interest at the rate provided for in the Notes) and the amounts provided
for in Section 8.07.
SECTION 7.09 Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to the Issuer, any Subsidiary or any Pledgor
and Guarantor, their creditors or their property and, unless prohibited by law
or applicable regulations, may vote on behalf of the Holders in any election of
a trustee in bankruptcy or other Person performing similar functions, and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 8.07.
SECTION 7.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 7, it shall pay out the money or property in
the following order:
FIRST: to the Collateral Agent for amounts due under Article
11 and to the Trustee for amounts due under Section 8.07;
SECOND: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
THIRD: to the Issuer.
The Trustee may fix a record date and payment date for any
payment to Holders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Holder and the Issuer a notice that states
the record date, the payment date and amount to be paid.
SECTION 7.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.07
or a suit by Holders of more than 10% in principal amount of the Notes.
SECTION 7.12 Waiver of Stay or Extension Laws. Neither the
Issuer nor any Pledgor and Guarantor (to the extent it may lawfully do so) shall
at any time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and each Issuer and each Pledgor and Guarantor (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and shall not hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 8
THE TRUSTEE
SECTION 8.01. Duties of Trustee. (a) If an Event of
Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, with respect to certificates and opinions
specifically required to be furnished to it hereunder, the Trustee
shall examine the certificates and opinions to determine whether or not
they substantially conform to the requirements of this Indenture, but
need not confirm or investigate the accuracy of any mathematical
calculations or other facts stated therein.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.05; and
(iv) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of
any of its rights or powers.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 8.01.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 8.02. Rights of Trustee.
(a) The Trustee may conclusively rely on any document (whether
in its original or facsimile form) believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents or attorneys and shall
not be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel of its own selection,
and the advice or Opinion of Counsel with respect to legal matters relating to
this Indenture and the Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in principal amount of the Notes at
the time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Issuer,
personally or by agent or attorney at the expense of the Issuer and shall incur
no liability of any kind by reason of such inquiry or investigation.
(g) 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 pursuant to this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
(h) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer has actual knowledge thereof
or unless written notice of any event which is in fact such a Default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture.
(i) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
SECTION 8.03. 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 Issuer or its Affiliates with the same rights it
would have if it were not Trustee. Any Paying Agent, Registrar or co-paying
agent may do the same with like rights. However, the Trustee must comply with
Sections 8.10 and 8.11.
SECTION 8.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture, any Security Document or the Notes, it shall not be accountable
for the Issuer's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer or any Pledgor and Guarantor in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Trustee's certificate of authentication. The Trustee
shall not be charged with knowledge of any Default or Event of Default under
Sections 7.01(b), (c), (d), (e), (f), (i), (j), (k), (l) or (m) or of the
identity of any Subsidiary unless a Trust Officer of the Trustee shall have
actually received notice thereof in accordance with Section 13.02 hereof from
the Issuer, any Pledgor and Guarantor or any Holder.
SECTION 8.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Holder notice of the Default within the earlier of 90 days after it occurs or 30
days after it is known to a Trust Officer. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the mandatory redemption provisions of such Note, if any), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of Holders.
SECTION 8.06. Reports by Trustee to Holders. Within 60
days after each August 15th beginning with August 15, 2002, the Trustee shall
mail to each Holder a brief report dated as of such August 15th that complies
with Section 313(a) of the TIA if and to the extent required thereby. The
Trustee shall also comply with Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Holders
shall be filed with the Commission and each stock exchange (if any) on which the
Notes are listed. The Issuer agree to notify promptly the Trustee whenever the
Notes become listed on any stock exchange and of any delisting thereof.
SECTION 8.07. Compensation and Indemnity. The Issuer shall pay
to the Trustee from time to time reasonable compensation for its services
hereunder as the Issuer and the Trustee shall from time to time agree in
writing. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse the
Trustee upon request for all out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Issuer shall fully indemnify the Trustee and any predecessor
Trustee against any and all loss, liability, claim, damage or expense (including
reasonable attorneys' fees) incurred by or in connection with the administration
of this trust and the performance of its duties hereunder. The Trustee shall
notify the Issuer of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof; provided, however, that any failure so to
notify the Issuer shall not relieve the Issuer or any Pledgor and Guarantor of
its indemnity obligations hereunder. The Issuer shall defend the claim and the
Trustee shall provide reasonable cooperation at the Issuer's expense in the
defense. The Trustee may have separate counsel and the Issuer shall pay the fees
and expenses of such counsel; provided, however, that the Issuer shall not be
required to pay such fees and expenses if it assumes the Trustee's defense and,
in the reasonable judgment of the Trustee's outside counsel, there is no
conflict of interest between the Issuer, on the one hand, and the Trustee, on
the other hand, in connection with such defense. The Issuer need not reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Trustee as determined by a court of competent jurisdiction to have been caused
by its own willful misconduct, negligence or bad faith.
To secure the Issuer's payment obligations in this Section,
the Trustee shall have a lien prior to the Notes on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes.
The Issuer's payment obligations pursuant to this Section
shall survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. Without prejudice to any other rights available to the
Trustee under applicable law, when the Trustee incurs expenses after the
occurrence of a Default specified in Section 7.01(g) or (h) with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
applicable bankruptcy, insolvency, receivership or similar law.
SECTION 8.08. Replacement of Trustee. (a) The Trustee may
resign at any time by so notifying the Issuer. The Holders of a majority in
principal amount of the Notes may remove the Trustee by so notifying the Trustee
and may appoint a successor Trustee. The Issuer shall remove the Trustee if:
(i) the Trustee fails to comply with Section 8.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Issuer or by the
Holders of a majority in principal amount of the Notes and such Holders do not
reasonably promptly appoint a successor Trustee, 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 Issuer shall promptly appoint a successor
Trustee.
(c) A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Issuer. 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. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 8.07.
(d) If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Notes may petition, at the expense of
the Issuer, any court of competent jurisdiction for the appointment of a
successor Trustee.
(e) If the Trustee fails to comply with Section 8.10, unless
the Trustee's duty to resign is stayed as provided in TIA ss.310(b), any Holder
who has been a bona fide holder of a Note for at least six months may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to
this Section, the Issuer's obligations under Section 8.07 shall continue for the
benefit of the retiring Trustee.
SECTION 8.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have.
SECTION 8.10. Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA ss. 310(b), subject to its right to apply for a stay of its duty to resign
under the penultimate paragraph of TIA ss.310(b); provided, however, that there
shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 8.11. Preferential Collection of Claims Against the
Issuer. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 9
DISCHARGE; DEFEASANCE
SECTION 9.01. Discharge of Liability on Notes; Defeasance.
(a) Subject to Section 9.01(c), when (i) all outstanding Notes
(other than Notes replaced or paid pursuant to Section 2.09) have been canceled
or delivered to the Trustee for cancellation or (ii) all outstanding Notes not
previously delivered for cancellation have become due and payable, whether at
maturity or as a result of redemption pursuant to Article 3 or 4 hereof, and the
Issuer irrevocably deposits with the Trustee funds in an amount sufficient or
U.S. Government Obligations, the principal of and interest on which will be
sufficient, or a combination thereof sufficient, in the written opinion of a
nationally recognized firm of independent public accountants delivered to the
Trustee (which delivery shall only be required if U.S. Government Obligations
have been so deposited) to pay the principal of and interest on the outstanding
Notes when due at maturity or upon redemption, including interest thereon to
maturity or such redemption date (other than Notes replaced pursuant to Section
2.08), and if in either case the Issuer pays all other sums payable hereunder by
the Issuer, then this Indenture shall, subject to Section 8.01(c), cease to be
of further effect. The Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Issuer accompanied by an Officers' Certificate
and an Opinion of Counsel and at the cost and expense of the Issuer.
(b) Subject to Sections 9.01(c) and 9.02, the Issuer at any
time may terminate (i) all of its obligations under the Notes and this Indenture
("legal defeasance option") and (ii) its obligations under Section 5.03, Section
5.04, Sections 5.06 through and including Section 5.11, Section 6.01, Section
6.02, and Sections 6.04 through and including Section 6.15 and the operation of
part (d), (e), (f), (j), (k) or (m) of Section 7.01 ("covenant defeasance
option"). The Issuer may exercise its legal defeasance option notwithstanding
its prior exercise of the covenant defeasance option. In the event that the
Issuer terminates all of its obligations under the Notes and this Indenture by
exercising the legal defeasance option, the obligations under the Security
Documents shall each be terminated simultaneously with the termination of such
obligations.
If the Issuer exercises its legal defeasance option, payment
of the Notes may not be accelerated because of an Event of Default. If the
Issuer exercises its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in part (d), (e), (f), (j),
(k) or (m) of Section 7.01.
Upon satisfaction of the conditions set forth herein and upon
request of the Issuer, the Trustee shall acknowledge in writing the discharge of
those obligations that the Issuer terminates.
(c) Notwithstanding the provisions of Sections 9.01(a) and 9.01(b), the
obligations of the Issuer in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 8.07,
8.08 and in this Article 9 shall survive until the Notes have been paid in full.
Thereafter, the obligations of the Issuer in Sections 8.07, 9.04 and 9.05 shall
survive such satisfaction and discharge.
SECTION 9.02. Conditions to Defeasance. (a) The Issuer may
exercise its legal defeasance option or covenant defeasance option only if:
(i) the Issuer irrevocably deposits in trust with the Trustee
money in an amount sufficient or U.S. Government Obligations, the
principal of and interest on which will be sufficient, or a combination
thereof sufficient, to pay the principal, premium (if any) and interest
on the Notes when due at maturity or redemption, as the case may be,
including interest thereon to maturity or such redemption date;
(ii) the Issuer delivers to the Trustee a certificate from a
firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment on
the deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such amounts
as will be sufficient to pay principal and interest when due on all the
Notes to maturity or redemption, as the case may be;
(iii) 91 days pass after the deposit is made and during the
91-day period no Default specified in Section 7.01(g) or (h) with
respect to the Issuer occurs which is continuing at the end of the
period;
(iv) the deposit does not constitute a default under any other
agreement binding on the Issuer;
(v) the Issuer delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(vi) in the case of the legal defeasance option, the Issuer
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Issuer has received from, or there has been published by, the
Internal Revenue Service a ruling, or (B) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders will not recognize income,
gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(vii) in the case of the covenant defeasance option, the
Issuer shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(viii) the Issuer delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Notes as set forth in
this Article 9 have been complied with.
(b) Before or after a deposit, the Issuer may make
arrangements satisfactory to the Trustee for the redemption of Notes at a future
date in accordance with Article 3.
SECTION 9.03. Application of Trust Money. The Trustee
shall hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article 9. It shall apply the deposited money and the money
from U.S. Government Obligations through the Paying Agent and in accordance with
this Indenture to the payment of principal of and interest on the Notes.
SECTION 9.04. Repayment to the Issuer. The Trustee and the
Paying Agent shall promptly turn over to the Issuer upon request any money or
U.S. Government Obligations held by it as provided in this Article which, in the
written opinion of a firm of independent public accountants delivered to the
Trustee (which delivery shall only be required if U.S. Government Obligations
have been so deposited), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent discharge or defeasance in
accordance with this Article.
The Trustee and the Paying Agent shall pay to the Issuer upon
written request any money held by them for the payment of principal or interest
that remains unclaimed for two years, and, thereafter, Holders entitled to the
money must look to the Issuer for payment as general creditors and the Trustee,
and the Paying Agent shall have no further liability with respect to such
monies.
SECTION 9.05. Indemnity for Government Obligations. The
Issuer shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 9.06. Reinstatement. If the Trustee or Paying
Agent is unable to apply any money or U.S. Government Obligations in accordance
with this Article 9 by reason of any legal proceeding or by reason of any order
or judgment of any Governmental Authority enjoining, restraining or otherwise
prohibiting such application, the Issuer's obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 9 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 9; provided, however, that, if the Issuer has made any payment
of interest on or principal of any Notes because of the reinstatement of its
obligations, the Issuer shall be subrogated to the rights of the Holders of such
Notes to receive such payment from the money or U.S. Government Obligations held
by the Trustee or Paying Agent.
ARTICLE 10
AMENDMENTS
SECTION 10.01. Without Consent of Holders. The Issuer and
the Trustee may amend this Indenture or the Notes without notice to or consent
of any Holder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to allow a Successor Issuer to assume obligations
hereunder pursuant to, and in compliance with, Section 6.03(a)(i);
(iii) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, however, 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;
(iv) to add additional Guarantees with respect to the Notes;
(v) to pledge additional Collateral as security for the Notes;
(vi) to add to the covenants of the Issuer for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Issuer;
(vii) to comply with any requirement of the Commission in
connection with qualifying, or maintaining the qualification of, this
Indenture under the TIA; or
(viii) to make any change that does not adversely affect the
rights of any Holder.
After an amendment under this Section becomes effective, the
Issuer shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 10.01.
SECTION 10.02. With Consent of Holders. (a) The Issuer and
the Trustee may amend this Indenture or the Notes without notice to any Holder
but with the written consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including consents obtained in connection
with a tender offer or exchange for the Notes). However, without the consent of
each Holder affected, an amendment may not:
(i) reduce the amount of Notes whose Holders must consent to
an amendment;
(ii) reduce the rate of or extend the time for payment of
interest on any Note;
(iii) reduce the principal of or extend the Stated Maturity of
any Note;
(iv) reduce the premium payable upon the redemption of any
Note or change the time at which any Note may be redeemed in accordance
with Article 3;
(v) make any Note payable in currency other than that stated
in the Note;
(vi) impair the right of any Holder to receive payment of
principal of, and interest 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;
(vii) make any change in Section 7.04 or 7.07 or the second
sentence of paragraph (a) of this Section 10.02; or
(viii) amend the Security Documents or modify the Collateral
and Guarantee Requirement, in each case, in any manner materially
adverse to the Holders.
(b) It shall not be necessary for the consent of the Holders
under this Section 10.02 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent approves the substance
thereof.
(c) After an amendment under this Section 10.02 becomes
effective, the Issuer shall mail to Holders a notice briefly describing such
amendment. The failure to give such notice to all Holders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 10.02.
SECTION 10.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Notes shall comply with the TIA as then in
effect.
SECTION 10.04. Revocation and Effect of Consents and
Waivers. (a) A consent to an amendment (pursuant to Section 10.02) or a waiver
(pursuant to Section 7.04) by a Holder of a Note shall bind the Holder and every
subsequent Holder of that Note or portion of the Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent or waiver
is not made on the Note. However, any such Holder or subsequent Holder may
revoke the consent or waiver as to such Holder's Note or portion of the Note if
the Trustee receives the notice of revocation before the date on which the
relevant amendment or waiver becomes effective. After an amendment or waiver
becomes effective, it shall bind every Holder. An amendment becomes effective
upon the (i) receipt by the Issuer or the Trustee of the requisite number of
consents, (ii) satisfaction of conditions to effectiveness as set forth in this
Indenture and any indenture supplemental hereto containing such amendment and
(iii) execution of such amendment or waiver (or supplemental indenture) by the
Issuer and the Trustee. A waiver becomes effective upon receipt by the Trustee
of the notice described in Section 7.04.
(b) The Issuer may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to give their consent or take any
other action described above or required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120 days after
such record date.
SECTION 10.05. Notation on or Exchange of Notes.
(a) If an amendment changes the terms of a Note, the Trustee
may require the Holder of the Note to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Note regarding the changed terms and return
it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the
Issuer in exchange for the Note shall issue and, upon Issuer Order, the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Note shall not affect the validity of
such amendment.
(b) The Issuer and the Trustee acknowledge that the amendment
and restatement accomplished by this Amended and Restated Indenture includes
amendments to the Notes initially issued on November 13, 2001. Accordingly, the
Issuer agrees to execute new Notes in the Form of Exhibit A, which reflect the
amendments accomplished hereby, and the Trustee agrees to countersign and
deliver such Notes to the Holders upon surrender of the initially-issued Notes.
SECTION 10.06. Trustee to Sign Amendments. The Trustee
shall sign any amendment authorized pursuant to this Article 10 if the amendment
does not affect the rights, duties, liabilities or immunities of the Trustee. If
it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 8.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such amendment
is the legal, valid and binding obligation of the Issuer enforceable against it
in accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof (including Section 10.03).
SECTION 10.07. Payment for Consent. Neither the Issuer nor
any Affiliate of the Issuer shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to any
Holder for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture or the Notes unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 11
SECURITY; NOTE GUARANTEES
SECTION 11.01. Collateral and Guarantee Requirement. Prior
to the issuance of the Notes on the Issue Date, and for so long as any Note
remains outstanding, the Issuer shall execute, and cause its Domestic
Subsidiaries to execute, the Security Documents and shall take any other steps
necessary to cause the Collateral and Guarantee Requirement to be satisfied.
SECTION 11.02. Regarding the Collateral Agent. (a) The
Trustee, on behalf of the Secured Parties, hereby appoints Citicorp USA, Inc. to
act as Collateral Agent under this Indenture and the Security Documents,
provided however that for so long as any Revolver Obligations are outstanding,
the same Person shall act as Collateral Agent under both the Security Documents
and the Revolving Loan Documentation. The Trustee on behalf of itself and the
Secured Parties hereby irrevocably appoints the Collateral Agent as its agent
and authorizes the Collateral Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Collateral Agent by the terms
hereof and of the Security Documents, together with such actions and powers as
are reasonably incidental thereto.
(b) The Person serving as Collateral Agent and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
banking, trust or other business with the Issuer or any Subsidiary or other
Affiliate thereof as if it were not the Collateral Agent hereunder and may
accept fees and other consideration from the Issuer for services in connection
with this Indenture, the Security Documents or otherwise without having to
account for the same to the Trustee or the Holders.
(c) The Collateral Agent shall not have any duties or
obligations except those expressly set forth in this Indenture and the Security
Documents. Without limiting the generality of the foregoing, (i) the Collateral
Agent shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default has occurred and is continuing, (ii) the Collateral Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by this Indenture and the Security Documents that the Collateral
Agent is required to exercise in writing by the Trustee or such number or
percentage of the Holders as shall be necessary under the circumstances as
provided in Article 10, and (iii) except as expressly set forth in this
Indenture and the Security Documents, the Collateral Agent shall not have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Issuer or any of the Subsidiaries that is
communicated to or obtained by the Person serving as Collateral Agent or any of
its Affiliates in any capacity. The Collateral Agent shall not be liable for any
action taken or not taken by it with the consent or at the request of the
Trustee or such number or percentage of the Holders as shall be necessary under
the circumstances as provided in Article 10 or otherwise in the absence of its
own gross negligence or willful misconduct as determined in a final judgment by
a court of competent jurisdiction. The Collateral Agent shall be deemed not to
have knowledge of any Default unless and until written notice thereof is given
to the Collateral Agent by the Issuer or the Trustee, and the Collateral Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Indenture or any Security Document, (ii) the contents of any certificate, report
or other document delivered thereunder or in connection therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in this Indenture or any Security Document, (iv) the
validity, enforceability, effectiveness or genuineness of this Indenture or any
Security Document or any other agreement, instrument or document, or the
validity, perfection, or priority of any Lien created by any of the Security
Documents, or (v) the satisfaction of any condition set forth in this Indenture
or any Security Document, other than to confirm receipt of items expressly
required to be delivered to the Collateral Agent.
(d) The Collateral Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Collateral Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Collateral Agent may consult with
legal counsel (who may be counsel for the Issuer), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.
(e) The Collateral Agent may perform any and all of its duties
and exercise its rights and powers by or through any one or more sub-agents or
attorneys-in-fact appointed by the Collateral Agent. The Collateral Agent and
any such sub-agent or attorney-in-fact may perform any and all its duties and
exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent or attorney-in-fact and to the Related Parties of the Collateral Agent
and any such sub-agent or attorney-in-fact.
(f) Subject to the appointment and acceptance of a successor
Collateral Agent as provided in this paragraph, the Collateral Agent may resign
at any time by notifying the Trustee and the Issuer and may be removed at any
time with or without cause by the Holders of a majority in principal amount of
the Notes. Upon any such resignation, the Holders of a majority in principal
amount of the Notes shall have the right, in consultation with the Issuer, to
appoint a successor. If no successor shall have been so appointed by such
Holders and shall have accepted such appointment within 30 days after the
retiring Collateral Agent gives notice of its resignation, then the retiring
Collateral Agent may, on behalf of the Trustee and the Holders, appoint a
successor Collateral Agent that shall have an office in New York, New York. Upon
the acceptance of its appointment as Collateral Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent, and the retiring
Collateral Agent shall be discharged from its duties and obligations hereunder
and under the Security Documents. The fees payable by the Issuer to a successor
Collateral Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Issuer and such successor. After the Collateral
Agent's resignation hereunder, the provisions of this Article shall continue in
effect for the benefit of such retiring Collateral Agent, its sub-agents and
attorneys-in-fact and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Collateral
Agent. Notwithstanding the foregoing, any successor Collateral Agent must meet
the requirements of Section 11.02(a).
(g) Except for action expressly required of the Collateral
Agent by this Indenture and the Security Documents, the Collateral Agent shall
in all cases be fully justified in failing or refusing to act thereunder unless
it shall receive further assurances to its satisfaction from the Holders of
their indemnification obligations under Section 11.02(i) in respect of such
action.
Without limiting the foregoing, the Collateral Agent shall not
be required to, and shall not, take any action to enforce any of its or the
Trustee's or Holders' rights under, nor waive or amend any provision of, this
Indenture or any Security Document or any Collateral, nor give any notice or
make any request or demand or filing thereunder, except in each instance as and
to the extent instructed to do so by the Trustee or such number or percentage of
the Holders as shall be necessary under the circumstances as provided in Article
10, and the Collateral Agent shall have no liability for failure to take any
action in the absence of such instructions, provided that the Collateral Agent
will promptly send to the Trustee a copy of each notice, request or other
document delivered to the Collateral Agent pursuant to the terms of this
Indenture and the Security Documents and will take such actions contemplated by
this Indenture and the Security Documents as the Trustee and such number or
percentage of the Holders as shall be necessary under the circumstances as
provided in Article 10 may reasonably instruct, except that nothing herein or in
any Security Document shall require the Collateral Agent to take any action that
in the reasonable opinion of the Collateral Agent would be contrary to the terms
of this Indenture or any Security Document or applicable law or subject the
Collateral Agent to personal liability.
(h) The Issuer shall pay (i) all reasonable out-of-pocket
expenses incurred by the Collateral Agent and its Affiliates, including the
reasonable fees, charges and disbursements of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, special New York counsel for the Collateral Agent, in connection with the
preparation of this Indenture and the Security Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and (ii) all
reasonable out-of-pocket expenses incurred by the Collateral Agent, including
the reasonable fees, charges and disbursements of any counsel for the Collateral
Agent in connection with the enforcement or protection of its rights in
connection with this Indenture and the Security Documents, including its rights
under this Article.
(i) The Issuer shall indemnify the Collateral Agent and each
Related Party of the Collateral Agent (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Indenture, the Notes and any
Security Document or any other agreement or instrument contemplated thereby, the
performance by the parties to such documents of their respective obligations
thereunder or the consummation of the transactions contemplated thereby, (ii)
the use of the proceeds from the sale of any Note, (iii) any presence, Release
or threatened Release of Hazardous Materials on, at, under or from any Mortgaged
Property or any other property currently or formerly owned or operated by the
Issuer or any of the Subsidiaries, or any Environmental Liability related in any
way to the Issuer or any of the Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto, provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or willful
misconduct of such Indemnitee or any Related Person of such Indemnitee as
determined in a final judgment by a court of competent jurisdiction.
(j) To the extent permitted by applicable law, the Issuer
shall not assert, and each hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Indenture, the Security Documents or any agreement
or instrument contemplated hereby or thereby.
ARTICLE 12
SUBORDINATION
SECTION 12.01. Agreement to Subordinate. The Issuer agrees,
and each Holder by accepting a Note agrees, that the Indebtedness evidenced by
the Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 12, to the prior payment in full of the Revolver
Obligations and that the subordination is for the benefit of and enforceable by
the lenders under the Revolver Obligations. The Notes shall in all respects rank
senior to all existing and future Indebtedness of the Issuer other than the
Revolver Obligations; and only Indebtedness in relation to the Revolver
Obligations shall rank senior to the Notes in accordance with the provisions set
forth herein. All provisions of this Article 12 shall be subject to Section
12.12.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon
any payment or distribution of the assets of the Issuer to its creditors upon a
total or partial liquidation or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Issuer or its property:
(a) lenders under the Revolver Obligations shall be entitled
to receive payment in full of such Revolver Obligations before Holders shall be
entitled to receive any payment of principal of or interest on the Notes; and
(b) until the Revolver Obligations are paid in full, any
payment or distribution to which Holders would be entitled but for this Article
12 shall be made to lenders under the Revolver Obligations as their interests
may appear, except that Holders may receive shares of stock and any debt
securities that are subordinated to such Revolver Obligations to at least the
same extent as the Notes.
SECTION 12.03. Default on Revolver Obligations. (a) The
Issuer may not pay the principal of, premium (if any) or interest on the Notes,
make any deposit pursuant to Section 9.01 or otherwise repurchase, redeem or
otherwise retire any Notes (collectively, "pay the Notes") if (i) any amount
under the Revolver Obligations is not paid when due or (ii) any other default on
such Revolver Obligations occurs and the maturity of such Revolver Obligations
is accelerated in accordance with the relevant terms of the Revolving Loan
Documentation unless, in either case, (A) the default has been cured or waived
and any such acceleration has been rescinded or (B) such Revolver Obligations
have been paid in full; provided, however, that the Issuer may pay the Notes
without regard to the foregoing if the Issuer and the Trustee receive written
notice approving such payment from a Representative of such creditors with
respect to which either of the events set forth in clause (i) or (ii) of this
sentence has occurred and is continuing.
(b) During the continuance of any default (other than a
default described in clause (i) or (ii) of part (a) of this Section 12.03) with
respect to any Revolver Obligations pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Issuer may not pay the Notes for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to the Issuer)
of written notice (a "Blockage Notice") of such default from any Representative
of such Revolver Obligations specifying an election to effect a Payment Blockage
Period and ending 179 days thereafter (or earlier if such Payment Blockage
Period is terminated (i) by written notice to the Trustee and the Issuer from
such a Representative, (ii) by repayment in full of such Revolver Obligations or
(iii) because no default with respect to any Revolver Obligations is
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of part (a) of this Section 12.03), the Issuer may resume payments on
the Notes after the end of such Payment Blockage Period, unless the lenders
under the Revolver Obligations or a Representative of such lenders shall have
accelerated the maturity of such Revolver Obligations, and such Revolver
Obligations have not been repaid in full.
(c) Not more than one Blockage Notice may be given in any
period of 360 consecutive days, irrespective of the number of defaults during
such period. For purposes of this Section 12.03, no default or event of default
that existed or was continuing on the date of the commencement of any Payment
Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Payment Blockage Period, whether or not within a period of 360
consecutive days, unless such default or event of default shall have been cured
or waived for a period of not less than 90 consecutive days.
SECTION 12.04. Acceleration of Payment of Notes. If payment
of the Notes is accelerated because of an Event of Default, the Trustee
(provided, that the Trustee shall have received written notice from the Issuer
or a Representative identifying the Revolver Obligations for which such
Representative is so designated, on which notice the Trustee shall be entitled
to rely conclusively) shall promptly notify the lenders under the Revolver
Obligations (or their Representative) of the acceleration. If any such Revolver
Obligation is outstanding, the Issuer may not pay the Notes until five Business
Days after such creditors or their Representative receive notice of such
acceleration and, thereafter, may pay the Notes only if this Article 12
otherwise permits payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over. If a
payment or distribution is made to Holders that because of this Article 12
should not have been made to them, any Holder who receive such a payment or
distribution shall hold it in trust for lenders under the Revolver Obligations
and pay it over to such lenders as their interests may appear.
SECTION 12.06.Subrogation. After all Revolver Obligations
are paid in full and for so long as any Note remains outstanding, Holders shall
be subrogated to the rights of lenders under the Revolver Obligations to receive
distributions applicable to Revolver Obligations. A distribution made under this
Article 12 to holders of such Revolver Obligations which otherwise would have
been made to Holders is not, as between the Issuer and Holders, a payment by the
Issuer on such Revolver Obligations.
SECTION 12.07. Relative Rights. This Article 12 defines the
relative rights of Holders and lenders under the Revolver Obligations. Nothing
in this Indenture shall:
(a) impair, as between the Issuer and Holders, the obligation
of the Issuer, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms; or
(b) prevent the Trustee or any Holder from exercising its
available remedies upon a Default, subject to the rights of lenders under the
Revolver Obligations to receive distributions otherwise payable to Holders.
SECTION 12.08. Subordination May Not Be Impaired by Issuer.
No right of any lender under the Revolver Obligations to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Issuer or by its failure to comply with this
Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make
payments on the Notes and shall not be charged with knowledge of the existence
of facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives written notice satisfactory to it that payments may not be made
under this Article 12. The Issuer, the Registrar, the Paying Agent, a
Representative or a lender under Revolver Obligations may give such notice;
provided, however, that, if a lender under Revolver Obligations has a
Representative, only the Representative may give such notice.
The Trustee in its individual or any other capacity may be a
lender under Revolver Obligations with the same rights it would have if it were
not Trustee. The Registrar, the Paying Agent and the Collateral Agent may do the
same with like rights. The Trustee shall be entitled to all the rights set forth
in this Article 12 with respect to any lender under Revolver Obligations which
may at any time be held by it, to the same extent as any other lender under such
Revolver Obligations; and nothing in Article 8 shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article 12 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 8.07 or any other
Section of this Indenture.
SECTION 12.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to a lender under
Revolver Obligations, the distribution may be made and the notice given to their
Representative or Representatives (if any).
SECTION 12.11. Article 12 Not To Prevent Events of Default
or Limit Right To Accelerate. The failure to make a payment pursuant to the
Notes by reason of any provision in this Article 12 shall not be construed as
preventing the occurrence of a Default. Nothing in this Article 12 shall have
any effect on the right of the Holders or the Trustee to accelerate the maturity
of the Notes.
SECTION 12.12. Trust Monies Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments from money
or the proceeds of U.S. Government Obligations held in trust under Article 9 by
the Trustee for the payment of principal of and interest on the Notes shall not
be subordinated to the prior payment of any Revolver Obligation or subject to
the restrictions set forth in this Article 12, and none of the Holders shall be
obligated to pay over any such amount to the Issuer or any lender under the
Revolver Obligations or any other creditor of the Issuer.
SECTION 12.13. Trustee Entitled To Rely. Upon any payment
or distribution pursuant to this Article 12, the Trustee and the Holders shall
be entitled to rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (b) upon a certificate of the liquidating trustee or agent or other
Person making such payment or distribution to the Trustee or to the Holders or
(c) upon the Representatives for the lenders under the Revolver Obligations for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the lenders under the Revolver Obligations and other
Indebtedness of the Issuer, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article 12. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a lender under
Revolver Obligations to participate in any payment or distribution pursuant to
this Article 12, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Revolver
Obligations owed to such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 8.01 and 8.02 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 12.
SECTION 12.14. Trustee To Effectuate Subordination. Each
Holder by accepting a Note authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination between the Holders and the lenders under the Revolver
Obligations as provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 12.15. Trustee Not Fiduciary for Lenders under
Revolver Obligations. The Trustee shall not be deemed to owe any fiduciary duty
to the lenders under the Revolver Obligations and shall not be liable to any
such creditors if it shall mistakenly pay over or distribute to Holders or the
Issuer or any other Person, money or assets to which lenders under the Revolver
Obligations shall be entitled by virtue of this Article 12 or otherwise.
SECTION 12.16. Reliance by Holders of Senior Indebtedness
on Subordination Provisions. Each Holder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to any lender under Revolver Obligations,
whether the Indebtedness under such Revolver Obligation was created or acquired
before or after the issuance of the Notes, to extend and continue to extend, or
to continue to extend, such Revolver Obligations and such lender under Revolver
Obligations shall be deemed conclusively to have relied on such subordination
provisions in extending and continuing to extend, or in continuing to extend,
such Revolver Obligations.
ARTICLE 13
Miscellaneous
SECTION 13.01. Trust Indenture Act Controls. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by, or with another provision (an "incorporated provision")
included in this Indenture by operation of, TIA ▇▇.▇▇. 310 to 318, inclusive,
such imposed duties or incorporated provision shall control.
SECTION 13.02. Notices. Any notice or communication shall
be in writing and delivered in person, sent by facsimile or mailed by
first-class mail addressed as follows:
if to the Issuer:
MEMC Electronic Materials, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (City of ▇'▇▇▇▇▇▇)
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
if to the Trustee:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Citibank Agency & Trust - ▇▇▇▇▇ ▇▇▇▇▇
if to the Collateral Agent:
Citicorp USA, Inc.
▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
(Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇)
The Issuer or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be
mailed, first class mail, to the Holder at the Holder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Issuer, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Issuer to the Trustee to take
or refrain from taking any action under this Indenture (other than a request to
authenticate the Notes in accordance with this Indenture), the Issuer shall
furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or
Opinion. Each certificate or opinion with respect to compliance with a covenant
or condition provided for in this Indenture (other than pursuant to Section
5.03) shall include:
(a) a statement that the individual 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 individual, he has made such
examination or investigation as is necessary to enable him to
express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to
factual matters on an Officers' Certificate or on certificates of public
officials.
SECTION 13.06. When Notes Disregarded. In determining
whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Issuer or any Pledgor and
Guarantor shall be disregarded and deemed not to be outstanding, except that,
for the purpose of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Notes which a Trust Officer of
the Trustee actually knows are so owned shall be so disregarded. Subject to the
foregoing, only Notes outstanding at the time shall be considered in any such
determination. Notwithstanding the foregoing, Notes that are to be acquired by
the Issuer or any Pledgor and Guarantor pursuant to an exchange offer, tender
offer or other agreement shall not be deemed to be owned by such entity until
legal title to such Notes passes to such entity.
SECTION 13.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08. Legal Holidays. If a payment date is not a
Business Day, payment shall be made on the immediately preceding Business Day,
and no interest shall accrue for the intervening period. If a regular record
date is not a Business Day, the record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 13.10. No Recourse Against Others. No director,
officer, employee, stockholder or member, as such, of the Issuer or any of the
Pledgors and Guarantors, shall have any liability for any obligations of the
Issuer or any of the Pledgors and Guarantors under the Notes, this Indenture or
the Security Documents, as applicable, or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Note, each
Holder shall waive and release all such liability. The waiver and release shall
be part of the consideration for the issue of the Notes.
SECTION 13.11. Successors. All agreements of the Issuer and
each Pledgor and Guarantor in this Indenture and the Notes shall bind its
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 13.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 13.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Amended and
Restated Indenture to be duly executed as of the date first written above.
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇.▇▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
CITIBANK, N.A.,
as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
CITICORP USA, Inc.,
as Collateral Agent.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director and Vice President
EXHIBIT D TO THE INDENTURE
EXECUTION COPY
PLEDGE AGREEMENT dated as of November 13, 2001,
among MEMC ELECTRONIC MATERIALS, INC., a Delaware
corporation (the "Issuer"), and each subsidiary of the
Issuer listed on Schedule I hereto (each such subsidiary
individually a "Pledgor and Guarantor" and collectively,
the "Pledgors and Guarantors") and Citicorp USA, Inc., a
Delaware corporation, as collateral agent (in such
capacity, the "Collateral Agent") for the Secured
Parties (as defined in the Security Agreement).
Reference is made to (a) the Indenture dated as of November 13, 2001
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among the Issuer, Citibank, N.A., as trustee (in such capacity,
the "Trustee") and the Collateral Agent, (b) the Restructuring Agreement dated
as of November 13, 2001 between the Issuer and TPG Wafer Holdings LLC (the
"Restructuring Agreement") and (c) the Guarantee Agreement dated as of November
13, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Guarantee Agreement") among the Issuer, each Pledgor and Guarantor party
thereto and the Collateral Agent. Capitalized terms used herein and not defined
herein shall have meanings assigned to such terms in the Indenture and, if not
defined therein, in the Restructuring Agreement.
The Holders have agreed to purchase the Notes pursuant to, and upon the
terms and subject to the conditions specified in, the Restructuring Agreement
and the Indenture. Each of the Pledgors and Guarantors has agreed to guarantee,
among other things, all the obligations of the Issuer under the Indenture on a
senior subordinated basis as set forth in Article 12 of the Indenture and
Article II of the Guarantee Agreement. The obligations of the Holders to
purchase the Notes are conditioned upon, among other things, the execution and
delivery by the Issuer of a Pledge Agreement in the form hereof to secure (a)
the due and punctual payment of (i) the principal of and interest (including
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Notes, when and as due, whether at
maturity, by acceleration, upon one or more dates set for redemption,
retirement, repurchase or otherwise and (ii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Issuer and the Pledgors and Guarantors to the Secured Parties under the
Indenture, the Notes and the Security Documents and (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Issuer and the Pledgors and Guarantors under or pursuant to the Indenture, the
Notes and the Security Documents (all the monetary and other obligations
referred to in the preceding clauses (a) and (b) being collectively called the
"Indenture Obligations").
Accordingly, the Pledgors and Guarantors and the Collateral Agent, on
behalf of itself and each Secured Party (and each of their respective successors
or assigns), hereby agree as follows:
SECTION 1. Pledge. As security for the payment and performance, as the
case may be, in full of the Obligations, each Pledgor and Guarantor hereby
pledges and grants to the Collateral Agent, its successors and assigns, and
hereby grants to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, a security interest in all of such
Pledgor and Guarantor's right, title and interest in, to and under (a) the
Equity Interests owned by it which are listed on Schedule II hereto and any
Equity Interests obtained in the future by such Pledgor and Guarantor and the
certificates representing all such Equity Interests (the "Pledged Interests");
provided that the Pledged Interests shall not include (i) more than 65% of the
issued and outstanding voting stock of any Foreign Subsidiary or (ii) the
outstanding voting stock of MEMC Korea Company, MEMC Kulim Electronic Materials,
Sdn. Bhd., MEMC Southwest Inc. and Taisil Electronic Materials Corporation or
(iii) to the extent that applicable law requires that a Subsidiary of such
Pledgor and Guarantor issue directors' qualifying shares, such qualifying
shares; (b)(i) the debt securities owned by it which are listed opposite the
name of such Pledgor and Guarantor on Schedule II hereto, (ii) any debt
securities in the future issued to such Pledgor and Guarantor and (iii) the
promissory notes and any other instruments evidencing such debt securities (the
"Pledged Debt Securities"); (c) all other property that may be delivered to and
held by the Collateral Agent pursuant to the terms hereof; (d) subject to
Section 5, all payments of principal or interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed, in respect of, in exchange for or upon the conversion of the
securities referred to in clauses (a) and (b) above; (e) subject to Section 5,
all rights and privileges of such Pledgor and Guarantor with respect to the
securities and other property referred to in clauses (a), (b), (c) and (d)
above; and (f) all proceeds of any of the foregoing (the items referred to in
clauses (a) through (f) above being collectively referred to as the
"Collateral"). Upon delivery to the Collateral Agent, (a) any Pledged Interests,
any Pledged Debt Securities or any stock certificates, notes or other securities
now or hereafter included in the Collateral (the "Pledged Securities") shall be
accompanied by stock powers duly executed in blank or other instruments of
transfer satisfactory to the Collateral Agent and by such other instruments and
documents as the Collateral Agent may reasonably request and (b) all other
property comprising part of the Collateral shall be accompanied by proper
instruments of assignment duly executed by the applicable Pledgor and Guarantor
and such other instruments or documents as the Collateral Agent may reasonably
request. Each delivery of Pledged Securities shall be accompanied by a schedule
describing the securities theretofore and then being pledged hereunder, which
schedule shall be attached hereto as Schedule II and made a part hereof. Each
schedule so delivered shall supersede any prior schedules so delivered. The
pledge of the Pledged Securities is subject to the terms and conditions of that
certain Option Agreement dated September 21, 1998, as amended on September 22,
2000, September 25, 2001, and October 25, 2001, among Tokuyama Corporation,
Marubeni Corporation, Marubeni America Corporation, the Issuer and MEMC
Pasadena.
TO HAVE AND TO HOLD the Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.
SECTION 2. Delivery of the Collateral. (a) Each Pledgor and Guarantor
agrees promptly to deliver or cause to be delivered to the Collateral Agent any
and all Pledged Securities, and any and all certificates or other instruments or
documents representing the Collateral.
(b) Each Pledgor and Guarantor will cause any Indebtedness for borrowed
money owed to the Pledgor and Guarantor by any Person to be evidenced by a
duly executed promissory note that is pledged and delivered to the
Collateral Agent pursuant to the terms thereof.
SECTION 3. Representations, Warranties and Covenants. Each Pledgor and
Guarantor hereby represents, warrants and covenants, as to itself and the
Collateral pledged by it hereunder, to and with the Collateral Agent that:
(a) the Pledged Interests represent that percentage as set forth on
Schedule II of the issued and outstanding shares of each class of the
Equity Interests of the issuer with respect thereto;
(b) except for the prior lien and security interest granted under the
Revolving Loan Documentation as security for the payment or performance,
as the case may be, in full of the Revolver Obligations ( the "Senior
Security Interest") and the security interest granted hereunder, such
Pledgor and Guarantor (i) is and will at all times continue to be the
direct owner, beneficially and of record, of the Pledged Securities
indicated on Schedule II, (ii) holds the same free and clear of all Liens,
(iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on, the
Collateral, other than pursuant hereto, and (iv) subject to Section 5,
will cause any and all Collateral, whether for value paid by such Pledgor
and Guarantor or otherwise, to be forthwith deposited with the Collateral
Agent and pledged or assigned hereunder;
(c) such Pledgor and Guarantor (i) has the power and authority to
pledge the Collateral in the manner hereby done or contemplated and (ii)
will defend its title or interest thereto or therein against any and all
Liens (other than the Lien created by this Agreement), however arising, of
all Persons whomsoever;
(d) no consent of any other Person (including stockholders or creditors
of any Pledgor and Guarantor) and no consent or approval of any
Governmental Authority or any securities exchange was or is necessary to
the validity of the pledge effected hereby;
(e) by virtue of the execution and delivery by the Pledgors and
Guarantors of this Agreement, when the Pledged Securities, certificates or
other documents representing or evidencing the Collateral are delivered to
the Collateral Agent in accordance with this Agreement, the Collateral
Agent will have a valid and perfected lien upon and security interest in
such Pledged Securities as security for the payment and performance of the
Indenture Obligations (subject only to the lien and security interest that
comprise the Senior Security Interest);
(f) the pledge effected hereby is effective to vest in the Collateral
Agent, on behalf of the Secured Parties, the rights of the Collateral
Agent in the Collateral as set forth herein;
(g) all of the Pledged Interests have been duly authorized and validly
issued and are fully paid and nonassessable;
(h) all information set forth herein relating to the Pledged Interests
is accurate and complete in all material respects as of the date hereof;
and
(i) the pledge of the Pledged Interests pursuant to this Agreement does
not violate Regulation T, U or X of the Federal Reserve Board or any
successor thereto as of the date hereof.
SECTION 4. Registration in Nominee Name; Denominations. The Collateral
Agent, on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in its own name as pledgee,
the name of its nominee (as pledgee or as sub-agent) or the name of the Pledgors
and Guarantors, endorsed or assigned in blank or in favor of the Collateral
Agent. Each Pledgor and Guarantor will promptly give to the Collateral Agent
copies of any notices or other communications received by it with respect to
Pledged Securities registered in the name of such Pledgor and Guarantor. The
Collateral Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement.
SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless and
until an Event of Default shall have occurred and be continuing:
(i) Each Pledgor and Guarantor shall be entitled to exercise any
and all voting and/or other consensual rights and powers inuring to an
owner of Pledged Securities or any part thereof for any purpose
consistent with the terms of this Agreement, the Indenture and the
other Transaction Documents; provided, however, that such Pledgor and
Guarantor will not be entitled to exercise any such right if the result
thereof could materially and adversely affect the rights inuring to a
holder of the Pledged Securities or the rights and remedies of any of
the Secured Parties under this Agreement or the Indenture or any other
Transaction Document or the ability of the Secured Parties to exercise
the same.
(ii) The Collateral Agent shall execute and deliver to each
Pledgor and Guarantor, or cause to be executed and delivered to each
Pledgor and Guarantor, all such proxies, powers of attorney and other
instruments as such Pledgor and Guarantor may reasonably request for
the purpose of enabling such Pledgor and Guarantor to exercise the
voting and/or consensual rights and powers it is entitled to exercise
pursuant to subparagraph (i) above and to receive the cash dividends it
is entitled to receive pursuant to subparagraph (iii) below.
(iii) Each Pledgor and Guarantor shall be entitled to receive and
retain any and all cash dividends, interest and principal paid on the
Pledged Securities to the extent and only to the extent that such cash
dividends, interest and principal are permitted by, and otherwise paid
in accordance with, the terms and conditions of the Indenture, the
Notes, the other Security Documents and applicable laws. All noncash
dividends, interest and principal, and all dividends, interest and
principal paid or payable in cash or otherwise in connection with a
partial or total liquidation or dissolution, return of capital, capital
surplus or paid-in surplus, and all other distributions (other than
distributions referred to in the preceding sentence) made on or in
respect of the Pledged Securities, whether paid or payable in cash or
otherwise, whether resulting from a subdivision, combination or
reclassification of the outstanding capital stock of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or
any part thereof, or in redemption thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which
such issuer may be a party or otherwise, shall be and become part of
the Collateral, and, if received by any Pledgor and Guarantor, shall
not be commingled by such Pledgor and Guarantor with any of its other
funds or property but shall be held separate and apart therefrom, shall
be held in trust for the benefit of the Collateral Agent and shall be
forthwith delivered to the Collateral Agent in the same form as so
received (with any necessary endorsement).
(iv) With regard to the pledge of the shares of MEMC Electronic
Materials S.p.A., the Collateral Agent shall take all reasonable
actions required by applicable mandatory provisions of Italian law in
order to enable the Pledgors and Guarantors to exercise all the rights
to which the Pledgors and Guarantors are entitled under this Section 5.
(b) Upon the occurrence and during the continuance of an Event of Default,
all rights of any Pledgor and Guarantor to dividends, interest or principal that
such Pledgor and Guarantor is authorized to receive pursuant to paragraph
(a)(iii) above shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, which shall subject to the provisions of this paragraph
(b) have the sole and exclusive right and authority to receive and retain such
dividends, interest or principal. All dividends, interest or principal received
by the Pledgor and Guarantor contrary to the provisions of this Section 5 shall
be held in trust for the benefit of the Collateral Agent, shall be segregated
from other property or funds of such Pledgor and Guarantor, and shall be
forthwith delivered to the Collateral Agent upon demand in the same form as so
received (with any necessary endorsement). Any and all money and other property
paid over to or received by the Collateral Agent pursuant to the provisions of
this paragraph (b) shall be retained by the Collateral Agent in an account to be
established by the Collateral Agent upon receipt of such money or other property
and shall be applied in accordance with the provisions of Section 7. After all
Events of Default have been cured or waived, the Collateral Agent shall promptly
repay to each Pledgor and Guarantor all cash dividends, interest or principal
(without interest), that such Pledgor and Guarantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) above and which remain in
such account.
(c) Upon the occurrence and during the continuance of an Event of Default,
all rights of any Pledgor and Guarantor to exercise the voting and consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 5, and the obligations of the Collateral Agent under paragraph
(a)(ii) of this Section 5, shall cease, and all such rights shall thereupon
become vested in the Collateral Agent, which shall have the sole and exclusive
right and authority to exercise such voting and consensual rights and powers,
provided that, unless otherwise directed by the Holders of a majority, by
aggregate principal amount, of the Notes, the Collateral Agent shall have the
right from time to time following and during the continuance of an Event of
Default to permit the Pledgors and Guarantors to exercise such rights. After all
Events of Default have been cured or waived, each Pledgor and Guarantor will
have the right to exercise the voting and consensual rights and powers that it
would otherwise be entitled to exercise pursuant to the terms of paragraph
(a)(i) above.
SECTION 6. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, subject to applicable regulatory and legal
requirements, the Collateral Agent may sell the Collateral, or any part thereof,
at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery as the Collateral Agent
shall deem appropriate. The Collateral Agent shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing the
Collateral for their own account for investment and not with a view to the
distribution or sale thereof, and upon consummation of any such sale the
Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Pledgor and Guarantor, and, to the extent permitted by
applicable law, the Pledgors and Guarantors hereby waive all rights of
redemption, stay, valuation and appraisal any Pledgor and Guarantor now has or
may at any time in the future have under any rule of law or statute now existing
or hereafter enacted.
The Collateral Agent shall give a Pledgor and Guarantor 10 days' prior
written notice (which each Pledgor and Guarantor agrees is a "reasonable
authenticated notification of disposition" within the meaning of Section 9-611
of the UCC (as defined in the Security Agreement) of the Collateral Agent's
intention to make any sale of such Pledgor and Guarantor's Collateral. Such
notice, in the case of a public sale, shall state the time and place for such
sale and, in the case of a sale at a broker's board or on a securities exchange,
shall state the board or exchange at which such sale is to be made and the day
on which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Collateral
Agent may fix and state in the notice of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may (in its sole and absolute
discretion) determine. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for sale, and such sale may, without further notice,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the sale price is paid in full by the purchaser or purchasers thereof, but the
Collateral Agent shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public (or, to the extent permitted by applicable law, private) sale made
pursuant to this Section 6, any Secured Party may bid for or purchase, free from
any right of redemption, stay or appraisal on the part of any Pledgor and
Guarantor (all said rights being also hereby waived and released), the
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any Indenture Obligation then due and payable to it from such
Pledgor and Guarantor as a credit against the purchase price, and it may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to such Pledgor and Guarantor therefor. For
purposes hereof, (a) a written agreement to purchase the Collateral or any
portion thereof shall be treated as a sale thereof, (b) the Collateral Agent
shall be free to carry out such sale pursuant to such agreement and (c) such
Pledgor and Guarantor shall not be entitled to the return of the Collateral or
any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Indenture Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
upon the Collateral and to sell the Collateral or any portion thereof pursuant
to a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 7. Subordination. Notwithstanding anything to the contrary
contained in this Pledge Agreement, all rights and remedies set forth in this
Pledge Agreement shall be subject to the subordination provisions set forth in
Article 12 of the Indenture and Article II of the Guarantee Agreement.
SECTION 8. Application of Proceeds of Sale. The Collateral Agent shall
apply the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of any Revolver Obligations oustanding, to the
extent the Revolving Loan Documentation is in force;
SECOND, to the payment of all costs and reasonable expenses incurred by
the Trustee or the Collateral Agent (in its capacity as such hereunder or
under any other Transaction Document) in connection with such collection
or sale or otherwise in connection with this Agreement or any of the
Indenture Obligations, including all court costs and the reasonable fees
and expenses of its agents and legal counsel, the repayment of all
advances made by the Collateral Agent hereunder or under any other
Transaction Document on behalf of any Pledgor and Guarantor, and any other
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Transaction Document;
THIRD, to the payment in full of the Indenture Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Indenture Obligations owed to them on
the date of any such distribution); and
FOURTH, to the Pledgors and Guarantors, their successors or assigns, or
as a court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the purchase money by the Collateral Agent or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Collateral Agent or such officer or be answerable in any way for the
misapplication thereof.
SECTION 9. Reimbursement of Collateral Agent. (a) Each Pledgor and
Guarantor agrees to pay upon demand to the Collateral Agent the amount of any
and all reasonable expenses, including the reasonable fees, other charges and
disbursements of its counsel and of any experts or agents, that the Collateral
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder or (iv) the failure by such
Pledgor and Guarantor to perform or observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the other
Transaction Documents, each Pledgor and Guarantor agrees to indemnify the
Collateral Agent and the Indemnified Parties (as defined in Section 10.04 of the
Restructuring Agreement) against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, other charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement or any other
Transaction Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
thereunder or the consummation of the other transactions contemplated thereby or
(ii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) Any amounts payable as provided hereunder shall be additional
Indenture Obligations secured hereby and by the other Security Documents. The
provisions of this Section 8 shall remain operative and in full force and effect
regardless of the termination of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Indenture
Obligations, the invalidity or unenforceability of any term or provision of this
Agreement or any other Transaction Document or any investigation made by or on
behalf of the Collateral Agent or any other Secured Party. All amounts due under
this Section 9 shall be payable on written demand therefor and shall bear
interest at the rate specified in Section 1 of the Notes.
SECTION 10. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor and
Guarantor hereby appoints the Collateral Agent the attorney-in-fact of such
Pledgor and Guarantor for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, the Collateral Agent shall have the right, upon the
occurrence and during the continuance of an Event of Default, with full power of
substitution either in the Collateral Agent's name or in the name of such
Pledgor and Guarantor, to ask for, demand, ▇▇▇ for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue of
any Collateral, to endorse checks, drafts, orders and other instruments for the
payment of money payable to the Pledgor and Guarantor representing any interest
or dividend or other distribution payable in respect of the Collateral or any
part thereof or on account thereof and to give full discharge for the same, to
settle, compromise, prosecute or defend any action, claim or proceeding with
respect thereto, and to sell, assign, endorse, pledge, transfer and to make any
agreement respecting, or otherwise deal with, the same; provided, however, that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present or
file any claim or notice, or to take any action with respect to the Collateral
or any part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Collateral Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to any Pledgor and
Guarantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
SECTION 11. Waivers; Amendment. (a) No failure or delay of the Collateral
Agent in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Collateral Agent hereunder and of
the other Secured Parties under the other Transaction Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provisions of this Agreement or consent to any departure by any
Pledgor and Guarantor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice or demand on any Pledgor and Guarantor in any case shall entitle such
Pledgor and Guarantor to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to a written agreement entered into between the
Collateral Agent and the Pledgor and Guarantor or Pledgors and Guarantors with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Article 10 of the Indenture.
SECTION 12. Securities Act, etc. In view of the position of the Pledgors
and Guarantors in relation to the Pledged Securities, or because of other
current or future circumstances, a question may arise under the Securities Act
of 1933, as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being called the "Federal Securities Laws") with respect
to any disposition of the Pledged Securities permitted hereunder. Each Pledgor
and Guarantor understands that compliance with the Federal Securities Laws might
very strictly limit the course of conduct of the Collateral Agent if the
Collateral Agent were to attempt to dispose of all or any part of the Pledged
Securities, and might also limit the extent to which or the manner in which any
subsequent transferee of any Pledged Securities could dispose of the same.
Similarly, there may be other legal restrictions or limitations affecting the
Collateral Agent in any attempt to dispose of all or part of the Pledged
Securities under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect. Each Pledgor and Guarantor recognizes that
in light of such restrictions and limitations the Collateral Agent may, with
respect to any sale of the Pledged Securities, limit the purchasers to those who
will agree, among other things, to acquire such Pledged Securities for their own
account, for investment, and not with a view to the distribution or resale
thereof. Each Pledgor and Guarantor acknowledges and agrees that in light of
such restrictions and limitations, the Collateral Agent, in its sole and
absolute discretion, (a) may proceed to make such a sale whether or not a
registration statement for the purpose of registering such Pledged Securities or
part thereof shall have been filed under the Federal Securities Laws and (b) may
approach and negotiate with a single potential purchaser to effect such sale, in
either case in accordance with a valid exemption from registration under the
Federal Securities Laws. Each Pledgor and Guarantor acknowledges and agrees that
any such sale might result in prices and other terms less favorable to the
seller than if such sale were a public sale without such restrictions. In the
event of any such sale, the Collateral Agent shall incur no responsibility or
liability for selling all or any part of the Pledged Securities at a price that
the Collateral Agent, in its sole and absolute discretion, may in good ▇▇▇▇▇
▇▇▇▇ reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 12 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.
SECTION 13. Registration, etc. Each Pledgor and Guarantor agrees that,
upon the occurrence and during the continuance of an Event of Default, if for
any reason the Collateral Agent desires to sell any of the Pledged Securities at
a public sale, it will, at any time and from time to time, upon the written
request of the Collateral Agent, use its reasonable best efforts to take or to
cause the issuer of such Pledged Securities to take such action and prepare,
distribute and/or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Collateral Agent to permit the public sale
of such Pledged Securities. Each Pledgor and Guarantor further agrees to
indemnify, defend and hold harmless the Collateral Agent, each other Secured
Party, any underwriter and their respective officers, directors, affiliates and
controlling Persons from and against all loss, liability, expenses, costs of
counsel (including, without limitation, reasonable fees and expenses to the
Collateral Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to such Pledgor and Guarantor or the issuer of
such Pledged Securities by the Collateral Agent or any other Secured Party
expressly for use therein. Each Pledgor and Guarantor further agrees, upon such
written request referred to above, to use its reasonable best efforts to
qualify, file or register, or cause the issuer of such Pledged Securities to
qualify, file or register, any of the Pledged Securities under the Blue Sky or
other securities laws of such states as may be requested by the Collateral Agent
and keep effective, or cause to be kept effective, all such qualifications,
filings or registrations. Each Pledgor and Guarantor will bear all costs and
expenses of carrying out its obligations under this Section 13. Each Pledgor and
Guarantor acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of this Section 13 and that such failure would not
be adequately compensable in damages, and therefore agrees that its agreements
contained in this Section 13 may be specifically enforced.
SECTION 14. Security Interest Absolute. All rights of the Collateral Agent
hereunder, the grant of a security interest in the Collateral and all
obligations of each Pledgor and Guarantor hereunder, shall be absolute and
unconditional irrespective of (a) any lack of validity or enforceability of the
Indenture, any other Transaction Document, any agreement with respect to any of
the Indenture Obligations or any other agreement or instrument relating to any
of the foregoing, (b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Indenture Obligations, or any other
amendment or waiver of or any consent to any departure from the Indenture, any
other Transaction Document or any other agreement or instrument relating to any
of the foregoing, (c) any exchange, release or nonperfection of any other
collateral, or any release or amendment or waiver of or consent to or departure
from any guaranty, for all or any of the Indenture Obligations or (d) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Pledgor and Guarantor in respect of the Indenture Obligations
or in respect of this Agreement (other than the indefeasible payment in full of
all the Indenture Obligations).
SECTION 15. Termination or Release. (a) This Agreement and the security
interests granted hereby shall terminate when all the Indenture Obligations have
been indefeasibly paid in full and there are no Notes outstanding.
(b) Upon any sale or other transfer by any Pledgor and Guarantor of any
Collateral that is permitted under the Indenture to any Person that is not a
Pledgor and Guarantor, or, upon the effectiveness of a release of the security
interest granted hereby in any Collateral pursuant to Section 18, the security
interest in such Collateral shall be automatically released.
(c) In connection with any termination or release pursuant to paragraph
(a) or (b) or Section 18, the Collateral Agent shall execute and deliver to any
Pledgor and Guarantor, at such Pledgor and Guarantor's expense, all documents
that such Pledgor and Guarantor shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to this
Section 15 shall be without recourse to or warranty by the Collateral Agent.
SECTION 16. Notices. All communications and notices hereunder shall be in
writing and given as provided in Section 13.02 of the Indenture. All
communications and notices hereunder to any Pledgor and Guarantor shall be given
to it at the address or telecopy number set forth on Schedule I, with a copy to
the Issuer.
SECTION 17. Further Assurances. Each Pledgor and Guarantor agrees to do
such further acts and things, and to execute and deliver such additional
conveyances, assignments, agreements and instruments, as the Collateral Agent
may at any time reasonably request in connection with the administration and
enforcement of this Agreement or with respect to the Collateral or any part
thereof or in order better to assure and confirm unto the Collateral Agent its
rights and remedies hereunder.
SECTION 18. Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Pledgor and Guarantor that are
contained in this Agreement shall bind and inure to the benefit of its
successors and assigns. This Agreement shall become effective as to any Pledgor
and Guarantor when a counterpart hereof executed on behalf of such Pledgor and
Guarantor shall have been delivered to the Collateral Agent and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Pledgor and Guarantor, and the Collateral
Agent and their respective successors and assigns, and shall inure to the
benefit of such Pledgor and Guarantor, the Collateral Agent and the other
Secured Parties, and their respective successors and assigns, except that no
Pledgor and Guarantor shall have the right to assign its rights hereunder or any
interest herein or in the Collateral (and any such attempted assignment shall be
void), except as expressly contemplated by this Agreement or the other
Transaction Documents. In the event that a Pledgor and Guarantor ceases to be a
Subsidiary pursuant to a transaction permitted under the Transaction Documents,
such Pledgor and Guarantor shall be released from its obligations under this
Agreement without further action. This Agreement shall be construed as a
separate agreement with respect to each Pledgor and Guarantor, and may be
amended, modified, supplemented, waived or released with respect to any Pledgor
and Guarantor without the approval of any other Pledgor and Guarantor, and
without affecting the obligations of any other Pledgor and Guarantor hereunder.
SECTION 19. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by each Pledgor and Guarantor
herein and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Transaction Document
shall be considered to have been relied upon by the Collateral Agent and the
other Secured Parties and shall survive the issuance and delivery to the Holders
of the Notes, regardless of any investigation made by the Secured Parties or on
their behalf, and shall continue in full force and effect as long as any
Indenture Obligation remains unpaid and for so long as any Notes are
outstanding.
(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 21. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute a single contract, and shall become effective
as provided in Section 18. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 22. Rules of Interpretation. The rules of construction specified
in Section 1.03 of the Indenture shall be applicable to this Agreement. Section
headings used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting this Agreement.
SECTION 23. Jurisdiction; Consent to Service of Process. (a) Each Pledgor
and Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Transaction Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that, to the extent permitted by
applicable law, all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Collateral Agent
or any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Transaction Documents against any
Pledgor and Guarantor or its properties in the courts of any jurisdiction.
(b) Each Pledgor and Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Transaction Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 16. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 24. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 25. Limitation on Security Interest. Anything contained in this
Agreement to the contrary notwithstanding, the obligation hereunder secured by
each Pledgor and Guarantor shall be limited to a maximum aggregate amount equal
to the greatest amount that would not render such Pledgor and Guarantor's
secured obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all liabilities of such Pledgor and
Guarantor, contingent or otherwise, that would be taken into account in
determining whether the incurrence of the obligation would constitute a
fraudulent conveyance under the Fraudulent Transfer Laws and after giving
effect, both in determining such Pledgor and Guarantor's probable debt hereunder
and in determining its assets, to the existence of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of such Pledgor and
Guarantor pursuant to (a) applicable law or (b) any agreement, including the
Indemnity, Subrogation and Contribution Agreement.
SECTION 26. Additional Pledgors and Guarantors. Pursuant to Section 5.11
of the Indenture, each Subsidiary that was not in existence or not a Domestic
Subsidiary on the date of the Indenture is required to enter into this Agreement
as a Pledgor and Guarantor upon becoming a Domestic Subsidiary. Upon execution
and delivery by the Collateral Agent and a Subsidiary of an instrument in the
form of Annex 1, such Subsidiary shall become a Pledgor and Guarantor hereunder
with the same force and effect as if originally named as a Pledgor and Guarantor
herein. The execution and delivery of such instrument shall not require the
consent of any Pledgor and Guarantor hereunder. The rights and obligations of
each Pledgor and Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Pledgor and Guarantor as a party to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO, as Pledgor and
Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in his capacity
as Treasurer for each of the
Subsidiaries listed on Schedule I
hereto
Citicorp USA, Inc., as Collateral Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director and Vice
President
SCHEDULE I TO THE PLEDGE AGREEMENT
PLEDGORS AND GUARANTORS
Name Address County
MEMC International, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
P. ▇. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MEMC Pasadena, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MEMC Southwest Inc. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
PlasmaSil, LLC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
P. ▇. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SiBond, LLC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇
P. O. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Schedule II to the
Pledge Agreement
CAPITAL STOCK OR OTHER EQUITY INTERESTS
Number and Percentage
Class of of
Shares Shares
or Other or Other
Number of Registered Equity Equity
Issuer Certificate Owner Interests Interests
------ ----------- ----- --------- ---------
[See Separate Document]
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
[See Separate Document]
SUPPLEMENT NO. 1 dated as of December 21, 2001 to
the PLEDGE AGREEMENT dated as of November 13, 2001,
among MEMC ELECTRONIC MATERIALS, INC., a Delaware
corporation ("Issuer"), and each subsidiary of the
Issuer listed on Schedule I thereto (each such
subsidiary individually a "Pledgor and Guarantor" and
collectively, the "Pledgors and Guarantors,") and
Citicorp USA, Inc., a Delaware corporation, as
collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined in the
Security Agreement).
A. Reference is made to (a) the Indenture dated as of November 13, 2001
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among the Issuer and Citibank, N.A., as Trustee (in such capacity,
the "Trustee") and the Collateral Agent, (b) the Restructuring Agreement dated
as of November 13, 2001 between the Issuer and TPG Wafer Holdings LLC (the
"Restructuring Agreement") and (c) the Guarantee Agreement dated as of November
13, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Guarantee Agreement") among the Issuer, each Pledgor and Guarantor party
thereto and the Collateral Agent.
B. Capitalized terms used herein and not defined herein shall have
meanings assigned to such terms in the Indenture and, if not defined therein, in
the Restructuring Agreement.
C. The Pledgors and Guarantors have entered into the Pledge Agreement
in order to induce the Holders to purchase Notes. Pursuant to Section 5.11 of
the Indenture, each Subsidiary that was not in existence or not a Domestic
Subsidiary on the date of the Indenture is required to enter into the Pledge
Agreement as a Pledgor and Guarantor upon becoming a Domestic Subsidiary.
Section 26 of the Pledge Agreement provides that such Subsidiaries may become
Pledgors and Guarantors under the Pledge Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary (the
"New Pledgor and Guarantor") is executing this Supplement in accordance with the
requirements of the Indenture to become a Subsidiary Pledgor and Guarantor under
the Pledge Agreement as consideration for Notes previously purchased.
Accordingly, the Collateral Agent and the New Pledgor and Guarantor
agree as follows:
SECTION 1. In accordance with Section 26 of the Pledge Agreement, the
New Pledgor and Guarantor by its signature below becomes a Pledgor and Guarantor
under the Pledge Agreement with the same force and effect as if originally named
therein as a Pledgor and Guarantor, and the New Pledgor and Guarantor hereby
agrees (a) to all the terms and provisions of the Pledge Agreement applicable to
it as a Pledgor and Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Pledgor and Guarantor
thereunder are true and correct on and as of the date hereof except to the
extent a representation and warranty expressly relates solely to a specific date
in which case such representation and warranty shall be true and correct on such
date. In furtherance of the foregoing, the New Pledgor and Guarantor, as
security for the payment and performance in full of the Indenture Obligations
(as defined in the Pledge Agreement), does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Holders,
their successors and assigns, a security interest in and lien on all of the New
Pledgor and Guarantor's right, title and interest in and to the Collateral (as
defined in the Pledge Agreement) of the New Pledgor and Guarantor. Each
reference to a "Pledgor and Guarantor" in the Pledge Agreement shall be deemed
to include the New Pledgor and Guarantor. The Pledge Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Pledgor and Guarantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Pledgor and Guarantor and the
Collateral Agent. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Pledgor and Guarantor hereby represents and warrants
that set forth on Schedule I attached hereto is a true and correct schedule of
all its Pledged Securities.
SECTION 5. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 16 of the Pledge Agreement. All communications
and notices hereunder to the New Pledgor and Guarantor shall be given to it at
the address set forth under its signature hereto, below, with a copy to the
Issuer.
SECTION 9. The New Pledgor and Guarantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Pledgor and Guarantor, and the Collateral
Agent have duly executed this Supplement to the Pledge Agreement as of the day
and year first above written.
MEMC HOLDINGS CORPORATION
By
---------------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Citicorp USA, Inc., as Collateral Agent
By
---------------------------------
Name:
Title:
SUPPLEMENT NO. [ ] dated as of [ ] to the
PLEDGE AGREEMENT dated as of November 13,
2001, among MEMC ELECTRONIC MATERIALS, INC.,
a Delaware corporation ("Issuer"), and each
subsidiary of the Issuer listed on Schedule
I thereto (each such subsidiary individually
a "Pledgor and Guarantor" and collectively,
the "Pledgors and Guarantors,") and Citicorp
USA, Inc., a Delaware corporation, as
collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties
(as defined in the Security Agreement).
A. Reference is made to (a) the Indenture dated as of November 13, 2001
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among the Issuer and Citibank, N.A., as Trustee (in such capacity,
the "Trustee") and the Collateral Agent, (b) the Restructuring Agreement dated
as of November 13, 2001 between the Issuer and TPG Wafer Holdings LLC (the
"Restructuring Agreement") and (c) the Guarantee Agreement dated as of November
13, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Guarantee Agreement") among the Issuer, each Pledgor and Guarantor party
thereto and the Collateral Agent.
B. Capitalized terms used herein and not defined herein shall have
meanings assigned to such terms in the Indenture and, if not defined therein, in
the Restructuring Agreement.
C. The Pledgors and Guarantors have entered into the Pledge Agreement
in order to induce the Holders to purchase Notes. Pursuant to Section 5.11 of
the Indenture, each Subsidiary that was not in existence or not a Domestic
Subsidiary on the date of the Indenture is required to enter into the Pledge
Agreement as a Pledgor and Guarantor upon becoming a Domestic Subsidiary.
Section 26 of the Pledge Agreement provides that such Subsidiaries may become
Pledgors and Guarantors under the Pledge Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary (the
"New Pledgor and Guarantor") is executing this Supplement in accordance with the
requirements of the Indenture to become a Subsidiary Pledgor and Guarantor under
the Pledge Agreement as consideration for Notes previously purchased.
Accordingly, the Collateral Agent and the New Pledgor and Guarantor
agree as follows:
SECTION 1. In accordance with Section 26 of the Pledge Agreement, the
New Pledgor and Guarantor by its signature below becomes a Pledgor and Guarantor
under the Pledge Agreement with the same force and effect as if originally named
therein as a Pledgor and Guarantor, and the New Pledgor and Guarantor hereby
agrees (a) to all the terms and provisions of the Pledge Agreement applicable to
it as a Pledgor and Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Pledgor and Guarantor
thereunder are true and correct on and as of the date hereof except to the
extent a representation and warranty expressly relates solely to a specific date
in which case such representation and warranty shall be true and correct on such
date. In furtherance of the foregoing, the New Pledgor and Guarantor, as
security for the payment and performance in full of the Indenture Obligations
(as defined in the Pledge Agreement), does hereby create and grant to the
Collateral Agent, its successors and assigns, for the benefit of the Holders,
their successors and assigns, a security interest in and lien on all of the New
Pledgor and Guarantor's right, title and interest in and to the Collateral (as
defined in the Pledge Agreement) of the New Pledgor and Guarantor. Each
reference to a "Pledgor and Guarantor" in the Pledge Agreement shall be deemed
to include the New Pledgor and Guarantor. The Pledge Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Pledgor and Guarantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Pledgor and Guarantor and the
Collateral Agent. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. The New Pledgor and Guarantor hereby represents and warrants
that set forth on Schedule I attached hereto is a true and correct schedule of
all its Pledged Securities.
SECTION 5. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 16 of the Pledge Agreement. All communications
and notices hereunder to the New Pledgor and Guarantor shall be given to it at
the address set forth under its signature hereto, below, with a copy to the
Issuer.
SECTION 9. The New Pledgor and Guarantor agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in connection with
this Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Pledgor and Guarantor, and the Collateral Agent have
duly executed this Supplement to the Pledge Agreement as of the day and year
first above written.
[NAME OF NEW PLEDGOR AND GUARANTOR]
By
------------------------------------
Name:
Title:
Address:
Citicorp USA, Inc., as Collateral Agent
By
------------------------------------
Name:
Title:
Schedule I
to Supplement No. [ ]
to the Pledge Agreement
Pledged Securities of the New Pledgor and Guarantor
CAPITAL STOCK OR OTHER EQUITY INTERESTS
Number and Percentage
Class of of
Shares Shares
or Other or Other
Number of Registered Equity Equity
Issuer Certificate Owner Interests Interests
------ ----------- ----- --------- ---------
DEBT SECURITIES
Principal
Issuer Amount Date of Note Maturity Date
------ ------ ------------ -------------
EXHIBIT E TO THE INDENTURE
EXECUTION COPY
SECURITY AGREEMENT dated as of November 13, 2001,
among MEMC ELECTRONIC MATERIALS, INC., a Delaware
corporation (the "Issuer"), each subsidiary of the
Issuer listed on Schedule I hereto (each such
subsidiary individually a "Pledgor and Guarantor" and,
collectively, the Pledgors and Guarantors, and
collectively, together with the Issuer, the
"Grantors") and CITICORP USA, Inc., a Delaware
corporation, as collateral agent (the "Collateral
Agent") for the Secured Parties (as defined herein).
Reference is made to (a) the Indenture dated as of November 13, 2001
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among the Issuer, Citibank, N.A., a national banking association,
as trustee (in such capacity, the "Trustee") and the Collateral Agent, (b) the
Restructuring Agreement dated as of November 13, 2001, among the Issuer and TPG
Wafer Holdings LLC (the "Restructuring Agreement") and (c) the Guarantee
Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Guarantee Agreement"), among the Issuer, each
Pledgor and Guarantor party thereto and the Collateral Agent. Unless the context
otherwise requires, capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Indenture and, if not defined in
the Indenture, in the Restructuring Agreement.
The Holders have agreed to purchase the Notes, upon the terms and
subject to the conditions specified in the Restructuring Agreement and the
Indenture. The Issuer has agreed to issue such Notes, upon the terms and subject
to the conditions specified in the Restructuring Agreement and the Indenture.
Each Pledgor and Guarantor has agreed to guarantee, among other things, all the
obligations of the Issuer under the Indenture on a senior subordinated basis as
set forth in Article 12 of the Indenture and Article II of the Guarantee
Agreement. The obligations of the Holders to purchase the notes are conditioned
upon, among other things, the execution and delivery by the Grantors of an
agreement in the form hereof to secure (a) the due and punctual payment of (i)
the principal of and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Notes,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for redemption, retirement, repurchase or otherwise and (ii) all other
monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Issuer and the Pledgors and Guarantors to
the Secured Parties under the Indenture, the Notes and the Security Documents
and (b) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the Issuer and the Pledgors and Guarantors under
or pursuant to the Indenture, the Notes and the Security Documents (all the
monetary and other obligations described in the preceding clauses (a) and (b)
being collectively called the "Indenture Obligations").
Accordingly, the Grantors and the Collateral Agent, on behalf of itself
and each Secured Party (and each of their respective successors or assigns),
hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definition of Certain Terms Used Herein. As used herein,
the following terms shall have the following meanings:
"Account Debtor" means any Person who is or who may become obligated to
any Grantor under, with respect to or on account of an Account.
"Accounts" means all "accounts" (as defined in UCC) of any Grantor and
shall include any and all right, title and interest of any Grantor to payment
for goods and services sold or leased, including any such right evidenced by
Chattel Paper, whether due or to become due, whether or not it has been earned
by performance, and whether now or hereafter acquired or arising in the future,
including accounts receivable from Affiliates of the Grantors.
"Accounts Receivable" means all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Chattel Paper" has the meaning assigned to such term in the UCC.
"Collateral" means all (a) Accounts Receivable, (b) Documents, (c)
Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash accounts,
(g) Investment Property (h) Chattel Paper, (i) Instruments, (j) Deposit Accounts
and (k) Proceeds, in each case whether or now or hereafter existing.
"Commodity Account" means an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and is carried on the books of a Commodity Intermediary for a
Commodity Customer.
"Commodity Customer" means a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Copyright License" means any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" means all of the following: (a) all copyright rights in
any work subject to the copyright laws of the United States or any other
country, whether as author, assignee, transferee or otherwise, and (b) all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.
"Deposit Accounts" has the meaning assigned to such term in the UCC.
"Documents" means all instruments, promissory notes, files, records,
ledger sheets and documents covering or relating to any of the Collateral.
"Entitlement Holder" means a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the UCC, such Person is the Entitlement Holder.
"Equipment" means "equipment" (as defined in the UCC) of any Grantor
and shall include all equipment, furniture and furnishings, and all tangible
personal property similar to any of the foregoing, including tools, parts and
supplies of every kind and description, and all improvements, accessions or
appurtenances thereto, that are now or hereafter owned by any Grantor. The term
Equipment shall include Fixtures.
"Financial Asset" means (a) a Security, (b) an obligation of a Person
or a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the UCC. As
the context requires, the term Financial Asset means either the interest itself
or the means by which a Person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a Security
or a Security Entitlement.
"Fixtures" means all items of Equipment, whether now owned or hereafter
acquired, of any Grantor that become so related to particular real estate that
an interest in them arises under any real estate law applicable thereto.
"General Intangibles" means all "general intangibles" (as defined in
the UCC) of any Grantor and shall include choses in action and causes of action
and all other intangible personal property of any Grantor of every kind and
nature (other than Accounts Receivable) now owned or hereafter acquired by any
Grantor, including corporate or other business records, indemnification claims,
contract rights (including rights under leases, whether entered into as lessor
or lessee, Hedging Agreements and other agreements), Intellectual Property,
goodwill, registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts
Receivable.
"Instrument" has the meaning assigned to such term in the UCC.
"Intellectual Property" means all intellectual and similar property of
any Grantor of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Indenture" has the meaning assigned to such term in the preliminary
statement of this Agreement.
"Indenture Obligations" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Inventory" means "inventory" (as defined in the UCC) of any Grantor
and shall include all goods of any Grantor, whether now owned or hereafter
acquired, held for sale or lease, or furnished or to be furnished by any Grantor
under contracts of service, or consumed in any Grantor's business, including raw
materials, intermediates, work in process, packaging materials, finished goods,
semi-finished inventory, scrap inventory, manufacturing supplies and spare
parts, and all such goods that have been returned to or repossessed by or on
behalf of any Grantor.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor.
"License" means any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III (other than those license agreements in
existence on the date hereof and listed on Schedule III and those license
agreements entered into after the date hereof, which by their terms prohibit
assignment or a grant of a security interest by such Grantor as licensee
thereunder).
"Patent License" means any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" means all of the following now owned or hereafter acquired by
any Grantor: (a) all letters patent of the United States or any other country,
all registrations and recordings thereof, and all applications for letters
patent of the United States or any other country, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office or any similar offices in any other country, including those listed on
Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" means a certificate substantially in the form
of Annex 1 hereto, completed and supplemented with the schedules and attachments
contemplated thereby, and duly executed by an executive officer or Financial
Officer of the Issuer.
"Proceeds" means "proceeds" (as defined in the UCC) of any Grantor and
shall include any consideration received from the sale, exchange, license, lease
or other disposition of any asset or property that constitutes Collateral, any
value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, any property
collected on or distributed on account of the Collateral, any rights arising out
of the Collateral, and shall include, (a) any claim of any Grantor against any
third party for (and the right to ▇▇▇ and recover for and the rights to damages
or profits due or accrued arising out of or in connection with) (i) past,
present or future infringement of any Patent now or hereafter owned by any
Grantor, or licensed under a Patent License, (ii) past, present or future
infringement or dilution of any Trademark now or hereafter owned by any Grantor
or licensed under a Trademark License or injury to the goodwill associated with
or symbolized by any Trademark now or hereafter owned by any Grantor, (iii)
past, present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
under a Copyright License and (b) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Revolver Obligations" has the meaning assigned to such term in the
Indenture.
"Revolving Loan Documentation" has the meaning assigned to such term in
the Indenture.
"Secured Parties" means (a) the Holders, (b) the Trustee, (c) the
Collateral Agent, (d) the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Transaction Document and (e) the successors
and assigns of each of the foregoing.
"Securities" means any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the UCC.
"Securities Account" means an account to which a Financial Asset is or
may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Documents" means the Guarantee Agreement and the Security
Agreement, the Collateral Assignment, the Pledge Agreement, the Mortgages and
each other security agreement or other instrument or document executed and
delivered pursuant to Section 5.11 or 5.12 of the Indenture to secure any of the
Indenture Obligations.
"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Security Interest" has the meaning assigned to such term in Section
2.01.
"Security Intermediary" means (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Texas Instruments Agreements" means the Shareholders' Agreement dated
as of May 16, 1995, by and between Texas Instruments Incorporated and the
Issuer, as amended; Technology Transfer Agreement dated as of June 30, 1995, by
and between Texas Instruments Incorporated, the Issuer and MEMC Southwest Inc.;
Texas Instruments Incorporated Purchase Agreement dated as of June 30, 1995, by
and between Texas Instruments Incorporated, MEMC Southwest Inc. and the Issuer,
as amended; Master Services Agreement dated as of June 30, 1995, by and between
Texas Instruments Incorporated and MEMC Southwest Inc.; Chemical Services
Agreement dated as of June 30, 1995, by and between Texas Instruments
Incorporated and MEMC Southwest Inc.; Information Systems and Services Agreement
dated as of June 30, 1995, by and between Texas Instruments Incorporated and
MEMC Southwest Inc.; Telephone Services Agreement dated as of June 30, 1995, by
and between Texas Instruments Incorporated and MEMC Southwest Inc.; Human
Resources Agreement dated as of June 30, 1995, by and between Texas Instruments
Incorporated and MEMC Southwest Inc.; Medical Services Agreement dated as of
June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest
Inc.; Purchasing and Inventory Services Agreement dated as of June 30, 1995, by
and between Texas Instruments Incorporated and MEMC Southwest Inc.;
Environmental, Health and Safety Services Agreement dated as of June 30, 1995,
by and between Texas Instruments Incorporated and the Issuer; Agreement
Regarding Health & Dental Administrative Expenses dated as of June 30, 1995, by
and between Texas Instruments Incorporated and the Issuer.
"Trademark License" means any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" means all of the following: (a) all trademarks, service
marks, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.
"Transaction Documents" means the Indenture, the Restructuring
Agreement, the Registration Rights Agreement and the Security Documents.
"Trustee" has the meaning set forth in the preamble.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the state of New York.
SECTION 1.02. Rules of Interpretation. The rules of construction
specified in Section 1.03 of the Indenture shall be applicable to this
Agreement.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Indenture Obligations, each
Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges,
hypothecates and transfers to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a security interest in, all of such Grantor's right, title and
interest, whether now owned or hereafter acquired, in, to and under the
Collateral (the "Security Interest"); provided that the Security Interest shall
not include (i) more than 65% of the issued and outstanding voting stock of any
Foreign Subsidiary, (ii) the outstanding voting stock of MEMC Korea Company,
MEMC Kulim Electronic Materials, Sbn. Bhd., MEMC Southwest Inc. and Taisil
Electronic Materials Corporation, (iii) the Texas Instruments Agreements or (iv)
any General Intangible that is, by its terms, not assignable, so long as the
failure of the Grantors to maintain such General Intangible would not result in
a Material Adverse Effect. Such Security Interest shall be subject to the prior
lien and security interest granted under the Revolving Loan Documentation as
security for the payment or performance, as the case may be, in full of the
Revolver Obligations (the "Senior Security Interest"). Without limiting the
foregoing, the Collateral Agent is hereby authorized to file one or more
financing statements (including fixture filings), continuation statements,
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantors, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest is
granted as security only and shall not subject the Collateral Agent, the Trustee
or any other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
The Grantors jointly and severally represent and warrant to the
Collateral Agent, the Trustee and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid
rights in and title to the Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant to
the Collateral Agent the Security Interest in such Collateral pursuant hereto
and to execute, deliver and perform its obligations in accordance with the terms
of this Agreement, without the consent or approval of any other Person other
than any consent or approval which has been obtained. The Security Interest
granted hereby is subject to the terms and conditions of that certain Option
Agreement dated September 21, 1998, as amended on September 22, 2000, September
25, 2001, and October 25, 2001, among Tokuyama Corporation, Marubeni
Corporation, Marubeni America Corporation, the Issuer and MEMC Pasadena.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete in all material respects. Appropriately completed UCC
financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 5 to the
Perfection Certificate, which are all the filings, recordings and registrations
(other than filings required to be made in the United States Patent and
Trademark Office and the United States Copyright Office in order to perfect the
Security Interest in Collateral consisting of United States Patents, Trademarks
and Copyrights) that are necessary to publish notice of and protect the validity
of and to establish a legal, valid and perfected security interest in favor of
the Collateral Agent (for the ratable benefit of the Secured Parties) in respect
of all Collateral in which the Security Interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law with
respect to the filing of continuation statements.
(b) Each Grantor shall ensure that fully executed security agreements
in the form hereof (or short-form supplements to this Agreement in form and
substance satisfactory to the Collateral Agent) and containing a description of
all Collateral consisting of Intellectual Property shall have been received and
recorded within three months after the execution of this Agreement with respect
to United States Patents and United States registered Trademarks (and Trademarks
for which United States registration applications are pending) and within one
month after the execution of this Agreement with respect to United States
registered Copyrights have been delivered to the Collateral Agent for recording
by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205
and the regulations thereunder, as applicable, and otherwise as may be required
pursuant to the laws of any other necessary jurisdiction in the United States
(or any political subdivision thereof) and its territories and possessions, to
protect the validity of and to establish a legal, valid and perfected security
interest in favor of the Collateral Agent (for the ratable benefit of the
Secured Parties) in respect of all Collateral consisting of Patents, Trademarks
and Copyrights in which a security interest may be perfected by filing,
recording or registration in the United States (or any political subdivision
thereof) and its territories and possessions, or in any other necessary
jurisdiction, and no further or subsequent filing, refiling, recording,
rerecording, registration or reregistration is necessary in any such
jurisdiction (other than such actions as are necessary to perfect the Security
Interest with respect to any Collateral consisting of Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired or
developed after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Indenture Obligations, (b) subject
to the filings described in Section 3.02 above, a perfected security interest in
all Collateral in which a security interest may be perfected by filing,
recording or registering a financing statement or analogous document in the
United States (or any political subdivision thereof) and its territories and
possessions pursuant to the UCC or other analogous applicable law in such
jurisdictions and (c) a security interest that shall be perfected in all
Collateral in which a security interest may be perfected upon the receipt and
recording of this Agreement with the United States Patent and Trademark Office
and the United States Copyright Office, as applicable, within the three month
period (commencing as of the date hereof) pursuant to 35 U.S.C. ss.261 or 15
U.S.C. ss.1060 or the one month period (commencing as of the date hereof)
pursuant to 17 U.S.C. ss.205 and otherwise as may be required to pursuant to the
laws of any other necessary jurisdiction in the United States (or any political
subdivision thereof) and its territories and possessions. The Security Interest
is and shall be prior to any other Lien on any of the Collateral, other than
Liens expressly permitted pursuant to Section 6.02 of the Indenture. For the
avoidance of doubt (and in each place where this agreement makes reference to
Liens permitted pursuant to Section 6.02 of the Indenture), the Senior Security
Interest shall be considered a Lien expressly permitted pursuant to Section 6.02
of the Indenture.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for Liens expressly permitted
pursuant to Section 6.02 of the Indenture. The Grantor has not filed or
consented to the filing of (a) any financing statement or analogous document
under the UCC or any other applicable laws covering any Collateral, (b) any
assignment in which any Grantor assigns any Collateral or any security agreement
or similar instrument covering any Collateral with the United States Patent and
Trademark Office or the United States Copyright Office or (c) any assignment in
which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment,
security agreement or similar instrument is still in effect, except, in each
case, for Liens expressly permitted pursuant to Section 6.02 of the Indenture.
ARTICLE IV
Covenants
SECTION 4.01. Issue Date Requirements. As of the Issue Date for the
Notes, the Issuer shall:
(a) furnish, to the Collateral Agent and the Trustee, a completed
Perfection Certificate (in substantially the form of Annex 1 hereto) dated the
Issue Date and signed by an executive officer or Financial Officer of the
Issuer, together with all attachments contemplated thereby, including the
results of a search of the Uniform Commercial Code (or equivalent) filings made
with respect to the Issuer and the Pledgors and Guarantors in the jurisdictions
contemplated by the Perfection Certificate and copies of the financing
statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Collateral Agent and the Trustee that the Liens
indicated by such financing statements (or similar documents) are permitted by
Section 6.02 of the Indenture or have been released;
(b) provide, to the Trustee and the Collateral Agent, a certificate
stating that the insurance required by Section 5.08 of the Indenture and the
Security Documents is in effect.
SECTION 4.02. Changes with respect to Collateral. Each of the Grantors
shall promptly notify the Trustee and the Collateral Agent in writing of any
change (i) in its legal name, (ii) in its jurisdiction of organization or
formation, (iii) in the location of its chief executive office or principal
place of business, (iv) in its identity or legal or organizational structure or
(v) in its organization identification number or its Federal Taxpayer
Identification Number. None of the Grantors shall effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the UCC or otherwise that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and perfected
security interest in all the Collateral (subject only to the Liens expressly
permitted pursuant to Section 6.02 of the Indenture). Each Grantor shall
promptly notify the Collateral Agent if any material portion of the Collateral
owned or held by or on behalf of such Grantor is damaged or destroyed.
SECTION 4.03. Records. Each Grantor agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the Collateral
owned by it as is consistent with its current practices, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of the Collateral, and, at such time or times
as the Collateral Agent may reasonably request, promptly to prepare and deliver
to the Collateral Agent an updated Perfection Certificate, noting all material
changes, if any, since the date of the most recent Perfection Certificate.
SECTION 4.04. Protection of Security. Each Grantor shall, at its own
cost and expense, take any and all actions reasonably necessary to defend title
to the Collateral against all Persons and to defend the Security Interest of the
Collateral Agent for the ratable benefit of the Secured Parties in the
Collateral and the priority thereof against any Lien not expressly permitted
pursuant to Section 6.02 of the Indenture.
SECTION 4.05. Further Assurances. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as are necessary or
as the Collateral Agent may from time to time request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be promptly pledged and delivered to the Collateral Agent, duly
endorsed in a manner satisfactory to the Collateral Agent.
SECTION 4.06. Inspection and Verification. The Collateral Agent and
such Persons as the Collateral Agent may reasonably designate shall have the
right to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, at reasonable times and intervals during normal business
hours upon reasonable advance notice to the respective Grantor, and to verify
under reasonable procedures the validity, amount, quality, quantity, value,
condition and status of the Collateral. The Collateral Agent shall have the
absolute right to share any information it gains from such inspection or
verification with any Holder in accordance with and subject to the provisions
set forth in Section 5.09 of the Indenture.
SECTION 4.07. Taxes; Encumbrances. At its option, the Collateral Agent
may, but is under no obligation to, discharge past due taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time
levied or placed on the Collateral and not permitted pursuant to Section 6.02 of
the Indenture, and may pay for the maintenance and preservation of the
Collateral, in each case to the extent any Grantor fails to do so as required by
the Indenture or this Agreement and such failure shall continue beyond any
applicable notice and cure period, and each Grantor jointly and severally agrees
to reimburse the Collateral Agent on demand for any payment made or any expense
incurred by the Collateral Agent pursuant to the foregoing authorization;
provided, however, that nothing in this Section 4.07 shall be interpreted as
excusing any Grantor from the performance of, or imposing any obligation on the
Collateral Agent or any Secured Party to cure or perform, any covenants or other
promises of any Grantor with respect to taxes, assessments, charges, fees,
liens, security interests or other encumbrances and maintenance as set forth
herein or in the other Transaction Documents.
SECTION 4.08. Assignment of Security Interest. If at any time any
Grantor shall take a security interest in any property of an Account Debtor or
any other Person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Collateral Agent to the
extent permitted by any contracts or arrangements to which such property is
subject. Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other Person granting the security
interest.
SECTION 4.09. Continuing Obligations of the Grantors. Each Grantor
shall remain liable to observe and perform all the conditions and obligations to
be observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent, the Trustee and the Secured Parties from and
against any and all liability for such performance; provided that such indemnity
shall not be available, as to the Collateral Agent and the Secured Parties, to
the extent that such liability resulted from the gross negligence or willful
misconduct of the Collateral Agent or a Secured Party.
SECTION 4.10. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted by Section 6.02 of the Indenture. None of the Grantors shall
make or permit to be made any transfer of the Collateral and each Grantor shall
remain at all times in possession of the Collateral owned by it, except that (a)
Inventory may be sold or consigned in the ordinary course of business and (b)
unless and until the Collateral Agent shall notify the Grantors that an Event of
Default shall have occurred and be continuing and that during the continuance
thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Collateral (which notice may be given by telephone if
promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of this
Agreement, the Indenture or any other Transaction Document. Without limiting the
generality of the foregoing, each Grantor agrees that it shall not permit any
material Inventory to be in the possession or control of any warehouseman,
bailee, agent or processor at any time unless such warehouseman, bailee, agent
or processor shall have been notified of the Security Interest and shall have
agreed in writing to hold the Inventory subject to the Security Interest and the
instructions of the Collateral Agent and to waive and release any Lien held by
it with respect to such Inventory, whether arising by operation of law or
otherwise.
SECTION 4.11. Limitation on Modification of Accounts. None of the
Grantors will, without the Collateral Agent's prior written consent, which
consent shall not be unreasonably withheld, grant any extension of the time of
payment of any of the Accounts Receivable, compromise, compound or settle the
same for less than the full amount thereof, release, wholly or partly, any
Person liable for the payment thereof or allow any credit or discount whatsoever
thereon, other than extensions, credits, discounts, compromises or settlements
granted or made in the ordinary course of business and consistent with its
current practices.
SECTION 4.12. Insurance. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
the Inventory and Equipment in accordance with Section 5.08 of the Indenture.
Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent
(and all officers, employees or agents designated by the Collateral Agent) as
such Grantor's true and lawful agent (and attorney-in-fact) for the purpose,
during the continuance of an Event of Default, of making, settling and adjusting
claims in respect of Collateral under policies of insurance, endorsing the name
of such Grantor on any check, draft, instrument or other item of payment for the
proceeds of such policies of insurance and for making all determinations and
decisions with respect thereto. In the event that any Grantor at any time or
times shall fail to obtain or maintain any of the policies of insurance required
hereby or to pay any premium in whole or part relating thereto, the Collateral
Agent may, but is under no obligation to, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its reasonable discretion, obtain and maintain such policies of insurance and
pay such premium and take any other actions with respect thereto as the
Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in
connection with this Section 4.12, including reasonable attorneys' fees, court
costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional
Indenture Obligations secured hereby.
SECTION 4.13. Legend. If any Accounts Receivable of any Grantor are
evidenced by Chattel Paper, such Grantor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, such Accounts Receivable and
its books, records and documents evidencing or pertaining thereto with an
appropriate reference to the fact that such Accounts Receivable have been
assigned to the Collateral Agent for the benefit of the Secured Parties and that
the Collateral Agent has a security interest therein.
SECTION 4.14. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, and will not permit any of
its licensees to, do any act, or omit to do any act, whereby any Patent which is
material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to ▇▇▇▇, to the
extent permitted by existing technology, any products covered by a Patent with
the relevant patent number as necessary and sufficient to establish and preserve
its maximum rights under applicable patent laws pursuant to which each such
Patent is issued.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark sufficient to preclude any findings of
abandonment, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law pursuant to which each such Trademark is
issued and (iv) not knowingly use or knowingly permit the use of such Trademark
in violation of any third party rights.
(c) Each Grantor (either itself or through licensees) will, for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws pursuant to which each such Copyright is issued.
(d) Each Grantor shall notify the Collateral Agent immediately if it
knows or has reason to know that any such Patent, Trademark or Copyright
material to the conduct of its business may become abandoned, lost or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any such Patent, Trademark or Copyright, its right to register the same, or
to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly
thereafter informs the Collateral Agent, and, upon request of the Collateral
Agent, executes and delivers any and all agreements, instruments, documents and
papers as are necessary or as the Collateral Agent may request to evidence and
perfect the Collateral Agent's security interest in such Patent, Trademark or
Copyright, and each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact to execute and file such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed; such power, being
coupled with an interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with
the practice in any proceeding before the United States Patent and Trademark
Office, United States Copyright Office or any office or agency in any political
subdivision of the United States or in any other country or any political
subdivision thereof, to maintain and pursue each material application relating
to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant
or registration) and to maintain each issued Patent and each registration of the
Trademarks and Copyrights that is material to the conduct of any Grantor's
business, including timely filings of applications for renewal, affidavits of
use, affidavits of incontestability and payment of maintenance fees, and, if
consistent with good business judgment, to initiate opposition, interference and
cancellation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly ▇▇▇ for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or approvals
from the licensor of each Copyright License, Patent License or Trademark License
to effect the assignment of all of such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
ARTICLE V
Power of Attorney
Each Grantor irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Grantor's true and lawful agent and attorney-in-fact, and in such
capacity the Collateral Agent shall have the right but not the obligation, with
power of substitution for each Grantor and in each Grantor's name or otherwise,
for the use and benefit of the Collateral Agent and the Secured Parties, upon
the occurrence and during the continuance of an Event of Default (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on any invoice or ▇▇▇▇ of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral; (g)
to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided,
however, that nothing herein contained shall be construed as requiring or
obligating the Collateral Agent or any Secured Party to make any commitment or
to make any inquiry as to the nature or sufficiency of any payment received by
the Collateral Agent or any Secured Party, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted to be taken by the Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor of any Grantor or to any
claim or action against the Collateral Agent or any Secured Party. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and attorney-in-fact of the Grantors for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve any Grantor of any of its obligations hereunder or under any other
Transaction Document with respect to the Collateral or any part thereof or
impose any obligation on the Collateral Agent or any Secured Party to proceed in
any particular manner with respect to the Collateral or any part thereof, or in
any way limit the exercise by the Collateral Agent or any Secured Party of any
other or further right which it may have on the date of this Agreement or
hereafter, whether hereunder, under any other Transaction Document, by law or
otherwise.
ARTICLE VI
Remedies
SECTION 6.01. Subordination. Notwithstanding anything to the contrary
contained in this Security Agreement, all rights and remedies set forth in this
Security Agreement shall be subject to the subordination provisions set forth in
Article 12 of the Indenture and Article II of the Guarantee Agreement.
SECTION 6.02. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item of
Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any or all of the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent (except to the
extent assignment, transfer or conveyance thereof would result in a loss of said
Intellectual Property), or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner
as the Collateral Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
UCC or other applicable law. Without limiting the generality of the foregoing,
each Grantor agrees that the Collateral Agent shall have the right, subject to
the mandatory requirements of applicable law, to sell or otherwise dispose of
all or any part of the Collateral, at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as the Collateral Agent shall deem appropriate. The Collateral Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.
The Collateral Agent shall give the Grantors 10 days' written notice
(which each Grantor agrees is a "reasonable authenticated notification of
disposition" within the meaning of Section 9-611 of the UCC or its equivalent in
other jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any Indenture
Obligation then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes hereof a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement all Events
of Default shall have been remedied and the Indenture Obligations paid in full.
As an alternative to exercising the power of sale herein conferred upon it, the
Collateral Agent may proceed by a suit or suits at law or in equity to foreclose
this Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 6.03. Application of Proceeds. The Collateral Agent shall apply
the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of any Revolver Obligations outstanding,
to the extent the Revolving Loan Documentation is in force;
SECOND, to the payment of all costs and expenses incurred by
the Trustee or the Collateral Agent (in its capacity as such hereunder
or under any other Transaction Document) in connection with such
collection or sale or otherwise in connection with this Agreement or
any of the Obligations, including all court costs and the reasonable
fees and expenses of its agents and legal counsel, the repayment of all
advances made by the Collateral Agent hereunder or under any other
Transaction Document on behalf of any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Transaction Document;
THIRD, to the payment in full of the Indenture Obligations
(the amounts so applied to be distributed among the Secured Parties pro
rata in accordance with the amounts of the Indenture Obligations owed
to them on the date of any such distribution); and
FOURTH, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 6.04. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent, upon the occurrence
and during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 13.02 of the Indenture. All communications and notices
hereunder to any Pledgor and Guarantor shall be given to it at its address or
telecopy number set forth on Schedule I, with a copy to the Issuer.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Indenture, any other Transaction Document, any
agreement with respect to any of the Indenture Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Indenture Obligations, or any other amendment or waiver of or any consent to any
departure from the Indenture, any other Transaction Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of any Lien
on other collateral, or any release or amendment or waiver of or consent under
or departure from any guarantee, securing or guaranteeing all or any of the
Indenture Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor in respect of
the Indenture Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the issuance of the Notes and their purchase
by the Holders, regardless of any investigation made by the Holders or on their
behalf, and shall continue in full force and effect until this Agreement shall
terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the other Transaction Documents.
This Agreement shall be construed as a separate agreement with respect to each
Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and without
affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with (i)
the administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from or other realization upon any of the Collateral,
(iii) the exercise, enforcement or protection of any of the rights of the
Collateral Agent hereunder or (iv) the failure of any Grantor to perform or
observe any of the provisions hereof applicable to it.
(b) Without limitation of its indemnification obligations under the
other Transaction Documents, each Grantor jointly and severally agrees to
indemnify the Collateral Agent and the other Indemnitees against, and hold each
of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
have resulted from the gross negligence or willful misconduct of such Indemnitee
as determined in a final judgment by a court of competent jurisdiction.
(c) Any such amounts payable as provided hereunder shall be additional
Indenture Obligations secured hereby and by the other Transaction Documents. The
provisions of this Section 7.06 shall remain operative and in full force and
effect regardless of the termination of this Agreement or any other Transaction
Document, the consummation of the transactions contemplated hereby, the
repayment of any amounts due under the Indenture or the Notes, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Transaction Document, or any investigation made by or on behalf of the
Collateral Agent or any Holder. All amounts due under this Section 7.06 shall be
payable on written demand therefor.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Trustee and the Secured Parties under the other
Transaction Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provisions of this
Agreement or any other Transaction Document or consent to any departure by any
Grantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Grantor in any case shall entitle such Grantor or any
other Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Article 10 of the Indenture.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.09.
SECTION 7.10. Limitation on Security Interest. Anything contained in
this Agreement to the contrary notwithstanding, the obligation hereunder secured
by each Pledgor and Guarantor shall be limited to a maximum aggregate amount
equal to the greatest amount that would not render such Pledgor and Guarantor's
secured obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all liabilities of such Pledgor and
Guarantor, contingent or otherwise, that would be taken into account in
determining whether the incurrence of the obligation would constitute a
fraudulent conveyance under the Fraudulent Transfer Laws and after giving
effect, both in determining such Pledgor and Guarantor's probable debt hereunder
and in determining its assets, to the existence of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of such Pledgor and
Guarantor pursuant to (a) applicable law or (b) any agreement, including the
Indemnity, Subrogation and Contribution Agreement.
SECTION 7.11. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.12 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 7.04),
and shall become effective as provided in Section 7.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 7.13. Headings. Article and Section headings used herein are
for the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Transaction Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each Grantor agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent, the Trustee or any Holder may otherwise have to bring any
action or proceeding relating to this Agreement or the other Transaction
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Transaction Documents
in any New York State or Federal court. Each Grantor hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affected the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 7.15. Termination. This Agreement and the Security Interest
shall terminate when all the Indenture Obligations have been indefeasibly paid
in full and there are no longer any Notes outstanding, at which time the
Collateral Agent shall execute and deliver to the Grantors, at the Grantors'
expense, all UCC termination statements and similar documents which the Grantors
shall reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section 7.15
shall be without recourse to or warranty by the Collateral Agent. A Grantor
shall automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Grantor shall be automatically released in
the event that such Grantor ceases to be a Pledgor and Guarantor pursuant to a
transaction permitted under the Transaction Documents, at which time the
Collateral Agent shall execute and deliver to any Grantor, at such Grantor's
expense, all documents that such Grantor shall reasonably request to evidence
such release.
SECTION 7.16. Additional Grantors. Pursuant to Section 5.11 of the
Indenture, each Subsidiary that was not in existence or not a Domestic
Subsidiary on the date of the Indenture is required to enter into this Agreement
as a Grantor upon becoming a Domestic Subsidiary. Upon execution and delivery by
the Collateral Agent and such Domestic Subsidiary of an instrument in the form
of Annex 2 hereto, such Domestic Subsidiary shall become a Grantor hereunder
with the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer
EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE I HERETO, as a Pledgor and Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in his capacity as
Treasurer for each of the
Subsidiaries listed on Schedule I
hereto
Citicorp USA, Inc, as Collateral Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director and Vice
President
SUPPLEMENT NO. 1 dated as of December 21, 2001,
to the Security Agreement dated as of November 13,
2001, among MEMC ELECTRONIC MATERIALS, INC., a
Delaware corporation (the "Issuer"), each subsidiary
of the Issuer listed on Schedule I thereto (each such
subsidiary individually a "Pledgor and Guarantor" and,
collectively, the "Pledgors and Guarantors," and the
Pledgors and Guarantors, collectively, together with
the Issuer, the "Grantors") and Citicorp USA, Inc., a
Delaware corporation, as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Security Agreement).
A. Reference is made to (a) the Indenture dated as of November 13, 2001
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among the Issuer, Citibank, N.A., as trustee (in such capacity,
the "Trustee") and the Collateral Agent, (b) the Restructuring Agreement dated
as of November 13, 2001, among the Issuer and TPG Wafer Holdings LLC (the
"Restructuring Agreement") and (c) the Guarantee Agreement dated as of November
13, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Guarantee Agreement"), among the Issuer, the Pledgors and Guarantors and the
Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Indenture.
C. The Grantors have entered into the Security Agreement in order to
induce the Holders to purchase the Notes. Pursuant to Section 5.11 of the
Indenture, each Subsidiary that was not in existence or not a Domestic
Subsidiary on the date of the Indenture is required to enter in to this
Agreement as a Grantor upon becoming a Domestic Subsidiary. Section 7.16 of the
Security Agreement provides that such Domestic Subsidiaries may become Grantors
under the Security Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned (the "New Grantor") is executing this
Supplement in accordance with the requirements of the Indenture to become a
Grantor under the Security Agreement, as consideration for the Holders' previous
purchase of the Notes.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.16 of the Security Agreement,
the New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof except to
the extent a representation and warranty expressly relates solely to a specific
date in which case such representation and warranty shall be true and correct on
such date. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Indenture Obligations (as defined in the
Security Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all of the New Grantor's right,
title and interest in and to the Collateral of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Grantor. The Security Agreement is hereby incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct statement of the exact
corporate name and jurisdiction of organization of the New Grantor and a true
and correct schedule of the location of any and all Collateral of the New
Grantor and (b) set forth on Schedule I attached hereto, is the true and correct
location of the chief executive office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below, with a copy to the Issuer.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
MEMC HOLDINGS CORPORATION
By
-------------------------
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Citicorp USA, Inc., as Collateral Agent
By
-------------------------
Name:
Title:
Annex 2 to the
Security Agreement
SUPPLEMENT NO. [ ] dated as of [ ], to the
Security Agreement dated as of November 13, 2001,
among MEMC ELECTRONIC MATERIALS, INC., a Delaware
corporation (the "Issuer"), each subsidiary of the
Issuer listed on Schedule I thereto (each such
subsidiary individually a "Pledgor and Guarantor" and,
collectively, the "Pledgors and Guarantors," and the
Pledgors and Guarantors, collectively, together with
the Issuer, the "Grantors") and Citicorp USA, Inc., a
Delaware corporation, as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Security Agreement).
A. Reference is made to (a) the Indenture dated as of November 13, 2001
(as amended, supplemented or otherwise modified from time to time, the
"Indenture"), among the Issuer, Citibank, N.A., as trustee (in such capacity,
the "Trustee") and the Collateral Agent, (b) the Restructuring Agreement dated
as of November 13, 2001, among the Issuer and TPG Wafer Holdings LLC (the
"Restructuring Agreement") and (c) the Guarantee Agreement dated as of November
13, 2001 (as amended, supplemented or otherwise modified from time to time, the
"Guarantee Agreement"), among the Issuer, the Pledgors and Guarantors and the
Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Indenture.
C. The Grantors have entered into the Security Agreement in order to
induce the Holders to purchase the Notes. Pursuant to Section 5.11 of the
Indenture, each Subsidiary that was not in existence or not a Domestic
Subsidiary on the date of the Indenture is required to enter in to this
Agreement as a Grantor upon becoming a Domestic Subsidiary. Section 7.16 of the
Security Agreement provides that such Domestic Subsidiaries may become Grantors
under the Security Agreement by execution and delivery of an instrument in the
form of this Supplement. The undersigned (the "New Grantor") is executing this
Supplement in accordance with the requirements of the Indenture to become a
Grantor under the Security Agreement, as consideration for the Holders' previous
purchase of the Notes.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 7.16 of the Security Agreement,
the New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof except to
the extent a representation and warranty expressly relates solely to a specific
date in which case such representation and warranty shall be true and correct on
such date. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Indenture Obligations (as defined in the
Security Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Secured Parties, their successors
and assigns, a security interest in and lien on all of the New Grantor's right,
title and interest in and to the Collateral of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Grantor. The Security Agreement is hereby incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct statement of the exact
corporate name and jurisdiction of organization of the New Grantor and a true
and correct schedule of the location of any and all Collateral of the New
Grantor and (b) set forth on Schedule I attached hereto, is the true and correct
location of the chief executive office of the New Grantor.
SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below, with a copy to the Issuer.
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed
this Supplement to the Security Agreement as of the day and year first above
written.
[NAME OF NEW GRANTOR]
By
-------------------------
Name:
Title:
Address:
Citicorp USA, Inc., as Collateral
Agent
By
-------------------------
Name:
Title:
Schedule I
to Supplement No. [ ]
to the Security Agreement
LOCATION OF COLLATERAL
Description Location
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