EXHIBIT 4.3
EXECUTION COPY
TRANCHE B NOTES INDENTURE
PCI CHEMICALS CANADA COMPANY,
as Issuer
PIONEER COMPANIES, INC.,
PIONEER AMERICAS LLC,
IMPERIAL WEST CHEMICAL CO.,
KEMWATER NORTH AMERICA COMPANY,
PIONEER (EAST), INC.,
PIONEER WATER TECHNOLOGIES, INC.,
PIONEER LICENSING, INC.,
and
KWT, INC.,
as Guarantors
and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
as Trustee
------------------------
INDENTURE
Dated as of December 31, 2001
-----------------------
$150,000,000
10% Senior Secured Guaranteed Notes due 2008
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 101. Definitions........................................................................ 2
"Act"................................................................................... 2
"Additional Amounts".................................................................... 3
"Adjusted Net Assets"................................................................... 3
"Administrative Agent".................................................................. 3
"Affiliate"............................................................................. 3
"Agent Members"......................................................................... 3
"Allowed Other Secured Claim"........................................................... 3
"Allowed Secured Tax Claim"............................................................. 3
"Asset Sale"............................................................................ 3
"Asset Sale Offer"...................................................................... 4
"Asset Sale Offer Amount"............................................................... 4
"Asset Sale Offer Period"............................................................... 4
"Asset Sale Purchase Date".............................................................. 4
"Asset Sale Purchase Price"............................................................. 4
"Attributable Indebtedness"............................................................. 5
"Bankruptcy Code"....................................................................... 5
"Bankruptcy Court"...................................................................... 5
"Bankruptcy Law"........................................................................ 5
"Board of Directors".................................................................... 5
"Board Resolution"...................................................................... 5
"Business Day".......................................................................... 6
"Canadian Act of Bankruptcy"............................................................ 6
"Canadian Bankruptcy Law"............................................................... 7
"Canadian Secured Term and Note Claim".................................................. 7
"Canadian Security Agreements".......................................................... 7
"Cancellation Date"..................................................................... 7
"Capital Expenditures".................................................................. 7
"Capital Stock"......................................................................... 7
"Capitalized Lease Obligation".......................................................... 7
"Cash Equivalents"...................................................................... 8
"Change of Control"..................................................................... 8
"Change of Control Date"................................................................ 9
"Change of Control Offer"............................................................... 9
"Change of Control Payment Date"........................................................ 9
"Change of Control Purchase Price"...................................................... 9
"Chapter 11 Cases"...................................................................... 9
i
"Claimant".............................................................................. 9
"Closing Date".......................................................................... 9
"Collateral"............................................................................ 9
"Collateral Agent"...................................................................... 9
"Collateral Proceeds"................................................................... 9
"Commencement Date"..................................................................... 9
"Commission"............................................................................ 9
"Common Security and Intercreditor Agreement"........................................... 9
"Company"............................................................................... 10
"Company Request"....................................................................... 10
"Confirmation Order".................................................................... 10
"Consolidated Cash Flow Available for Fixed Charges".................................... 10
"Consolidated Fixed Charge Coverage Ratio".............................................. 10
"Consolidated Income Tax Expense"....................................................... 11
"Consolidated Interest Expense"......................................................... 11
"Consolidated Net Income"............................................................... 11
"Consolidated Net Worth"................................................................ 11
"Corporate Trust Office"................................................................ 12
"Covenant Defeasance"................................................................... 12
"CRC Portfolio"......................................................................... 12
"Cumulative Capital Expenditures"....................................................... 12
"Cumulative Capital Expenditure Deficit"................................................ 12
"Cumulative Capital Expenditure Limit".................................................. 12
"Custodian"............................................................................. 12
"Custody and Disbursing Agreement"...................................................... 13
"Default"............................................................................... 13
"Defaulted Interest".................................................................... 13
"Defeasance"............................................................................ 13
"Defeasance Redemption Date"............................................................ 13
"Defeased Securities"................................................................... 13
"Depositary"............................................................................ 13
"Direction"............................................................................. 13
"Disbursing Agent"...................................................................... 13
"Effective Plan Date"................................................................... 13
"Eligible Investments".................................................................. 13
"Environmental Claim"................................................................... 14
"Environmental Law"..................................................................... 14
"Event of Default"...................................................................... 14
"Exchange Act".......................................................................... 14
"Excluded Holders"...................................................................... 14
"Existing Indebtedness"................................................................. 14
"Exit Facility"......................................................................... 14
"Exit Facility Agent"................................................................... 14
"Exit Facility Lenders"................................................................. 14
"Fair Market Value"..................................................................... 15
"Final Order"........................................................................... 15
ii
"Fiscal Quarter"........................................................................ 15
"Fiscal Year"........................................................................... 15
"Funding Guarantor"..................................................................... 15
"GAAP".................................................................................. 15
"Global Security"....................................................................... 15
"Guaranties"............................................................................ 15
"Guarantors"............................................................................ 15
"Guaranty".............................................................................. 15
"Guaranteed Obligations"................................................................ 16
"Hazardous Materials"................................................................... 16
"Hedging Obligations"................................................................... 16
"Holder"................................................................................ 16
"Including"............................................................................. 16
"Incur"................................................................................. 16
"Indebtedness".......................................................................... 16
"Indenture"............................................................................. 17
"Indenture Documents"................................................................... 17
"Indenture Obligations"................................................................. 18
"Indenture Obligors".................................................................... 18
"Independent Director".................................................................. 18
"Insurance Proceeds".................................................................... 18
"Intercreditor Collateral Account"...................................................... 18
"Interest Payment Date"................................................................. 18
"Investment"............................................................................ 18
"Judgment Currency"..................................................................... 19
"Lenders"............................................................................... 19
"Letter of Transmittals"................................................................ 19
"Lien".................................................................................. 19
"Loan Documents"........................................................................ 19
"Material Adverse Effect"............................................................... 19
"Maturity".............................................................................. 20
"MEIP".................................................................................. 20
"▇▇▇▇▇'▇"............................................................................... 20
"Mortgage".............................................................................. 20
"Mortgaged Property".................................................................... 20
"Net Award"............................................................................. 20
"Net Income"............................................................................ 20
"Net Offering Proceeds"................................................................. 20
"Net Proceeds".......................................................................... 20
"New Common Stock"...................................................................... 21
"New Debt".............................................................................. 21
"New Other Secured Notes"............................................................... 21
"New Other Secured Notes And Claims".................................................... 21
"New Tranche A Notes"................................................................... 21
"New Tranche A Notes Holders"........................................................... 21
"New Tranche A Notes Indenture"......................................................... 21
iii
"New Tranche A Notes Indenture Trustee"................................................. 21
"New Tranche A Term Notes".............................................................. 21
"Obligor"............................................................................... 21
"Obligor Subsidiary".................................................................... 21
"Officers' Certificate"................................................................. 22
"Old Debt".............................................................................. 22
"Opinion of Counsel".................................................................... 22
"Opinion of Independent Counsel"........................................................ 22
"Organizational Documents".............................................................. 22
"Outstanding"........................................................................... 22
"Paying Agent".......................................................................... 23
"PCA U.S. Secured Term and Note Claim".................................................. 23
"PCI"................................................................................... 23
"Permitted Investments"................................................................. 23
"Permitted Issuance".................................................................... 24
"Permitted Liens"....................................................................... 24
"Person"................................................................................ 27
"Physical Securities"................................................................... 27
"Pioneer Americas"...................................................................... 27
"Pioneer Companies"..................................................................... 27
"Plan of Reorganization"................................................................ 27
"Post Petition Interest"................................................................ 27
"Power of Attorney"..................................................................... 27
"Predecessor Security".................................................................. 27
"Qualified Equity Offering"............................................................. 28
"Quebec Mortgage and Security Agreement"................................................ 28
"Redemption Date"....................................................................... 28
"Redemption Price"...................................................................... 28
"Refinancing"........................................................................... 28
"Refinancing Indebtedness".............................................................. 28
"Registration Rights Agreement"......................................................... 28
"Regular Record Date"................................................................... 28
"Related Business"...................................................................... 28
"Release"............................................................................... 28
"Restoration"........................................................................... 28
"Restricted Payments"................................................................... 28
"Returned Payments"..................................................................... 29
"Rollover Amount"....................................................................... 29
"S&P"................................................................................... 29
"Safety and Health Laws"................................................................ 29
"Sale and Leaseback Transaction"........................................................ 29
"Securities"............................................................................ 29
"Securities Act"........................................................................ 29
"Security and Intercreditor Supplement"................................................. 29
"Security Documents".................................................................... 29
"Security Register"..................................................................... 29
iv
"Security Registrar".................................................................... 29
"Senior Indebtedness"................................................................... 29
"Special Record Date"................................................................... 30
"Stated Maturity"....................................................................... 30
"Subordinated Indebtedness"............................................................. 30
"Subordinated Obligations".............................................................. 30
"Subsidiary"............................................................................ 30
"Taxes"................................................................................. 31
"Term Loan Agreement"................................................................... 31
"Tranche A Documents"................................................................... 31
"Transaction Documents"................................................................. 31
"Trust Indenture Act"................................................................... 31
"Trust Moneys".......................................................................... 31
"Trustee"............................................................................... 32
"UCC"................................................................................... 32
"Unallocated Payments".................................................................. 32
"Unallocated Securities"................................................................ 32
"U.S. Government Obligations"........................................................... 32
"Voting Stock".......................................................................... 32
"Wholly-Owned Subsidiary"............................................................... 32
Section 102. [Intentionally Omitted.]........................................................... 33
Section 103. Compliance Certificates and Opinions............................................... 33
Section 104. Form of Documents Delivered to Trustee............................................. 33
Section 105. Acts of Holders.................................................................... 34
Section 106. Notices, etc., to Trustee, the Company and any Indenture
Obligor or Obligor Subsidiary. ................................................. 36
Section 107. Notice to Holders; Waiver.......................................................... 36
Section 108. Conflict with Trust Indenture Act.................................................. 37
Section 109. Effect of Headings and Table of Contents........................................... 37
Section 110. Successors and Assigns............................................................. 37
Section 111. Separability Clause................................................................ 37
Section 112. Benefits of Indenture.............................................................. 37
Section 113. Governing Law...................................................................... 38
Section 114. Legal Holidays..................................................................... 38
Section 115. Schedules and Exhibits............................................................. 38
Section 116. Counterparts....................................................................... 38
Section 117. Communication by Holders with other Holders........................................ 38
Section 118. No Recourse against Others......................................................... 38
Section 119. Article Applicable to Paying Agents................................................ 38
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.................................................................... 39
Section 202. Legends............................................................................ 39
Section 203. Form of Face of Security........................................................... 40
v
Section 204. Form of Reverse of Securities...................................................... 42
Section 205. Form of Trustee's Certificate of Authentication.................................... 48
Section 206. Form of Guaranty of Each of the Guarantors......................................... 48
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.................................................................... 51
Section 302. Denominations...................................................................... 52
Section 303. Execution, Authentication, Delivery and Dating..................................... 52
Section 304. Temporary Securities............................................................... 53
Section 305. Registration of Transfer and Exchange.............................................. 54
Section 306. Book-Entry Provisions for Global Security.......................................... 56
Section 307. [Intentionally Omitted.]........................................................... 57
Section 308. Mutilated, Destroyed, Lost and Stolen Securities................................... 57
Section 309. Payment of Interest; Interest Rights Preserved..................................... 58
Section 310. Persons Deemed Owners.............................................................. 59
Section 311. Cancellation....................................................................... 59
Section 312. Computation of Interest; Interest Act (Canada)..................................... 59
Section 313. Deposit of Moneys.................................................................. 59
Section 314. CUSIP Number....................................................................... 60
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant Defeasance....................... 60
Section 402. Defeasance and Discharge........................................................... 60
Section 403. Covenant Defeasance................................................................ 61
Section 404. Conditions to Defeasance or Covenant Defeasance.................................... 61
Section 405. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions........................................ 63
Section 406. Reinstatement...................................................................... 64
Section 407. Repayment of the Company........................................................... 64
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.................................................................. 65
Section 502. Acceleration....................................................................... 68
Section 503. Other Remedies..................................................................... 69
Section 504. Waiver of Past Defaults............................................................ 69
Section 505. Control by Majority................................................................ 70
Section 506. Limitation on Suits................................................................ 70
vi
Section 507. Rights of Holders to Receive Payment............................................... 71
Section 508. Collection Suit by Trustee......................................................... 71
Section 509. Trustee May File Proofs of Claim................................................... 71
Section 510. Priorities......................................................................... 72
Section 511. Undertaking for Costs.............................................................. 73
Section 512. Waiver of Stay, Extension or Usury Laws............................................ 73
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults................................................................. 73
Section 602. Certain Rights of Trustee.......................................................... 74
Section 603. Trustee Not Responsible for Recitals, Dispositions of Securities
or Application of Proceeds Thereof.............................................. 75
Section 604. Trustee and Agents May Hold Securities; Collections; etc........................... 76
Section 605. Money Held in Trust................................................................ 76
Section 606. Compensation and Indemnification of Trustee and Its Prior Claim.................... 76
Section 607. Conflicting Interests.............................................................. 77
Section 608. Corporate Trustee Required; Eligibility............................................ 77
Section 609. Resignation and Removal; Appointment of Successor Trustee.......................... 78
Section 610. Acceptance of Appointment by Successor............................................. 79
Section 611. Merger, Conversion, Consolidation or Succession to Business........................ 80
Section 612. Preferential Collection of Claims Against Company.................................. 81
Section 613. Certain Duties and Responsibilities................................................ 81
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.......................... 82
Section 702. Preservation of Information; Disclosure of Names and Addresses of Holders.......... 82
Section 703. Reports by Trustee................................................................. 82
Section 704. Reports by Company and Guarantors.................................................. 83
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. When Indenture Obligors May Merge, Etc............................................. 85
Section 802. Successor Substituted.............................................................. 87
vii
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of Holders.................. 88
Section 902. Supplemental Indentures and Agreements with Consent of Holders..................... 90
Section 903. Execution of Supplemental Indentures and Agreements................................ 92
Section 904. Revocation Effect of Supplemental Indentures....................................... 92
Section 905. Conformity with Trust Indenture Act................................................ 92
Section 906. Reference in Securities to Supplemental Indentures................................. 92
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest........................................ 93
Section 1002. Maintenance of Office or Agency................................................... 93
Section 1003. Compliance Certificate............................................................ 93
Section 1004. Taxes............................................................................. 94
Section 1005. Jurisdiction, Service of Process and Venue Immunity; Judgment Currency............ 94
Section 1006. Limitation on Restricted Payments................................................. 96
Section 1007. Limitations on Payment Restrictions Affecting Subsidiaries........................ 97
Section 1008. Limitations on Indebtedness....................................................... 98
Section 1009. Asset Sales....................................................................... 101
Section 1010. Limitation on Sale and Leaseback Transactions..................................... 104
Section 1011. Limitation on Transactions With Affiliates........................................ 104
Section 1012. Limitation on Liens............................................................... 105
Section 1013. Corporate Existence; Corporate Separateness....................................... 105
Section 1014. Change of Control................................................................. 106
Section 1015. Maintenance of Properties......................................................... 108
Section 1016. Maintenance of Insurance.......................................................... 109
Section 1017. Stock Pledges..................................................................... 109
Section 1018. Money for Security Payments to be Held in Trust................................... 109
Section 1019. Redemption of Securities with proceeds of Qualified Equity Offering............... 111
Section 1020. Limitation on Ownership of Wholly-Owned Subsidiary Stock.......................... 111
Section 1021. Impairment of Security Interest................................................... 112
Section 1022. Amendment to Certain Agreements................................................... 112
Section 1023. Plan of Reorganization............................................................ 112
Section 1024. Nature of Business, Organizational Documents and Capital
Structure and New Subsidiaries; Books and Records.............................. 112
Section 1025. Compliance with Laws and Environmental and Safety and Health Matters.............. 113
Section 1026. Authorizations.................................................................... 113
viii
Section 1027. Further Assurances................................................................ 114
Section 1028. Fiscal Year....................................................................... 114
Section 1029. Additional Amounts................................................................ 114
Section 1030. Pension Transfer Agreement........................................................ 116
Section 1031. Capital Expenditures.............................................................. 116
Section 1032. Working Capital Line.............................................................. 116
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.............................................................. 116
Section 1102. Applicability of Article.......................................................... 117
Section 1103. Election to Redeem; Notice to Trustee............................................. 117
Section 1104. Selection by Trustee of Securities to Be Redeemed................................. 117
Section 1105. Notice of Redemption.............................................................. 118
Section 1106. Deposit of Redemption Price....................................................... 119
Section 1107. Securities Payable on Redemption Date............................................. 119
Section 1108. Securities Redeemed or Purchased in Part.......................................... 119
Section 1109. Asset Sale Offers................................................................. 120
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture........................................... 122
Section 1202. Application of Trust Money........................................................ 123
ARTICLE THIRTEEN
GUARANTY
Section 1301. Guaranty; Limitation of Liability................................................. 124
Section 1302. Guaranty Absolute................................................................. 125
Section 1303. Right to Demand Full Performance.................................................. 126
Section 1304. Waivers and Acknowledgments....................................................... 127
Section 1305. The Guarantors Remain Obligated in Event the Company is No
Longer Obligated to Discharge Indenture Obligations............................ 128
Section 1306. Subrogation....................................................................... 128
Section 1307. Subordination..................................................................... 129
Section 1308. Continuing Guaranty; Assignments.................................................. 129
Section 1309. Guaranty Is in Addition to Other Security......................................... 130
Section 1310. Contribution...................................................................... 130
Section 1311. Trustee's Duties; Notice to Trustee............................................... 130
Section 1312. Release of Guaranty............................................................... 131
Section 1313. Execution of Guaranty............................................................. 131
Section 1314. Payment Permitted by Each of the Guarantors if no Default......................... 131
ix
Section 1315. Notice to Trustee by Each of the Guarantors....................................... 131
Section 1316. Additional Guaranties............................................................. 132
Section 1317. No Suspension of Remedies......................................................... 132
ARTICLE FOURTEEN
CONDITIONS TO EFFECTIVENESS OF INDENTURE
Section 1401. Conditions Precedent to the Effectiveness of the Plan of
Reorganization, etc............................................................ 132
Section 1402. Implementation of Plan of Reorganization.......................................... 132
ARTICLE FIFTEEN
SECURITY
Section 1501. Security.......................................................................... 133
Section 1502. Recording; Priority; Opinions, Etc................................................ 134
Section 1503. Release of Collateral............................................................. 134
Section 1504. Trust Indenture Act Requirements.................................................. 135
Section 1505. Suits to Protect Collateral....................................................... 135
Section 1506. Determinations Relating to Collateral............................................. 135
Section 1507. Trust Moneys...................................................................... 136
Section 1508. Power of Attorney for Collateral in Quebec........................................ 137
ARTICLE SIXTEEN
UNALLOCATED SECURITIES
Section 1601. Escrow of Unallocated Securities and Unallocated Payments......................... 138
Section 1602. Cancellation of Unallocated Securities and Release of
Unallocated Payments........................................................... 138
SCHEDULE 1 Existing Indebtedness
SCHEDULE 2 Existing Investments
SCHEDULE 3 Allowed Secured Tax Claims and Allowed Other Secured Claims Liens
EXHIBIT A Forms of Mortgages
EXHIBIT B Form of Common Security and Intercreditor Agreement
x
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of December 31, 2001
Trust Indenture Indenture
Act Section Section
------------------------- ----------------
Section 310(a)(1)....................................... 608
(a)(2)........................................... 608
(a)(3)........................................... N.A.
(a)(4)........................................... N.A.
(a)(5)........................................... 607
(b).............................................. 607, 609
(c).............................................. N.A.
Section 311(a).......................................... 612
(b).............................................. 612
(c).............................................. N.A.
Section 312(a).......................................... 701, 702
(b).............................................. 117, 702
(c).............................................. 117, 702
Section 313(a).......................................... 703
(b)(1)........................................... 703
(b)(2)........................................... 703
(c).............................................. 703
(d).............................................. 703
Section 314(a).......................................... 704, 1003
(b).............................................. 1502
(c)(1)........................................... 103
(c)(2)........................................... 103
(c)(3)........................................... N.A.
(d).............................................. 103, 1503, 1504, 1507
(e).............................................. 103
(f).............................................. N.A.
Section 315(a).......................................... 602, 613, 903
(b).............................................. 601, 602, 903
(c).............................................. 602, 903
(d).............................................. 602, 903
(e).............................................. 511
Section 316(a)(last sentence)........................... 101
("Outstanding")
(a)(1)(A)............................................... 502, 505
(a)(1)(B)........................................ 504
(a)(2)........................................... N.A.
(b).............................................. 507
(c).............................................. 105
Section 317(a)(1)....................................... 508
(a)(2)........................................... 509
(b).............................................. 1018
Section 318(a).......................................... 310
N.A. means not applicable.
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
INDENTURE, dated as of December 31, 2001, (the "Indenture") among
PCI CHEMICALS CANADA COMPANY, an unlimited liability company organized and
existing under the laws of the province of Nova Scotia, Canada (the "Company"),
each Guarantor (as hereinafter defined) from time to time a party hereto (the
Company and the Guarantors party to this Indenture, and their respective assigns
and affiliates, shall be referred to herein as the "Pioneer Companies") and
▇▇▇▇▇ FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as trustee (the "Trustee").
RECITALS OF THE COMPANY
1. The Pioneer Companies are successors to the debtors that commenced the
Chapter 11 Cases (as hereinafter defined) and the initial Holders of the
Securities on the date hereof (as each such term is hereinafter defined), prior
to the effectiveness of the Plan of Reorganization (as hereinafter defined),
together beneficially hold the Old Debt (as hereinafter defined).
2. Pursuant to the Plan of Reorganization and the implementation thereof
and in conformity with the steps described in Section 7.1 of the Plan of
Reorganization and upon the Plan of Reorganization becoming effective, the
applicable Pioneer Companies are willing and required (among other things) to
remain indebted to certain holders of the Old Debt by accepting the New Debt and
to issue the New Common Stock (as each such term is hereinafter defined) in
exchange for the cancellation and the extinguishment of the Old Debt by such
holders.
3. Such holders of the Old Debt are willing and required to accept the New
Debt and the New Common Stock upon such cancellation and extinguishment.
4. The New Debt comprises indebtedness represented by the New Tranche A
Notes and the New Tranche A Term Notes (each as hereinafter defined) and the
Securities, and the Pioneer Companies and the Trustee, on behalf of the holders
of the Old Debt, wish to enter into this Indenture to consummate that part of
the exchange of Old Debt for New Debt that relates to the issuance by the
Company of the Securities (guaranteed by the Guarantors jointly and severally)
and to govern (for the benefit of such Holders or any other Holders) the
indebtedness assumed and incurred hereby.
5. In accordance with the Plan of Reorganization and the implementation
thereof, the Company has duly authorized the creation of an issue of 10% Senior
Secured Guaranteed Notes due 2008 (the "Securities"), of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture and the Securities. The
Securities are referred to in the Plan of Reorganization as the "New Tranche B
Notes".
6. Each Guarantor has duly authorized the issuance of its Guaranty (as
hereinafter defined) of the Securities, of substantially the tenor hereinafter
set forth, and to provide therefor, each Guarantor has duly authorized the
execution and delivery of this Indenture and its Guaranty.
7. This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act (as hereinafter defined) that are required to be part
of and to govern indentures qualified under the Trust Indenture Act.
8. All things necessary have been done to make (i) the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, (ii) their
respective Guaranties (as hereinafter defined), when executed and delivered by
each of the Guarantors, the valid obligation of such Guarantor, and (iii) this
Indenture a valid agreement of the Company and each of the Guarantors in
accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is covenanted and agreed, for the benefit
of each other and for the equal and proportionate benefit of the Holders of the
Securities issued under this Indenture, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States of America.
"Act" is defined in Section 105 hereof.
2
"Additional Amounts" is defined in Section 1029 hereof.
"Adjusted Net Assets" means, with respect to any Guarantor, at any
date, the lesser of the amount by which (x) the Fair Market Value of the
property of such Guarantor exceeds the total amount of liabilities, including,
without limitation, contingent liabilities (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date, but excluding
liabilities under the Guaranty), of such Guarantor at such date and (y) the
present Fair Market Value of assets of such Guarantor at such date exceeds the
amount that shall be required to pay the probable liability of such Guarantor on
its debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date but excluding debt in respect of its Guaranty),
as they become absolute and matured.
"Administrative Agent" means ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as the administrative agent under the Term Loan Agreement,
including each other Person as shall have subsequently been appointed as the
successor Administrative Agent pursuant to the Term Loan Agreement.
"Affiliate" means, with respect to any specified Person, (i) any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person, (ii) any director or
controlling shareholder of such other Person, or (iii) any senior officer of
such specified Person or such other Person. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; provided,
however, that beneficial ownership of 5% or more of the voting equity securities
(or of warrants or other rights to acquire such voting equity securities) of a
Person shall be deemed to be control; and provided further, that,
notwithstanding the first proviso to this definition of "Affiliate", creditors
of the debtors in the Chapter 11 Cases receiving New Common Stock that
beneficially own at any time 20% or less of the voting securities of any Obligor
or Obligor Subsidiary shall not be "Affiliates" of such Obligor or Obligor
Subsidiary.
"Agent Members" is defined in Section 306 hereof.
"Allowed Other Secured Claim" means any Other Secured Claim (as
defined in the Plan of Reorganization) that is also Allowed (as defined in the
Plan of Reorganization).
"Allowed Secured Tax Claim" means any Secured Tax Claim (as defined
in the Plan of Reorganization) that is also Allowed (as defined in the Plan of
Reorganization).
"Asset Sale" means, with respect to any Obligor or any Obligor
Subsidiary, the sale (including Sale and Leaseback Transactions), lease,
conveyance,
3
transfer or other disposition (including, without limitation, by way of merger
or consolidation, and whether indirectly or directly or by operation of law or
otherwise) to any Person, other than any Obligor or any Obligor Subsidiary, of
any of such Obligor's or such Obligor Subsidiary's assets (including, without
limitation, (x) any sale, lease, conveyance, transfer or other disposition of
Capital Stock of any Obligor Subsidiary, (y) any sale, lease, conveyance,
transfer or other disposition of any non-cash consideration received by any
Obligor or any Obligor Subsidiary from any prior transaction or series of
related transactions that constituted an Asset Sale hereunder) whether owned on
the date hereof or subsequently acquired, in one transaction or a series of
related transactions; provided, however, that the following will not constitute
an Asset Sale: (i) transactions (other than transactions described in clause (y)
above), including Sale and Leaseback Transactions, in any calendar year with
aggregate cash and/or Fair Market Value of any other consideration received
(including, without limitation, the unconditional assumption of Indebtedness) of
less than $1,000,000; (ii) a transaction or series of related transactions that
results in a Change of Control; (iii) any sale of assets of any Obligor or any
Obligor Subsidiary or merger permitted pursuant to Article Eight hereof; (iv)
any sale or other disposition of inventory, property (whether real, personal or
mixed) or equipment that has become worn out, obsolete or damaged or otherwise
unsuitable or no longer needed for use in connection with the business of any
Obligor or any Obligor Subsidiary, as the case may be, in the good faith
determination of the Boards of Directors of PCI and the Company and so certified
to the Trustee (provided that no such determination by the Board of Directors
and no such certification to the Trustee shall be required in respect of such
sales or dispositions with aggregate cash and/or fair market value of any
non-cash consideration received in respect of such sales or dispositions being
equal to or less than $100,000 individually or up to $500,000 in the aggregate
in any calendar year); (v) any sale of inventory to customers in the ordinary
and customary course of business; (vi) sales of cash and cash equivalents in the
ordinary course of business, (vii) sales of assets consummated on or after the
payment, satisfaction and discharge in full of the Tranche A Obligations (as
such term is defined in the Common Security and Intercreditor Agreement), the
Net Proceeds from which are used within 180 days of such sale to purchase assets
of similar value and quality and business utility to those assets sold; provided
that the aggregate amount of Net Proceeds outstanding and pending reinvestment
pursuant to this clause (vii) shall not exceed $10,000,000 at any time; (viii)
transfers resulting from any casualty or condemnation of property or assets;
(ix) the sale or discount of overdue accounts receivable in the ordinary course
of business, in connection with the compromise or collection thereof; and (x)
the sale of the Pioneer Technology Centre situated at ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇.
"Asset Sale Offer" is defined in Section 1009 hereof.
"Asset Sale Offer Amount" is defined in Section 1109 hereof.
"Asset Sale Offer Period" is defined in Section 1109 hereof.
"Asset Sale Purchase Date" is defined in Section 1109 hereof.
"Asset Sale Purchase Price" is defined in Section 1009 hereof.
4
"Attributable Indebtedness" means, with respect to any Sale and
Leaseback Transaction, as at the time of determination, the greater of (i) the
Fair Market Value of the property subject to such transaction, and (ii) the
present value (discounted at a rate equivalent to the Company's then current
weighted average cost of funds for borrowed money, compounded on a semi-annual
basis) of the total net obligations of the lessee for rental payments during the
remaining term of the lease (or the lease back in the case of a lease and
leaseback transaction) included in such arrangement (including any period for
which such lease has been extended). As used in the preceding sentence, the
"total net obligations of the lessee for rental payments" under any lease (or
any lease back in the case of a lease and leaseback transaction) for any such
period means the sum of rental and other payments required to be paid (including
any step-up in interest rate of any financing) with respect to such period by
the lessee thereunder excluding any amounts required to be paid by such lessee
on account of maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges. In the case of any lease (or any lease back in the
case of a lease and leaseback transaction) which is terminable by the lessee
upon payment of a penalty, such net amount of rent also includes the amount of
such penalty, but no rent will be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Bankruptcy Code" means Title 11 of the United States Code, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of Texas, Houston Division, having jurisdiction over the
Chapter 11 Cases, or if such court ceases to exercise jurisdiction over the
Chapter 11 Cases, such other court or adjunct thereof that exercises
jurisdiction over the Chapter 11 Cases in lieu of the United States Bankruptcy
Court for such district.
"Bankruptcy Law" means the Bankruptcy Code, Canadian Bankruptcy Law
or any law of any other country or jurisdiction relating to bankruptcy,
insolvency, receivership, winding-up, liquidation, reorganization or relief of
debtors.
"Board of Directors" means, in respect of any Person, its Board of
Directors or equivalent body or any committee thereof duly authorized to act on
behalf of such Board of Directors or equivalent body in respect of such matters
as are referred to herein as requiring such action on behalf of such Board of
Directors or equivalent body.
"Board Resolution" of any corporation, limited liability company or
other entity means a copy of a resolution or limited liability company corporate
action or other equivalent action certified by the Secretary or an Assistant
Secretary or equivalent officer of such corporation, limited liability company
or other entity to have been duly adopted by the Board of Directors of such
corporation, limited liability company or other entity, as the case may be, and
to be in full force and effect on the date of such certification and delivered
to the Trustee.
5
"Business Day" means any day which is neither a Saturday or Sunday
nor a legal holiday on which banking institutions and trust companies in The
City of New York or the city in which the Corporate Trust Office is located are
authorized or required by law or executive order to be closed.
"Canadian Act of Bankruptcy" means, with respect to any Person:
(1) an admission in writing by such Person of its inability to pay
its debts generally as they become due;
(2) a general assignment by such Person for the benefit of its
creditors pursuant to the Bankruptcy and Insolvency Act (Canada);
(3) such Person becoming subject to any bankruptcy proceedings in
Canada which it is not contesting in good faith, diligently and by
appropriate means or which continue undischarged, unstayed or undismissed
for a period of 30 days;
(4) any application under any Canadian Bankruptcy Law to any
tribunal or authority for the purpose of suspending payment or performance
of any of the liabilities of such Person;
(5) a petition or application by such Person under any Canadian
Bankruptcy Law to any tribunal or authority for the appointment of an
administrator, receiver, trustee or intervenor for it or for any
substantial part of such Person's property;
(6) the commencement against such Person of any proceedings
(including a notice of intention or a proposal under the Bankruptcy and
Insolvency Act (Canada)) or any Canadian Bankruptcy Law, statute,
regulation or decree whether now or hereafter in effect in Canada,
relating to it or its debt, or to any reorganization, arrangement,
adjustment, dissolution or liquidation involving such Person, which
proceedings are not being contested in good faith, diligently and by
appropriate means or which continue undischarged, unstayed or undismissed
for a period of 30 days;
(7) the bankruptcy of such Person within the meaning of the
Bankruptcy and Insolvency Act (Canada), or any successor or equivalent
legislation; or
(8) any act by such Person signifying its consent to, approval of,
or acquiescence in any bankruptcy, reorganization or insolvency proceeding
in Canada under any law relating to bankruptcy, insolvency or relief of
debtors or any proceeding for the appointment of a receiver or trustee for
itself or for any substantial part of its property where such receiver or
trustee remains undischarged for a period of 30 days.
6
"Canadian Bankruptcy Law" means the Bankruptcy and Insolvency Act
(Canada), the Companies' Creditors Arrangement Act (Canada), the Winding-Up and
Restructuring Act (Canada), or any similar Canadian federal or provincial law
relating to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization or relief of debtors, each as amended or changed.
"Canadian Secured Term and Note Claim" has the meaning given to such
term in the Plan of Reorganization.
"Canadian Security Agreements" means any general security agreement
and deed of hypothec charging all of the personal and movable property of PCI
Chemicals Canada Company and any other Obligor having property, assets or any
place of business or office in Canada, including, without limitation, the Quebec
Mortgage and Security Agreement, a deed of hypothec charging all of the
immovable property of PCI Chemicals Canada Company located in the province of
Quebec and deeds of mortgage charging all the real property of PCI Chemicals
Canada Company located in the provinces of Ontario and New Brunswick.
"Cancellation Date" has the meaning given to it in Section 1602.
"Capital Expenditures" means, for any Person for any period, the sum
of, without duplication, (a) all expenditures made, directly or indirectly, by
such Person during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment on a consolidated balance sheet of
such Person or have a useful life of more than one year, plus (b) the aggregate
principal amount of all Indebtedness assumed or incurred (to the extent
permitted by this Indenture) in connection with any such expenditures. For
purposes of this definition, the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment for the equipment being traded in at such time or the amount of
such proceeds, as the case may be.
"Capital Stock" means, with respect to any Person, any common stock,
preferred stock and any other capital stock of such Person and shares,
interests, participations or other ownership interest (however designated), of
any Person and any rights (other than debt securities convertible into, or
exchangeable for, capital stock or such other ownership interests), warrants,
options or other rights to purchase any of the foregoing, including each class
of common stock and preferred stock of such Person if such Person is a
corporation and each general and/or limited partnership interest of such Person
if such Person is a partnership and/or limited liability company interest of
such Person if such Person is a limited liability company.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes
7
in accordance with GAAP and the amount of such Indebtedness shall be the
capitalized amount of such obligations determined in accordance with GAAP.
"Cash Equivalents" means, (i) any evidence of Indebtedness with a
maturity of one year or less from the date of acquisition issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) certificates of deposit
or acceptances with a maturity of one year or less from the date of acquisition
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$250,000,000; (iii) commercial paper with a maturity of one year or less from
the date of acquisition issued by a corporation that is not an Affiliate of the
Company organized under the laws of any state of the United States of America or
the District of Columbia and rated at least "A-1" by S&P or at least "P-1" by
Moody's or at least an equivalent rating category of another nationally
recognized securities rating agency; (iv) any money market deposit accounts
issued or offered by a domestic commercial bank having capital and surplus in
excess of $250,000,000; and (v) repurchase agreements and reverse repurchase
agreements relating to marketable direct obligations issued or unconditionally
guaranteed by the government of the United States of America or issued by any
agency thereof and backed by the full faith and credit of the United States of
America, in each case maturing within one year from the date of acquisition;
provided that the terms of such agreements comply with the guidelines set forth
in the Federal Financial Agreements of Depository Institutions With Securities
Dealers and Others, as adopted by the Comptroller of the Currency on October 31,
1985.
"Change of Control" means the occurrence of any of the following:
(i) a "person" or "group" (as such terms are used in Sections 14(d)(2) and
13(d)(3), respectively, of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of at least 50% of the
outstanding voting power of the fully diluted Voting Stock of PCI or the Company
(other than, in respect of the Company, if such "person" is PCI or an Affiliate
of PCI), (ii) the adoption of a plan relating to the liquidation or dissolution
of PCI or the Company, taken individually or on a consolidated basis with its
Subsidiaries, (iii) the merger or consolidation of PCI or the Company with or
into another corporation with the effect that the stockholders of PCI or the
Company immediately prior to such merger or consolidation cease to be the
"beneficial owners" (as defined in Rule 13d-3 under the Exchange Act) of 50% or
more of the combined voting power of the securities of the surviving corporation
of such merger or the corporation resulting from such merger or consolidation
ordinarily (and apart from rights arising under special circumstances) having
the right to vote in the election of directors outstanding immediately after
such merger or consolidation, or (iv) during any period of two consecutive
calendar years, individuals who at the beginning of such period constituted the
Board of Directors of PCI (together with any new directors whose election by the
Board of Directors of PCI, or whose nomination for election by the shareholders
of PCI, was approved by a vote of a majority of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors of PCI then in office.
Notwithstanding the foregoing, a Change
8
of Control shall not be deemed to have occurred under clause (iii) above solely
as a result of a merger or consolidation of the Company with or into PCI
provided that such merger or consolidation is permitted under Article Eight of
this Indenture.
"Change of Control Date" is defined in Section 1014 hereof.
"Change of Control Offer" is defined in Section 1014 hereof.
"Change of Control Payment Date" is defined in Section 1014 hereof.
"Change of Control Purchase Price" is defined in Section 1014
hereof.
"Chapter 11 Cases" means each and all of the cases under Chapter 11
of the Bankruptcy Code commenced by Pioneer Companies, Inc., Pioneer Corporation
of America, Imperial West Chemical Co., Kemwater North America Company, PCI
Chemicals Canada Inc./PCI Chimie Canada Inc., Pioneer Americas, Inc., Pioneer
(East), Inc., Pioneer Water Technologies, Inc., Pioneer Licensing, Inc. and KWT,
Inc., and styled In re Pioneer Companies, Inc. et al, Chapter 11 Case No.
01-38259-H3-11 Jointly Administered.
"Claimant" means a holder of an Allowed (as such term is defined in
the Plan of Reorganization) PCA U.S. Secured Term and Note Claim and/or an
Allowed (as such term is defined in the Plan of Reorganization) Canadian Secured
Term and Note Claim.
"Closing Date" means the date of consummation of the initial
offering of the Securities.
"Collateral" means all of the property and assets of each Obligor
and Obligor Subsidiary now existing or hereafter acquired which secures
Indenture Obligations pursuant to, and as otherwise defined in, the Security
Documents.
"Collateral Agent" means ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as collateral agent under the Common Security and Intercreditor
Agreement, and any successor thereto.
"Collateral Proceeds" has the meaning specified in Section 1009
hereof.
"Commencement Date" is defined in Section 1109 hereof.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act or
if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Security and Intercreditor Agreement" means the Common
Security and Intercreditor Agreement, dated as of December 31, 2001, by and
among the
9
Indenture Obligors and others, the New Tranche A Notes Indenture Trustee (for
itself and for the benefit of the New Tranche A Notes Holders), the Collateral
Agent, the Trustee (for itself and for the benefit of the Holders of the
Securities) and the Administrative Agent (for itself and for the benefit of the
Lenders), substantially in the form of Exhibit B attached hereto, and as may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Company" is defined in the preamble hereto, and includes each other
successor thereto.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by any one of its Chairman of the Board
of Directors, its President or a Vice President (regardless of vice presidential
designation), and by any one of its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan of Reorganization pursuant to Section 1129 of the Bankruptcy
Code.
"Consolidated Cash Flow Available for Fixed Charges" of any Person
means for any period the Consolidated Net Income for such period increased by
the sum of (i) Consolidated Interest Expense of such Person for such period,
plus (ii) Consolidated Income Tax Expense of such Person for such period, plus
(iii) the consolidated depreciation and amortization expenses included in the
income statement of such Person for such period, plus (iv) other non-cash
charges of such Person for such period deducted from consolidated revenues in
determining Consolidated Net Income for such period, minus (v) non-cash items of
such Person for such period increasing consolidated revenues in determining
Consolidated Net Income for such period.
"Consolidated Fixed Charge Coverage Ratio" of any Person means for
any period the ratio of (i) Consolidated Cash Flow Available for Fixed Charges
of such Person for such period to (ii) the sum of (A) Consolidated Interest
Expense of such Person for such Period, plus (B) the annual interest expense
(including the amortization of debt discount) with respect to any Indebtedness
proposed to be incurred by such Person or its Subsidiaries, plus (C) the annual
interest expense (including the amortization of debt discount) with respect to
any other Indebtedness incurred by such Person or its Subsidiaries since the end
of such period to the extent not included in clause (ii)(A) above, minus (D)
Consolidated Interest Expense of such Person to the extent included in clause
(ii)(A) with respect to any Indebtedness that will no longer be outstanding as a
result of the incurrence of the Indebtedness proposed to be incurred; provided,
however, that in making such computation, the Consolidated Interest Expense of
such Person attributable to interest on any Indebtedness bearing a floating
interest rate shall be computed on a pro forma basis as if the rate in effect on
the date of computation had been the applicable rate for the entire period;
provided further, that in the event such Person or its Subsidiaries has made
Asset Sales or acquisitions of assets which are permitted pursuant to the terms
and provisions of this Indenture (including acquisitions of other Persons by
merger, consolidation or purchase of Capital Stock) during or after such
10
period, such computation shall be made on a pro forma basis as if the Asset
Sales or acquisitions had taken place on the first day of such period.
"Consolidated Income Tax Expense" of any Person means for any period
the consolidated provision for income taxes of such Person for such period
calculated on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" for any Person, means for any period
the consolidated interest expense included in a consolidated income statement
(without deduction of interest income) of such Person for such period calculated
on a consolidated basis in accordance with GAAP, including, without limitation
or duplication (or, to the extent not so included, with the addition of), (i)
the amortization of debt discounts, (ii) any payments of fees with respect to
letters of credit, bankers acceptances or similar facilities, (iii) fees with
respect to interest rate swap or similar agreements, or foreign currency hedge,
exchange or similar agreements, and (iv) the portion of any rental obligations
allocable to interest expense.
"Consolidated Net Income" means, for any period, and as to any
Person, the aggregate Net Income of such Person and its Subsidiaries for such
period determined in accordance with GAAP; provided that (i) the Net Income of
any Person which is not a Subsidiary of such Person but which is consolidated
with such Person or is accounted for by such Person by the equity method of
accounting will be included only to the extent of the amount of cash dividends
or cash distributions paid to such Person or a Wholly-Owned Subsidiary of such
Person, (ii) the Net Income of any Subsidiary of such Person that is subject to
restrictions, direct or indirect, on the payment of dividends or the making of
distributions to such Person will be excluded to the extent of such
restrictions, (iii) the Net Income of any Subsidiary less than 80% of whose
securities having the right (apart from the right under special circumstances)
to vote in the election of directors are owned by PCI, the Company or their
respective Wholly-Owned Subsidiaries will be included only to the extent of the
amount of cash dividends or cash distributions actually paid by such Subsidiary
to PCI, the Company or a Wholly-Owned Subsidiary of the Company or PCI, (iv) all
extraordinary gains and losses, and any gain or loss realized upon the
termination of any employee pension benefit plan, in respect of dispositions of
assets other than in the ordinary course of business and any one-time increase
or decrease to Net Income which is required to be recorded because of the
adoption of new accounting policies, practices or standards required by GAAP
(together, in each case, with any provision for taxes) will be excluded, and (v)
all amounts of "other income, net" classified as such on one or more lines of
such Person's statement of operations, in accordance with GAAP, net of
applicable income taxes, will be excluded from such Person's aggregate Net
Income.
"Consolidated Net Worth" means, for any Person, the total of the
amounts shown on the balance sheet of such Person and its Subsidiaries,
determined on a consolidated basis without duplication in accordance with GAAP,
as of the end of the most recent Fiscal Quarter of such Person ending at least
forty-five (45) days prior to the taking of any action for the purpose of which
the determination is being made, as (i) the
11
amount of Capital Stock plus (ii) the amount of surplus and retained earnings
(or, in the case of a surplus or retained earnings deficit, minus the amount of
such deficit).
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Services.
"Covenant Defeasance" is defined in Section 403 hereof.
"CRC Portfolio" means those certain derivatives contracts purported
and alleged by the Colorado River Commission ("CRC") to have been entered into,
in each case before the date hereof, on behalf of Pioneer Americas by the CRC in
connection with that certain (i) Contract No. P03-50, (ii) ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇-▇▇,
(▇▇▇) ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇-▇▇, and (iv) Contract No. P03-70.
"Cumulative Capital Expenditures" at any given time, means the
amount in dollars that is equal to the sum of all Capital Expenditures of PCI,
the Company and their respective Subsidiaries, taken as a whole, from January 1,
2002, and up to and including December 31 of the immediately preceding Fiscal
Year of the Company.
"Cumulative Capital Expenditure Deficit" for a Fiscal Year of the
Company is the amount in dollars equal to the greater if (a) zero, and (b) the
Rollover Amount in respect of such Fiscal Year.
"Cumulative Capital Expenditure Limit" for a given Fiscal Year of
the Company means a dollar amount determined by reference to the following
table:
-------------------------------------------------------------------------------------------------
FISCAL YEAR OF COMPANY CUMULATIVE CAPITAL EXPENDITURE LIMIT
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Beginning January 1, 2003 and ending December 31, 2003 $ 30,000,000
-------------------------------------------------------------------------------------------------
Beginning January 1, 2004 and ending December 31, 2004 $ 54,000,000
-------------------------------------------------------------------------------------------------
Beginning January 1, 2005 and ending December 31, 2005 $ 78,000,000
-------------------------------------------------------------------------------------------------
Beginning January 1, 2006 and ending December 31, 2006 $ 102,000,000
-------------------------------------------------------------------------------------------------
Beginning January 1, 2007 and ending December 31, 2007 $ 126,000,000
-------------------------------------------------------------------------------------------------
Beginning January 1, 2008 and ending December 31, 2008 $ 150,000,000
-------------------------------------------------------------------------------------------------
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
12
"Custody and Disbursing Agreement" means that certain Custody and
Disbursing Agreement, dated effective as of December 4, 2001, between ▇▇▇▇▇
Fargo Bank Minnesota, N.A. and Pioneer Companies, Inc.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would, unless cured or
waived, constitute an Event of Default.
"Defaulted Interest" is defined in Section 309 hereof.
"Defeasance" is defined in Section 402 hereof.
"Defeasance Redemption Date" is defined in Section 404 hereof.
"Defeased Securities" is defined in Section 401 hereof.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Direction" is defined in Section 105 hereof.
"Disbursing Agent" means ▇▇▇▇▇ Fargo Bank Minnesota, N.A. in its
capacity as disbursing agent under the Custody and Disbursing Agreement.
"Effective Plan Date" means the first Business Day on which the
conditions specified in Section 10.1 of the Plan of Reorganization have been
satisfied or waived.
"Eligible Investments" means, (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof or Canada or any province thereof (provided that the
full faith and credit of the United States of America or Canada, as the case may
be, is pledged in support thereof) having maturities of not more than 90 days
from the date of acquisition, (ii) time deposits and certificates of deposit
with maturities of not more than 90 days from the date of acquisition of any
commercial banking institution that is a member of the Federal Reserve System or
is a Schedule 1 Canadian Bank, in either case having capital and surplus in
excess of $500,000,000 and whose debt has a rating at the time of any such
investment of at least "A-1" or the equivalent thereof by S&P or at least "P-1"
or the equivalent thereof by Moody's, or any Lender, (iii) fully secured
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) entered into with any bank or
financial institution meeting the qualifications specified in clause (ii) above,
(iv) commercial paper issued by the parent corporation of any commercial banking
institution that is a member of the Federal Reserve System or is a Schedule 1
Canadian Bank, in either case having capital and surplus in excess of
$500,000,000 and commercial paper or master notes of issuers rated at the time
of any such investment at least "A-1" or the equivalent thereof by S&P or at
least "P-1" or the equivalent thereof by Moody's, and in each case maturing
within 270 days after the date of acquisition, and (v) any shares in an open-end
mutual fund organized by a bank or
13
financial institution having combined capital and surplus of at least
$500,000,000 investing solely in investments permitted by the foregoing clauses
(i), (ii) and (iv).
"Environmental Claim" means any claim, assertion, demand, notice of
violation, suit, administrative or judicial proceeding, regulatory action,
investigation, information request or order involving any Hazardous Materials,
Environmental Law, noise or odor pollution or any injury or threat of injury to
human health, property or the environment.
"Environmental Law" means all international, national, provincial,
regional, federal, state, local and municipal statutes, laws (including
principles of common and decisional law), regulations, by-laws, policies,
guidelines, directives, standards, rules, orders, decrees, judgments,
ordinances, permits, certificates, licenses, registrations, approvals, or
requirements or authorizations of any governmental or administrative authority
relating to the environment, natural resources, safety or health of humans or
other organisms, including the manufacture, distribution in commerce, and use or
Release of Hazardous Materials.
"Event of Default" has the meaning specified in Article Five of this
Indenture.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Excluded Holders" is defined in Section 1029(a) hereof.
"Existing Indebtedness" means all Indebtedness (other than the
Securities outstanding) of the Obligors existing as of the Effective Plan Date
after giving effect to the Plan of Reorganization and listed on Schedule 1
hereto.
"Exit Facility" means the Loan and Security Agreement, dated as of
December 31, 2001, among the Company and Pioneer Americas, as borrowers,
guarantors parties thereto, the Exit Facility Lenders and the Exit Facility
Agent, and any refinancing thereof as may be permitted pursuant to this
Indenture, as may be amended, supplemented, amended and restated or otherwise
modified from time to time, and all agreements and instruments related thereto
and contemplated thereby, each dated as of December 31, 2001 (including any
security agreement entered into in connection therewith), as each such agreement
or instrument may be amended, supplemented, amended and restated or otherwise
modified from time to time and notwithstanding that there may be a period of
time between such refinancings.
"Exit Facility Agent" means Foothill Capital Corporation and its
successors and assigns under the Exit Facility and any agent party to any
subsequent Exit Facility.
"Exit Facility Lenders" means the lenders and any other secured
parties as are or may from time to time become parties to the Exit Facility and
their respective
14
successors and assigns and any other lenders and secured parties party to any
subsequent Exit Facility.
"Fair Market Value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined by a majority of the members of the Boards of Directors of PCI and
the Company and a majority of the disinterested members of the Boards of
Directors of PCI and the Company, if any, acting in good faith, and will be
evidenced by a duly and properly adopted resolution of such Boards of Directors.
"Final Order" has the meaning given to it in the Plan of
Reorganization.
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
"Fiscal Year" means, with respect to any Obligor, any period of
twelve consecutive months ending on December 31; references to a Fiscal Year
with a numbering corresponding to any calendar year refer to the fiscal year
ending on the 31st of December during such calendar year.
"Funding Guarantor" is defined in Section 1310 hereof.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are in effect from time to time.
"Global Security" means a security that evidences all of the
Securities (other than Physical Securities) and bears the legend set forth in
Section 202(a) (but not the legend set forth in Section 202(b)).
"Guaranties" means each Guaranty taken together with each other
Guaranty.
"Guarantors" means, collectively, Pioneer Companies, Inc., a
Delaware corporation, Imperial West Chemical Co., a Nevada corporation, Kemwater
North America Company, a Delaware corporation, Pioneer Americas, Pioneer (East),
Inc., a Delaware corporation, Pioneer Water Technologies, Inc., a Delaware
corporation, Pioneer Licensing, Inc., a Delaware corporation, and KWT, Inc., a
Delaware corporation, and each other guarantor of the Company that becomes a
guarantor pursuant to this Indenture, and "Guarantor" shall mean any one of such
guarantors.
"Guaranty" means the guaranty by any Guarantor of the Company's
Indenture Obligations pursuant to a guaranty given in accordance with this
Indenture,
15
including the Guaranties by the Guarantors included in Article Thirteen of this
Indenture and any Guaranty delivered pursuant to Section 1316 hereof.
"Guaranteed Obligations" is defined in Section 1301 hereof.
"Hazardous Materials" means all pollutants, contaminants, hazardous
substances, hazardous chemicals, hazardous wastes, hazardous materials, residual
hazardous materials, medical and biochemical wastes, special wastes, toxic
substances, petroleum (including crude oil) and petroleum-derived substances,
wastes and additives, asbestos, polychlorinated biphenyls, ozone-depleting
substances, methane, radioactive materials (including source, special nuclear
and by-product materials as defined by 42 U.S.C. Section 2011 et seq. (whether
or not 42 U.S.C. Section 2011 et seq. would apply in respect of any Obligor
incorporated or organized outside of the United States)) and all other
compounds, elements, materials and substances in any form or condition
(including products) regulated, restricted or addressed by or under
Environmental Laws.
"Hedging Obligations" means the obligations of any Person or entity
pursuant to any swap or cap agreement, exchange agreement, collar agreement,
option, futures or forward hedging contract, derivative instrument or other
similar agreement or any arrangement designed to protect such Person or entity
against fluctuations in interest rates or foreign exchange rates or the price of
raw materials and other chemical products used or produced in the Company's
business or the business of any other Obligor, as the case may be.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Indenture, the
parties hereto agree that the rule of ejusdem generis shall not be applicable to
limit a general statement, which is followed by or referable to an enumeration
of specific matters, to matters similar to the matters specifically mentioned.
"Incur" has the meaning given to it in Section 1008 hereof; provided
that (i) with respect to any Indebtedness of any Subsidiary of PCI or the
Company that is owing to PCI or the Company, or another such Subsidiary, any
disposition, pledge or transfer of such Indebtedness to any Person (other than
PCI or the Company or a Wholly-Owned Subsidiary of PCI or the Company) shall be
deemed to be an incurrence of such Indebtedness and, (ii) with respect to any
Indebtedness of PCI or the Company or a Subsidiary of the Company or PCI that is
owing to another such Subsidiary, any transaction pursuant to which a
Wholly-Owned Subsidiary to which such Indebtedness is owing ceases to be a
Wholly-Owned Subsidiary shall be deemed to be an incurrence of such
Indebtedness; and provided further, that any Indebtedness of a Person existing
at the time such Person becomes a Subsidiary of PCI or the Company shall be
deemed to be incurred by such Subsidiary at the time it becomes a Subsidiary.
The term "incurrence" has a corresponding meaning.
16
"Indebtedness" of any Person means, without duplication, all
liabilities with respect to: (i) indebtedness for money borrowed or the deferred
purchase price of property or services or which is evidenced by a bond,
debenture, note or other similar instrument or agreement, but excluding trade
credit evidenced by any such instrument or agreement incurred in the ordinary
course of business and payable on usual and customary terms, or Indebtedness of
any partnership of which such Person is a partner; (ii) reimbursement
obligations, letters of credit and bankers' acceptances; (iii) indebtedness with
respect to Hedging Obligations; (iv) Capitalized Lease Obligations; (v)
indebtedness, secured or unsecured, created or arising in connection with the
acquisition or improvement of any property or asset or the acquisition of any
business; (vi) all indebtedness secured by or for which the obligee has an
existing right, contingent or otherwise, to be secured by any Lien upon property
owned by such Person and all indebtedness secured in the manner specified in
this clause even if such Person has not assumed or become liable for the payment
thereof; (vii) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person or otherwise representing the deferred and unpaid
balance of the purchase price of any such property, including all indebtedness
created or arising in the manner specified in this clause even though the rights
and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property; (viii) guaranties,
direct or indirect, of any Indebtedness of other Persons referred to in clauses
(i) through (vii) above, or of dividends or leases, taxes or other obligations
of other Persons, excluding any guaranty arising out of the endorsement of
negotiable instruments for collection in the ordinary course of business; (ix)
contingent obligations in respect of, or to purchase or otherwise acquire or be
responsible or liable for, through the purchase of products or services,
irrespective of whether such products are delivered or such services are
rendered, or otherwise, any such indebtedness referred to in clauses (i) through
(vii) above; (x) any obligation, contingent or otherwise, arising under any
surety, performance or maintenance bond; and (xi) all preferred stock or other
redeemable stock of such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends. As
used herein, Indebtedness with respect to any Hedging Obligation means, with
respect to any specified Person on any date, the net amount (if any) that would
be payable by such specified Person upon the liquidation, close-out or early
termination on such date of such Hedging Obligation. For purposes of the
foregoing, any settlement amount payable upon the liquidation, close-out or
early termination of a Hedging Obligation shall be calculated by PCI and the
Company in good faith and in a commercially reasonable manner on the basis that
such liquidation, close-out or early termination results from an event of
default or other similar event with respect to such specified Person. Any
reference in this definition to indebtedness shall be deemed to include any
renewals, extensions and refundings of any such indebtedness or any indebtedness
issued in exchange for such indebtedness.
"Indenture" means, on any date, this Indenture (including each
Guaranty, the Disclosure Schedule, each other schedule hereto and all exhibits)
as originally in effect on the Closing Date and as thereafter from time to time
amended, supplemented, amended and restated or otherwise modified and in effect
on such date.
17
"Indenture Documents" means this Indenture, the Securities, the
Guaranties, the Common Security and Intercreditor Agreement, each Mortgage (upon
execution and delivery thereof), the other Security Documents and each other
agreement, document or instrument delivered in connection herewith and
therewith, whether or not specifically mentioned herein or therein, each as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Indenture Obligations" means (i) the obligations (monetary or
otherwise) of the Company and each other Obligor and their respective Obligor
Subsidiaries under this Indenture, the Securities and the other Indenture
Documents, to pay principal, premium, if any, and interest when due and payable,
and all other amounts due or to become due under or in connection with this
Indenture (including, without limitation, all sums due to the Trustee pursuant
to Section 606 hereof), the Securities and the other Indenture Documents, and
(ii) the performance of all other obligations to the Trustee and the Holders
under this Indenture, the Securities and the other Indenture Documents,
according to the terms hereof and thereof.
"Indenture Obligors" means the Company, as issuer of the Securities,
each of the Guarantors and each other obligor under this Indenture, excluding
the Trustee.
"Independent Director" means, in relation to any Person, a director
other than a director (i) who (apart from being a director of the Person or any
of its Subsidiaries) is an employee, insider, associate or Affiliate of the
Person or any of its Subsidiaries or has held any such position during the
previous year, or (ii) who is a director, an employee, insider, associate or
Affiliate of another party to the transaction in question.
"Insurance Proceeds" has the meaning given to it in the Common
Security and Intercreditor Agreement.
"Intercreditor Collateral Account" means the Collateral Account as
defined in the Common Security and Intercreditor Agreement.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities.
"Investment" means any direct or indirect advance, loan, other
extension of credit or capital contribution (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others) to, purchase or acquire Capital Stock, bonds, notes,
debentures or other securities of, or purchase or acquire all, or a substantial
part, of the business, Capital Stock or other evidence of beneficial ownership
of, or any other investment in or guaranty of any Indebtedness of, any Person or
any other item that would be classified as an investment on a balance sheet
prepared in accordance with GAAP. Investments do not include advances to
customers and suppliers in the ordinary course of business on commercially
reasonable terms. If any Obligor or any Obligor Subsidiary sells or otherwise
disposes of any Capital Stock of any direct or indirect Subsidiary of any
Obligor or Obligor
18
Subsidiary such that, after giving effect to any such sale or disposition, such
Person is no longer such a Subsidiary of the Obligor or Obligor Subsidiary, the
Company shall be deemed to have made an Investment on the date of any such sale
or disposition equal to the Fair Market Value of the Capital Stock of such
Subsidiary not sold or disposed of.
"Judgment Currency" is defined in Section 1005 hereof.
"Lenders" shall mean the lenders party to the Term Loan Agreement.
"Letter of Transmittals" means those certain letters of transmittals
(including Agent's Messages for ATOPS transmitted by the Depositary) distributed
to the Claimants in connection with the implementation of the Plan of
Reorganization.
"Lien" means any mortgage, pledge, lien, security interest,
hypothec, prior claim, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement and any lease in the nature
thereof).
"Loan Documents" means collectively, the Term Loan Agreement
(including the guaranties contained therein), the New Tranche A Term Notes, the
Common Security and Intercreditor Agreement, each Mortgage (upon execution and
delivery thereof), the other Security Documents and each other agreement,
document or instrument delivered in connection therewith, whether or not
specifically mentioned herein or therein, each as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Material Adverse Effect" means (i) any material adverse effect on
the business, assets, debt service capacity, liabilities (including
environmental liabilities but excluding any changes in the financial condition
of the Company resulting from the application of FAS 133 to the CRC Portfolio),
financial condition, operations or prospects of the Obligors and the Obligor
Subsidiaries, taken as a whole, (ii) any material adverse effect upon the
ability of the Company or any other Obligor, taken as a whole, to timely perform
its respective material obligations under the Indenture Documents, the New
Tranche A Notes Indenture (and each of the guaranties thereunder), the New
Tranche A Notes, the Term Loan Agreement (and each of the guaranties
thereunder), the New Tranche A Term Notes or the Registration Rights Agreement,
or (iii) any impairment of the legality, validity or enforceability of this
Indenture, any other Indenture Document, the New Tranche A Notes Indenture (and
each of the guaranties thereunder), the New Tranche A Notes, the Term Loan
Agreement (and each of the guaranties thereunder), the New Tranche A Term Notes
or the Registration Rights Agreement, or any material impairment of the rights,
remedies or benefits available, as the case may be, to the Trustee, the
Collateral Agent or the Holders under this Indenture, or under any other
Indenture Document, to the Collateral Agent, the New Tranche A Notes Indenture
Trustee, the New Tranche A Notes Holders, the Administrative Agent or the
Lenders under the Security Documents, the New Tranche A Notes Indenture (and
each of the guaranties thereunder), the New Tranche A Notes, the Term Loan
Agreement (and each of the guaranties thereunder), the New Tranche A Term Notes
or the Registration Rights Agreement.
19
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein provided
or as provided in this Indenture, whether at Stated Maturity, the Asset Sale
Purchase Date, the Change of Control Payment Date or the Redemption Date and
whether by declaration of acceleration, Change of Control, call for redemption
or otherwise.
"MEIP" means an equity incentive plan which shall become effective
on the Effective Plan Date or as soon as reasonably practicable thereafter,
substantially in the form contained in the Plan Supplement (as such term is
defined in the Plan of Reorganization).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
rating agency.
"Mortgage" means each mortgage, deed of trust, or similar security
instrument, including the Quebec Mortgage and Security Agreement, substantially
in the form of Exhibit A attached to this Indenture, which from time to time
affects any property (including real property or immovable property situated in
the United States or in any Canadian province) that secures PCI's, the Company's
or any other Obligor's obligations under this Indenture (including the
Guaranties), the Securities, the New Tranche A Notes Indenture (including the
guaranties thereunder), the New Tranche A Notes, the Term Loan Agreement
(including the guaranties thereunder), the New Tranche A Term Notes and each
other Indenture Document, as such instruments may be amended, supplemented or
otherwise modified from time to time.
"Mortgaged Property" has the meaning given to it in the Common
Security and Intercreditor Agreement and, for the avoidance of doubt, includes
the immovable property, improvements and all other collateral subject to the
Mortgages.
"Net Award" has the meaning given to it in the Common Security and
Intercreditor Agreement.
"Net Income" means, for any period for any Person, the net income of
such Person determined in accordance with GAAP.
"Net Offering Proceeds" means the aggregate cash proceeds of a
Qualified Equity Offering, or of one or more such Qualified Equity Offerings
together, net of the direct, reasonable and customary costs (such as reasonable
legal, accounting and underwriting discounts/sales commissions) relating to such
Qualified Equity Offering, or one or more such Qualified Equity Offerings
together.
"Net Proceeds" means the aggregate cash proceeds received by any
Obligor or any Obligor Subsidiary in respect of any Asset Sale (including any
non-cash consideration received by any Obligor or any Obligor Subsidiary from
any Asset Sale that is converted into or sold or otherwise disposed of for cash
within 45 days after the relevant Asset Sale), net of (i) the direct costs
relating to such Asset Sale (including, without limitation, reasonable legal,
accounting and investment banking fees, sales commissions and adjustments of
severance costs), (ii) any taxes paid or payable as a
20
result thereof, (iii) all amounts required to be applied to the repayment of, or
representing the amount of permanent reductions in the commitments relating to,
Indebtedness (other than the Securities) secured by a Lien on the asset or
assets the subject of such Asset Sale which Lien is permitted pursuant hereto,
and (iv) any reserve for adjustment in respect of the sale price of such asset
or assets required by GAAP.
"New Common Stock" means the common stock of PCI authorized by and
issued pursuant to the Plan of Reorganization.
"New Debt" means the New Tranche A Notes, the New Tranche A Term
Notes and the Securities.
"New Other Secured Notes" has the meaning given it in the Plan of
Reorganization.
"New Other Secured Notes And Claims" means the Allowed Other Secured
Claims reinstated pursuant to the Bankruptcy Code and Plan of Reorganization and
the New Other Secured Notes.
"New Tranche A Notes" means indebtedness of Pioneer Americas in an
aggregate principal amount of $45,421,874, evidenced by the notes issued by
Pioneer Americas pursuant to the New Tranche A Notes Indenture.
"New Tranche A Notes Holders" means holders of the New Tranche A
Notes.
"New Tranche A Notes Indenture" means the indenture, dated as of
December 31, 2001, by and among Pioneer Americas, as issuer, the guarantors
party thereto and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as indenture
trustee, pursuant to which the New Tranche A Notes are issued, as may be
amended, supplemented, amended and restated, or otherwise modified from time to
time.
"New Tranche A Notes Indenture Trustee" means the indenture trustee
under the New Tranche A Notes Indenture.
"New Tranche A Term Notes" means indebtedness of the Term Loan
Borrower in an aggregate principal amount of $4,578,126, as such indebtedness is
continued and incurred by the Term Loan Borrower from time to time in accordance
with the terms of the Term Loan Agreement.
"Obligor" means the Company, each of the Guarantors and any Person
(other than the Administrative Agent, the New Tranche A Notes Indenture Trustee,
the Collateral Agent, the Trustee, any Lender, any New Tranche A Notes Holder or
any Holder) obligated under any Indenture Document.
"Obligor Subsidiary" means, in respect of an Obligor or an Indenture
Obligor, any Subsidiary of such Obligor or Indenture Obligor, as the case may
be.
21
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, Vice Chairman, the President or a Vice President (regardless of
vice presidential designation), and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the relevant Obligor or Obligor
Subsidiary, as the case may be, and delivered to the Trustee.
"Old Debt" means indebtedness under (i) those certain $175,000,000
9.25% Senior Secured Guaranteed Notes due October 2007 issued by PCI Chemicals
Canada Inc. pursuant to that certain Indenture, dated as of October 30, 1997,
among PCI Chemicals Canada Inc., the Guarantors (as such term is defined
therein) and the United States Trust Company of New York ("USTC"), in its
capacity as trustee and as collateral agent, (ii) that certain Term Loan
Agreement, dated as of October 30, 1997, among Pioneer Corporation of America,
the Lenders (as such term is defined therein), certain other parties and BNY
Asset Solutions LLC, in its capacity as administrative agent, (iii) those
certain $200,000,000 9.25% Senior Secured Guaranteed Notes due June 2007 issued
by Pioneer Corporation of America pursuant to that certain Indenture, dated as
of June 17, 1997 among Pioneer Corporation of America, the Guarantors (as such
term is defined therein) and USTC, in its capacity as trustee, and (iv) that
certain Term Loan Agreement, dated as of June 17, 1997, among Pioneer
Corporation of America, the Lenders (as such term is defined therein), certain
other parties and BNY Asset Solutions LLC, in its capacity as administrative
agent.
"Opinion of Counsel" means a written opinion of counsel in form and
substance satisfactory to the Trustee, who shall be counsel for the relevant
Obligor or Obligor Subsidiary, as the case may be, and who shall be reasonably
acceptable to the Trustee.
"Opinion of Independent Counsel" means a written opinion of counsel
in form and substance satisfactory to the Trustee issued by someone who is not
an employee or consultant of the relevant Obligor or Obligor Subsidiary, as the
case may be, and who shall be reasonably acceptable to the Trustee.
"Organizational Documents" means, in respect of any Obligor or other
Person, its certificate of incorporation and its by-laws (or equivalent
constitutive documents) and all shareholder agreements, voting trusts and
similar arrangements to which such Obligor or other Person is a party applicable
to any of authorized shares, or other units or forms, of its Capital Stock.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or
22
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders; provided that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 402 and
403 hereof, with respect to which the Company has effected defeasance or
covenant defeasance as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given or taken any request,
demand, authorization, vote, direction, notice, consent, waiver or other Act
hereunder, (i) Securities owned by the Company, any Guarantor, or any other
Obligor upon the Securities or any Affiliate of the Company, any Guarantor, or
such other Obligor, and (ii) all Unallocated Securities shall, in either case,
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the pledgee is not the Company,
any guarantor or any other Obligor upon the Securities or any Affiliate of the
Company, any Guarantor or such other Obligor.
"Paying Agent" means any person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"PCA U.S. Secured Term and Note Claim" has the meaning given to such
term in the Plan of Reorganization.
"PCI" means Pioneer Companies, Inc., a Delaware corporation, in its
capacities as the parent of the Company and a Guarantor.
"Permitted Investments" means (i) any Eligible Investment, (ii) any
Investment in the Company or any other Obligor, (iii) Investments in existence
on the date hereof and listed on Schedule 2 hereto, (iv) Indebtedness permitted
pursuant to clause (vi) of Section 1008 herein, (v) other investments by any
Obligor after the date hereof in joint ventures, corporations, limited liability
companies, partnerships or Obligor Subsidiaries engaged in a Related Business
that do not at any one time outstanding exceed $5,000,000 in addition to the
amount of any Net Offering Proceeds,
23
(vi) promissory notes and other non-cash consideration received by the Obligors
or the Obligor Subsidiaries in connection with Asset Sales permitted hereunder,
(vii) Investments by PCI or the Company in Hedging Obligations permitted
hereunder, (viii) investments (including debt obligations and Capital Stock)
received by the Company or its Subsidiaries in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with customers and suppliers arising in the
ordinary course of business, in each case of the Company or its Subsidiaries, or
(ix) other Investments not permitted by the foregoing clauses (i) through (viii)
(including loans and advances to officers or employees of the Company or its
Subsidiaries) in an aggregate amount not to exceed $5,000,000 at any one time
outstanding).
"Permitted Issuance" means (i) the issuance by PCI of shares of
Capital Stock as dividends on issued and outstanding Capital Stock of the same
class of PCI or pursuant to any dividend reinvestment plan, (ii) the issuance by
PCI of options or other equity securities of PCI to outside directors, members
of management or employees of PCI or any Subsidiary of PCI, (iii) the issuance
of securities as interest or dividends on pay-in-kind debt or preferred equity
securities in accordance with the terms permitted hereunder and under the other
Indenture Documents, (iv) the issuance to PCI or any of its Subsidiaries (or any
director, with respect to such director's qualifying shares) by any of PCI's
Subsidiaries of any of their respective Capital Stock, in each case with respect
to this clause (iv) to the extent such Capital Stock issued to PCI or such
Subsidiary is pledged to the Collateral Agent pursuant to the applicable
Indenture Document, (v) the issuance by PCI of shares of its Capital Stock in
connection with an acquisition permitted under this Indenture, (vi) cash
payments made in lieu of fractional shares of PCI's Capital Stock in connection
with an acquisition referred to in clause (v) above in an aggregate amount not
to exceed $250,000 during the term of this Indenture, and (vii) the issuance by
PCI of additional shares of Capital Stock of PCI to infuse additional capital
into PCI and its Subsidiaries in an aggregate amount not to exceed $5,000,000
during the term of this Indenture.
"Permitted Liens" means as of any particular time, any one or more
of the following:
(i) Liens for taxes, rates and assessments not yet past due or, if
past due, the validity of which is being contested in good faith by the
Obligors and the Obligor Subsidiaries by appropriate proceedings promptly
instituted and diligently conducted and against which such Obligors and
Obligor Subsidiaries have established appropriate reserves in accordance
with GAAP;
(ii) the Lien of any judgment rendered for an amount and for a
period not resulting in an Event of Default which is being contested in
good faith by the Obligors and the Obligor Subsidiaries by appropriate
proceedings promptly instituted and diligently conducted and against which
the Obligors and the Obligor Subsidiaries have established appropriate
reserves in accordance with GAAP and which does not have a Material
Adverse Effect;
24
(iii) other than in connection with Indebtedness, any Lien arising
in the ordinary course of business (a) to secure payments of workers'
compensation, unemployment insurance, pension or other social security or
retirement benefits, or to secure the performance of bids, tenders,
leases, progress payments, contracts (other than for the payment of money)
or to secure public or statutory obligations of any Obligor or Obligor
Subsidiary, or to secure surety or appeal bonds to which any Obligor or
Obligor Subsidiary is a party, (b) imposed by law dealing with
materialmen's, mechanics', workmen's, repairmen's, warehousemen's,
landlords', vendors' or carriers' Liens created by law, or deposits or
pledges which are not yet due or, if due, the validity of which is being
contested in good faith by the Obligors and the Obligor Subsidiaries by
appropriate proceedings promptly instituted and diligently conducted and
against which the Obligors and the Obligor Subsidiaries have established
appropriate reserves in accordance with GAAP, and (c) rights of financial
institutions to setoff and chargeback arising by operation of law;
(iv) servitudes, licenses, easements, encumbrances, restrictions,
rights-of-way and rights in the nature of easements or similar charges,
minor title defects and irregularities which shall not in the aggregate
materially adversely impair the use of the subject property by any Obligor
or Obligor Subsidiary;
(v) zoning and building by-laws and ordinances, municipal by-laws
and regulations, and restrictive covenants, which do not materially
interfere with the use of the subject property by any Obligor or any
Obligor Subsidiary as such property is used as of the date hereof;
(vi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods by the Obligor or the Obligor Subsidiaries;
(vii) deposits to secure statutory obligations in the form of excise
taxes;
(viii) Liens arising from precautionary UCC financing statement
filings in respect of operating leases or consignment arrangements entered
to by the Company or its Subsidiaries with a supplier of goods in the
ordinary course of business which Liens are customarily filed as
precautionary liens by such supplier of goods in the ordinary course of
its business;
(ix) any extension, renewal, substitution or replacement (or
successive extensions, renewals, substitutions or replacements), as a
whole or in part, of any of the Liens referred to in clauses (i) through
(viii) of this definition or the Indebtedness secured thereby; provided
that (a) such extension, renewal, substitution or replacement Lien is
limited to that portion of the property or assets, now owned or hereafter
acquired, that secured the Lien prior to such extension, renewal,
substitution or replacement Lien and (b) the Indebtedness secured by such
Lien (assuming all available amounts were borrowed) at such time is not
increased;
25
(x) Liens (a) securing obligations owed in respect of Allowed
Secured Tax Claims and obligations owed in respect of Allowed Other
Secured Claims reinstated in accordance with the Bankruptcy Code and
pursuant to the Plan of Reorganization listed in Schedule 3 hereto, (b)
securing the Indenture Obligations, (c) on accounts receivable, inventory
and related general intangibles securing obligations under the Exit
Facility, (d) securing the obligations under the Transaction Documents,
and (e) securing obligations under New Other Secured Notes (to the extent
the corresponding Allowed Other Secured Claims shall not have been
reinstated) and any other Lien granted by the Obligors as permitted by the
Plan of Reorganization;
(xi) Liens on assets or property of the Company, or on assets or
property of Subsidiaries of the Company, to secure the payment of all or a
part of the purchase price of assets or property acquired or constructed
in the ordinary course of business after the Closing Date; provided,
however, that (a) the aggregate principal amount of Indebtedness secured
by such Liens does not exceed the original cost or purchase price of the
assets or property so acquired (including the reasonable and customary
costs of associated with the acquisition of such acquired assets) or
constructed, (b) the Indebtedness secured by such Liens is otherwise
permitted to be incurred hereunder, (c) such Liens do not encumber any
other assets or property of any Indenture Obligor or any of its Obligor
Subsidiaries, and (d) the Indebtedness secured by such Liens may not be
created more than 100 days after the later of the acquisition, completion
of construction, repair, improvement, addition or commencement of full
operation of the property subject to such Liens;
(xii) Liens on the assets or property permitted to be acquired
hereby by the Company or any of its Subsidiaries after the date hereof;
provided, however, that (a) such Liens existed on the date such asset or
property was acquired and were not incurred as a result of or in
anticipation of such acquisition, and (b) such Liens shall not extend to
or cover any property or assets of any Indenture Obligor or any of its
Obligor Subsidiaries other than the property or assets so acquired;
(xiii) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien permitted hereunder and
which is permitted to be refinanced hereunder; provided, however, that
such Liens do not extend to or cover any assets or property of any Obligor
or any Obligor Subsidiaries not securing the Indebtedness so refinanced;
(xiv) Liens on assets or property of any Obligor or any Obligor
Subsidiary that is subject (and only subject) to a Sale and Leaseback
Transaction; provided, however, that the aggregate principal amount of
Attributable Indebtedness in respect of all Sale and Leaseback
Transactions then Outstanding shall not at the time such a Lien is
incurred exceed $1,000,000;
(xv) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Company or any of
26
its Subsidiaries in the ordinary course of business in accordance with
past practices of the Company or any of its Subsidiaries;
(xvi) Liens arising out of barter transactions or arrangements for
the sale or purchase of goods or services entered into by the Company or
any of its Subsidiaries in the ordinary course of business in accordance
with past practices of the Company or any of its Subsidiaries;
(xvii) Liens in favor of any Indenture Obligor or its Obligor
Subsidiaries; and
(xviii) in addition to Liens referred to in clauses (i) through
(xvii) of this definition of "Permitted Liens", Liens securing
Indebtedness of the Obligors and Obligor Subsidiaries, taken together, in
an aggregate principal amount not to exceed $200,000 at any one time
outstanding; provided, however, that such Liens secure Indebtedness
permitted by this Indenture; and provided further, that such Indebtedness
is permitted pursuant to the terms of this Indenture to be secured by a
Lien.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Physical Securities" means permanent certificated Securities in
registered form in substantially the form set forth in Article Two.
"Pioneer Americas" means Pioneer Americas LLC, a Delaware limited
liability company.
"Pioneer Companies" is defined in the preamble of this Indenture.
"Plan of Reorganization" means the Debtor's Amended Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code, dated September 21,
2001, filed with the United States Bankruptcy Court, Southern District of Texas,
Houston Division, Case No. 01-38259-H3-11, on behalf of Pioneer Companies, Inc.,
Pioneer Corporation of America, Imperial West Chemical Co., Kemwater North
America Company, PCI Chemicals Canada Inc./PCI Chimie Canada Inc., Pioneer
Americas, Inc., Pioneer (East), Inc., Pioneer Water Technologies, Inc., Pioneer
Licensing, Inc., and KWT, Inc.
"Post Petition Interest" is defined in Section 1307 hereof.
"Power of Attorney" is defined in Section 1508 hereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 308 hereof in exchange for a
mutilated Security or in lieu of a lost,
27
destroyed or stolen Security shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Security.
"Qualified Equity Offering" means an offer and sale of common stock
(which is Capital Stock) of PCI made on a primary basis by PCI pursuant to a
registration statement that has been declared effective by the Commission
pursuant to the Securities Act (other than a registration statement on Form S-8
or otherwise relating to equity securities issuable under any employee benefit
plan of any Obligor), or an offer and sale of common stock (which is Capital
Stock) of PCI which may be made pursuant to an exemption from registration under
the Securities Act, in each case, only to the extent permitted pursuant to
clause (vii) of the definition of "Permitted Issuance."
"Quebec Mortgage and Security Agreement" means a deed of hypothec
executed by an authorized representative of the Company in respect of Collateral
located in Quebec, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Redemption Date", when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture, means the date fixed for
such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture, means the price at which
it is to be redeemed pursuant to this Indenture.
"Refinancing" is defined in Section 1008 hereof.
"Refinancing Indebtedness" is defined in Section 1008 hereof.
"Registration Rights Agreement" has the meaning given to it in the
Plan of Reorganization.
"Regular Record Date" for the interest payable on any Interest
Payment Date means each June 15 and December 15 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.
"Related Business" means the manufacture or distribution of
chlorine, caustic soda, bleach, hydrochloric acid, and other chlorides and
aluminum sulfate, and in lines of business reasonably related thereto.
"Release" means any release, discharge, deposit, pumping, pouring,
emptying, injecting, escaping, leaching, migrating, dumping, seepage, spill,
leak, flow, discharge, disposal or emission.
"Restoration" has the meaning set forth in the Common Security and
Intercreditor Agreement.
"Restricted Payments" is defined in Section 1006 hereof.
28
"Returned Payments" has the meaning given to it in Section 1602.
"Rollover Amount" for a Fiscal Year of the Company is the amount in
dollars equal to the Cumulative Capital Expenditure Limit for such Fiscal Year
minus the Cumulative Capital Expenditures.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc. or any successor rating agency.
"Safety and Health Laws" means all national, federal, state,
provincial, regional, municipal or local statutes, laws, ordinances, codes,
rules, regulations, by-laws, policies, guidelines, directives, judgments, orders
or decrees regulating, relating to or imposing liability or standards of conduct
concerning employee health and/or safety.
"Sale and Leaseback Transaction" with respect to any Person, means
any arrangement with another Person for the leasing of any real or tangible
personal property, which property has been or is to be sold or transferred or
initially leased by such Person to such other Person in contemplation of such
leasing (including a lease and leaseback transaction).
"Securities" means any of the securities, as defined in the fifth
paragraph of the recitals hereof, that are authenticated and delivered under
this Indenture.
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.
"Security and Intercreditor Supplement" means the "Security and
Intercreditor Supplement" as such term is defined in the Common Security and
Intercreditor Agreement.
"Security Documents" means (i) each Mortgage, (ii) the Common
Security and Intercreditor Agreement, (iii) the Canadian Security Agreements,
and (iv) all security agreements, mortgages, deeds of trust, pledges, collateral
assignments, UCC filings, financing statements and registrations or any other
instrument evidencing or creating any security interest in favor of the
Collateral Agent in all or any portion of the Collateral, in each case as
amended, amended and restated, supplemented or otherwise modified from time to
time.
"Security Register" has the meaning specified in Section 305 hereof.
"Security Registrar" has the meaning specified in Section 305
hereof.
"Senior Indebtedness" means Indebtedness of any Obligor or Obligor
Subsidiary permitted hereunder, unless in the case of any particular
Indebtedness, the agreement or instrument creating or evidencing the same or
pursuant to which the same is outstanding provides that such Indebtedness is
junior to or subordinated in right of payment to any Indebtedness of such
Obligor or Obligor Subsidiary; provided, however, that Senior Indebtedness does
not include (i) in the case of the obligation of the Company
29
in respect of each Security, the obligation of the Company in respect of the
other Securities, (ii) any liability for foreign, federal, state, local or other
taxes owed or owing by any Obligor or any Obligor Subsidiary to the extent that
such liability constitutes Indebtedness, (iii) Indebtedness of any Obligor to
any Obligor Subsidiary or of any Obligor Subsidiary to the Company or another
Obligor Subsidiary, (iv) that portion of any Indebtedness which at the time of
issuance is issued in violation of the Indenture and (v) Indebtedness and
amounts incurred in connection with obtaining goods, materials or services in
the ordinary course of business (other than such Indebtedness which is owed to
banks and other financial institutions or secured by the goods or materials
which were purchased with such Indebtedness).
"Special Record Date", for the payment of any Defaulted Interest,
means a date fixed by the Trustee pursuant to Section 309 hereof.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of any Obligor or
Obligor Subsidiary as to which the payment of principal of, premium, if any,
interest and other payment obligations in respect of such Indebtedness shall be
subordinate to the prior payment in full of the Securities (including the
Guaranties) to at least the following extent: (i) no payments of principal of,
premium, if any, or interest on, or otherwise due in respect of, such
Indebtedness may be permitted for so long as any default in the payment of
principal of, premium, if any, or interest on the Securities exists; (ii) in the
event that any other Default that with the passing of time or the giving of
notice, or both, would constitute an Event of Default exists with respect to the
Securities, upon notice by Holders of 25% or more of the aggregate principal
amount of the Securities to the Trustee, the Trustee shall have the right to
give notice to the Company and the holders of such Indebtedness (or trustees or
agents therefor) of a payment blockage, and thereafter no payments of principal
of, premium, if any, or interest on or otherwise due in respect of such
Indebtedness may be made for a period of 179 days from the date of such notice;
and (iii) such Indebtedness may not (x) provide for payments of principal of
such Indebtedness at the stated maturity thereof or by way of a sinking fund
applicable thereto or by way of any mandatory redemption, defeasance, retirement
or repurchase thereof by such Obligor or Obligor Subsidiary (including any
redemption, retirement or repurchase which is contingent upon events of
circumstances, but excluding any retirement required by virtue of acceleration
of such Indebtedness upon an event of default thereunder), in each case prior to
the final Stated Maturity of the Securities, or (y) permit redemption or other
retirement (including pursuant to an offer to purchase made by such Obligor or
Obligor Subsidiary) of such other Indebtedness at the option of the holder
thereof prior to the final Stated Maturity of the Securities.
"Subordinated Obligations" is defined in Section 1307 hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be
30
cast in the election of directors, under ordinary circumstances, is at the time
owned, directly or indirectly, by such Person and one or more of its
Subsidiaries or by one or more of such Person's Subsidiaries or (ii) any other
Person of which at least a majority of voting interest, under ordinary
circumstances, is at the time owned, directly or indirectly, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries,
whether or not such corporation or other Person is incorporated or organized in
or under the laws of the United States of America or any state thereof.
"Taxes" is defined in Section 1029 hereof.
"Term Loan Agreement" means that certain Term Loan Agreement dated
as of December 31, 2001, among the Term Loan Borrower, PCI, the Guarantors party
thereto, the Lenders from time to time party thereto, and ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, as the Administrative Agent for the Lenders, as
amended, supplemented, amended and restated or otherwise modified form time to
time.
"Tranche A Documents" means collectively, the New Tranche A Notes
Indenture (including the guaranties thereunder), the New Tranche A Notes, the
Common Security and Intercreditor Agreement, each Mortgage (upon execution and
delivery thereof), the other Security Documents and each other agreement,
document or instrument delivered in connection therewith, whether or not
specifically mentioned herein or therein, each as amended, supplemented, amended
and restated or otherwise modified from time to time as permitted in accordance
with their respective terms.
"Transaction Documents" means the various documents, instruments and
agreements, implementing the Plan of Reorganization other than the Indenture
Documents (except for the Security Documents which shall also be "Transaction
Documents"), including the Tranche A Documents, the Loan Documents, the Amended
PCI Certificate of Incorporation (as such term is defined in the Plan of
Reorganization), the Amended PCI Bylaws (as such term is defined in the Plan of
Reorganization), the amended by-laws and certificates of incorporation of each
of the Subsidiaries of PCI and of the Company, the Exit Facility, the MEIP, the
New Common Stock, the New Other Secured Notes and Claims, the Registration
Rights Agreement (as such term is defined in the Plan of Reorganization), the
documents relating to the Canadian Corporate Reorganization (as such term is
defined in the New Tranche A Notes Indenture) and all other agreements,
documents, instruments, certificates, filings, consents, approvals, Board of
Directors resolutions and opinions executed, delivered or furnished pursuant to
or in connection with the implementation of the Plan of Reorganization, each as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Trust Indenture Act" means the United States Trust Indenture Act of
1939, as amended from time to time.
"Trust Moneys" means all cash or Eligible Investments received by
the Collateral Agent, (i) in exchange for the release of property from the Lien
of any of the Security Documents, including Collateral Proceeds, or (ii) as
compensation for or proceeds of the sale of all or any part of the Collateral
taken by eminent domain or
31
purchased by, or sold pursuant to any order of, a governmental authority or
otherwise disposed of, including any Net Award, or (iii) as proceeds of
insurance upon any, all or part of the Collateral (other than any liability
insurance proceeds payable to the Collateral Agent for any loss, liability or
expense incurred by it), including any Insurance Proceeds, or (iv) as proceeds
of any other sale or other disposition of all or any part of the Collateral by
or on behalf of the Collateral Agent or any collection, recovery, receipt,
appropriation or other realization of or from all or any part of the Collateral
pursuant to the Security Documents or otherwise, or (v) Returned Payments, or
(vi) for application under this Indenture as provided in this Indenture or any
Security Document, or whose disposition is not otherwise specifically provided
for in this Indenture or in any Security Document, as the case may be.
"Trustee" means the Person named as the "trustee" in the preamble of
this Indenture until a successor trustee shall have become such pursuant to the
applicable provisions of this Indenture and thereafter "Trustee" shall mean such
successor trustee.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York.
"Unallocated Payments" has the meaning given to it in Section 1601.
"Unallocated Securities" has the meaning given to it in Section
1601.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by, and acting as an agency or instrumentality of, the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case
under clause (i) or (ii) above, are not callable or redeemable at the option of
the issuer thereof.
"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or Persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than capital stock constituting directors'
qualifying shares or interests held by directors or shares or interests required
to be held by foreign nationals, to the extent mandated by applicable law) are
owned by such Person or by one or more Wholly-Owned Subsidiaries of such Person.
32
Section 102. [Intentionally Omitted.]
Section 103. Compliance Certificates and Opinions.
Upon any application or request by any Indenture Obligor to the
Trustee to take any action under any provision of this Indenture, such Indenture
Obligor shall furnish to the Trustee an Officers' Certificate, in form and
substance satisfactory to the Trustee, stating that all conditions precedent, if
any, provided for in this Indenture (including any covenants compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents, certificates and/or opinions is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance
with a covenant or condition provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinion contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is reasonably necessary
to enable such individual 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, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of any Obligor may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any
33
such certificate or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of any Obligor stating that the information with respect to
such factual matters is in the possession of any Obligor, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
relevant Obligor or government or other officials customary for opinions of the
type required, including certificates certifying as to matters of fact,
including that various financial covenants have been complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. Acts of Holders.
(a) Any request, demand, authorization, vote, direction, notice,
consent, waiver or other Act (as such term is defined below) provided by this
Indenture to be given or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee if made in the manner provided in this Section. The fact and date of the
execution by any Person of any such instrument or writing or the authority of
the Person executing the same may also be proved in any other manner which the
Trustee deems sufficient in accordance with such reasonable rules as the Trustee
may determine.
(b) The ownership of Securities shall be evidenced by the Security
Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or Act by the Holder of any Security shall bind every future Holder of
the same Security or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or any Indenture
Obligor or its respective Obligor Subsidiary in reliance thereon, whether or not
notation of such action is made upon such Security.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the
34
determination of such Holders entitled to give, make or take such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding Section 316(c) of the
Trust Indenture Act, any such record date shall be the record date specified in
or pursuant to such Board Resolution, which shall be a date not more than 30
days prior to the first solicitation of Holders generally in connection
therewith and no later than the date such solicitation is completed.
Without limiting the generality of the foregoing, a Holder,
including the Depositary that is a Holder of a Global Security, may make, give
or take, by a proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted in this Indenture to be made, given or taken by Holders and the
Depositary that is a Holder of a Global Security may provide its proxy or
proxies to the beneficial owners of interest in any such Global Security.
Notwithstanding the foregoing, upon receipt by the Trustee of (i)
any notice of default pursuant to Section 704(e), (ii) any declaration of
acceleration, or any rescission and annulment of any such declaration pursuant
to Section 502 or (iii) any direction given pursuant to Section 505 (any such
notice, declaration, rescission and annulment, or direction being referred to
herein as a "Direction"), a record date shall automatically and without any
other action by any Person be set for the purpose of determining the Holders
entitled to join in such Direction, which record date shall be the close of
business on the day the Trustee receives such Direction. The Holders on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such Direction whether or not such Holders remain Holders
after such record date; provided that unless such Direction shall have become
effective by virtue of Holders of a majority of the aggregate principal amount
of the Securities then Outstanding (or their duly appointed agents) having
joined therein on or prior to the 90th day after such record date, such
Direction shall automatically and without any action by any Person be cancelled
and be of no further effect. Nothing in this paragraph shall prevent a Holder
(or a duly appointed agent thereof) from giving, before or after the expiration
of such 90-day period, a Direction contrary to, or different from, or, after the
expiration of such period, identical to, a Direction that has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date in respect thereof shall be set pursuant to this paragraph.
If such a record date is fixed (pursuant to the immediately
preceding paragraph), such request, demand, authorization, direction, notice,
consent, waiver or other Act may be made, given or taken before or after such
record date, but only the Holders of record at the close of business on such
record date shall be deemed to be Holders for purposes of determining whether
Holders of the requisite proportion of Securities then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the
Securities then Outstanding shall be computed as of such record date; provided
that no such request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holders on such record date shall be deemed effective unless
it shall
35
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
(e) If at any time a request, demand, authorization, direction,
notice, consent, waiver or other Act to be made, given or taken by the Holders
is required pursuant to the terms of this Indenture, the Trustee shall solicit
the direction of the Holders of such aggregate principal amount of the
Securities then Outstanding as are specified in the applicable provisions of
this Indenture and, if not so specified, the Holders of a majority of the
aggregate principal amount of the Securities then Outstanding.
Section 106. Notices, etc., to Trustee, the Company and any
Indenture Obligor or Obligor Subsidiary.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by any Indenture Obligor shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing and mailed, first-class postage prepaid, telecopied, hand delivered, or
delivered by recognized overnight courier, to the Trustee at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Services; telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, or at any other address previously furnished
in writing to the Holders or any Indenture Obligor by the Trustee; or
(b) any Indenture Obligor, shall be sufficient for every purpose
hereunder if in writing (including telecopy) and mailed, first-class postage
prepaid, telecopied, hand delivered, or delivered by recognized overnight
courier, to the Company addressed to it at c/o Pioneer Companies, Inc., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, Esq., Vice President, General Counsel and Secretary; telecopy: (713)
223-9202, or at any other address previously furnished by the Company in writing
to the Trustee.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in the official
language of the country of publication.
Section 107. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event by
the Indenture Obligors or the Trustee, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, or delivered by recognized overnight courier, to
each Holder affected by such event at his address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with
36
respect to other Holders. Any notice when mailed to a Holder in the aforesaid
manner shall be conclusively deemed to have been received by such Holder whether
or not actually received by such Holder. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and
each of the other Indenture Obligors shall bind their respective successors and
assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities or the Guaranties,
express or implied, shall give to any Person (other than the parties hereto,
their successors hereunder, any Paying Agent and the Holders) any benefit or any
legal or equitable right, remedy or claim under this Indenture.
37
Section 113. Governing Law.
THIS INDENTURE, THE SECURITIES AND THE GUARANTIES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest, principal, or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Redemption Date or Stated
Maturity and no interest shall accrue with respect to such payment for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to the next succeeding Business Day.
Section 115. Schedules and Exhibits.
All schedules and exhibits attached hereto are by this reference
made a part hereof with the same effect as if herein set forth in full.
Section 116. Counterparts.
This Indenture may be executed in any number of counterparts, each
of which shall be an original, but such counterparts shall together constitute
but one and the same instrument.
Section 117. Communication by Holders with other Holders.
Holders may communicate pursuant to Section 312(b) of the Trust
Indenture Act with other Holders with respect to their rights under this
Indenture or the Securities. Each Indenture Obligor, the Trustee, the Security
Registrar and anyone else shall have the protection of Section 312(c) of the
Trust Indenture Act.
Section 118. No Recourse against Others.
A director, officer, employee or stockholder (or other holder of an
ownership interest), as such, of any Obligor or Obligor Subsidiary shall not
have any liability for any obligations of the Company under the Securities or
this Indenture, or for any obligation of any Guarantor under the Guaranties or
this Indenture. By accepting a Security, each Holder shall waive and release all
such liability. The waiver and release shall be part of the consideration for
the issue of the Securities.
Section 119. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting under this Indenture, the
term "Trustee" (unless the context otherwise requires) shall be construed as
extending to and
38
including such Paying Agent within its meaning as fully, for all intents and
purposes, as if such Paying Agent were named in addition to or in place of the
Trustee; provided, however, that this Section 119 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Securities, the Guaranties and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article
Two, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by the Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange, any Organizational Document or governing instrument or
applicable law or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities.
Any portion of the text of any Security may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Security.
The Securities shall be initially issued in the form of one
permanent Global Security and certain Physical Securities, substantially in the
form set forth in this Article Two. The Global Security shall be deposited with
the Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
Section 202. Legends.
(a) Every Global Security authenticated and delivered hereunder
shall bear the following legend on the face thereof:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, TO PCI CHEMICALS CANADA COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN
39
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH
OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFER OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE.
(b) Each Security authenticated and delivered hereunder to any
Person that does not certify that it is not an underwriter (as such term is
defined in Section 1145 of the Bankruptcy Code) or, prior to such time as the
Shelf Registration Statements (as such term is defined in the Plan of
Reorganization) for the benefit of such Persons have been declared effective
under the Securities Act, to any Person receiving ten percent (10%) or more of
the outstanding New Common Stock calculated on a fully diluted basis, shall be a
Physical Security and shall bear the following legend on the face thereof:
THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY PERSON UNLESS
SUCH OFFER, SALE, PLEDGE OR TRANSFER IS REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE LAW OR
PURSUANT TO AN APPLICABLE EXEMPTION THEREFROM.
Section 203. Form of Face of Security.
The form of the face of the Securities shall be substantially as
follows:
PCI CHEMICALS CANADA COMPANY
-------------------
10% SENIOR SECURED GUARANTEED NOTES DUE 2008
CUSIP No:
No. __________ $150,000,000
40
PCI CHEMICALS CANADA COMPANY, a unlimited liability company
organized and existing under the laws of the province of Nova Scotia, Canada
(herein called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co., or registered assigns, the principal sum of ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ DOLLARS ($150,000,000) [or such lesser amount as is
indicated from time to time on Schedule A hereto](1) on December 31, 2008, at
the office or agency of the Company referred to below, and to pay interest
thereon from the date of original issuance, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semiannually
on June 30 and December 31, in each year, commencing June 30, 2002, and at
Maturity thereof, at the rate of 10% per annum (subject to adjustment as
provided below), in United States dollars, until the principal hereof is paid or
duly provided for. [Schedule A hereto indicates the principal amount outstanding
on this Global Security on December 31, 2001 and shall indicate exchanges of a
part of this Global Security for an interest in another Global Security or for
Securities in certificated form and corresponding increases and decreases in
such principal amount.](2)
The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date shall, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which shall be June 15 or December 15 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid, or duly provided for, and interest on such defaulted
interest at the interest rate borne by the Securities, to the extent lawful,
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice of which shall be given to Holders of Securities not less than
10 days prior to such Special Record Date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any, and interest on this
Security shall be made at the office or agency of the Company maintained for
that purpose in The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts against surrender of this Security in the case of any
payment due at the Maturity of the principal thereof (other than any payment of
interest that first becomes payable on a day other than an Interest Payment
Date); provided, however, that payment of interest may be made at the option of
the Company by check mailed to the address of the Person entitled thereto as
such address shall appear on the Security Register[; provided further, that if
this Security is a
--------
(1) Applicable only to a Global Security.
(2) Applicable only to a Global Security.
41
Global Security, payment may be made pursuant to the rules and procedures of the
Depositary as permitted in said Indenture](3). Interest shall be computed on the
basis of a 360-day year of twelve 30-day months.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Security is entitled to the benefits of Guaranties by each of
the Guarantors of the punctual payment when due of the Indenture Obligations
made in favor of the Trustee for the benefit of the Holders. Such Guaranties
shall be senior obligations of each Guarantor, and shall rank pari passu with
all existing and future Senior Indebtedness of such Guarantor, and senior to all
Subordinated Indebtedness of such Guarantor. Such Guaranties shall be secured by
Collateral. Reference is hereby made to Article Thirteen of the Indenture for a
statement of the respective rights, limitations of rights, duties and
obligations under the Guaranties of each of the Guarantors.
Unless the certificate of authentication hereon has been duly
executed by the Trustee referred to on the reverse hereof or by the
authenticating agent appointed as provided in the Indenture by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed by the manual or facsimile signature of its authorized officers
and its corporate seal to be affixed or reproduced hereon.
Dated: PCI CHEMICALS CANADA
COMPANY
By:
--------------------------
Name:
Title:
Section 204. Form of Reverse of Securities.
The form of the reverse of the Securities shall be substantially as
follows:
The Holder, by becoming holder of this Security, shall be bound by
the terms and conditions of the Indenture and shall be automatically deemed to
have ratified
----------
(3) Applicable only to a Global Security.
42
and consented to the granting by the Trustee and the Holders to the Collateral
Agent of the irrevocable Power of Attorney constituted in the Indenture.
The Holder agrees (i) with the Trustee and the other Holders
that it will not, without the prior consent of the Trustee and the other
Holders, take or obtain any Lien on any property of the Company to secure the
obligations of the Company hereunder, except for the benefit of the Collateral
Agent or as may otherwise be required by law, and (ii) that, notwithstanding the
provisions of Section 32 of the Special Corporate Powers Act (Quebec), the
Collateral Agent may, as the Person holding the Power of Attorney of the Trustee
and the Holders, acquire any title of indebtedness secured by any hypothec in
its favor related to this Security or the Indenture or any other document
contemplated hereunder.
This Security is one of a duly authorized issue of Securities of the
Company designated as its 10% Senior Secured Guaranteed Notes due 2008, limited
(except as otherwise provided in the Indenture referred to below) in aggregate
principal amount to $150,000,000, which may be issued under an indenture (the
"Indenture") dated as of December 31, 2001, among the Company, each Guarantor
from time to time a party thereto, and ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, obligations and immunities thereunder of
the Company, the Guarantors, the Trustee and the Holders of the Securities, and
of the terms upon which the Securities and the Guaranties are, and are to be,
authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Securities, and (b) certain restrictive covenants
and related Defaults and Events of Default, in each case upon compliance or
noncompliance with certain conditions set forth therein.
The Securities shall be senior obligations of the Company, and shall
rank pari passu with all existing and future Senior Indebtedness of the Company,
and senior to all Subordinated Indebtedness of the Company.
The Securities shall not be redeemable by the Company prior to
December 31, 2005. On or after that date, the Securities shall be redeemable by
the Company, in whole or in part, on not less than thirty (30) nor more than
sixty (60) days' prior notice, mailed by first-class mail to the Holders'
registered addresses, in cash, in amounts of $1 or an integral multiple of $1 at
the following Redemption Prices (expressed as percentages of the principal
amount), if redeemed in the 12-month period commencing December 31 in the year
indicated below:
Year Redemption Price
---- ----------------
2005 105.00%
2006 102.50%
2007 100.00%
43
in each case together with accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of record on relevant record dates to receive
interest due on an Interest Payment Date). If less than all of the Securities
are to be redeemed, the Trustee shall select the Securities to be redeemed pro
rata, by lot or by a method that complies with applicable legal and securities
exchange requirements, if any, and that the Trustee in its sole discretion
considers fair and appropriate.
Upon the occurrence of a Change of Control, each Holder may require
the Company to repurchase all or a portion of such Holder's Securities.
The Company shall apply 100% of the aggregate amount of Net Proceeds
from each and every Asset Sale, subject to the provisions of the Indenture, the
New Tranche A Notes Indenture, the Term Loan Agreement and the Common Security
and Intercreditor Agreement, if applicable, to pro rata prepay the New Tranche A
Notes then outstanding and the Securities then Outstanding, on or prior to the
10th day following the date on which such Net Proceeds are received by the
Company or any Guarantor, or any Subsidiary thereof, at a price equal to 100% of
the principal amount thereof, plus accrued interest thereon to the date of
prepayment.
In the case of any redemption of Securities, interest installments
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities of record as of the close of business on the
relevant record date referred to on the face hereof. Securities (or portions
thereof) for whose redemption and payment provision is made in accordance with
the Indenture shall cease to bear interest from and after the date of
redemption.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders and certain amendments
permitted only with the consent of all Holders) as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Obligors and the rights of the Holders under the Indenture or the other
Indenture Documents at any time by the Obligors and the Trustee with the consent
of the Holders of a majority of aggregate principal amount of the Securities at
the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Securities
at the time Outstanding, on behalf of the Holders of all the Securities, (i) to
waive compliance by the Obligors with certain provisions of the Indenture, the
Guaranties or the other Indenture Documents, and (ii) to waive certain past
Defaults under the Indenture and the Guaranties and their consequences. Any such
consent or
44
waiver by or on behalf of the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of any
Indenture Obligor or any other obligor upon the Securities (in the event such
other obligor is obligated to make payments in respect of the Securities), which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
The Securities may be issuable only in registered form without
coupons in denominations of $1 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, the
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, State of New York, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities, of authorized denominations
and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to and at the time of due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security is overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
In order to secure the due and punctual payment of the principal of,
premium, if any, or interest on the Securities when and as the same shall become
due and payable, whether on an Interest Payment Date, at maturity, by
acceleration, repurchase, redemption or otherwise, and interest on the overdue
principal of and interest thereon (to the extent permitted by law), if any, on
the Securities, and performance of all other obligations of the Company to the
Holders or the Trustee under this Indenture and the Securities, the Obligors
have entered into the Security Documents with the Collateral Agent. The
Securities shall be secured by Liens on and security interests in the Collateral
45
subject to pari passu Liens and security interests and other permitted
encumbrances as described further in the Security Documents.
Each Holder, by accepting a Security, agrees to all of the terms and
provisions of the Security Documents as the same may be amended from time to
time pursuant to the respective provisions thereof and of the Indenture.
Each Holder acknowledges that a release of any of the Collateral or
any Lien strictly in accordance with the terms and provisions of the Security
Documents and the terms and provisions of the Indenture will not be deemed for
any purpose to be an impairment of the security under the Indenture.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and the Security Documents.
[This Security is a Global Security and is subject to the provisions
of the Indenture relating to Global Securities, including the limitation in
Section 305 thereof on transfer and exchanges of Global Securities. The
principal amount of this Global Security may be reduced if and to the extent
required by Article Sixteen of the Indenture.](4)
This Security and the Indenture shall be governed and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
----------
(4) Applicable only to a Global Security.
46
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
________________________________________________________________________________
________________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
________________________________________________________________________________
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
________________________________________________________________________________
attorney to transfer said Security on the books of the Company with full power
of substitution in the premises.
Date:_____________________
____________________________
NOTICE: The signature
to this assignment
must correspond with
the name as written
upon the face of the
within-mentioned
instrument in every
particular, without
alteration or any
change whatsoever.
OPTION OF HOLDER TO ELECT PURCHASE
A. Purchase pursuant Section 1014 (Change of Control Offer)
If you wish to have this Security purchased by the Company pursuant
to Section 1014 of the Indenture, check the Box: | |.
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 1014 of the Indenture, state the amount (in
authorized denominations): $___________________
47
B. Purchase pursuant Section 1109 (Asset Sale Offer)
If you wish to have this Security purchased by the Company pursuant
to Section 1109 of the Indenture, check the Box: | |.
If you wish to have a portion of this Security purchased by the
Company pursuant to Section 1109 of the Indenture, state the amount (in
authorized denominations): $___________________
Date:
Your signature: ________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: _______________________
Section 205. Form of Trustee's Certificate of Authentication.
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 10% Senior Secured Guaranteed Notes due 2008
referred to in the within-mentioned Indenture.
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:________________________
Authorized Signatory
Section 206. Form of Guaranty of Each of the Guarantors.
The form of Guaranty shall be set forth on the Securities
substantially as follows:
GUARANTIES
For value received, each of the undersigned hereby unconditionally
guaranties, jointly and severally, to the Holder of this Security the payment of
the principal of, premium, if any, or interest on this Security in the amounts
and at the time when due and interest on the overdue principal and interest, if
any, of this Security, if
48
lawful, and the payment or performance of all other obligations of the Company
under the Indenture or the Securities, to the Holder of this Security and the
Trustee, all in accordance with and subject to the terms and limitations of this
Security and Article Thirteen of the Indenture. This Guaranty shall not become
effective until the Trustee duly manually executes the certificate of
authentication on this Security.
PIONEER COMPANIES, INC.
By:____________________________
Name:
Title:
IMPERIAL WEST CHEMICAL CO.
By:____________________________
Name:
Title:
KEMWATER NORTH AMERICA COMPANY
By:____________________________
Name:
Title:
PIONEER AMERICAS LLC
By:____________________________
Name:
Title:
PIONEER (EAST), INC.
By:____________________________
Name:
Title:
49
PIONEER WATER TECHNOLOGIES, INC.
By:____________________________
Name:
Title:
PIONEER LICENSING, INC.
By:____________________________
Name:
Title:
KWT, INC.
By:____________________________
Name:
Title:
50
SCHEDULE A TO GLOBAL SECURITY
1. Principal Amount of this Global Security outstanding on December 31, 2001:
$[ ]
2. The following exchanges of a part of this Global Security for an interest
in another Global Security or for Securities in certificated form have been
made:
Principal Amount
Amount of Amount of of this Global Signature
decrease in increase in Security of
Principal Amount Principal Amount following such authorized
Date of of this Global of this Global decrease officer of
Exchange Security Security (or increase) Trustee
-------------- ------------------- ------------------- ------------------ -----------------
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $150,000,000 in
principal amount of Securities, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Sections 303, 304, 305, 306, 308, 906, 1009, 1014
or 1108 hereof.
The Securities shall be known and designated as the "10% Senior
Secured Guaranteed Notes due 2008" of the Company. The Stated Maturity of the
principal amount of the Securities shall be December 31, 2008, and the
Securities shall each bear interest at the rate of 10% per annum from the
Closing Date or from the most recent Interest Payment Date to which interest has
been paid, as the case may be, payable on June 30, 2002, and semiannually
thereafter on June 30 and December 31, in each year, until the principal thereof
is paid or duly made available for payment.
The principal of, premium, if any, or interest on the Global
Security shall be payable to the Depositary or its nominee, as the case may be,
as the sole registered owner and the sole Holder of the Global Security
represented thereby. The principal of, premium, if any, or interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose; provided, however, that at the option of the Company, interest
may be paid by check mailed to the addresses of the Persons entitled thereto as
such addresses shall appear on the Security Register.
51
The Securities shall be redeemable as provided in Article Eleven and
other provisions of this Indenture.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
Section 302. Denominations.
The Securities shall be issuable only in fully registered form
without coupons and only in denominations of $1 and any integral multiple
thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by one of
its Chairman of the Board, its President or one of its Vice Presidents under its
corporate seal reproduced thereon and attested to by its Secretary or one of its
Assistant Secretaries.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices on the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, in compliance with Section 103
hereof, and the Trustee, in accordance with such Company Order, shall
authenticate and deliver such Securities as provided in this Indenture and not
otherwise. Each such Company Order shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated or
such other information as the Trustee shall reasonably request.
The Trustee shall not be required to authenticate and deliver any
Securities if (i) the issue of such Securities pursuant to this Indenture will
adversely affect the Trustee's own rights, duties or immunities under the
Securities and this Indenture; (ii) the Trustee, being advised by counsel,
determines that such action may not lawfully be taken; or (iii) the Trustee in
good faith, acting by its board of directors or officers of the Trustee,
determines that such action would expose the Trustee to personal liability to
Holders of any Outstanding Securities.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly
52
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 311 and in compliance with
Section 103, for all purposes of this Indenture such Security shall be deemed
never to have been authenticated and delivered hereunder and shall never be
entitled to the benefits of this Indenture.
In case the Company or any Guarantor, pursuant to and in accordance
with the provisions of Article Eight, shall be consolidated, merged with or into
any other Person or shall sell, assign, convey, transfer or lease substantially
all of its properties and assets to any Person, and the successor Person
resulting from such consolidation, or surviving such merger, or into which the
Company or such Guarantor shall have been merged, or the Person which shall have
received a sale, assignment, conveyance, transfer or lease as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Securities authenticated or delivered prior to such
consolidation, merger, sale, assignment, conveyance, transfer or lease may, from
time to time, at the request of the successor Person, be exchanged for other
Securities executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like
tenor as the Securities surrendered for such exchange and of like principal
amount and the Trustee, upon Company Request of the successor Person in
compliance with Section 103, shall authenticate and deliver Securities as
specified in such request for the purpose of such exchange. If Securities shall
at any time be authenticated and delivered in any new name of a successor Person
pursuant to this Section in exchange or substitution for or upon registration of
transfer of any Securities, such successor Person, at the option of the Holders
but without expense to them, shall provide for the exchange of all Securities at
the time Outstanding for Securities authenticated and delivered in such new
name.
The Trustee (at the expense of the Company) may appoint an
authenticating agent reasonably acceptable to the Company to authenticate
Securities on behalf of the Trustee. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Security Registrar or Paying Agent to deal with the Company
and its Affiliates.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order in compliance with Section 103, the Trustee, in
accordance with the terms of Section 303, shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities (but which do not affect the rights or duties of
the Trustee).
53
After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the
temporary Securities at the office or agency of the Company designated for such
purpose pursuant to Section 1002 hereof, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations and of like tenor and aggregate principal amount. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
Section 305. Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee, or such other office as the Trustee may designate, a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 1002 hereof being herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as the
Security Registrar may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee or an agent thereof or
of the Company shall initially be the "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002 hereof, the
Company shall execute, and the Trustee, in accordance with Section 303, shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series of any authorized
denomination or denominations, of a like aggregate principal amount.
Any Holder of the Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interests in such Global
Security may be effected only through a book-entry system maintained by the
Holder of such Global Security (or its agent) and that ownership of a beneficial
interest in the Security shall be required to be reflected in a book entry.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee, in accordance with Section 303, shall
authenticate and deliver, the Securities of the same series which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
54
Every Security presented or surrendered for registration of
transfer, or for exchange or redemption shall (if so required by the Company or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange or redemption of Securities, but the Company may require
payment of a sum sufficient to pay all documentary, stamp or similar issue or
transfer taxes or other governmental charges that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 303, 304, 305, 306, 308, 906, 1009, 1014 or 1108
hereof not involving any transfer.
The Company shall not be required (a) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the date of selection of Securities for redemption under
Section 1104 hereof and ending at the close of business on the day of the
mailing of a notice of redemption in respect of any such Securities selected for
redemption, or (b) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
Securities being redeemed in part.
All Securities issued upon transfer or exchange or replacement of
Securities originally issued hereunder which bear the legend set forth in
Section 202(b) shall bear such legend unless the Company shall have delivered to
the Trustee (or the Security Registrar, if other than the Trustee) a Company
Order which states that the Security may be issued without such legend thereon.
The Holder of a Physical Security may, and upon the satisfaction of
the requirements of this paragraph the Company shall issue a Company Order
directing the Trustee to, exchange such Security for a beneficial interest in
the Global Security only (i) in accordance with the rules and procedures of the
Depositary, the Security Registrar and the Trustee (if the Security Registrar is
not the Trustee or an agent thereof), and (ii) upon furnishing any information
relating to such exchange as may reasonably be requested by the Depositary, the
Security Registrar and the Trustee (if the Security Registrar is not the Trustee
or an agent thereof), including, in connection with any Physical Security that
bears the legend set forth in Section 202(b), information or certification
relating to the exchange of a Physical Security bearing such a legend for a
beneficial interest in the Global Security.
Section 306. Book-Entry Provisions for Global Security.
(a) The Global Security shall (i) be registered in the name of the
Depositary for such Global Security or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary, (iii) constitute a
single Security for all purposes of this Indenture, and (iv) bear legends as set
forth in Section 202 hereof.
55
Members of, or participants in, the Depositary ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Security, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a beneficial holder of any Security as if such
person were a Holder.
(b) Transfers of the Global Security shall be limited to transfers
of such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in the
Global Security may be transferred in accordance with the rules and procedures
of the Depositary. Beneficial owners may obtain Physical Securities in exchange
for their beneficial interests in the Global Security upon request in accordance
with the Depositary's and the Security Registrar's procedures. In addition,
Physical Securities shall be transferred to all beneficial owners in exchange
for their beneficial interests in the Global Security if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for the Global Security and a successor depositary is not appointed by the
Company within 90 days of such notice, or (ii) an Event of Default has occurred
and is continuing and the Security Registrar has received a request from the
Depositary.
(c) In connection with any transfer of a portion of the beneficial
interests in the Global Security to beneficial owners pursuant to subsection (b)
of this Section, the Security Registrar shall reflect on its books and records
the date of such transfer and a decrease in the principal amount of the Global
Security in an amount equal to the principal amount of the beneficial interest
in the Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount. In connection with the exchange of a Physical Security for a
beneficial interest in the Global Security in accordance with Section 305, the
Security Registrar shall reflect on its books and records the date of such
exchange and an increase in the principal amount of the Global Security in an
amount equal to the principal amount of the Physical Security to be exchanged.
(d) In connection with the transfer of the entire Global Security to
beneficial owners pursuant to subsection (b) of this Section, the Global
Security shall be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee, in accordance with Section 303, shall
authenticate and deliver, to each beneficial owner identified by the Depositary
in exchange for its beneficial interest in the Global Security, an equal
aggregate principal amount of Physical Securities of authorized denominations.
(e) The registered Holder of the Global Security may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold
56
interests in the Global Security through Agent Members, to take any action which
a Holder is entitled to take under this Indenture or the Securities.
Section 307. [Intentionally Omitted.]
Section 308. Mutilated, Destroyed, Lost and Stolen Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, each Guarantor and the Trustee, such security or indemnity, in each
case, as may be required by them to keep each of them harmless, then, in the
absence of notice to the Company, any Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute,
and upon its written request, in compliance with Section 103, the Trustee, in
accordance with Section 303, shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a replacement Security of like tenor and principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section,
the Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charges that may
be imposed in relation thereof and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company and the Guarantors, whether or
not the destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 309. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security is registered at the close of business on the Regular
Record Date for such interest (or, if no business is conducted by the Trustee at
its Corporate Trust Office on such Regular Record Date, at 5:00 P.M. New York
City time on such Regular Record Date).
57
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest"), shall forthwith cease to be payable
to the Holder on the Regular Record Date and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subsection (a) or
(b) below:
(a) the Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which date shall be fixed in the following manner. The Company shall notify the
Trustee in writing in compliance with Section 103 of the amount of Defaulted
Interest proposed to be paid on each Security and the date (not less than 30
days after such notice) of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment (such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
subsection provided). Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company in writing of such
Special Record Date. In the name and at the expense of the Company, the Trustee
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Security Register, not less than 10
days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities are registered on such Special Record Date and shall no longer be
payable pursuant to the following subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after written notice given by the Company to the
Trustee of the proposed payment pursuant to this subsection, such payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
58
Section 310. Persons Deemed Owners.
The Company, any Guarantor, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name any Security is registered as
the owner of such Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 309 hereof) interest on such Security
and for all other purposes whatsoever, whether or not such Security is overdue,
and neither the Company, any Guarantor, the Trustee nor any agent of the
Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
Section 311. Cancellation.
All Securities surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already canceled, shall be promptly canceled by it. The Company and any
Guarantor may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company or such
Guarantor may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be destroyed and certification of their
destruction delivered to the Company. The Trustee shall provide the Company a
list of all Securities that have been canceled from time to time as requested by
the Company.
Section 312. Computation of Interest; Interest Act (Canada).
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months. For purposes of the Interest Act (Canada),
any amount of interest or fees calculated on the basis of a period comprising
360, 365 or 366 days and expressed as an annual rate is equal to the said rate
of interest or fees multiplied by the actual number of days comprised within the
calendar year divided by 360, 365 or 366 days, as the case may be.
Section 313. Deposit of Moneys.
Prior to 10:00 a.m., New York City time, on each Interest Payment
Date and at Maturity, the Company, in accordance with Section 1018, shall
deposit with the Trustee or a Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date or
at Maturity, as the case may be, in a timely manner which permits the Trustee or
such Paying Agent to remit payment to the Holders on such Interest Payment Date
or at Maturity, as the case may be.
Section 314. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number(s)
and if so used, the Trustee shall use the CUSIP number(s) in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made by the Trustee as to the
correctness or accuracy of the CUSIP
59
number(s) printed in the notice or on the Securities and that reliance may be
placed only on the other identification numbers printed on the Securities. The
Company shall promptly notify the Trustee of any changes in the CUSIP numbers.
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its and PCI's option by Board Resolution of
their respective Board of Directors, at any time, with respect to the
Securities, elect to have either Section 402 or Section 403 hereof be applied to
all of the Outstanding Securities (the "Defeased Securities"), upon compliance
with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
Upon the Company's exercise under Section 401 hereof of the option
applicable to this Section 402, the Company, each of the Guarantors and any
other Indenture Obligor upon the Securities, if any, shall be deemed to have
been discharged from its obligations with respect to the Defeased Securities on
the date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
Defeased Securities, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 405 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture, including obligations to
the Trustee, if any (and the Trustee, at the expense of the Company and upon
written request in compliance with Section 103, shall execute proper instruments
reasonably acceptable to it in form and substance acknowledging the same),
except for the following which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of Defeased Securities to
receive, solely from the trust fund described in Section 404 hereof and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, or interest on such Securities when such payments are due, (b)
the Company's obligations with respect to such Defeased Securities under
Sections 304, 305, 308, 1002 and 1018 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, including, without limitation,
the Trustee's rights under Sections 606, 1303 and 1305 hereof and the Company's
obligations to the Trustee in connection therewith, and (d) this Article Four.
Subject to compliance with this Article Four, the Company may exercise its
option under this Section 402 notwithstanding the prior exercise of its option
under Sections 403 hereof with respect to the Securities.
60
Section 403. Covenant Defeasance.
Upon the Company's exercise under Section 401 hereof of the option
applicable to this Section 403, the Company and each Guarantor shall be released
from its obligations under any covenant or provision contained or referred to in
Sections 1003, 1004, 1005, 1006, 1007, 1008, 1009, 1010, 1011, 1012, 1014, 1015,
1016, 1019, 1020, 1021, 1022, 1024, 1025, 1028 and 1316 hereof with respect to
the Defeased Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Defeased Securities
shall thereafter be deemed to be not "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company and each Guarantor may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 501(2) or (3) hereof but, except as specified
above, the remainder of this Indenture and such Defeased Securities shall be
unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 402 or Section 403 hereof to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 608 hereof who shall agree to comply with the provisions of
this Article Four applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such
Securities, (a) United States dollars in an amount, or (b) U.S. Government
Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms shall provide, not later
than one day before the due date of any payment, money in an amount, or
(c) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants or a nationally
recognized investment banking firm expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee), to pay and
discharge, the principal of, premium, if any, or interest on the Defeased
Securities on the Stated Maturity of such principal or installment of
principal or interest (such date being referred to as the "Defeasance
Redemption Date"), if when exercising under Section 401 hereof either its
option applicable to Section 402 hereof or its option applicable to
Section 403 hereof, the Company shall have delivered to the Trustee an
irrevocable notice to redeem all of the Outstanding Securities on the
Defeasance Redemption Date); provided that
61
the Trustee shall have been irrevocably instructed to apply such United
States dollars or the proceeds of such U.S. Government Obligations to said
payments with respect to the Securities.
(2) In the case of an election under Section 402 hereof, the Company
shall have delivered to the Trustee an Opinion of Independent Counsel from
the United States of America and an Opinion of Independent Counsel from
Canada, stating that (a) in the case of the Opinion of Independent Counsel
from the United States of America, the Company has received a ruling from
the Internal Revenue Service, and in the case of the Opinion of
Independent Counsel from Canada, the Company has received a ruling from
the Canada Customs and Revenue Agency, or (b) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, including, in the case of the Opinion of Independent Counsel from the
United States of America, by means of a Revenue Ruling published by the
Internal Revenue Service, and in the case of the Opinion of Independent
Counsel from Canada, a published ruling from the Canada Customs and
Revenue Agency, in either case to the effect that, and based thereon such
Opinion of Independent Counsel from the United States of America or
Canada, as applicable, shall confirm that, the Holders of the Outstanding
Securities will not recognize income, gain or loss for U.S. Federal income
tax and Canadian federal or provincial 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.
(3) In the case of an election under Section 403 hereof, the Company
shall have delivered to the Trustee an Opinion of Independent Counsel in
the United States of America or Canada, as applicable, to the effect that
the Holders of the Outstanding Securities will not recognize income, gain
or loss for U.S. Federal income tax, Canadian federal or provincial income
tax or certain other tax purposes as a result of such covenant defeasance
and will be subject to U.S. Federal income tax or Canadian federal or
provincial 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.
(4) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Sections 501(10),
(11) or (12) hereof are concerned, at any time during the period ending on
the 91st day after the date of deposit.
(5) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, any material
agreement or instrument (other than this Indenture) to which the Company
or any Guarantor is a party or by which it is bound.
(6) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that after the 91st day following the
deposit, the
62
trust funds will not be treated as a preference under any applicable
Bankruptcy Law.
(7) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit shall not cause the Trustee or the
trust so created to be subject to the United States Investment Company Act
of 1940, as amended from time to time.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Securities or any Guaranty over
the other creditors of the Company or any Guarantor with the intent of
defeating, hindering, delaying or defrauding creditors of the Company, any
Guarantor or others.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 402 hereof or the covenant defeasance under Section 403 hereof (as
the case may be) have been complied with as contemplated by this Section
404.
Opinions of Counsel or Opinions of Independent Counsel may have
qualifications customary for opinions of the type required and counsel
delivering such opinions may rely on certificates of the Company or any other
relevant Obligor or government or other officials customary for opinions of the
type required, including certificates certifying as to matters of fact,
including that various financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1018
hereof, all United States dollars and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 405, the "Trustee") pursuant to
Section 404 hereof in respect of the Defeased Securities shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), as the Trustee may
determine, to the Holders of such Securities of all sums due and to become due
thereon in respect of principal, premium, if any, and interest but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 hereof or the principal and interest received
in respect thereof.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section
63
404 hereof which, in the unqualified opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered in form and substance satisfactory to the Trustee, are in excess of
the amount thereof which would then be required to be deposited to effect
defeasance or covenant defeasance after application of the appropriate
defeasance option.
Section 406. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 402 or 403
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and each Guarantor's obligations under this
Indenture and the Securities (including, without limitation, the provisions of
Article Thirteen hereof) shall be revived and reinstated as though no deposit
had occurred pursuant to Section 402 or 403 hereof, as the case may be, until
such time as the Trustee or Paying Agent is permitted to apply all such United
States dollars or U.S. Government Obligations in accordance with Section 402 or
403 hereof, as the case may be; provided, however, that if the Company makes any
payment to the Trustee or Paying Agent of principal of, premium, if any, or
interest on any Security following the reinstatement of its obligations, the
Trustee or Paying Agent shall promptly pay any such amount to the Holders of the
Securities and the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
Section 407. Repayment of the Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company in trust for the payment of the principal of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal, interest or premium, if any, has become due and payable, shall
be paid to the Company on its written request or (if then held by the Company)
shall be discharged from such trust. The Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than thirty
(30) days from the date of such notification or publication, any unclaimed
balance of such money then remaining shall promptly be repaid to the Company.
64
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
An "Event of Default" shall occur if:
(1) (a) the Company shall default in the payment of any principal of
any Security when the same becomes due, whether by acceleration, at
maturity, upon redemption, in connection with a Change of Control or an
Asset Sale, or otherwise, (b) the Company shall fail to pay any interest,
fee or penalty on the Securities, or any other amount payable hereunder,
within ten (10) days after any such interest or other amount becomes due
in accordance with the terms hereof, or (c) any other Obligor shall
default (and such default shall continue unremedied for a period of ten
(10) days) in the payment when due of any fee with respect to any Security
or any monetary Indenture Obligation (other than those covered by clauses
(a) or (b) hereof);
(2) any Indenture Obligor (including the Company) fails to observe
or perform any covenant, condition or agreement on the part of such
Indenture Obligor to be observed or performed pursuant to Section 1006,
1007, 1008, 1009, 1010, 1011, 1012, 1013, 1014, 1019, 1020 or Article
Eight hereof;
(3) any Obligor (including the Company) fails to duly observe or
perform any other covenant, condition or agreement in, to and under this
Indenture or any other Indenture Document executed by it and such failure
continues for a period of 30 days after notice thereof shall have been
given to the Company by the Trustee or shall have been given by the
Holders of at least 25% of the aggregate principal amount of the
Securities then Outstanding to the Company and the Trustee, in either
case, specifying such default and demanding that it be remedied;
(4) any Obligor (including the Company) denies, disaffirms or
repudiates its obligations under this Indenture (including the Guaranties
of the Securities), the Securities, any other Indenture Documents, the New
Tranche A Notes Indenture (including any guaranty thereunder), the New
Tranche A Notes, the Term Loan Agreement (including the guaranties
thereunder), the New Tranche A Term Notes, or the Registration Rights
Agreement, or any material provision of any Indenture Document, the New
Tranche A Notes Indenture (including any guaranties thereunder), the New
Tranche A Notes, the Term Loan Agreement (including the guaranties
thereunder), the New Tranche A Term Notes, or the Registration Rights
Agreement shall cease to be valid or binding or any Obligor shall so
assert in writing;
(5) a default occurs (a) in the payment when due, whether by
acceleration or otherwise, of any amount (including principal, premium or
65
interest) in respect of Indebtedness of any Obligor (including the
Company), including Indebtedness under the New Tranche A Notes Indenture,
the New Tranche A Notes, the Term Loan Agreement (including the guaranties
thereunder), the New Tranche A Term Notes, or in respect of any other
Indebtedness of any Obligor (including the Company) but not including the
Indebtedness described in and covered by clause (1) of this Section 501
(subject only to any applicable grace period pursuant to the terms of such
Indebtedness), having a principal amount equal to or in excess of $500,000
in respect of an individual Indebtedness or having principal amounts equal
to or in excess of $1,000,000 in the aggregate in respect of more than one
individual Indebtedness taken as a whole, or (b) a default shall occur in
the performance or observance of any obligation or condition with respect
to such Indebtedness if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit the
holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity, or (c) a default or an event of default shall occur in
the performance or observance of any obligation or condition of any
agreement (including any Transaction Document) to which any Obligor is
party or by which it is bound and such default or event of default could
reasonably be expected to have a Material Adverse Effect;
(6) a final judgment is, or final judgments are, entered by a court
or courts of competent jurisdiction against any Obligor or any Obligor
Subsidiary of such Obligor and such judgment or judgments remain
undischarged, unbonded or unstayed for a period of sixty (60) days;
provided that the aggregate of all such judgments equals or exceeds
$5,000,000 or any such individual judgment exceeds $1,000,000 (other than,
in each case, any judgment as to which and only to the extent that, a
reputable insurance company has acknowledged, whether subject to its
customary reservation of rights or otherwise, coverage of such claim in
writing);
(7) a warrant of attachment or execution or similar process shall be
issued or levied against the property of any Obligor or any Obligor
Subsidiary having an aggregate value in excess of $1,000,000 which is not
stayed or lifted within thirty (30) days;
(8) any representation, warranty or certification of any Obligor
(including the Company) made or deemed to be made hereunder or in any
other Indenture Document executed by it, or pursuant to or in respect of
the Term Loan Agreement (or any of the guaranties thereunder), the New
Tranche A Term Notes, the New Tranche A Notes Indenture (or any of the
guaranties thereunder) or the New Tranche A Notes or in any other writing
or certificate furnished by or on behalf of any Obligor (including the
Company) for the purposes of or in connection with this Indenture, such
other Indenture Document or pursuant to or in respect of the Term Loan
Agreement (or any of the guaranties thereunder), the New Tranche A Term
Notes, the New Tranche A Notes Indenture (or any of the
66
guaranties thereunder) or the New Tranche A Notes is or shall be incorrect
when made or deemed made in any material respect;
(9) (a) any of the Security Documents ceases to give the Collateral
Agent a valid and perfected Lien of the priority required thereby or the
rights, powers and privileges purported to be created thereby (other than
in accordance with their respective terms or if released by the Collateral
Agent in accordance with the terms hereof), or (b) any of the Security
Documents is declared null and void, or (c) any Obligor denies any of its
obligations under any of the Security Documents or (d) any Collateral
becomes subject to any Lien other than the Liens created or permitted by
the Security Documents or the Indenture, or (e) any Collateral (or part
thereof) is seized or taken by any governmental agency or authority, which
taking or seizure could reasonably be expected to have a Material Adverse
Effect;
(10) any Obligor or any Obligor Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case in which it is a debtor,
(c) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) admits in writing its inability to pay debts as the same
become due;
(11) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against any Obligor or any Obligor
Subsidiary in an involuntary case in which it is a debtor,
(b) appoints a Custodian of any Obligor or any Obligor
Subsidiary or for all or substantially all of their respective
property, or
(c) orders the liquidation of any Obligor or any Obligor
Subsidiary,
and the order or decree remains unstayed and in effect for sixty
(60) days;
(12) any Obligor or any Obligor Subsidiary commits or suffers to
occur a Canadian Act of Bankruptcy; or
67
(13) the Guaranty of any Guarantor for any reason ceases to be, or
is asserted by any Guarantor or the Company not to be, in full force and
effect or enforceable in accordance with its terms, except to the extent
contemplated in the Guaranty.
Section 502. Acceleration.
If an Event of Default (other than an Event of Default specified in
clauses (10), (11) and (12) of Section 501 hereof) occurs and is continuing for
any reason, whether voluntary or involuntary, then, subject to the provisions of
the Common Security and Intercreditor Agreement, the Trustee, by notice to the
Company, or the Holders of at least 25% of the aggregate principal amount of the
Securities then Outstanding, by written notice to the Company and the Trustee,
may declare the unpaid principal of, premium, if any, and any accrued interest
on all the Securities to be immediately due and payable. Upon such declaration,
the principal, premium, if any, and interest on the Securities shall become
automatically and immediately due and payable, without further notice, demand or
presentment. If an Event of Default specified in clause (10), (11) or (12) of
Section 501 hereof occurs, such an amount shall ipso facto automatically be and
become immediately due and payable, without any declaration or other act on the
part of the Trustee or any Holder, and such amount shall be dealt with in
accordance with, and subject to, the provisions of the Common Security and
Intercreditor Agreement. Other than in respect of (i) a continuing Default or
Event of Default in the payment of the principal of, premium, if any, or
interest on any Security held by a non-consenting Holder, or (ii) a covenant or
provision hereof which under Article Nine cannot be modified or amended without
the consent of the Holder of each Security then Outstanding, or (iii) any
continuing Default or Event of Default in respect of any matter involving the
release of Collateral (not otherwise permitted by terms of the Indenture
Documents), which shall not be waived without the consent of the Holder of each
then Outstanding Security, Holders of a majority of the aggregate principal
amount of the Securities then Outstanding (or, in the case of the failure to
make a Change of Control Offer pursuant to Section 1014 hereof, two-thirds of
the aggregate principal amount of Securities then Outstanding) by written notice
to the Trustee, may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all sums paid or advanced by the Trustee under this Indenture
and the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and any other amounts due to the
Trustee under Section 606;
(ii) all overdue interest on all Securities;
68
(iii) the principal of and premium, if any, on any Securities which
have become due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities; and
(iv) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the Securities; and
(b) all Events of Default, other than the non-payment of principal
of the Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 504 hereof. No
such rescission shall affect any subsequent Default or impair any right
consequent thereon provided in Section 504 hereof.
Section 503. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may, in
accordance with the provisions of the Common Security and Intercreditor
Agreement, pursue any available remedy (under this Indenture or otherwise) to
collect the payment of principal, premium, if any, or interest on the Securities
or to enforce the performance of any provision of the Securities or this
Indenture.
The Trustee may maintain a proceeding pursuant to the provisions of
the Common Security and Intercreditor Agreement even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 308, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy,
including such other rights and remedies of the Holders as set forth in the
Common Security and Intercreditor Agreement.
Section 504. Waiver of Past Defaults.
The Holders of a majority of the aggregate principal amount of the
Securities then Outstanding (or, in the case of the failure by the Company to
make a Change of Control Offer pursuant to Section 1014 hereof, two-thirds of
the Holders of the aggregate principal amount of the Securities then
Outstanding), by notice to the Trustee, may waive an existing Default or Event
of Default and its consequences, except in respect of (i) a continuing Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on any Security held by a non-consenting Holder, or (ii) a
69
covenant or provision hereof which under Article Nine, cannot be modified or
amended without the consent of the Holder of each Security then Outstanding, or
(iii) any continuing Default or Event of Default in respect of any matter
involving the release of Collateral (not otherwise permitted by terms of the
Indenture Documents), which shall not be waived without the consent of the
Holder of each then Outstanding Security. Upon any such waiver, such Default
shall cease to exist and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; provided, however, that
no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any right consequent thereon.
Section 505. Control by Majority.
The Holders of a majority of the aggregate principal amount of the
Securities then Outstanding shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities by this Indenture or the Security Documents; provided that the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of other Holders, or that may involve the Trustee in personal liability and the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 506. Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or the
Securities only if:
(1) such Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% of principal amount of the
Securities then Outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory in form and substance to the Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the request within twenty (20)
days after receipt of the request and the offer and, if requested, the
provision of the indemnity; and
(5) during such twenty (20) day period the Holders of a majority of
the aggregate principal amount of the Securities then Outstanding do not
give the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to affect, disturb or prejudice the rights
of another Holder or to obtain, or seek to obtain, a preference or priority over
another Holder or to enforce any right under this Indenture or under the
Securities, except in the manner
70
herein provided and for the equal, ratable and common benefit of all Holders of
the Securities. For the protection and enforcement of the provisions of this
Section, each and every Holder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Section 507. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Security to receive payment of principal, or premium, if any,
and interest on the Security, on or after the respective due dates expressed in
the Security (or, in the case of redemption or repurchase, on the Redemption
Date or repurchase date), or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of the Holder.
Section 508. Collection Suit by Trustee.
If an Event of Default specified in Section 501(1) or (2) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against any Obligor or any Obligor
Subsidiary for the whole amount of principal, premium, if any, and interest
remaining unpaid on the Securities and interest on overdue principal and, to the
extent lawful, premium and interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, subject to Article Thirteen.
If any Obligor or Obligor Subsidiary fails to pay such amounts
forthwith upon the demand of the Trustee pursuant to the immediately preceding
paragraph, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree, may enforce
the same against such Obligor, and may collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of such Obligor
wherever situated.
If an Event of Default occurs and is continuing, the Trustee may, in
its discretion, proceed to protect and enforce its rights and the rights of the
Holders under this Indenture (including the Guaranties of the Securities) and
the Common Security and Intercreditor Agreement by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including, without limitation, seeking recourse against any
Guarantor pursuant to the terms of any Guaranty, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein or therein, or to enforce any other proper
remedy, subject however to Section 505 hereof.
Section 509. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and
71
advances of the Trustee, its agents and counsel) and the Holders allowed in any
judicial proceedings relative to any Obligor or any Obligor Subsidiary, their
creditors or their property. The Trustee shall be entitled and empowered,
subject to Article Thirteen, to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 606 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 606 hereof out
of the estate in any such proceeding shall be denied for any reason, payment of
the same shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders of the Securities may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 510. Priorities.
If the Trustee collects any money pursuant to this Article Five, it
shall pay out the money in the following order:
First: to (i) the Trustee, its agents and attorneys for amounts due
under Section 606 hereof, including payment of all compensation, expenses
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection, and (ii) the Collateral Agent, pursuant
to the terms of the Common Security and Intercreditor Agreement;
Second: to (i) Holders for amounts due and unpaid on the Securities
for principal, premium, if any, and interest ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Securities for principal, premium, if any, and interest, respectively, and
(ii) the Administrative Agent and to the New Tranche A Notes Indenture
Trustee for obligations under the Term Loan Agreement and the New Tranche
A Notes Indenture and the New Tranche A Notes, including amounts of
principal of, premium, if any, and interest on such obligations, in each
case subject to and in accordance with the Common Security and
Intercreditor Agreement;
Third: without duplication, to Holders for any other Indenture
Obligations owing to the Holders under this Indenture or the Securities;
and
72
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders.
Section 511. 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, suffered or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 507 hereof or a suit by Holders of more than 10% of
the aggregate principal amount of the Securities then Outstanding or any suit
instituted by any Holder for the enforcement of the payment of the principal of,
premium, if any, or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on or after the Redemption Date or repurchase date).
Section 512. Waiver of Stay, Extension or Usury Laws.
Each Indenture Obligor covenants (to the extent that it may lawfully
do so) that it shall not at any time insist upon, plead or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive such Indenture Obligor from paying all or
any portion of the principal of, premium, if any, or interest on the Securities
contemplated herein or in the Securities or which may affect the covenants or
the performance of this Indenture. Each Indenture Obligor (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it shall not 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 SIX
THE TRUSTEE
Section 601. Notice of Defaults.
Within thirty (30) days after the receipt of written notice from the
Company of the occurrence of any Default pursuant to Section 704(e), the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Security Register, notice of such Default hereunder known to the Trustee
unless such Default shall have been cured or waived; provided, however, that,
except in the case of a Default in the payment of principal of, premium, if any,
or interest on, any Security, the Trustee shall be
73
protected in withholding such notice if and so long as a trust committee of
officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 602. Certain Rights of Trustee.
Subject to the provisions of Sections 315(a) through 315(d) of the
Trust Indenture Act and Section 613 hereof:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of Indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order, and, in each
case, accompanied by the documents required by Section 103, and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel and any written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder or under any Security Document in good faith and in reliance thereon
in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture or any Security Document 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 therein or thereby in compliance with such request or
direction;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture or any Security
Document other than any liabilities arising out of the gross negligence or
willful misconduct of the Trustee, as determined by a court of competent
jurisdiction pursuant to a final, non-appealable judgment;
(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, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security or other paper or
document unless requested in writing to do so by the Holders of not less than a
majority of the aggregate principal amount of the Securities then Outstanding;
provided that the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to
74
examine the books, records and premises of the Company, personally or by agent
or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder or under any Security Document either directly or
by or through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed by
it hereunder;
(h) no provision of this Indenture or any Security Document shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers;
(i) notwithstanding anything to the contrary set forth herein or in
any Security Document, under no circumstances shall the Trustee be required to
take possession of or maintain an action to foreclose upon any Mortgaged
Property;
(j) delivery of reports, information and documents to the Trustee
under Section 704 is for informational purposes only and the Trustee's receipt
of the foregoing shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the obligor's compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officer's Certificates);
(k) the Trustee shall not be deemed to have notice of any Event of
Default unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references this
Indentures; and
(l) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder.
Section 603. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility on Form T-1, if any, supplied to the Company
are true and accurate in all material respects subject to the qualifications set
forth therein. The Trustee shall not be accountable for the use or application
by the Company of the Securities or the proceeds thereof.
75
Section 604. Trustee and Agents May Hold Securities; Collections;
etc.
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company and their respective Affiliates, in its individual or any other
capacity, may become the owner or pledgee of Securities, with the same rights it
would have if it were not the Trustee, Paying Agent, Security Registrar or such
other agent or such Affiliates and, subject to Sections 310 and 311 of the Trust
Indenture Act may otherwise deal with the Company and receive, collect, hold and
retain collections from the Company with the same rights it would have if it
were not the Trustee, Paying Agent, Security Registrar or such other agent or
such Affiliate.
Section 605. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
applicable provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee may invest all moneys received by
the Trustee, until used or applied as herein provided, in Cash Equivalents in
accordance with the written directions of the Company in compliance with Section
103. The Trustee shall not be liable for any losses incurred in connection with
any investments made in accordance with this Section 605, except to the extent
that such losses are attributable to the Trustee's gross negligence, bad faith
or willful misconduct as determined by a court of competent jurisdiction
pursuant to a final non-appealable judgment. With respect to any losses on
investments made under this Section 605, the Company is liable for the full
extent of any such loss. The Trustee shall be under no liability for interest or
any money received by it hereunder except as otherwise agreed with the Company.
Section 606. Compensation and Indemnification of Trustee and Its
Prior Claim.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it hereunder (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust) and the
Company covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee, upon its request, for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all agents
and other persons not regularly in its employ), except to the extent any such
expense, disbursement or advance arises directly from the Trustee's gross
negligence, bad faith or willful misconduct as determined by a court of
competent jurisdiction pursuant to a final non-appealable judgment. The Company
also covenants to indemnify the Trustee and each predecessor Trustee for, and to
hold it harmless against, any loss, liability, tax, assessment or other
governmental charge (other than taxes applicable to the Trustee's compensation
hereunder) or expense incurred without gross negligence or bad faith on such
Trustee's part, as determined by a court of competent jurisdiction pursuant to a
final,
76
non-appealable judgment, arising out of or in connection with the acceptance or
administration of this Indenture or any Security Document or the trusts
hereunder and such Trustee's duties hereunder, including enforcement of this
Section 606 and also including any liability which the Trustee may incur as a
result of failure to withhold, pay or report any tax, assessment or other
governmental charge, and the costs and expenses of defending itself against or
investigating any claim of liability in the premises. The obligations of the
Company under this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, disbursements and advances shall constitute an additional
obligation hereunder and shall survive the satisfaction and discharge of this
Indenture, or the resignation or removal of any Trustee.
To secure the Company's payment obligations in this Section 606, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of, premium, if any, or interest on
particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(10), (11) or (12), the
expenses and the compensation for the services shall be preferred over the
status of Holders in any proceeding under any Bankruptcy Law and are intended to
constitute expenses of administration under any Bankruptcy Law.
Any Trustee hereunder shall not be liable for the acts or omission
of any successor Trustee hereunder.
Section 607. Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of
the Trust Indenture Act. If the Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Section 310(a)(1) of the Trust Indenture Act
and which shall have a combined capital and surplus of at least $50,000,000 or
which shall be a wholly-owned subsidiary of a company that has a combined
capital and surplus of at least $50,000,000, to the extent there is an
institution eligible and willing to serve. If the Trustee does not have an
office in The City of New York, the Trustee may appoint an agent in The City of
New York reasonably acceptable to PCI and the Company to conduct any activities
which the Trustee may be required under this Indenture to conduct in The City of
New York. If the Trustee does not have an office in The City of New York or has
not appointed an agent in The City of New York, the Trustee shall be a
participant in the Depository Trust Company and its FAST distribution systems.
If such corporation
77
published reports of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect hereinafter specified in this Article Six.
Section 609. Resignation and Removal; Appointment of Successor
Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article Six shall become effective until the
acceptance of appointment by the successor trustee under Section 610 hereof.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice thereof to the Company. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument executed by authority of its Board of
Directors, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor trustee. If an instrument of acceptance by a successor
trustee shall not have been delivered to the Trustee within thirty (30) days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper, appoint a
successor trustee.
(c) The Trustee may be removed at any time by an Act of the Holders
of not less than a majority of the aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act after written request
therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 608
hereof and shall fail to resign after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee, its property or its affairs for
the purpose of rehabilitation, conservation or liquidation,
78
then, in any case, (i) the Company by a Board Resolution of its Board of
Directors, may remove the Trustee, or (ii) subject to Section 511 hereof, the
Holder of any Security who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all other similarly situated
Holders, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper, prescribe or remove the
Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution of its Board of Directors, shall promptly appoint
a successor trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor trustee shall be
appointed by Act of the Holders of a majority of the aggregate principal amount
of the Securities then Outstanding, delivered to PCI, the Company and the
retiring Trustee, the successor trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor trustee and supersede the
successor trustee appointed by the Company. If no successor trustee shall have
been so appointed by the Company or the Holders of the Securities and accepted
appointment in the manner hereinafter provided, the Holder of any Security who
has been a bona fide Holder for at least six months may, subject to Section 511
hereof, on behalf of himself and all other similarly situated Holders, petition
any court of competent jurisdiction for the appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name of the successor trustee and the
address of its Corporate Trust Office or agent hereunder.
Section 610. Acceptance of Appointment by Successor.
Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Obligors and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee as if originally named
as Trustee hereunder; provided, however, that on the written request of the
Company in compliance with Section 103 or the successor trustee, upon payment of
its charges then unpaid, such retiring Trustee shall pay over to the successor
trustee all moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor trustee all such rights,
powers, duties and obligations. Upon request of any such successor trustee, each
Indenture Obligor shall execute any and all instruments to more fully and
certainly vest in and confirm in such successor trustee all such rights and
powers. Any Trustee ceasing to act shall, nevertheless, retain a Lien upon all
property or funds held or collected by such Trustee or such successor trustee to
79
secure any amounts then due such Trustee pursuant to the provisions of Section
606 hereof.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 610 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Section 310(a) of the Trust Indenture Act and this Article Six and
shall have a combined capital and surplus of at least $50,000,000 or which shall
be a wholly-owned subsidiary of a company that has a combined capital and
surplus of at least $50,000,000 and have a Corporate Trust Office or an agent
selected in accordance with Section 608 hereof.
Upon acceptance of appointment by any successor trustee as provided
in this Section 610, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
609 hereof. If the Company fails to give such notice within ten (10) days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be given at the expense of the Company.
Section 611. Merger, Conversion, Consolidation or Succession to
Business.
Any legal Person into which the Trustee may be merged or converted
or with which it may be consolidated, or any legal Person resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any legal Person succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
provided that such legal Person shall be eligible under Section 310(a) of the
Trust Indenture Act and this Article Six and shall have a combined capital and
surplus of at least $50,000,000 or which shall be a wholly-owned subsidiary of a
company that has a combined capital and surplus of at least $50,000,000 and have
a Corporate Trust Office or an agent selected in accordance with Section 608
hereof without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
If at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated. If at such time any of the Securities shall not
have been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
such successor trustee. In all such cases provided for under this paragraph,
such certificate shall have the full force which it has anywhere in the
Securities or in this Indenture, unless the certificate of the Trustee shall
have stipulated that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any predecessor
Trustee shall only apply to its successor or successors by merger, conversion or
consolidation.
80
Section 612. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or other Indenture Obligor under the Guaranties and the Securities), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Company (or any such other obligor). A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.
Section 613. Certain Duties and Responsibilities.
(a) 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, but in the case of any such certificates or
opinions which by any provision hereof are specifically required to
be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture but shall not be required to verify
the contents thereof.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own gross negligence action,
gross negligence failure to act, or willful misconduct, as determined by a court
of competent jurisdiction pursuant to a final, non-appealable judgment, except
that:
(i) this clause (c) does not limit the effect of clause (a) of
this Section 613;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by an officer of the Trustee, unless it is proven
that the Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 502, 504 or 505.
81
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company shall furnish or cause to be furnished to the Trustee
(a) semiannually, not more than ten (10) days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may request in writing,
within thirty (30) days after receipt by the Company of any such request, a list
of similar form and content as of a date not more than fifteen (15) days prior
to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
Section 702. Preservation of Information; Disclosure of Names and
Addresses of Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 312 of the Trust Indenture Act.
Section 703. Reports by Trustee.
Within sixty (60) days after May 15 of each year commencing with the
first May 15 after the Closing Date, the Trustee shall transmit by mail to all
Holders, as their names and addresses appear in the Security Register, as
provided in Section 313(c)
82
of the Trust Indenture Act, a brief report dated as of such May 15 in accordance
with and to the extent required by Section 313(a) of the Trust Indenture Act.
The Trustee shall also comply with Section 313(b) of the Trust Indenture Act.
Commencing at the time this Indenture is qualified under the Trust
Indenture Act, a copy of each report at the time of its mailing to Holders shall
be filed with the Commission and each stock exchange on which the Securities are
listed of which the Company has notified the Trustee in writing. The Company
shall notify the Trustee when Securities are listed on any stock exchange.
Section 704. Reports by Company and Guarantors.
PCI and the Company will furnish, or will cause to be furnished, to
the Trustee copies of the following financial statements, reports, notices and
information and shall perform, or cause to be performed, such other covenants as
are set forth below.
(a) Deliver, within ninety (90) days after each Fiscal Year, a copy
of the annual audited financial statements of PCI, the Company and their
respective Subsidiaries, as well as of any of the Guarantors as are required to
file their annual audited financial statements with the Commission pursuant to
the Securities Act or the Exchange Act and the rules and regulations thereunder,
prepared on a consolidated basis and in conformity with GAAP and certified by an
independent certified public accountant who shall be satisfactory to the
Trustee, together with (i) a certificate from such accountant to the effect
that, in making the examination necessary for the signing of such annual audit
report, such accountant has not become aware of any Default or Event of Default
that has occurred and is continuing and that relates to financial or other
accounting matters or the covenants set forth in Article Ten or, if such
accountant has become aware of any such event, describing it, and (ii) if
prepared in connection with the annual audit report, the annual operating
statements of PCI, the Company and such Subsidiaries prepared on a consolidating
basis and in conformity with GAAP applied in a manner consistent with the audit
report referred to in preceding clause (a)(i) of this Section 704, signed by
PCI's, the Company's and such other Guarantor's chief financial officer or
assistant treasurer.
(b) Deliver, within forty-five (45) days after the end of each
Fiscal Quarter, a copy of the unaudited financial statements of PCI, the Company
and their respective Subsidiaries, as well as of any Guarantors as are required
to file their quarterly financial statements with the Commission pursuant to the
Securities Act or the Exchange Act, and the rules and regulations thereunder,
prepared on a consolidating and consolidated basis and in conformity with GAAP
(subject to normal year-end audit adjustments) and applied in a manner
consistent with the audit report referred to in preceding clause (a)(i) of this
Section 704, signed by PCI's, the Company's and such other Guarantor's chief
financial officer and consisting of at least a balance sheet as at the close of
such Fiscal Quarter and an income statement and cash flow statement for such
Fiscal Quarter compared, in each case, to the actual results for the same period
during the prior Fiscal Year and to the Company's budget delivered pursuant to
clause (c) below for the current Fiscal Year.
83
(c) (i) File, or caused to be filed, all applicable periodic reports
and other reports and documents pursuant to Sections 13 or 15(d) of the Exchange
Act, and the rules and regulations thereunder, within the time limits or periods
specified therein, and remain, and cause each other applicable Obligor and
applicable Obligor Subsidiary to remain, a company reporting to the Commission
under Section 13 or 15(d) of the Exchange Act and such rules and regulations or
part of a group of consolidated companies, one or more whom reports or report to
the Commission in such manner, and (ii) within five (5) days of such filing or
report having been made, (x) transmit by mail to Holders of Securities, as their
names and addresses appear in the Security Register, without cost to such
Holders, and (y) file with the Trustee copies of each filing and report made by
any Obligor or any Obligor Subsidiary, or any third party with respect to any
Obligor or Obligor Subsidiary with or to any securities exchange or the
Commission or any Securities Commission in Canada, including any registration
statements and all amendments thereto filed with respect to the Securities, or
as required pursuant to this Indenture or any other document relating thereto.
(d) Give prompt notice of the occurrence of (i) a Default or (ii) a
default (or of any default of the nature specified in Section 501(1), whether or
not in respect of any Indebtedness incurred hereunder or permitted hereby) by
any Obligor or any Obligor Subsidiary under any material note, indenture, loan
agreement, mortgage, lease or other material similar agreement to which any
Obligor or any Obligor Subsidiary, as the case may be, is a party or by which it
is bound (including any of the Indenture Documents or Transaction Documents), in
each case together with an Officers' Certificate specifying such Default or such
other default or event of default and what action the Company is taking or
proposes to take with respect thereto.
(e) Give notice of the entry of any judgment or decree, or judgments
or decrees, against any Obligor or any Obligor Subsidiary, if the amount of such
individual judgment or decree equals or exceeds $500,000 or the aggregate amount
of all such judgments and decrees equals or exceeds $1,000,000.
(f) Subject to Section 1008, deliver copies of any material
amendments, waivers or consents, notices of breach or default, notices relating
to the exercise or nonexercise of any remedy available to any Person, notices of
indemnity or other material claims, and written materials relating to the
exercise of any rights derived from or arising in connection with, any material
Indebtedness of any Obligor or Obligor Subsidiary and other written
communications of a material nature, including any communications by any Obligor
or Obligor Subsidiary in connection with the Indenture Documents other than any
such notice or other written materials already sent to the Holders or the
Trustee pursuant to any other Section of this Indenture (in each case such
copies shall be furnished promptly).
(g) Deliver any statement, report, notice and/or information
required to be delivered to the Collateral Agent pursuant to any of the Security
Documents at the same time as delivery thereof to the Collateral Agent.
84
(h) Provide any information required to be provided pursuant to
other provisions of this Indenture, and such other reports or information from
time to time requested by the Trustee, the Collateral Agent or any Holder.
Notwithstanding anything herein to the contrary, any of the financial
statements, reports, notices or other information required to be furnished
pursuant to Section 704(d)(ii), Section 704(f) (in respect of Indebtedness other
than that pursuant to this Indenture) or Section 704(h) which contain or
contains non-public information, as reasonably determined by PCI and the
Company, shall be identified in writing as non-public information by PCI and the
Company to the Trustee upon delivery thereof to the Trustee and the Trustee
shall not disclose such non-public information to any Holder without such Holder
having entered into a confidentiality agreement on customary terms with the
Trustee (which terms shall be satisfactory to the Trustee) in respect of such
non-public information pursuant to which agreement such Holder shall be required
to keep such information confidential for so long as such information shall not
be public. The Trustee has no duty to review any financial or other reports for
purposes of determining compliance with this or any other provisions of this
Indenture.
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. When Indenture Obligors May Merge, Etc.
No Indenture Obligor shall, nor shall it cause or permit any of its
Obligor Subsidiaries to, consolidate with or merge into, or sell, assign,
convey, lease or transfer all or substantially all of its assets and those of
its Subsidiaries taken as a whole to, any Person (except that any Indenture
Obligor (other than PCI or the Company) or any Obligor Subsidiary of such
Indenture Obligor (other than the Company) may be merged with or into (x) the
Company, if the Company shall be the surviving corporation, or (y) any other
such Obligor Subsidiary), unless each of the following conditions in this
Section 801 is satisfied:
(a) the resulting, surviving or transferee Person (if not the
Company) expressly assumes all the obligations of such Indenture Obligor
or of the relevant Obligor Subsidiary under this Indenture and each other
Indenture Document to which such Indenture Obligor or Obligor Subsidiary
is a party pursuant to amendments thereto in form and substance reasonably
satisfactory to the Trustee;
(b) such resulting, surviving or transferee Person is organized and
existing under the laws of the United States of America, a state thereof
or the District of Columbia or, in the case of an assignee or transferee
of the assets of the Company, under the laws of Canada or one of Canada's
provinces or territories;
85
(c) at the time of the occurrence of such transaction and after
giving effect to such transaction on a pro forma basis, such Person could
incur $1.00 of additional Indebtedness (assuming a market rate of interest
with respect to such additional Indebtedness);
(d) (x) at the time of the occurrence of such transaction and after
giving effect to such transaction on a pro forma basis, the Consolidated
Net Worth of such Person is greater than the Consolidated Net Worth of the
Obligors and the Obligor Subsidiaries, taken together, immediately prior
to such transaction, and (y) the Administrative Agent, the Lenders, the
New Tranche A Notes Indenture Trustee, the New Tranche A Notes Holders,
the Trustee and the Holders of the Securities shall have received an
opinion of a nationally recognized investment banking firm not affiliated
to any Person involved in any such merger or consolidation relating to
fairness and confirming that the position of the Lenders, the New Tranche
A Notes Holders and the Holders of the Securities will not in any way be
less favorable than it was immediately prior to any such merger or
consolidation as a result of such merger or consolidation;
(e) each Guarantor, to the extent applicable, will acknowledge and
confirm in writing that its Guaranty hereunder will apply to such Person's
obligations under this Indenture, the Securities, each other Indenture
Document and its guaranty under the Term Loan Agreement and in respect of
the New Tranche A Term Notes, the New Tranche A Notes Indenture and in
respect of the New Tranche A Notes will apply to such Person's obligations
under the Term Loan Agreement, the New Tranche A Term Notes, the New
Tranche A Notes Indenture and the New Tranche A Notes;
(f) immediately before and immediately after giving effect to such
transaction and treating any Indebtedness which becomes an obligation of
any Obligor or Obligor Subsidiary or of such Person as a result of such
transaction as having been incurred by such Obligor or such Obligor
Subsidiary or such Person, as the case may be, at the time of such
transaction, no Default shall have occurred and be continuing; and
(g) the Company shall have received an Opinion of Independent
Counsel in Canada to the effect that (x) any payment of interest or
principal on the Securities by the Company to a Holder will, after the
amalgamation, consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition of assets, be exempt from Canadian
withholding tax, if the Holder is or is deemed to be a non-resident of
Canada, deals at arm's-length with the resulting, surviving or transferee
Person for purposes of the Income Tax Act (Canada) at the time of making
the payment, and (y) no other taxes on income (including taxable capital
gains) will be payable under the Income Tax Act (Canada) by a Holder of
the Securities who is or who is deemed to be a non-resident of Canada in
respect of the acquisition, ownership or disposition of the Securities,
including the receipt of principal thereof, or premium, if any, or
interest, thereon; provided that such Holder does not use or hold, and is
not
86
deemed to use or hold, the Securities in carrying on a business in Canada
for purposes of the Income Tax Act (Canada) and, in the case of a Holder
of Securities who carries on an insurance business in Canada and
elsewhere, the Securities are not effectively connected with its Canadian
insurance business.
The Company shall deliver to the Trustee, prior to the consummation of any
proposed transaction pursuant to this Section 801, an Officers' Certificate to
the foregoing effect and an Opinion of Counsel, stating that the proposed
transaction and such amendments comply with this Indenture. The provisions of
this Section 801 will not apply to any transaction (including any Asset Sale
made in accordance with Section 1009 with respect to any Guarantor) if the
Guaranty of such Guarantor is released in connection with such transaction in
accordance with the applicable provisions of this Indenture and the other
Indenture Documents.
Section 802. Successor Substituted.
Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer or disposition of all or substantially all of the
properties and assets of any Obligor or Obligor Subsidiary in accordance with
Section 801 hereof, the successor Person formed by such consolidation or into
which such Obligor or Obligor Subsidiary is merged or the successor Person to
which such sale, assignment, conveyance, transfer, lease or disposition is made
shall succeed to, and be substituted for, and may exercise every right and power
of, PCI, the Company or a Guarantor, as the case may be, under this Indenture,
the Securities, its Guaranty, and/or the other Indenture Documents, as the case
may be, with the same effect as if such successor had been named as PCI, the
Company or a Guarantor, as the case may be, herein, in the Securities, the
Guaranty, and such other Indenture Documents, as the case may be. When a
successor assumes all the obligations of its predecessor under this Indenture,
the Securities, a Guaranty, and/or other Indenture Documents, as the case may
be, the predecessor shall be released from those obligations; provided that in
the case of a transfer by lease, the predecessor shall not be released from the
principal of, premium, if any, or interest on the Securities or any other
Indenture Obligations relating to, this Indenture, the Securities, each
Guaranty, or the other Indenture Documents, as the case may be.
Notwithstanding anything in the foregoing, any consolidation or
merger, or any sale, assignment, conveyance, transfer or disposition of
properties or assets under this Article Eight shall be subject to the provisions
of Section 1014 and Section 1109 hereof.
87
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent
of Holders.
(a) Without the consent of any Holders, the Indenture Obligors and
their respective Obligor Subsidiaries (if a party to the applicable document or
instrument), when authorized by Board Resolutions of such Obligor's or Obligor
Subsidiary's Board of Directors, and the Trustee, subject to Section 903 hereof,
at any time and from time to time, may enter into one or more indentures
supplemental hereto or agreements or other instruments with respect to any
Guaranty, in form and substance satisfactory to the Trustee, for any of the
following purposes:
(i) to cure any ambiguity, defect or inconsistency herein or
therein;
(ii) to provide for the assumption pursuant to Article Eight of the
Company's and/or a Guarantor's obligations to the Holders in the case of a
merger, consolidation or sale of assets;
(iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(iv) to make any change herein or therein that does not adversely
affect the rights hereunder or thereunder of any Holder;
(v) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture
Act;
(vi) to add a Guarantor pursuant to the requirements of Section 1316
hereof;
(vii) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder;
(viii) to provide additional collateral for the Securities or the
Guaranties or other Indebtedness permitted to be secured by the
Collateral, and in connection therewith (and only in such limited
respect), to modify covenants, to provide additional indemnity to the
Trustee, and to modify other provisions of this Indenture, the Securities
and the Guaranties that relate solely to such additional collateral or
that will or may be impacted by the providing of such collateral, and to
enter into agreements, documents or other instruments to effect the
foregoing, including, without limitation, intercreditor and collateral
agency agreements relating to Liens on such collateral on a pari passu
basis in favor of the Trustee for the benefit of the Holders;
88
(ix) to add to the covenants of any Indenture Obligor or any other
obligor upon the Securities for the benefit of the Holders, or to
surrender any right or power herein or therein conferred upon such
Indenture Obligor or any other obligor upon the Securities herein or
therein, in the Securities or in any Guaranty; or
(x) to add any additional Events of Default for the benefit of the
Holders of all Securities.
(b) Without the consent of any Holders, the Trustee, on behalf of
the Holders, at any time and from time to time, may enter, subject to the
provisions of the relevant Indenture Documents (other than the Indenture), into
one or more amendments, supplements or other modifications to such other
Indenture Document, in form and substance satisfactory to the Trustee for any of
the following purposes:
(i) to cure any ambiguity, defect or inconsistency therein;
(ii) to provide for the assumption pursuant to Article Eight of the
Company's and/or a Guarantor's obligations to the Holders in the case of a
merger, consolidation or sale of assets;
(iii) to make any change therein that does not adversely affect the
rights hereunder or thereunder of any Holder;
(iv) to effectuate and evidence the succession of another entity to
any Obligor and the assumption by any successor of the covenants of such
Obligor, under the Indenture Documents to which such Obligor is a party;
(v) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder;
(vi) to provide additional collateral for the Securities or the
Guaranties or other Indebtedness permitted to be secured by the
Collateral, and in connection therewith (and only in such limited
respect), to modify covenants, to provide additional indemnity to the
Trustee, and to modify other provisions of this Indenture, the Securities
and the Guaranties that relate solely to such additional collateral or
that will or may be impacted by the providing of such additional
collateral, and to enter into agreements, documents or other instruments
to effect the foregoing, including, without limitation, intercreditor and
collateral agency agreements relating to Liens on such collateral on a
pari passu basis in favor of the Trustee for the benefit of the Holders;
(vii) to add to the covenants of any Obligor or any other obligor
upon the Securities for the benefit of the Holders, or to surrender any
right or power therein conferred upon such Obligor or any other obligor
upon the Securities therein;
89
(viii) to add any additional Events of Default for the benefit of
the Holders of all Securities; or
(ix) to provide for uncertificated securities in addition to or in
place of certificated securities.
Section 902. Supplemental Indentures and Agreements with Consent of
Holders.
With the consent of the Holders of not less than a majority of the
aggregate principal amount of the Securities then Outstanding, by Act of said
Holders delivered to the Company and the Trustee, each Indenture Obligor and
each of its respective Obligor Subsidiaries (if a party thereto), when
authorized by Board Resolutions of such Indenture Obligor's or such Obligor
Subsidiary's Board of Directors, and the Trustee may enter into an indenture or
indentures supplemental hereto or agreements or other instruments with respect
to any Guaranty or any other Indenture Documents (subject, in the case of such
other Indenture Documents to the applicable provisions of such Indenture
Documents) in form and substance satisfactory to the Trustee for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture, the Securities, any Guaranty or any other
Indenture Documents, as the case may be; provided, however, that no such
supplemental indenture, agreement or instrument shall, without the consent of
the Holder of each Outstanding Security affected thereby:
(i) reduce the percentage of the aggregate principal amount of
Securities, the consent of whose Holders is required for any amendment,
supplement or waiver (or compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture and/or such other Indenture Document, as applicable;
(ii) reduce the rate of, or change the time for payment of, any
premium, if any, or interest (including Defaulted Interest), payable on
any Security, or change the place of payment where, or the coin or
currency in which, any Security or any premium, if any, or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date);
(iii) reduce the principal of or change the Stated Maturity of any
Security, or alter the optional redemption provisions, or alter the price
at which the Company shall offer to purchase such Securities pursuant to
Sections 1014 or 1109 hereof or such other applicable terms of this
Indenture;
(iv) make any Security payable in money other than that stated in
the Security;
(v) make any change in Sections 504 or 507 hereof;
90
(vi) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest on the Securities, including any such
obligation arising under Sections 1009, 1014 or Section 1109 hereof
(except a rescission of acceleration of the Securities pursuant to Section
502 hereof by the Holders of at least a majority of the aggregate
principal amount of the Securities then Outstanding (or in the case of the
failure to make a Change of Control Offer, two-third of the aggregate
principal amount of the Securities then Outstanding) and a waiver of the
payment default that resulted from such acceleration);
(vii) waive a purchase payment required to be made under Sections
1009, 1014 or 1109 or a payment under Article Thirteen hereof with respect
to any Security;
(viii) affect the ranking of the Securities;
(ix) affect adversely the interests, rights or obligations of the
Trustee or the Collateral Agent, unless consented to by the Trustee or the
Collateral Agent, as applicable; (x) release (x) any Guarantor from its
obligations under its Guaranty, or (y) any Collateral other than pursuant
to the terms of the Indenture, such Guaranty or the applicable Security
Document; or
(xi) make any change in the provisions of this Section 902.
Further, no such supplemental indenture shall, without the consent
of the Holders of all of the Securities then Outstanding, permit the creation of
any Lien prior to or pari passu with the Lien of the Security Documents with
respect to any of the Collateral, or terminate the Liens of the Security
Documents, on any Collateral or deprive any Holder of the security afforded by
the Lien of the Security Documents, except to the extent expressly permitted by
this Indenture, the Common Security and Intercreditor Agreement or any of the
Security Documents.
Upon the written request of the Indenture Obligors and their
respective Obligor Subsidiaries (if parties thereto), accompanied by a copy of
Board Resolutions of their respective Boards of Directors, authorizing the
execution of any such supplemental indenture, Guaranty or Indenture Document,
and upon the filing with the Trustee of evidence satisfactory to the Trustee of
the consent of Holders as aforesaid, the Trustee shall, subject to Section 903
hereof, join with the Indenture Obligors and such Obligor Subsidiaries in the
execution of such supplemental indenture, Guaranty or Indenture Document.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture or
Guaranty or agreement or instrument relating to any Guaranty or any other
Indenture Document, but it shall be sufficient if such Act shall approve the
substance thereof.
91
Section 903. Execution of Supplemental Indentures and Agreements.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article Nine
or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Sections 315(a) through
315(d) of the Trust Indenture Act and Section 602 hereof) shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
stating that the execution of such supplemental indenture, agreement or
instrument is authorized or permitted by this Indenture, that no consent is
required or that all requisite consents have been received and that such
supplemental indenture, agreement or instrument constitutes the legal, valid and
binding obligation of the Indenture Obligors and Obligor Subsidiaries or their
respective successors, as the case may be, enforceable against such entity in
accordance with its terms, subject to customary exceptions. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture, agreement
or instrument which affects the Trustee's own rights, duties or immunities under
this Indenture, any Guaranty or otherwise.
Section 904. Revocation Effect of Supplemental Indentures.
Until a supplemental indenture, amendment or waiver becomes
effective, a consent to it by a Holder of a Security is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of consent is not made on any Security.
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture shall be modified in accordance therewith and such
supplemental indenture shall form a part of this Indenture for all purposes and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may bear a notation in form
satisfactory to the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities so modified as to
conform to any such supplemental indenture may be prepared and executed by the
Company and each Guarantor and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
92
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
The Company shall duly and punctually pay the principal of, premium,
if any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain (or cause to be maintained) an office or
agency where Securities may be presented or surrendered for payment. The Company
also shall maintain (or cause to be maintained) in The City of New York, State
of New York an office or agency where Securities may be surrendered for
registration or transfer, redemption or exchange and where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be
served. Such office or agency shall be initially at the Corporate Trust Office.
This office or agency shall accept delivery of Securities as described in
Section 201, Section 305 and Section 309 hereof. The Company shall give prompt
written notice to the Trustee of the location and any change in the location of
any such offices or agencies. If at any time the Company shall fail to maintain
(or cause to be maintained) any such required offices or agencies or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee described above and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more additional
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes, and may from time
to time rescind such designation. The Company shall give prompt written notice
to the Trustee of any such designation or rescission and any change in the
location of any such office or agency.
Section 1003. Compliance Certificate.
(a) Each of PCI and the Company shall deliver to the Trustee, within
ninety (90) days after the end of each fiscal year of PCI and the Company, an
Officers' Certificate stating that a review of the activities of each Obligor
and each Obligor Subsidiary during the period in respect of which the financial
statements have been furnished pursuant to Section 704(a) hereof, and the
preceding fiscal year has been made under the supervision of the signing
officers with a view to determining whether each has kept, observed, performed
and fulfilled its Indenture Obligations under this Indenture and the other
Indenture Documents, and further stating, as to each such officer signing such
certificate, that to the best of his or her knowledge each has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
the other Indenture
93
Documents to which it is a party and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof or thereof (or,
if a Default shall have occurred, describing all such Defaults of which he or
she may have knowledge and what action each is taking or proposes to take with
respect thereto).
(b) Each of PCI and the Company shall deliver to the Trustee, within
forty-five (45) days after the end of the first three quarters of each fiscal
year, an Officers' Certificate stating that a review of the activities of each
Obligor and each Obligor Subsidiary during the period in respect of which the
financial statements have been furnished pursuant to Section 704(b) hereof, and
the preceding Fiscal Quarter has been made under the supervision of the signing
officers with a view to determining whether each has kept, observed, performed
and fulfilled its Indenture Obligations under this Indenture and the other
Indenture Documents, and further stating, as to each such officer signing such
certificate, that to the best of his or her knowledge each has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
the other Indenture Documents to which it is a party and is not in default in
the performance or observance of any of the terms, provisions and conditions
hereof or thereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action each is taking or proposes to take with respect
thereto).
Section 1004. Taxes.
Each Indenture Obligor shall, and shall cause each of its Obligor
Subsidiaries to, pay and discharge prior to delinquency (a) all federal, state,
foreign, provincial and other material Taxes, assessments and governmental
charges or levies imposed upon it, its income and its properties, except, in
each case, as are being contested in good faith and by appropriate proceedings
diligently conducted by the Indenture Obligors and in respect of which
appropriate reserves are being maintained in accordance with GAAP, and (b) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Indenture Obligor or any of its Obligor
Subsidiaries, except, in each case, as are being contested in good faith by
appropriate proceedings diligently conducted by the Indenture Obligors and in
respect of which appropriate reserves are being maintained in accordance with
GAAP.
Section 1005. Jurisdiction, Service of Process and Venue Immunity;
Judgment Currency.
(a) Each Indenture Obligor irrevocably agrees that any suit, action
or proceeding with respect to this Indenture or any other Indenture Document or
any judgment entered by any court in respect thereof may be brought in the
United States District Court for the Southern District of New York, in the
Supreme Court of the State of New York sitting in New York County (including its
Appellate Division), or in any other appellate court in the State of New York,
as the party commencing such suit, action or proceeding may elect in its sole
discretion, and each Indenture Obligor hereby irrevocably submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. Each Indenture Obligor further submits, for
94
the purpose of any suit, action, proceeding or judgment brought or rendered
against any Collateral or other property, to the appropriate courts of the
jurisdiction where such Collateral or other property may be found.
(b) Each Indenture Obligor agrees that service of all writs, process
and summonses in any such suit, action or proceeding brought in any Federal or
state court located in The City of New York may be made upon CT Corporation,
presently located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
U.S.A. (the "U.S. Process Agent"), and each Indenture Obligor hereby confirms
and agrees that the U.S. Process Agent has been duly and irrevocably appointed
as its agent and true and lawful attorney-in-fact in its name, place and stead
to accept such service of any and all such writs, process and summonses, and
agrees that the failure of the U.S. Process Agent to give any notice of any such
service of process to the applicable Indenture Obligor shall not impair or
affect the validity of such service or of any judgment based thereon. Each
Indenture Obligor hereby further irrevocably consents to the service of process
in any suit, action or proceeding in such courts by the mailing thereof by
registered or certified mail, postage prepaid, at its address set forth in
Section 106 hereof or by personal service within or without the jurisdiction of
its domicile.
(c) Nothing herein shall in any way be deemed to limit the ability
of the Trustee or the Holders to serve any such writs, process or summonses in
any other manner permitted by applicable law or to obtain jurisdiction over any
Indenture Obligor in such other jurisdictions, and in such manner, as may be
permitted by applicable law.
(d) Each Indenture Obligor hereby irrevocably waives, to the fullest
extent permitted by applicable law, any objection that it may now or hereafter
have to the laying of the venue of any suit, action or proceeding arising out of
or relating to this Indenture or any other Indenture Document brought in the
Supreme Court of the State of New York, County of New York, in the United States
District Court for the Southern District of New York or in the courts of the
jurisdiction of its domicile or in the courts of the jurisdiction where any
Collateral or other property of such Person may be found, and hereby further
irrevocably waives, to the fullest extent permitted by applicable law, any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.
(e) To the extent that any Indenture Obligor may be or become
entitled, in any judicial proceeding which may at any time be commenced with
respect to this Indenture or any other Indenture Document, to claim for itself
or the Collateral or its other property or revenues any immunity from suit,
court jurisdiction, attachment prior to judgment, attachment in aid of execution
of a judgment, execution of a judgment or from any other legal process or remedy
relating to its obligations under this Indenture or any other Indenture
Document, and to the extent that there may be attributed such an immunity
(whether or not claimed), such Indenture Obligor hereby irrevocably agrees not
to claim and hereby irrevocably waives such immunity to the fullest extent
permitted by the laws of the state of New York.
95
(f) This is an international debt transaction in which the
specification of United States dollars and payment in The City of New York is of
the essence, and the obligation of the Indenture Obligors under this Indenture
and the other Indenture Documents to make payment to (or for the account of) the
Trustee and the Holders in dollars shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency or in another place except to the extent that such tender or
recovery results in the effective receipt by the Trustee and the Holders in The
City of New York of the full amounts of dollars payable to the Trustee and the
Holders under this Indenture and the other Indenture Documents. If for the
purpose of obtaining judgment in any court it is necessary to convert a sum due
hereunder in dollars into another currency (in this Section 1005 called the
"judgment currency"), the rate of exchange that shall be applied shall be that
at which in accordance with normal banking procedures dollars could be purchased
in The City of New York with the judgment currency on the Business Day next
preceding the day on which such judgment is rendered. The obligation of each
Indenture Obligor in respect of any such sum due from it to the Trustee and the
Holders under this Indenture or any other Indenture Document shall,
notwithstanding the rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the Business Day following
receipt by the Trustee or the Holders, as the case may be, of any sum adjudged
to be due under this Indenture or any other Indenture Document, as the case may
be, in the judgment currency the Trustee or the Holders, as the case may be, may
in accordance with normal banking procedures purchase and transfer dollars to
The City of New York with the amount of the judgment currency so adjudged to be
due, and each Indenture Obligor hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify the Trustee and the
Holders against, and to pay the Trustee and the Holders on demand, in dollars,
the amount (if any) by which the sum adjudged to be due to the Trustee or the
Holders, as the case may be, in dollars under this Indenture or any other
Indenture Document exceeds the amount of the dollars so purchased and
transferred.
Section 1006. Limitation on Restricted Payments.
No Indenture Obligor will, nor will it cause, permit or suffer any
of its Obligor Subsidiaries to, (a) declare or pay any dividends or make any
other distributions (including through mergers, liquidations or other
transactions but excluding, for the avoidance of doubt, the issuance of New
Common Stock pursuant to the Plan of Reorganization) on any class of Capital
Stock of any Indenture Obligor or its Obligor Subsidiaries (other than dividends
or distributions payable to PCI or by a Wholly-Owned Subsidiary of PCI or of the
Company on account of its Capital Stock held by PCI or the Company or another
Subsidiary of PCI or the Company or payable or paid in shares of Capital Stock
of the Company other than preferred stock or redeemable stock), (b) make any
payment on account of, or set apart money for a sinking or other analogous fund
for, the purchase, redemption or other retirement of such Capital Stock, (c)
purchase, defease, redeem or otherwise retire any Subordinated Indebtedness
(other than with the proceeds of the issuance of Capital Stock of PCI which is
permitted to be issued pursuant to the terms of this Indenture or with the
proceeds of Subordinated Indebtedness which is permitted to be incurred pursuant
to the terms of this Indenture), or (d) make any Investment, either directly or
indirectly, whether in cash or property or in obligations of
96
any Indenture Obligor or its Obligor Subsidiaries (all of the foregoing being
called "Restricted Payments"). Notwithstanding the foregoing, any Obligor may
make (i) Permitted Issuances, (ii) Restricted Payments made pursuant to the
Transaction Documents, (iii) Permitted Investments, and (iv) regularly scheduled
payments on Subordinated Indebtedness which is permitted to be incurred pursuant
to the terms of this Indenture.
Section 1007. Limitations on Payment Restrictions Affecting
Subsidiaries.
No Indenture Obligor shall, nor shall it permit any of its Obligor
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Obligor Subsidiary to (a) pay dividends or make any
other distribution to any Indenture Obligor or its Obligor Subsidiaries on its
Capital Stock, (b) pay any Indebtedness owed to any Indenture Obligor or such
other Subsidiary, (c) make loans or advances to any Indenture Obligor or such
other Subsidiary, or (d) transfer any of its property or assets to any Indenture
Obligor or such other Subsidiary, except:
(i) consensual encumbrances or restrictions contained in or created
pursuant to any Indenture Documents or the Transaction Documents;
(ii) any restriction, with respect to a Subsidiary of any Indenture
Obligor that is not a Subsidiary of such Indenture Obligor on the Closing
Date, in existence at the time such entity becomes a Subsidiary of such
Indenture Obligor; provided that such encumbrance or restriction is not
created in anticipation of or in connection with such entity becoming a
Subsidiary of the Company and is not applicable to any Person or the
properties or assets of any Person other than a Person that becomes a
Subsidiary;
(iii) encumbrances or restrictions contained in any other
Indebtedness permitted to be incurred subsequent to the Closing Date
pursuant to the provisions of Section 1008 hereof; provided that any such
encumbrances or restrictions (except pursuant to the Exit Facility) are
not more restrictive taken individually and as a whole than the most
restrictive of those provided for in the Indebtedness referred to in
clause (i) of this Section 1007;
(iv) any such encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests to the
extent such provisions restrict the transfer of the lease;
(v) any restriction with respect to such a Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary in
compliance with the Indenture pending the closing of such sale or
disposition; or
(vi) any encumbrance or restriction required or mandated by
applicable law.
97
Section 1008. Limitations on Indebtedness.
No Indenture Obligor shall, nor shall it permit its Obligor
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty
or otherwise become liable with respect to, or become responsible for the
payment of, contingently or otherwise ("incur"), any Indebtedness.
Notwithstanding the foregoing limitations, the limitations of this Section 1008
shall not apply to the incurrence of the following Indebtedness:
(i) Indebtedness of the Company evidenced by the Securities,
Indebtedness of any Guarantor evidenced by the Guaranties with respect
thereto and Indebtedness of the Company and of the Guarantors, as
evidenced by and in respect of all other Indenture Obligations and
Indenture Documents;
(ii) Indebtedness of Pioneer Americas evidenced by the New Tranche A
Term Notes or under or in respect of the Term Loan Agreement and all other
obligations continued or incurred thereunder, Indebtedness of any
guarantor in respect of the guaranties of the obligations under the Term
Loan Agreement or the New Tranche A Term Notes, Indebtedness of Pioneer
Americas evidenced by the New Tranche A Notes, Indebtedness of any
guarantor in respect of the guaranties of the New Tranche A Notes and
Indebtedness in respect of all other Transaction Documents and all other
obligations incurred thereunder;
(iii) Indebtedness of any Indenture Obligor or Obligor Subsidiaries
constituting Existing Indebtedness and any extension, deferral, renewal,
refinancing or refunding thereof, without increasing the aggregate
principal amount of such Indebtedness then outstanding and covered
thereby;
(iv) Indebtedness of any Obligor or Obligor Subsidiary in respect of
and in accordance with the terms of, the Exit Facility; provided that
notwithstanding the terms of the Exit Facility, the aggregate principal
amount of Indebtedness at any time outstanding under the Exit Facility
shall not exceed $65,000,000;
(v) Capitalized Lease Obligations of any Indenture Obligor or its
Obligor Subsidiaries, including Indebtedness in respect of Capitalized
Lease Obligations of any Indenture Obligor or its Obligor Subsidiary
secured by Liens that secure the payment of all or part of the purchase
price of assets or property acquired or constructed in the ordinary course
of business after the date hereof; provided, however, that the aggregate
principal amount of such Capitalized Lease Obligations, including such
Indebtedness in respect of Capitalized Lease Obligations of Indenture
Obligors and all of their respective Obligors Subsidiaries, does not
exceed $10,000,000 in the aggregate outstanding at any time;
(vi) Indebtedness of PCI or the Company to any of their respective
Subsidiaries or of any such Subsidiary to PCI, the Company or another such
98
Subsidiary (but only so long as such Indebtedness is held by PCI, the
Company or such Subsidiary);
(vii) Indebtedness incurred in connection with the CRC Portfolio and
other Indebtedness, not secured by or subject to any Lien, under Hedging
Obligations incurred in the ordinary course of PCI's or Pioneer Americas'
business or entered into by Pioneer Americas (or any other Person on
behalf of Pioneer Americas with the express authority of Pioneer Americas
to bind Pioneer Americas with respect thereto) for the sole purpose of
offsetting any open position with respect to the CRC Portfolio and
otherwise mitigating any exposure in respect of the CRC Portfolio;
provided, however, that in the case of foreign currency exchange or
similar agreements which relate to other Indebtedness, such agreements do
not increase the Indebtedness of any Indenture Obligor or its Obligor
Subsidiaries outstanding other than as a result of fluctuations in foreign
currency exchange rates, and in the case of interest rate protection
agreements, only if the notional principal amount of such interest rate
protection agreement does not exceed the principal amount of the
Indebtedness to which such interest rate protection agreement relates;
(viii) Indebtedness, not secured by or subject to any Lien (except
as shall, in the ordinary course of business, be backed by cash or cash
equivalents), in respect of performance, completion, guaranty, surety and
similar bonds, banker's acceptances, bills of exchange or letters of
credit provided or to be endorsed by PCI, the Company or any of their
respective Subsidiaries in the ordinary course of business;
(ix) Indebtedness, not secured by or subject to any Lien, in respect
of (i) any guaranty (not otherwise referred to above) provided by PCI, the
Company or any of their respective Subsidiaries in respect of any other
Indebtedness permitted to be incurred hereunder; provided, however, that
if such Indebtedness guaranteed is (x) subordinated in right of payment to
any other Indebtedness of the Indenture Obligor thereof, then such
guaranty shall be subordinated to Indebtedness of such guarantor to the
same extent, and (y) secured by a Lien otherwise permitted pursuant to
Section 1012, then such guaranty may be so secured, (ii) indemnities in
favor of Persons issuing title insurance policies, (iii) indemnifications
in the Transaction Documents and in any agreements contemplated thereunder
or thereby, (iv) indemnities in the Organizational Documents of PCI and
its Subsidiaries, and (v) customary indemnities given to a purchaser of
assets from the Company; provided that the sale of such assets by the
Company is permitted pursuant to the terms hereof;
(x) Indebtedness, not secured by or subject to any Lien, of a Person
which becomes a Subsidiary of the Company incurred and outstanding on or
prior to the date on which such Person was acquired as a Subsidiary by the
Company; provided that (i) on the date of such acquisition and after
giving effect thereto, the Consolidated Fixed Charge Coverage Ratio of the
Company for the most recently ended four full Fiscal Quarters for which
internal financial statements are
99
available immediately preceding the date of such incurrence would have
been at least equal to 2.5:1.0 determined on a pro forma basis after
giving effect, in each case, to such acquisition which makes that Person a
Subsidiary of the Company, and (ii) immediately after giving effect to the
acquisition of such Person, no Default or Event of Default shall occur and
be continuing;
(xi) Indebtedness subject to Liens permitted by Section 1012
(including purchase money Indebtedness and Attributable Indebtedness in
respect of Sale and Leaseback Transactions);
(xii) Indebtedness incurred in respect of New Other Secured Notes
and Claims;
(xiii) Subordinated Indebtedness, not secured by or subject to any
Lien; provided that (i) on the date of incurrence of such Subordinated
Indebtedness and after giving effect thereto, the Consolidated Fixed
Charge Coverage Ratio of the Company for the most recently ended four full
Fiscal Quarters immediately preceding the date of such incurrence would
have been at least equal to 1.75:1.0 determined on a pro forma basis, and
(ii) immediately after giving effect to such Indebtedness, no Default or
Event of Default shall have occurred and be continuing;
(xiv) any refinancing, refunding, deferral, renewal or extension
(each, a "Refinancing") of any Indebtedness of any Obligor or any Obligor
Subsidiary permitted by subsections (ii), (iii), (iv), (x) and (xii) (the
"Refinancing Indebtedness"); provided, however, that (a) such Refinancing
Indebtedness does not exceed the aggregate principal amount of the
Indebtedness so refinanced, plus the amount of any premium required to be
paid in connection with such Refinancing in accordance with the terms of
such Indebtedness or the amount of any premium reasonably determined by
such Obligor as necessary to accomplish such Refinancing, plus the amount
of reasonable and customary out-of-pocket fees and expenses payable in
connection therewith, (b) the Refinancing Indebtedness does not provide
for any mandatory redemption, amortization or sinking fund requirement in
an amount greater than or at a time prior to the amounts and times
specified in the Indebtedness being refinanced, refunded, deferred,
renewed or extended and (c) if the Indebtedness being refinanced,
refunded, deferred, renewed or extended is subordinated to the
Indebtedness of the Obligor or Obligor Subsidiaries under the Securities,
the Refinancing Indebtedness incurred to refinance, refund, defer, renew
or extend such Indebtedness is subordinated in right of payment to the
Obligations on terms at least as favorable to the Holders as those
contained in the documentation governing the Indebtedness being so
refinanced, refunded, deferred, renewed or extended; or
(xv) in addition to Indebtedness permitted by clauses (i) through
(xiii) of this Section 1008, Indebtedness of such Obligors and Obligor
Subsidiaries,
100
taken together, in an aggregate principal amount not to exceed $200,000 at
any time outstanding;
provided, however, that no Indebtedness permitted to be incurred pursuant to
this Section 1008 (except for the Exit Facility or any refinancing thereof
permitted under this Indenture) shall contain any terms that are more
restrictive on or to the obligor of such Indebtedness than those set forth in
this Indenture, whether taken individually or as a whole.
Section 1009. Asset Sales.
(a) No Indenture Obligor shall, nor shall it permit any of its
Obligor Subsidiaries to, make any Asset Sale (other than to another Indenture
Obligor or such other Subsidiary) unless (i) such Indenture Obligor or such
Subsidiary receives consideration at the time of such Asset Sale at least equal
to the Fair Market Value of the assets sold or otherwise disposed of, and at
least 85% of the consideration received by such Indenture Obligor or such
Subsidiary from such Asset Sale is in the form of cash (in Dollars) and no
portion thereof shall consist of inventory or accounts receivable or other
property that would become subject to a Lien held by any other creditor of such
Indenture Obligor or of any such Subsidiary other than the Lenders, New Tranche
A Note Holders or the Holders of the Securities; provided, however, that the
amount of any cash equivalent or note or other obligation received by such
Indenture Obligor or such Subsidiary from the transferee in any such transaction
that is converted within 45 days by such Indenture Obligor or such Subsidiary
into cash shall be deemed upon such conversion to be cash for purposes of this
provision; (ii) to the extent such Asset Sale involves Collateral, PCI or the
Company shall cause the aggregate cash proceeds received by such Indenture
Obligor or such Subsidiary in respect of such Asset Sale which are allocated to
the Collateral, net of the items set forth in clauses (i) through (iii) of the
definition of Net Proceeds (the "Collateral Proceeds"), to be deposited with the
Collateral Agent in the Intercreditor Collateral Account as and when received by
such Indenture Obligor or any such Subsidiary for application in accordance with
the Common Security and Intercreditor Agreement and this Indenture; and (iii)
the Net Proceeds received by such Indenture Obligor or such Subsidiary from any
Asset Sale are applied in accordance with the following paragraphs.
(b) The Company shall apply 100% of the aggregate amount of Net
Proceeds or the Collateral Proceeds, as the case may be, from each and every
Asset Sale, subject to the provisions, if applicable, of the Common Security and
Intercreditor Agreement, to the purchase of Securities tendered to the Company
for purchase, in each case then Outstanding, at a price (the "Asset Sale
Purchase Price") equal to 100% of the principal amount thereof, plus accrued
interest, and premium, if any, to the date of purchase pursuant to an offer to
purchase made by the Company (an "Asset Sale Offer") with respect to the
Securities.
(c) Until such time, if any, as the Net Proceeds from any Asset Sale
are applied in accordance with this covenant, such Net Proceeds shall be
segregated from
101
the other assets of each Indenture Obligor and each of its Obligor Subsidiaries
and invested in cash or Eligible Investments.
(d) Any Asset Sale Offer shall be made substantially in accordance
with the procedures described under Section 1109 hereof. Each Indenture Obligor
shall cause a notice of any Asset Sale Offer to be mailed to the Trustee and the
Holders at their registered addresses not less than 30 days nor more than 45
days before the purchase date.
In the case of a sale of Collateral, the notice of an Asset Sale
Offer shall contain the following additional information: (i) a description of
the interests to be released; (ii) the Fair Market Value of the released
interests as of a date no later than 60 days before the date of such notice; and
(iii) certification that the purchase price received is not less than the Fair
Market Value of such released interest as of the date of such release. Such
notice to the Trustee shall be accompanied by an Officers' Certificate setting
forth a statement to the effect that (x) an Indenture Obligor intends to make an
Asset Sale, and/or (y) there has occurred a destruction or condemnation in
respect of Collateral resulting in Insurance Proceeds or Net Awards which are
not required to be applied to effect a Restoration of the affected Collateral
under the applicable Security Document. The notice shall also be accompanied by
an Opinion of Counsel as to the Asset Sale Offer and satisfactory evidence from
a title company that the Liens of the Collateral Agent or the remaining
Collateral continue unimpaired as perfected first priority liens.
Upon receiving notice of an Asset Sale Offer, Holders may elect to
tender their Securities in whole or in part in integral multiples of $1 in
exchange for cash. To the extent that Holders properly tender Securities in an
amount exceeding the Asset Sale Offer, Securities of tendering Holders shall be
repurchased on a pro rata basis (based on amounts tendered).
(e) In the event any Indenture Obligor is required to make an Asset
Sale Offer at a time when such Indenture Obligor is prohibited from making such
Offer, any other Indenture Obligor shall, on or prior to the date that such
Indenture Obligor is required to make an Asset Sale Offer, seek the consent of
the Holders and the New Tranche A Note Holders to repurchase Securities pursuant
to such Asset Sale Offer; provided, however, that the failure to make or
consummate the Asset Sale Offer as provided herein shall constitute an Event of
Default.
(f) The Company shall comply, to the extent applicable, with the
requirements of Rule 14e-1 under the Exchange Act, any other tender offer rules
under the Exchange Act and all other applicable U.S. Federal and state and
Canadian federal and provincial securities laws or regulations in connection
with any offer to repurchase and the repurchase of the Securities as described
above.
(g) No Indenture Obligor shall, nor shall it not permit any of its
Obligor Subsidiaries to, create or permit to exist or become effective any
consensual restriction, other than restrictions not more restrictive taken as a
whole (as determined in
102
good faith by the Board of Directors of PCI) than those in effect under the Exit
Facility or any other Indebtedness permitted by Section 1008, that would
materially impair the ability of any Indenture Obligor or any of its Obligor
Subsidiaries to comply with the provisions of this Section 1009.
(h) If at any time any non-cash consideration permitted by this
Section 1009 (other than any such consideration consisting of inventory,
accounts receivable and certain related assets securing or permitted to secure
the Exit Facility) is received by any Indenture Obligor or any Obligor
Subsidiary, as the case may be, in connection with any Asset Sale of assets
permitted by this Section 1009 which includes Collateral, such non-cash
consideration shall be made subject to the Lien of the Security Documents in the
manner contemplated in the Common Security and Intercreditor Agreement to the
extent of the purchase price allocated to the Collateral. If and when any such
non-cash consideration received from any Asset Sale (whether or not relating to
Collateral) is converted into or sold or otherwise disposed of for cash, then
such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Proceeds or the Collateral Proceeds thereof shall be
applied in accordance with this Section 1009 and this Indenture.
(i) All Insurance Proceeds and all Net Awards required to be
delivered to the Collateral Agent pursuant to any Security Document shall
constitute Trust Moneys and shall be delivered, or caused to be delivered by
each Indenture Obligor or any of its Obligor Subsidiaries, as the case may be,
to the Collateral Agent promptly after receipt by any Indenture Obligor or any
of its Obligor Subsidiaries and be deposited into the appropriate Intercreditor
Collateral Account. If the relevant Obligor shall not deliver a Restoration
Election Notice (as such term is defined in the Common Security and
Intercreditor Agreement) in accordance with Section 5.04 of the Common Security
and Intercreditor Agreement, or if a Restoration (as such term is defined in the
Common Security and Intercreditor Agreement) is not commenced and diligently
continued, such Insurance Proceeds and Net Awards shall be deemed proceeds of an
Asset Sale for the purposes of this Indenture, and the Company shall promptly
apply 100% of the aggregate amount of Insurance Proceeds and Net Awards to the
purchase of Securities then Outstanding at a price equal to 100% of the
principal amount thereof, plus accrued interest, and premium, if any, tendered
to the Company for purchase pursuant to an offer to purchase made by the Company
with respect to the Securities and the provisions of this Indenture governing
Asset Sale Offers and other related provisions shall apply to such an offer to
purchase mutatis mutandis. Insurance Proceeds and Net Awards so deposited that
may be applied by each Indenture Obligor or any of its Obligor Subsidiaries to
effect a Restoration of the affected Collateral under the applicable Security
Document may be withdrawn from the Intercreditor Collateral Account only in
accordance with the applicable provisions of the Common Security and
Intercreditor Agreement. Insurance Proceeds and Net Awards so deposited that are
not applied to effect a Restoration of the affected Collateral under the
applicable Security Document and are subject to a consummated Asset Sale Offer
may only be withdrawn in accordance with applicable provisions of the Common
Security and Intercreditor Agreement.
103
Section 1010. Limitation on Sale and Leaseback Transactions.
No Indenture Obligor shall, nor shall it permit any of its Obligor
Subsidiaries to, enter into any Sale and Leaseback Transaction unless (a) at the
time of the occurrence of such transaction and after giving effect to such
transaction and (x) in the case of a Sale and Leaseback Transaction which is a
Capitalized Lease Obligation, giving effect to the Indebtedness in respect
thereof, the Indenture Obligor and any of its Obligor Subsidiaries entering into
such transaction will remain in compliance with the clause (d) of Section 1008
and (y) in the case of any other Sale and Leaseback Transaction, giving effect
to the Attributable Indebtedness in respect thereof, the aggregate Attributed
Indebtedness of the Indenture Obligors and their Obligor Subsidiaries, taken as
a whole, does not exceed $1,000,000, (b) at the time of the occurrence of such
transaction, such Indenture Obligor or its Obligor Subsidiaries could incur
Indebtedness secured by a Lien on property in a principal amount equal to or
exceeding the Attributable Indebtedness in respect of such Sale and Leaseback
Transaction pursuant to Section 1012 hereof, and (c) the transfer of assets in
such Sale and Leaseback Transaction is permitted by, and the Company shall apply
the proceeds of such transaction in compliance with, Section 1009 hereof.
Section 1011. Limitation on Transactions With Affiliates.
(a) No Indenture Obligor shall, nor shall it permit any of its
Obligor Subsidiaries to, directly or indirectly, enter into any transaction, or
series of related transactions, with or for the benefit of any of their
respective Affiliates, except on an arm's-length basis and if (x)(i) in the case
of any such transaction other than with any Indenture Obligor or Obligor
Subsidiary in which the aggregate rental value, remuneration or other
consideration (including the value of a loan), together with the aggregate
rental value, remuneration or other consideration (including the value of a
loan) of all such other transactions consummated in the year during which such
transaction is proposed to be consummated, is less than or equal to $750,000,
PCI and the Company shall deliver Board Resolutions of their respective Board of
Directors to the Trustee evidencing that the Boards of Directors and the
Independent Directors of each of PCI and the Company that are disinterested
each, acting together in the first instance and separately in second, have (by a
majority vote) determined in good faith that the aggregate rental value,
remuneration or other consideration (including the value of any loan) inuring to
the benefit of such Affiliate from any such transaction is not greater than that
which would be charged to or extended by such Indenture Obligor or any of its
Obligor Subsidiaries, as the case may be, on an arm's-length basis for similar
properties, assets, rights, goods or services by or to a Person not affiliated
with any Indenture Obligor or any of its Obligor Subsidiaries, as the case may
be, and (ii) in the case of any such transaction in which the aggregate rental
value, remuneration or other consideration (including the value of any loan),
together with the aggregate rental value, remuneration or other consideration
(including the value of any loan) of all such other transactions consummated in
the year during which such transactions are proposed to be consummated, exceeds
$750,000, PCI and the Company shall deliver to the Trustee Board Resolutions of
their respective Boards of Directors as described in clause (a)(x)(i) of this
Section 1011 and an opinion of a nationally recognized investment banking firm,
104
not affiliated with any Indenture Obligor or any of its Obligor Subsidiaries or
the Affiliate which is party to such transaction, to the effect that the
aggregate rental price, remuneration or other consideration (including the value
of a loan) inuring to the benefit of such Affiliate from any such transaction is
not greater than that which would be charged to or extended by such Indenture
Obligor or any of its Obligor Subsidiaries, as the case may be, on an
arm's-length basis for similar properties, assets, rights, goods or services by
or to a Person not affiliated with such Indenture Obligor or any of its Obligor
Subsidiaries, as the case may be, and (y) all such transactions referred to in
clauses (a)(x)(i) and (a)(x)(ii) of this Section 1011 are entered into in good
faith.
(b) The provisions of the preceding paragraph do not prohibit (i)
the execution and delivery of the Indenture Documents and the Transaction
Documents and the consummation of the transactions contemplated herein or
therein or the implementation of the Plan of Reorganization, (ii) any permitted
payment on, or with respect to, Capital Stock of PCI held by creditors of any
Indenture Obligor, (iii) 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 PCI and the Company pursuant and consistent with the MEIP,
(iv) loans or advances to employees in the ordinary course of business
consistent with past practices which together with such other Investments as are
referred to in clause (ix) of the definition of Permitted Investments, do not
exceed $500,000 in the aggregate at any one time outstanding, (v) the payment of
fees and compensation paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of PCI, the Company or any of their
respective Subsidiaries, as determined by the Board of Directors of PCI, the
Company or any of their respective Subsidiaries in good faith, (vi) employment
agreements entered in the ordinary course of business and on an arm's-length
basis, and (vii) transactions permitted pursuant to Section 1006.
Section 1012. Limitation on Liens.
No Indenture Obligor shall, nor shall it permit any of its Obligor
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of
their respective assets or properties now owned or acquired after the Closing
Date, or any income or profits therefrom, other than Permitted Liens.
Section 1013. Corporate Existence; Corporate Separateness.
Subject to Article Eight, each Indenture Obligor shall do or cause
to be done all things necessary to preserve and keep in full force and effect
(a) its corporate existence and the corporate existence of each of its Obligor
Subsidiaries, in each case in accordance with their respective Organizational
Documents (as the same may, subject to Section 1024, be amended from time to
time) and (b) its (and its Subsidiaries) rights (charter and statutory),
licenses and franchises necessary or desirable in the normal course of its
business; provided, however, that no Indenture Obligor shall be required to
preserve such corporate existence or such licenses, permits or approvals if the
failure to
105
preserve the same could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
Each Indenture Obligor will, and will cause each of its Obligor
Subsidiaries to, satisfy customary corporate formalities, including the holding
of regular Board of Directors' and shareholders' meetings and the maintenance of
corporate offices and records. No Indenture Obligor nor any of its Subsidiaries
shall take any action, or conduct its affairs in a manner, which is likely to
result in the corporate existence of any such Subsidiary being ignored by any
court of competent jurisdiction.
Section 1014. Change of Control.
(a) Each Indenture Obligor will, and will cause each of its Obligor
Subsidiaries to, give reasonable notice to the Trustee and the Holders of any
proposed Change of Control prior to consummating, or permitting the consummation
of, such Change of Control.
(b) In the event of a Change of Control (the date of such occurrence
being the "Change of Control Date"), each Indenture Obligor shall notify the
Holders in writing of such occurrence and shall make an irrevocable offer (the
"Change of Control Offer") to purchase, on a Business Day not later than 60 days
following the Change of Control Date (the "Change of Control Payment Date"), all
Securities then Outstanding at a purchase price (the "Change of Control Purchase
Price") equal to 100% of the principal amount thereof plus accrued and unpaid
interest to the Change of Control Payment Date.
(c) Notice of a Change of Control Offer shall be mailed by the
Company to the Holders at their registered addresses not less than 30 days nor
more than 45 days before the Change of Control Payment Date. The Change of
Control Offer shall remain open for at least 20 Business Days and until 5:00
p.m., New York City time, on the Business Day next preceding the Change of
Control Payment Date. Substantially simultaneously with mailing of the notice,
the Company shall cause a copy of such notice to be published in a newspaper of
general circulation in the Borough of Manhattan, The City of New York, State of
New York.
(d) The notice, which governs the terms of the Change of Control
Offer, shall state:
(i) that the Change of Control Offer is being made pursuant to this
Section 1014 and that all Securities (or portions thereof) tendered will
be accepted for payment;
(ii) the Change of Control Purchase Price and the Change of Control
Payment Date;
(iii) that any Securities not surrendered or accepted for payment
shall continue to accrue interest, and premium, if any, in accordance with
the terms thereof and of this Indenture;
106
(iv) that, unless the Company defaults in the payment of the Change
of Control Purchase Price, any Securities accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest, or premium, if
any, after the Change of Control Payment Date;
(v) that any Holder electing to have a Security purchased (in whole
or in part) pursuant to a Change of Control Offer shall be required to
surrender the Security, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Security completed, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice (or otherwise make effective delivery of the
Security pursuant to book-entry procedures and the related rules of the
applicable Depositary) at least five Business Days before the Change of
Control Payment Date;
(vi) that any Holder shall be entitled to withdraw its election if
the Company, depositary or a Paying Agent, as the case may be, receives,
not later than three (3) Business Days prior to the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security the
Holder delivered for purchase, the certificate number of the Security and
a statement that such Holder is withdrawing his or her election to have
such Security purchased;
(vii) that Holders whose Securities are purchased only in part shall
be issued Securities representing the unpurchased portion of the
Securities surrendered, which unpurchased portion must be equal to $1,000
principal amount or an integral multiple thereof;
(viii) the instructions that Holders must follow in order to tender
their Securities; and
(ix) the circumstances and relevant facts regarding such Change of
Control (including, but not limited to, information with respect to pro
forma financial information after giving effect to such Change of Control
and information regarding the Persons acquiring control).
(e) On the Change of Control Payment Date, the Company shall:
(i) accept for payment the Securities, or portions thereof,
surrendered and properly tendered and not withdrawn, pursuant to the
Change of Control Offer;
(ii) deposit with the Paying Agent money sufficient to pay the
Change of Control Purchase Price of all the Securities, or portions
thereof, so accepted; and
(iii) deliver to the Trustee the Securities so accepted together
with an Officers' Certificate stating that such Securities have been
accepted for payment by the Company.
107
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Change of Control Purchase Price and
the Trustee shall promptly authenticate and mail to such Holders a new Security
equal in principal amount to the unpurchased portion of the Security
surrendered.
(f) Subject to applicable escheat laws, as provided in the
Securities, the Trustee or the Paying Agent shall, upon the Company's written
request in compliance with Section 103, return to the Company any cash that
remains unclaimed thereon held by them for the payment of the Change of Control
Purchase Price; provided, however, that (x) to the extent that the aggregate
amount of cash deposited by the Company pursuant to clause (ii) of paragraph (e)
above exceeds the aggregate Change of Control Purchase Price of the Securities
or portions thereof to be purchased, then the Trustee shall hold such excess for
the Company and (y) unless otherwise directed by the Company in writing,
promptly after the Business Day following the Change of Control Payment Date the
Trustee shall return any such excess to the Company.
(g) The Company shall comply, to the extent applicable, with the
requirements of Rule 14e-1 under the Exchange Act, any other tender offer rules
under the Exchange Act and all other applicable U.S. Federal and state and
Canadian federal and provincial securities laws or regulations in connection
with the offer to repurchase and the repurchase of the Securities as described
above.
(h) No Indenture Obligor shall, nor shall it permit any of its
Subsidiaries to, create or permit to exist or become effective any restriction
(other than restrictions not more restrictive taken as a whole (as determined in
good faith by the Board of Directors of such Indenture Obligor) than those in
effect under Indebtedness hereunder, the Term Loan Agreement and the New Tranche
A Notes Indenture) that would impair the ability of such Indenture Obligor to
make a Change of Control Offer to purchase the Securities or, if such Change of
Control Offer is made, to pay for the Securities tendered for purchase;
provided, however, that the failure to make or consummate the Change of Control
Offer shall constitute an Event of Default.
Section 1015. Maintenance of Properties.
Each Indenture Obligor shall, and shall cause each of its Obligor
Subsidiaries to, maintain its properties and assets in normal working order and
condition as of the date hereof (reasonable wear and tear excepted) and make all
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of the business
of Indenture Obligors and the Obligor Subsidiaries taken as a whole; provided
that nothing herein shall prevent any Indenture Obligor or any Obligor
Subsidiary from discontinuing any maintenance of any such properties if such
discontinuance could not reasonably be expected individually or in the
aggregate, to have a Material Adverse Effect.
108
Section 1016. Maintenance of Insurance.
Each Indenture Obligor shall, and shall cause each of its Obligor
Subsidiaries to, maintain property, liability, casualty, directors' and officers
(D&O) and other insurance (subject to the customary deductibles and retentions)
with reputable insurance companies in such amounts and against such risks as is
customarily carried by responsible companies engaged in similar businesses and
owning similar assets in the general areas in which the Indenture Obligors and
its Obligor Subsidiaries operate (which may include self-insurance in comparable
form to that maintained by such responsible companies).
Section 1017. Stock Pledges.
Each Indenture Obligor and each of its Obligor Subsidiaries in
existence as of the Closing Date (except for any such Obligor Subsidiary which
has no Subsidiaries) shall pledge the Capital Stock of its Subsidiaries owned by
it to secure the Indenture Obligations pro rata (and as further provided for in
the Common Security and Intercreditor Agreement) and each Indenture Obligor
will, and will cause each existing Subsidiary to, pledge such Capital Stock of
any Subsidiary of any Indenture Obligor or such existing Obligor Subsidiary
formed after the Closing Date to secure the Indenture Obligations and will
execute and deliver to the Trustee and the Collateral Agent one or more
agreements pledging Capital Stock substantially in the form of the Security
Agreement Supplement providing, among other things, for the pledge to the
Collateral Agent for the benefit of the Collateral Agent, as applicable, and of
(x) the New Tranche A Notes Indenture Trustee (for itself and the New Tranche A
Note Holders), (y) the Trustee (for itself and the Holders of the Securities),
and (z) the Administrative Agent (for itself and the Lenders) of all the Capital
Stock of such newly formed Subsidiary held by such Indenture Obligor or such
existing Obligor Subsidiary, as the case may be, and deliver to the Collateral
Agent stock certificates (or other certificates if the Capital Stock does not
take the form of shares) evidencing such Capital Stock (together with undated
stock powers (or other appropriate powers if the Capital Stock does not take the
form of shares) executed in blank), which Capital Stock and stock powers will
become "Collateral" for purposes of the Security Documents. This Section 1017
shall apply mutatis mutandis to any such newly formed Subsidiary.
Section 1018. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
shall, on or before each due date of the principal of, premium, if any, or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Holders entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and shall promptly notify
the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company shall,
before 10:00 a.m. New York City time on each due date of the principal of,
premium, if any, or interest, on any Securities, deposit with a Paying Agent a
sum in same day funds
109
sufficient to pay the principal, premium, if any, or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, or interest and (unless such Paying Agent is the Trustee)
the Company shall promptly notify the Trustee of such action or any failure so
to act.
If the Company is not acting as Paying Agent, the Company shall
cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent shall:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any
Guarantor (or any other Indenture Obligor upon the Securities) in the making of
any payment of principal, premium, if any, or interest;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order in compliance with Section 103 direct any Paying Agent to pay,
to the Trustee all sums held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same terms as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by any
Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Security and remaining unclaimed for two years after
such principal, premium, if any, or interest has become due and payable shall
promptly be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust. The Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which
110
shall not be less than thirty (30) days from the date of such notification or
publication, any unclaimed balance of such money then remaining shall promptly
be repaid to the Company.
Section 1019. Redemption of Securities with proceeds of Qualified
Equity Offering.
PCI may, but shall not be obliged to, make and consummate one or
more Qualified Equity Offerings. If the Net Offering Proceeds of one or more
such Qualified Equity Offerings, are greater than $35,000,000 (after giving
effect to any mandatory application of proceeds from each such Qualified Equity
Offering to repay the New Tranche A Notes in accordance with the New Tranche A
Notes Indenture) and no Indebtedness in respect of the New Tranche A Notes is
outstanding (including as a result of the proceeds of each such Qualified Equity
Offering being applied to repay the New Tranche A Notes in accordance with the
New Tranche A Notes Indenture), then PCI and the Company shall cause the Net
Offering Proceeds of such consummated Qualified Equity Offering, or one or more
such consummated Qualified Equity Offerings, that are in excess of $35,000,000
to be applied to redeem Outstanding Securities (and if such proceeds are not
sufficient to redeem all of the Securities then Outstanding, then to redeem the
then Outstanding Securities on a pro rata basis) and the provisions of Sections
1101 through to and including Section 1108 shall apply in respect of such
redemption as if the Company shall have exercised its right to redeem
Outstanding Securities pursuant to Article Eleven. Notwithstanding this Section
1019 or any other provision of this Indenture to the contrary, the aggregate
amount of Securities redeemed pursuant to this Section 1019, or any other
provision of this Indenture requiring the Securities to be redeemed by the
Company, within five (5) years from the Closing Date shall not exceed 25% of the
principal amount of Securities issued pursuant to this Indenture.
Section 1020. Limitation on Ownership of Wholly-Owned Subsidiary
Stock.
No Indenture Obligor and no Obligor Subsidiary (a) shall, nor shall
it permit any of its Wholly-Owned Subsidiaries to, transfer, convey, sell or
otherwise dispose of any Capital Stock of such Wholly-Owned Subsidiary to any
Person (other than to any Indenture Obligor, any of its Obligor Subsidiaries or
another such Wholly-Owned Subsidiary), unless (i) such transfer, conveyance,
sale or other disposition is of all the Capital Stock of such Wholly-Owned
Subsidiary and (ii) the Net Proceeds from such transfer, conveyance, sale, lease
or other disposition are applied in accordance with Section 1009 hereof (unless
such disposition does not constitute an Asset Sale hereunder), and (b) shall
permit any Wholly-Owned Subsidiary of any Indenture Obligor or any of its
Obligor Subsidiaries to issue any of its Capital Stock (other than, if
necessary, Capital Stock constituting directors' qualifying shares or interests
held by directors or shares or interests required to be held by foreign
nationals, to the extent mandated by applicable law) to any Person other than to
the any Indenture Obligor or a Wholly-Owned Subsidiary of any Indenture Obligor.
111
Section 1021. Impairment of Security Interest.
No Indenture Obligor shall, nor shall it cause or permit any of its
Obligor Subsidiaries to, take or omit to take any action which action or
omission might or would have the result of affecting or impairing the Liens and
security interest in favor of the Collateral Agent for the benefit of the
Holders with respect to the Collateral and no Indenture Obligor shall grant, nor
shall it cause or permit any of its Obligor Subsidiaries to grant, to any
Person, or suffer any Person to have any interest whatsoever in the Collateral,
in each case other than as otherwise permitted by this Indenture, the Term Loan
Agreement, the New Tranche A Notes Indenture, the New Tranche A Notes, the New
Tranche A Term Notes, the Securities and the Security Documents.
No Indenture Obligor shall, nor shall it cause or permit any of its
Obligor Subsidiaries to, enter into any agreement or instrument that by its
terms requires that the proceeds received from any sale of Collateral be applied
to repay, redeem, defease or otherwise acquire or retire any Indebtedness of any
Person, other than pursuant to this Indenture, the Term Loan Agreement, the New
Tranche A Notes Indenture, the New Tranche A Notes, the New Tranche A Term
Notes, the Securities and the Security Documents or any instrument governing
Indebtedness permitted to be secured by a Lien on the Collateral pursuant to
Section 1012 hereof.
Section 1022. Amendment to Certain Agreements.
Except as expressly provided for in the Transaction Documents, no
Indenture Obligor shall, nor shall it permit any of its Obligor Subsidiaries to,
amend, modify or supplement, or permit or consent to any amendment, modification
or supplement of, the Exit Facility, the New Other Secured Notes And Claims and
the Transaction Documents, except in each case to the extent such amendment,
modification or supplement could not reasonably be expected to have a Material
Adverse Effect.
Section 1023. Plan of Reorganization.
Each Indenture Obligor shall, and shall cause each of its Obligor
Subsidiaries to, take all such steps and actions and to consummate all
transactions necessary to implement the Plan of Reorganization to the extent
such steps, actions and transactions are contemplated in the Plan of
Reorganization as occurring after the Closing Date and to the extent the Plan of
Reorganization contemplates that any Indenture Obligor or any Obligor Subsidiary
shall take such steps and actions or consummate such transactions.
Section 1024. Nature of Business, Organizational Documents and
Capital Structure and New Subsidiaries; Books and Records.
(a) No Indenture Obligor shall, nor shall it cause or permit any of
its Obligor Subsidiaries to, (i) engage directly or indirectly in any business
activity other than in a Related Business, (ii) amend or modify any provision of
its Organizational Documents except to the extent such amendment could not
reasonably be expected to
112
have a Material Adverse Effect, or (iii) change its legal or capital structure
other than as otherwise permitted under Article Eight.
(b) Each Indenture Obligor shall, and shall cause each of its
Obligor Subsidiaries to, keep books and records which accurately reflect in all
material respects all of its business affairs and transactions and permit the
Trustee or its representatives at all times during normal business hours, or
such other reasonable times, and upon reasonable notice (unless a Default has
occurred or the Trustee reasonably suspects that a Default has occurred, in
which case no prior notice shall be required), to visit all of its or their
offices, to inspect the properties of each Indenture Obligor and each of its
Obligor Subsidiaries, to inspect the Collateral, to discuss its financial
matters, its business, its assets, its liabilities and its prospects with its
officers and with its independent public accountants (and each Indenture Obligor
and each of its Obligor Subsidiaries hereby authorizes such independent public
accountants to discuss all such matters with the Trustee or such representatives
whether or not any representative of any Indenture Obligor or its Obligor
Subsidiaries is present and, so long as there shall not have occurred and be
continuing a Default, the Company shall be given a reasonable opportunity to be
present) and to examine, and photocopy extracts from, any of its books or other
corporate records including management letters prepared by independent
accountants, in each case for the purposes of monitoring each Indenture
Obligor's compliance with its obligations under the Indenture Documents to which
it is a party. So long as there shall not have occurred and be continuing a
Default, the cost and expense of each such visit shall be borne by the Trustee,
except that the Trustee may make one such visit each Fiscal Year of the Company
at the cost and expense of the Company. If there shall have occurred and be
continuing a Default, and so long as the same shall be continuing, such costs
and expenses for all such visits shall be borne by the Company.
Section 1025. Compliance with Laws and Environmental and Safety and
Health Matters.
Each Indenture Obligor shall, and shall cause each of its Obligor
Subsidiaries to, (a) comply, in all material respects with all applicable laws,
statutes, rules, regulations, by-laws, policies, guidelines, directives,
decrees, opinions or agency requirements or orders (including, without
limitation, Environmental Laws and Safety and Health Laws), and (b) notify the
Trustee promptly after becoming aware of any Environmental Claim, or any fact or
circumstance that could reasonably be expected to result in an Environmental
Claim or a violation of, or liability under, any laws, statutes, rules,
regulations, by-laws, policies, guidelines, directives, decrees, opinions or
agency requirements or orders, including Environmental Laws and Safety and
Health Laws, that could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
Section 1026. Authorizations.
Each Indenture Obligor shall, and shall cause each of its Obligor
Subsidiaries to, make and keep in full force and effect all authorizations from
and
113
registrations with governmental authorities and agencies required for the
validity or enforceability of the Indenture Documents.
Section 1027. Further Assurances.
(a) Promptly upon the request of the Trustee, the Collateral Agent
or any Holder through the Trustee, each Indenture Obligor shall correct, and
shall cause each of its Obligor Subsidiaries promptly to correct, any material
defect or error that may be discovered in the execution, acknowledgment, filing
or recordation of any Indenture Document, and (b) promptly upon the request by
the Trustee or Collateral Agent or any Holder through the Trustee or Collateral
Agent, each Indenture Obligor shall, and shall cause its Obligor Subsidiaries
to, execute, acknowledge, deliver, record, re-record, file, re-file, register
and re-register any and all such further acts, deeds, conveyances, pledge
agreements, mortgages, deeds of trusts, trust deeds, assignments, financing
statements and continuations thereof, termination statements, notices of
assignment, transfers, certificates, assurances and other instruments as the
Trustee or Collateral Agent or any Holder through the Trustee or Collateral
Agent, may reasonably require from time to time in order to (i) carry out more
effectively the purposes of the Indenture Documents, (ii) to the fullest extent
permitted by applicable law, subject any Indenture Obligor's or any of its
Obligor Subsidiaries' properties, assets, rights or interests intended to be
Collateral to the Liens now or hereafter intended to be covered by any of the
Security Documents, (iii) perfect and maintain the validity, effectiveness and
priority of any of the Security Documents and any of the Liens intended to be
created thereunder, and (iv) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Holders the rights granted or now
or hereafter intended to be granted to the Holders under any Indenture Document
or under any other instrument executed in connection with any Indenture Document
to which any Indenture Obligor or any of its Obligor Subsidiaries is or is to be
a party.
Section 1028. Fiscal Year.
Each of PCI and the Company will not change its Fiscal Year.
Section 1029. Additional Amounts.
(a) Any and all payments by the Company to or for the account of any
Holder hereunder, other than an Excluded Holder, shall be made free and clear
of, and without deduction, for any and all present or future income, excise,
stamp or franchise taxes and other taxes, fees, duties, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto of
any nature whatsoever imposed by any taxing authority, including, without
limitation, any penalties, interest or additions to tax with respect thereto,
excluding, in the case of each Holder, taxes imposed on its net income, receipts
or franchise taxes imposed in lieu of a tax on net income by the jurisdiction
under the laws of which a Holder is organized or maintained or any political
subdivision thereof (all such nonexcluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If the Company is required by law to withhold or deduct any amount
for or on account of Taxes from any
114
payment made under or with respect to the Securities, the Company shall pay such
additional amounts ("Additional Amounts") as may be necessary so that the net
amount received by each Holder (including Additional Amounts) after such
withholding or deduction will not be less than the amount the Holder would have
received if such Taxes had not been withheld or deducted; provided that no
Additional Amounts shall be payable with respect to a payment made to a Holder
to the extent solely attributable to (i) such Holder not being treated as
dealing at arm's-length with the Company within the meaning of the Income Tax
Act (Canada) at the time of making such payment, or (ii) such Holder's being
connected with Canada or any province or territory thereof otherwise than solely
by reason of the Holder's activity in connection with purchasing the Securities,
by the mere holding of Securities or by reason of the receipt of payments
thereunder (collectively, Persons described in clauses (i) and (ii) of this
Section 1029(a) are "Excluded Holders"). The Company will also (1) make such
withholding or deduction, and (2) remit the full amount deducted or withheld to
the relevant authority in accordance with applicable law.
(b) The Company shall furnish to the Holders, within 30 calendar
days after the date the payment of any Taxes is due pursuant to the applicable
law, certified copies of tax receipts evidencing such payment by the Company.
The Company shall upon written request of each Holder (other than an Excluded
Holder), reimburse each such Holder for the amount of (i) any Taxes so levied or
imposed and paid by such Holder as a result of payments made under or with
respect to the Securities, and (ii) any Taxes so levied or imposed with respect
to any reimbursement under foregoing clause (i) so that the net amount received
by such Holder (net of payments made under or with respect to the Securities)
after such reimbursement will not be less than the net amount the Holder would
have received if Taxes on such reimbursement had not been imposed; provided,
however, no reimbursement shall be made in respect of Taxes for which no
Additional Amounts would be payable by reason of clause (i) or (ii) of the
second preceding sentence of Section 1029(a).
(c) In addition, the Company agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Indenture.
(d) At least 30 calendar days prior to each date on which any
payment under or with respect to the Securities is due and payable, if the
Company will be obligated to pay Additional Amounts with respect to such
payment, the Company will deliver to the Trustee an Officers' Certificate
stating the fact that such Additional Amounts will be payable and the amounts so
payable and will set forth such other information necessary to enable the
Trustee to pay such Additional Amounts to Holders on the payment date. Whenever
in this Indenture there is mentioned, in any context, the payment of principal,
premium, if any, or interest, or any other amount payable under or with respect
to any Securities, such mention shall be deemed to include mention of the
payment of Additional Amounts to the extent that, in such context, Additional
Amounts are, were or would be payable in respect thereof. The Holders, by
acceptance of a Note, and the Company agree that the payment of any Additional
Amounts by the Company shall be treated as payments of interest.
115
(e) If the Company fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit the required receipts or other
required documentary evidence, the Company shall indemnify the Holders for any
incremental Taxes, interest or penalties that may become payable by any Holder,
other than an Excluded Holder, as a result of any such failure.
Section 1030. Pension Transfer Agreement.
The Company shall fulfill all of its obligations under the Pension
Transfer Agreement dated October 31, 1997, between the Company and ICI Canada,
in accordance with the terms thereof, that relate to the establishment, funding,
maintenance and operation of each Canadian Pension Plan to be established
therewith.
Section 1031. Capital Expenditures.
Each of PCI and the Company shall not, and shall cause each of its
Subsidiaries not to, permit Capital Expenditures (excluding, for the purposes of
determining the Company's Capital Expenditures, any Insurance Proceeds or Net
Awards reinvested by the Company) for PCI, the Company and their respective
Subsidiaries, taken as a whole, to exceed:
(a) $30,000,000 for the Company's Fiscal Year commencing January 1,
2002 and ending on December 31, 2002; and
(b) for each subsequent Fiscal Year of the Company up to and
including the Fiscal Year of the Company ending on December 31, 2006,
$30,000,000 plus the Cumulative Capital Expenditure Deficit for such Fiscal Year
of the Company.
Section 1032. Working Capital Line.
Subject to the terms of this Indenture, the Company shall use its
best efforts to maintain a revolving credit facility or similar arrangement with
the Company and Pioneer Americas as the borrowers thereunder, as provided for in
the effective Plan of Reorganization, to the extent it deems necessary based on
its cash position and cash flows needed to fund the foreseeable capital
expenditure and working capital requirements of the Company, Pioneer Americas
and their respective Subsidiaries, taken as a whole.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
The Securities shall not be redeemable by the Company prior to
December 31, 2005. On or after that date, the Securities shall be redeemable by
the Company, in whole or in part, on not less than thirty (30) nor more than
sixty (60) days'
116
prior notice, mailed by first-class mail to the Holders' registered addresses,
in cash, in amounts of $1,000 or an integral multiple of $1,000 at the following
Redemption Prices (expressed as percentages of the principal amount), if
redeemed in the 12-month period commencing December 31 in the year indicated
below:
Year Redemption Price
---- ----------------
2005 105.00%
2006 102.50%
2007 100.00%
in each case together with accrued and unpaid interest, to the Redemption Date
(subject to the right of Holders of record on relevant record dates to receive
interest, due on an Interest Payment Date). If less than all of the Securities
are to be redeemed, the Trustee shall select the Securities to be redeemed pro
rata, by lot or by any other method the Trustee shall deem fair and appropriate.
Securities may be redeemed or repurchased as set forth in Sections
1009, 1014 and 1109 hereof. Any redemption pursuant to this Section 1101 shall
be made pursuant to the provisions of Sections 1102 through 1108 hereof.
Section 1102. Applicability of Article.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article Eleven.
Section 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 hereof shall be evidenced by a Company Order and an Officers'
Certificate in compliance with Section 103. In case of any redemption at the
election of the Company, the Company shall, not less than forty-five (45) nor
more than sixty (60) days prior to the Redemption Date fixed by the Company for
such redemption (unless a shorter notice period shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemption Date, the Redemption
Price and of the principal amount of Securities to be redeemed.
Section 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than
thirty (30) days prior to the Redemption Date by the Trustee, from the
Outstanding Securities not previously called for redemption, pro rata, by lot or
such other method as the Trustee shall deem fair and appropriate and the amounts
to be redeemed may be, subject to Section 1101, equal to $1 or any integral
multiple thereof.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than the Company or the Trustee) in writing of the
Securities selected for
117
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than thirty (30) nor more than sixty (60) days prior to
the Redemption Date to each Holder of Securities to be redeemed at his address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date upon
surrender of such Security, a new Security or new Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof, and that (unless the
Company shall default in payment of the Redemption Price) interest, and premium,
if any, thereon shall cease to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered
for payment of the Redemption Price;
(h) the paragraph of the Securities and/or Section of this Indenture
pursuant to which the Securities called for redemption are being redeemed; and
(i) the CUSIP number, if any, relating to such Securities (as to the
accuracy of which the Trustee shall make no representation).
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request
in
118
compliance with Section 103, by the Trustee in the name and at the expense of
PCI and the Company.
The notice, if mailed in the manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to mail such notice, or any defect in any
notice so mailed, to any particular Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
Section 1106. Deposit of Redemption Price.
On or prior to 10:00 a.m., New York City time, on any Redemption
Date and in accordance with Section 313, the Company shall deposit with the
Trustee or with a Paying Agent (or if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1018 hereof) an amount
of money in same day funds sufficient to pay the Redemption Price of and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest on
all the Securities or portions thereof which are to be redeemed on that date.
When the Redemption Date falls on an Interest Payment Date, payments of interest
due on such date are to be paid as provided hereunder as if no such redemption
were occurring.
Section 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid for by the Company at the Redemption Price together with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Regular Record Dates according to
the terms and the provisions of Section 309 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal, and premium, if any,
shall, until paid, bear interest from the Redemption Date at the rate borne by
such Security.
Section 1108. Securities Redeemed or Purchased in Part.
Any Security which is to be redeemed or purchased only in part shall
be surrendered to the Company at the office or agency maintained for such
purpose pursuant to Section 1002 hereof (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar or the Trustee duly executed by the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate in accordance with Section 303 and deliver to the
119
Holder of such Security without service charge, a new Security or Securities of
any authorized denomination as requested by such Holder in an aggregate
principal amount equal to, and in exchange for, the portion of the principal of
the Security so surrendered that is not redeemed or purchased.
Section 1109. Asset Sale Offers.
In the event that the Company shall commence an Asset Sale Offer
pursuant to Section 1009 hereof, it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for twenty (20) Business Days
after the date on which such Asset Sale Offer is commenced (the "Commencement
Date"), except to the extent required to be extended pursuant to applicable law
(as so extended, the "Asset Sale Offer Period"). No later than one Business Day
after the termination of the Asset Sale Offer Period (the "Asset Sale Purchase
Date"), the Company shall purchase the principal amount (the "Asset Sale Offer
Amount") of Securities required pursuant to Section 1009 hereof to be purchased
in such Asset Sale Offer and other pari passu Indebtedness that is required by
its terms to be purchased in such Asset Sale Offer or, if less than the Asset
Sale Offer Amount has been tendered, all Securities tendered in response to the
Asset Sale Offer.
If the Asset Sale Purchase Date is on or after a Regular Record Date
and on or before the related Interest Payment Date, or any accrued interest
shall be paid to the Person in whose name a Security is registered at the close
of business on such Regular Record Date, and no additional interest shall be
payable to Holders who tender Securities pursuant to the Asset Sale Offer.
On the Commencement Date of any Asset Sale Offer, the Company shall
send or cause to be sent, by first class mail, a notice to each of the Holders,
with a copy to the Trustee. Such notice, which shall govern the terms of the
Asset Sale Offer, shall contain all instructions and materials necessary to
enable the Holders to tender Securities pursuant to the Asset Sale Offer and
shall state:
(1) that the Asset Sale Offer is being made pursuant to Section 1009
hereof and this Section 1109 and the length of time the Asset Sale Offer
shall remain open;
(2) the Asset Sale Offer Amount, the Asset Sale Purchase Price and
the Asset Sale Purchase Date;
(3) that any Security not tendered or accepted for payment shall
continue to accrue interest, and premium, if any, in accordance with this
Indenture;
(4) that, unless the Company defaults in the payment of the Asset
Sale Purchase Price, all Securities accepted for payment pursuant to the
Asset Sale Offer shall cease to accrue interest after the Asset Sale
Purchase Date;
120
(5) that Holders electing to have Securities purchased pursuant to
any Asset Sale Offer shall be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice prior to
the close of business on the Business Day preceding the Asset Sale
Purchase Date;
(6) that Holders shall be entitled to withdraw their election if the
Company, Depositary or Paying Agent, as the case may be, receives not
later than the close of business on the Business Day preceding the
termination of the Asset Sale Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security the Holder delivered for purchase, the certificate
number on the Security and a statement that such Holder is withdrawing his
election to have the Security purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders together with any other pari passu Indebtedness
that is required by its terms to be purchased in such Asset Sale Offer
exceeds the Asset Sale Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as
may be deemed appropriate by the Company so that only Securities in
denominations of $1,000, or integral multiples thereof, shall be
purchased); and
(8) that Holders whose Securities are purchased only in part shall
be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be
equal to $1,000 principal amount or an integral multiples thereof.
On or before 10:00 a.m., New York City time, on each Asset Sale
Purchase Date, the Company shall irrevocably deposit with the Trustee or Paying
Agent in immediately available funds the aggregate Asset Sale Purchase Price
with respect to a principal amount of Securities equal to the Asset Sale Offer
Amount, together with accrued interest thereon, to be held for payment in
accordance with the terms of this Section 1109. On the Asset Sale Purchase Date,
the Company shall, (i) to the extent lawful, (i) accept for payment, on a pro
rata basis to the extent necessary, an aggregate principal amount equal to the
Asset Sale Offer Amount of Securities tendered pursuant to the Asset Sale Offer,
or if less than the Asset Sale Offer Amount has been tendered, all Securities or
portions thereof tendered, (ii) deliver, or cause the Paying Agent or
depositary, as the case may be, to deliver to the Trustee the Securities so
accepted, and (iii) deliver to the Trustee an Officers' Certificate stating that
such Securities or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 1109. The Company, a depositary or
Paying Agent, as the case may be, shall promptly (but in any case not later than
two (2) Business Days after the Asset Sale Purchase Date) mail or deliver to
each tendering Holder an amount equal to the Asset Sale Purchase Price with
respect to the Securities tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Security, and the
Trustee shall authenticate in accordance with Section 303 and mail or deliver
such
121
new Security, to such Holder, equal in principal amount to any unpurchased
portion of such Holder's Securities surrendered. Any Security not accepted in
the Asset Sale Offer shall be promptly mailed or delivered by the Company to the
Holder thereof. The Company shall publicly announce in a newspaper of general
circulation the results of the Asset Sale Offer on the Asset Sale Purchase Date.
The Asset Sale Offer shall be made by the Company in compliance with
all applicable laws, including, without limitation, the requirements of Rule
14e-1 under the Exchange Act, any other tender offer rules under the Exchange
Act and all other applicable U.S. Federal and state and Canadian federal and
provincial securities laws.
Subject to applicable escheat laws, as provided in the Securities,
the Trustee or the Paying Agent, as applicable, shall, upon the Company's
written request in compliance with Section 103, return to the Company any cash
that remains unclaimed held by them for the payment of the Asset Sale Purchase
Price; provided, however, that (x) to the extent that the aggregate amount of an
Asset Sale Offer exceeds the aggregate Asset Sale Purchase Price of the
Securities or portions thereof to be purchased, the Trustee shall hold such
excess for the Company, and (y) unless otherwise directed by the Company in
writing in compliance with Section 103, promptly after the Business Day
following the Asset Sale Purchase Date the Trustee shall return any such excess
to the Company.
Other than as specifically provided in this Section 1109, each
purchase pursuant to this Section 1109 shall be made pursuant to the provisions
of Sections 1101 through 1108 hereof.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for) and the Trustee, upon receipt of written demand, in
compliance with Section 103, and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when each of the following are satisfied:
(a) either
(1) all the Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 308
hereof, or (ii) all Securities for whose payment United States
dollars have theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as
122
provided in Section 1018 hereof) have been delivered to the Trustee
for cancellation; or
(2) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, (ii) shall
become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company, and the Company or any Guarantor, in the case of (2)(i),
(ii) or (iii) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose
an amount in United States dollars sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
and discharge the entire Indebtedness on the Securities not
theretofore delivered to the Trustee for cancellation, for the
principal, premium, if any, and accrued interest at such Stated
Maturity or Redemption Date;
(b) the Company or any other Indenture Obligor has paid or caused to
be paid all other sums payable hereunder by the Company and such other Indenture
Obligor, and has satisfied and/or paid in full all Indenture Obligations
hereunder; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that (i) all conditions precedent
herein provided for relating to the satisfaction and discharge of this Indenture
have been complied with, and (ii) such satisfaction and discharge shall not
result in a breach or violation of or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company or any
Indenture Obligor is a party or by which the Company or any Indenture Obligor is
bound.
Opinions of Counsel required to be delivered under this Section may
have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 606, the obligations
of the Guarantors to the Trustee under Section 1303 and Section 1305 hereof and,
if United States dollars shall have been deposited with the Trustee pursuant to
subclause (2) of subsection (a) of this Section, the obligations of the Trustee
under Section 1202 and the last paragraph of Section 1018 hereof shall survive.
Section 1202. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1018
hereof, all United States dollars deposited with the Trustee pursuant to Section
1201 hereof shall be
123
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, and interest on the Securities for whose payment such United
States dollars have been deposited with the Trustee.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States dollars or U.S.
Government Obligations deposited pursuant to Section 1201 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of all Outstanding
Securities.
ARTICLE THIRTEEN
GUARANTY
Section 1301. Guaranty; Limitation of Liability.
(a) Each Guarantor, jointly and severally, hereby absolutely,
unconditionally and irrevocably guaranties the punctual payment when due,
whether at scheduled maturity or on any date of a required or optional
prepayment or redemption or by acceleration, demand or otherwise, of all
Indenture Obligations of the Company now or hereafter existing under or in
respect of the Indenture Documents (including, without limitation, any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Indenture Obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, premiums, fees, indemnities,
contract causes of action, costs, expenses or otherwise (such Indenture
Obligations being the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including, without limitation, reasonable fees and expenses of counsel
incurred by the Trustee, the Collateral Agent or the Holders in enforcing any
rights under each Guaranty or any other Indenture Document. Without limiting the
generality of the foregoing, each Guarantor's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
the Company to the Trustee, the Collateral Agent and the Holders under or in
respect of the Indenture Documents but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Company.
(b) Each Guarantor, and by its acceptance of this Guaranty, the
Trustee, the Collateral Agent and each Holder, hereby confirms that it is the
intention of all such Persons that this Guaranty and the Indenture Obligations
of each Guarantor hereunder not constitute a fraudulent transfer or conveyance
for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to
the extent applicable to this Guaranty and the Indenture Obligations of each
Guarantor hereunder. To effectuate the foregoing intention, the Trustee, the
Collateral Agent, the Holders and the Guarantors hereby irrevocably agree that
the Indenture Obligations of each Guarantor under this
124
Guaranty at any time shall be limited to the maximum amount as will result in
the Indenture Obligations of such Guarantor under this Guaranty not constituting
a fraudulent transfer or conveyance.
(c) Each Guarantor hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to the Trustee, the
Collateral Agent or any Holder under this Guaranty or any other guaranty, such
Guarantor will contribute, to the maximum extent permitted by law, such amounts
to each other Guarantor and any other guarantor or surety so as to maximize the
aggregate amount paid to the Trustee, the Collateral Agent and the Holders under
or in respect of the Indenture Documents.
(d) It is specifically acknowledged and agreed that this Guaranty
has been delivered by each Guarantor free of any conditions whatsoever and that
no representations, warranties or promises have been made to any Guarantor
affecting its liabilities hereunder, and that the Trustee shall not be bound by
any representations, warranties or promises now or at any time hereafter made by
the Company to any Guarantor.
Section 1302. Guaranty Absolute.
Each Guarantor guaranties that the Guaranteed Obligations will be
paid strictly in accordance with the terms of the Indenture Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Trustee, the
Collateral Agent or any Holder with respect thereto. The obligations of each
Guarantor under or in respect of this Guaranty are independent of the Guaranteed
Obligations or any other Obligations of any other Indenture Obligor under or in
respect of the Indenture Documents, and a separate action or actions may be
brought and prosecuted against each Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Company, any other
Guarantor or any of their respective Subsidiaries or whether the Company, any
other Guarantor or any of their respective Subsidiaries is joined in any such
action or actions. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to, any or all of the following:
(i) any lack of validity or enforceability of any Indenture Document or
any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other Indenture
Obligations of any other Obligor under or in respect of the Indenture Documents,
or any other amendment or waiver of, or any consent to departure from, any
Indenture Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to any
Obligor or any of its Subsidiaries or otherwise;
125
(iii) any taking, exchange, release or non-perfection of any Collateral or
any other collateral, or any taking, release or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
(iv) any manner of application of Collateral or any other collateral, or
proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral or any other collateral for all or
any of the Guaranteed Obligations or any other Indenture Obligations of any
Obligor under the Indenture Documents or any other assets of any Obligor or any
of its Subsidiaries;
(v) any change, restructuring or termination of the corporate structure or
existence of any Obligor or any of its Subsidiaries;
(vi) any failure of any of the Trustee, the Collateral Agent or any Holder
to disclose to any Obligor any information relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Obligor now or hereafter known to the Trustee, the Collateral Agent or
any Holder (each Guarantor waiving any duty on the part of the Trustee, the
Collateral Agent or any Holder to disclose such information);
(vii) the failure of any other Person to execute or deliver this Guaranty,
any Guaranty Supplement or any other guaranty or agreement or the release or
reduction of liability of any Guarantor or other guarantor or surety with
respect to the Guaranteed Obligations; or
(viii) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by the
Trustee, the Collateral Agent or any Holder that might otherwise constitute a
defense available to, or a discharge of, any Obligor or any other guarantor or
surety.
This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Guaranteed Obligations
is rescinded or must otherwise be returned by the Trustee, the Collateral Agent,
or any Holder or any other Person upon the insolvency, bankruptcy or
reorganization of the Company or any other Indenture Obligor or otherwise, all
as though such payment had not been made.
Section 1303. Right to Demand Full Performance.
In the event of any demand for payment or performance by the Trustee
from any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all payments in respect thereof until the
Indenture Obligations have been paid in full and the Guarantors shall continue
to be jointly and severally liable hereunder for any balance which may be owing
to the Trustee or the Holders by the Company under this Indenture and the
Securities. The retention by the Trustee or the Holders of any security, prior
to the realization by the Trustee or the Holders of their rights to such
security upon foreclosure thereon, shall not, as between the Trustee and any
Guarantor, be considered as a purchase of such security, or as payment,
satisfaction or
126
reduction of the Indenture Obligations due to the Trustee or the Holders by the
Company or any part thereof.
Section 1304. Waivers and Acknowledgments.
(a) Each Guarantor hereby unconditionally and irrevocably waives
promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed Obligations
and this Guaranty and any requirement that the Trustee, the Collateral Agent, or
any Holder protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against any Obligor or any
Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guaranty and acknowledges that this Guaranty is continuing
in nature and applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) Each Guarantor hereby unconditionally and irrevocably waives, to
the extent permitted by law, (i) any defense arising by reason of any claim or
defense based upon an election of remedies by the Trustee, the Collateral Agent,
or any Holders that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such Guarantor to
proceed against any of the other Indenture Obligors, any other guarantor or
surety or any other Person or any Collateral, and (ii) any defense based on any
right of set-off or counterclaim against or in respect of the Indenture
Obligations of such Guarantor hereunder.
(d) Each Guarantor acknowledges that the Trustee or the Collateral
Agent may, without notice to or demand upon such Guarantor and without affecting
the liability of such Guarantor under this Guaranty, foreclose under any
mortgage or other security interest by nonjudicial sale, and each Guarantor
hereby waives any defense to the recovery by the Trustee, the Collateral Agent
or the Holders against such Guarantor of any deficiency after such nonjudicial
sale and any defense or benefits that may be afforded by applicable law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of the Trustee, the Collateral Agent, or any Holder to disclose
to such Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Obligor or any of its Subsidiaries now or hereafter known by the
Trustee, the Collateral Agent, or any Holder.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by the
Indenture Documents and that the waivers set forth in Section 1302 and this
Section 1304 are knowingly made in contemplation of such benefits.
127
Section 1305. The Guarantors Remain Obligated in Event the Company
is No Longer Obligated to Discharge Indenture Obligations.
It is the express intention of the Trustee and the Guarantors that
if for any reason the Company has no legal existence, is or becomes under no
legal obligation to discharge the Indenture Obligations owing to the Trustee or
the Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders become irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guaranty and the covenants,
agreements and obligations of the Guarantors contained in this Article Thirteen
shall nevertheless be binding upon the Guarantors, as principal debtor, until
such time as all such Indenture Obligations have been paid in full to the
Trustee and all Indenture Obligations owing to the Trustee or the Holders by the
Company have been discharged, or such earlier time as Section 402 hereof shall
apply to the Securities and the Guarantors shall be responsible for the payment
thereof to the Trustee or the Holders upon demand.
Section 1306. Subrogation.
Each Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against the
Company, any other Obligor or any other insider guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's Obligations
under or in respect of this Guaranty or any other Indenture Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Trustee, the Collateral Agent, or any Holder against the Company,
any other Obligor or any other insider guarantor or any Collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Company, any other Obligor or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash. If any amount shall be paid to
any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, and (b) the full
and complete payment and performance of the Indenture Obligations, such amount
shall be received and held in trust for the benefit of the Trustee, the
Collateral Agent, and the Holders, shall be segregated from other property and
funds of such Guarantor and shall forthwith be paid or delivered to the Trustee
in the same form as so received (with any necessary endorsement or assignment)
to be credited and applied to the Guaranteed Obligations and all other amounts
payable under this Guaranty, whether matured or unmatured, in accordance with
the terms of the Indenture Documents, or to be held as Collateral for any
Guaranteed Obligations or other amounts payable under this Guaranty thereafter
arising. If (i) any Guarantor shall make payment to the Trustee, the Collateral
Agent or any Holder of all or any part of the Guaranteed Obligations, (ii) all
of the Guaranteed Obligations and all other amounts payable under this Guaranty
shall have been paid in full in cash, and (iii) the Indenture Obligations shall
have been paid and
128
performed completely and fully, the Trustee, the Collateral Agent, and the
Holders will, at such Guarantor's request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment made by such Guarantor pursuant to this Guaranty.
Section 1307. Subordination.
Each Guarantor hereby subordinates any and all debts, liabilities
and other obligations owed to such Guarantor by each other Obligor (the
"Subordinated Obligations") to the Guaranteed Obligations to the extent and in
the manner hereinafter set forth in this Section 1307.
(a) Prohibited Payments, Etc. Except during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Obligor), each Guarantor may
receive regularly scheduled payments from any other Obligor on account of the
Subordinated Obligations. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Obligor), unless the Holders of a
majority of the aggregate principal amount of the Securities then Outstanding
otherwise agree, no Guarantor shall demand, accept or take any action to collect
any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law relating to any other Obligor, each Guarantor agrees that the
Trustee, the Collateral Agent, and the Holders shall be entitled to receive
payment in full in cash of all Guaranteed Obligations (including all interest
and expenses accruing after the commencement of a proceeding under any
Bankruptcy Law, whether or not constituting an allowed claim in such proceeding
("Post Petition Interest")) before such Guarantor receives payment of any
Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the continuance of
any Event of Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Obligor), each
Guarantor shall, if the Trustee so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for the Trustee,
the Collateral Agent, and the Holders and deliver such payments to the Trustee
on account of the Guaranteed Obligations (including all Post Petition Interest
as referred to in Section 1307(b)), together with any necessary endorsements or
other instruments of transfer, but without reducing or affecting in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Section 1308. Continuing Guaranty; Assignments.
This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations
129
and all other amounts payable under this Guaranty, and (ii) the payment and
performance in full of all the Indenture Obligations of all the Obligors under
any Indenture Document, (b) be binding upon each Guarantor, its successors and
assigns permitted by this Indenture, and (c) inure to the benefit of and be
enforceable by the Trustee, the Collateral Agent, and the Holders and their
respective successors, transferees and assigns. Without limiting the generality
of clause (c) of the immediately preceding sentence, the Trustee, the Collateral
Agent or any Holder may assign or otherwise transfer all or any portion of its
rights under this Guaranty (including, without limitation, all or any portion of
its Securities held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to the
Trustee, the Collateral Agent, or such Holder herein or otherwise, in each case
as and to the extent provided in this Indenture. No Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Trustee, the Collateral Agent and each of the Holders.
Section 1309. Guaranty Is in Addition to Other Security.
This Guaranty shall be in addition to and not in substitution for
any other guaranties or other security which the Trustee may now or hereafter
hold in respect of the Indenture Obligations owing to the Trustee or the Holders
by the Company and (except as may be required by law) the Trustee shall be under
no obligation to marshal in favor of each of the Guarantors any other guaranties
or other security or any moneys or other assets which the Trustee may be
entitled to receive or upon which the Trustee or the Holders may have a claim.
Section 1310. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guaranty, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Securities or any other Guarantor's obligation
with respect to its Guaranty.
Section 1311. Trustee's Duties; Notice to Trustee.
(a) Any provision in this Article Thirteen or elsewhere in this
Indenture allowing the Trustee to request any information or to take any action
authorized by, or on behalf of any Guarantor, shall be subject to Section 602(d)
and shall be permissive and shall not be obligatory on the Trustee except as the
Holders may direct in accordance with the provisions of this Indenture or where
the failure of the Trustee to request any such information or to take any such
action arises from the Trustee's gross negligence, bad faith or willful
misconduct, as determined by a court of competent jurisdiction pursuant to a
final, non-appealable judgment.
130
(b) The Trustee shall not be required to inquire into the existence,
powers or capacities of the Company or any Guarantor or the officers, directors
or agents acting or purporting to act on their respective behalf.
Section 1312. Release of Guaranty.
Concurrently with the payment in full of all of the Indenture
Obligations, the Guarantors shall be released from and relieved of their
obligations under this Article Thirteen, except that this Section 1312 shall
survive such release of the Guarantors and the termination of this Indenture.
Upon the delivery by the Company to the Trustee of an Officers' Certificate and,
if requested by the Trustee, an Opinion of Counsel to the effect that the
transaction giving rise to the release of this Guaranty was made by the Company
in accordance with the provisions of this Indenture and the Securities, the
Trustee shall execute any documents reasonably required in order to evidence the
release of the Guarantors from their obligations under this Guaranty. If any of
the Indenture Obligations are revived and reinstated after the termination of
this Guaranty, then all of the obligations of the Guarantors under this Guaranty
shall be revived and reinstated as if this Guaranty had not been terminated
until such time as the Indenture Obligations are paid in full and each Guarantor
shall enter into an amendment to this Guaranty, reasonably satisfactory to the
Trustee, evidencing such revival and reinstatement.
Section 1313. Execution of Guaranty.
To evidence the Guaranty, each Guarantor hereby agrees to execute
the guaranty substantially in the form set forth in Section 206 hereof, to be
endorsed on each Security authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of each Guarantor by its Chairman of
the Board, its President, or one of its Vice Presidents, under its corporate
seal reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
If an officer whose signature is on this Indenture no longer holds
that office at the time the Trustee authenticates a Security on which a Guaranty
is endorsed, such Guaranty shall be valid nevertheless.
Section 1314. Payment Permitted by Each of the Guarantors if no
Default.
Nothing contained in this Article Thirteen, elsewhere in this
Indenture or in any of the Securities shall affect the obligation of any
Guarantor to make, or prevent any Guarantor from making at any time, payments
pursuant to the Securities.
Section 1315. Notice to Trustee by Each of the Guarantors.
Each Guarantor shall give prompt written notice to the Trustee of
any fact known to such Guarantor which would prohibit the making of any payment
to or by the Trustee in respect of the Guaranty. Notwithstanding the provisions
of this Article Thirteen or any provision of this Indenture, the Trustee shall
not be charged with
131
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, unless and until the
Trustee shall have received written notice thereof from any Guarantor. Prior to
the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist.
Section 1316. Additional Guaranties.
Each Subsidiary of an Indenture Obligor shall be a Guarantor and,
accordingly, if any Subsidiary of any Indenture Obligor shall be formed after
the Closing Date, such Indenture Obligor shall cause such Subsidiary to execute
and deliver to the Trustee a duly executed supplemental indenture, pursuant to
which such Subsidiary shall unconditionally guaranty, in accordance with Article
Thirteen hereof, all of PCI and the Company's obligations under the Indenture
and the Securities on the same terms as the other Guarantors, and such guaranty
shall rank pari passu with the senior Indebtedness of such Subsidiary.
Section 1317. No Suspension of Remedies.
Nothing contained in this Article Thirteen shall limit the right of
the Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to the provisions described under Article
Five and as set forth in this Indenture or to pursue any rights or remedies
hereunder or under applicable law.
ARTICLE FOURTEEN
CONDITIONS TO EFFECTIVENESS OF INDENTURE
This Indenture shall become effective, and the issuance of the
Securities shall be made subject to, the prior or concurrent satisfaction of
each of the conditions set forth in this Article Fourteen.
Section 1401. Conditions Precedent to the Effectiveness of the Plan
of Reorganization, etc.
All conditions precedent to the effectiveness of the Plan of
Reorganization shall have been satisfied or waived in accordance with the terms
of the Plan of Reorganization, the Confirmation Order shall have become a Final
Order and the Effective Plan Date shall have occurred.
Section 1402. Implementation of Plan of Reorganization.
The transactions contemplated by the Plan of Reorganization to have
been consummated on or before the Closing Date shall have been consummated on or
before the Closing Date in accordance with the terms of the Plan of
Reorganization, including the New Tranche A Notes Indenture and the other
Indenture Documents taking effect, and the granting of Liens securing the
Collateral.
132
ARTICLE FIFTEEN
SECURITY
Section 1501. Security.
(a) In order to secure the due and punctual payment of principal of,
premium, if any, and interest on the Indenture Obligations when and as the same
shall become due and payable, whether on an Interest Payment Date, at maturity,
by acceleration, repurchase, redemption, in connection with an Change of Control
or Asset Sale, or otherwise, and interest on the overdue principal of, interest
(to the extent permitted by law), and premium, if any, on the Securities, and
performance of all other obligations of the Company to the Trustee or the
Holders under this Indenture and each other Indenture Document and of all
obligations of the Guarantors under the Guaranty and each other Indenture
Document, the Company and the other Obligors have entered into the applicable
Security Documents to which each is a party. Each Indenture Obligor hereby
acknowledges and agrees with each other Indenture Obligor, the Trustee, and the
Holders that such Indenture Obligor has secured valuable and fair consideration
and corporate and other benefit for entering into each Security Document to
which it is a party.
(b) Each Holder, by accepting a Security, consents and agrees to all
of the terms and provisions of the Security Documents and the Common Security
and Intercreditor Agreement, as the same may be amended from time to time in
accordance with the provisions of the Security Documents, the Common Security
and Intercreditor Agreement and this Indenture, and authorizes and directs the
Collateral Agent to act as mortgagee or secured party with respect thereto or to
act as collateral agent pursuant to the Common Security and Intercreditor
Agreement.
(c) As set forth in and governed by the Security Documents, as among
the Holders, the Collateral as now or hereafter constituted shall be held for
the equal and ratable benefit of the Holders without preference, priority or
distinction of any thereof over any other by reason of difference in time of
issuance, sale or otherwise, as security for the Securities.
(d) The Company shall deliver to the Trustee copies of all documents
delivered to the Collateral Agent pursuant to the Security Documents, and shall
do or cause to be done all such acts and things as may be necessary or proper,
or as may be required by the provisions of the Security Documents, to assure and
confirm to the Trustee and the Collateral Agent the security interest in the
Collateral contemplated hereby, by the Security Documents or any part thereof,
as from time to time constituted, so as to render the same available for the
security and benefit of this Indenture and of the Securities secured thereby,
according to the intent and purposes herein and therein expressed.
133
Section 1502. Recording; Priority; Opinions, Etc.
(a) Each Indenture Obligor will, and will cause each of its Obligor
Subsidiaries to, perform at its sole cost and expense any and all acts and
execute any and all documents (including, without limitation, the execution,
amendment or supplementation of any financing statement, continuation statement,
charge, registration or other statement) for filing under the provisions of the
UCC and the rules and regulations thereunder, applicable Canadian federal or
provincial statutes (including the Civil Code of Quebec) and the rules and
regulations thereunder, or any other statute, rule or regulation of any
applicable federal, state, provincial or local jurisdiction, including any
filings in local real estate land record offices, which are necessary or
advisable and shall do such other acts and execute such other documents as may
be required under any of the Security Documents to which it is a party, from
time to time, in order to grant and maintain valid and perfected Liens on the
Collateral relating to it in favor of the Collateral Agent in the priorities
expressed to be created by the Security Documents, subject only to Liens
permitted under the Security Documents to be senior or pari passu to the Liens
of the Collateral Agent, and to fully preserve and protect, and set-up against
third persons, the rights of the Trustee, the Collateral Agent and the Holder
under this Indenture and the other Indenture Documents. Each relevant Indenture
Obligor will, and will cause each of its Obligor Subsidiaries to, pay and
satisfy promptly all mortgage and financing and continuation statement recording
and/or filing fees or registration fees, charges and taxes relating to this
Indenture, the Security Documents and the other Indenture Documents, any
amendments thereto and any other instruments of further assurance.
(b) The Company shall, as soon as practicable after the Closing Date
and on each anniversary of the Closing Date beginning in the year 2002 and upon
each delivery of a Security Agreement Supplement pursuant to Section 1017,
furnish to the Trustee an Opinion of Counsel, dated as of such date, either (a)
to the effect that, in the opinion of such counsel, such action has been taken
with respect to the recordings, registerings, filings, re-recordings,
re-registerings and refilings of all financing statements, continuation
statements or other instruments of further assurance as is necessary to maintain
the Lien of each of the Security Documents and reciting with respect to such
Liens the details of such action or referencing prior Opinions of Counsel in
which such details are given, and stating that all financing statements and
continuation statements and other filings or registrations have been executed
and filed that are necessary as of such date, and during the succeeding twelve
months, fully to preserve and protect, and set-up against third persons, the
rights of the Collateral Agent, the Holders and the Trustee hereunder and under
each of the Security Documents with respect to the Liens, or (b) to the effect
that, in the opinion of such counsel, no such action is necessary to maintain
the effectiveness of such Liens.
Section 1503. Release of Collateral.
The Trustee shall not direct the Collateral Agent to release
Collateral from the Lien of the Security Documents unless such release is in
accordance with the provisions of the Security Documents and Section 314(d) of
the Trust Indenture Act.
134
Section 1504. Trust Indenture Act Requirements.
The release of any Collateral from any of the Security Documents or
the release of, in whole or in part, the Liens created by any of the Security
Documents, will not be deemed to impair the Lien of the Security Documents in
contravention of the provisions hereof if and to the extent the Collateral or
Liens are released pursuant to the terms of the Security Documents. The Trustee
and each of the Holders acknowledge that a release of Collateral or Liens
strictly in accordance with the terms of the Security Documents and the terms
hereof will not be deemed for any purpose to be an impairment of the Liens
created pursuant to the Security Documents in contravention of the terms of this
Indenture. Without limitation, the Company and each other Indenture Obligor on
the Securities shall cause Section 314(d) of the Trust Indenture Act relating to
the release of property or securities from the Liens of the Security Documents
to be complied with. Any certificate or opinion required by Section 314(d) of
the Trust Indenture Act may be made by an officer of PCI, the Company or any
Guarantor, as the case may be, except in cases where Section 314(d) of the Trust
Indenture Act requires that such certificate or opinion be made by an
independent person.
Section 1505. Suits to Protect Collateral.
Subject to the provisions of the Common Security and Intercreditor
Agreement, the Trustee, acting at the written direction of Holders of a majority
of the aggregate principal amount of the Securities then Outstanding, shall have
power to institute and to maintain, or direct the Collateral Agent to institute
and maintain, such suits and proceedings as the Trustee may deem expedient to
prevent any impairment of the Collateral by any acts which may be unlawful or in
violation of any of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders in the Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the Liens of each
Collateral Agent in the Collateral or be prejudicial to the interests of the
Holders or the Trustee). Nothing in this Section 1505 shall prohibit, restrict
or prevent the Holders, upon the vote or consent of the Holders of a majority of
the aggregate principal amount of the Securities then Outstanding, to institute
such suits or proceedings independently of the Trustee and/or the Collateral
Agent.
Section 1506. Determinations Relating to Collateral.
In the event (a) the Trustee shall receive any written request in
compliance with Section 103 from PCI, the Company or any Guarantor under any
Security Document for consent or approval with respect to any matter or thing
relating to any Collateral or any Obligor's obligations with respect thereto, or
(b) there shall be due to or from the Trustee under the provisions of any
Security Document, any performance or the delivery of any instrument, or (c) the
Trustee shall become aware of any nonperformance by any Obligor of any covenant
or any breach of any representation or warranty of PCI, the
135
Company or any Guarantor set forth in any Security Document, then, in each such
event, the Trustee may, in its sole discretion and without the consent of the
Holders, direct, on behalf of the Holders, the Collateral Agent to take all
actions it deems necessary or appropriate in order to (x) enforce any of the
terms of the Security Documents, and (y) collect and receive any and all amounts
payable in respect of the obligations of the Obligors hereunder. The Trustee
shall have power to institute and maintain such suits and proceedings as it may
deem expedient to preserve or protect its interests and the interests of the
Holders in the Collateral (including the power to institute and maintain suits
and proceedings to restrain the enforcement of or compliance with any
legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders or to the Trustee). The Trustee
shall be entitled, at the expense of the Company and subject to Sections 602
hereof, to hire experts, consultants, agents and attorneys (including internal
counsel) to advise the Trustee on the manner in which the Trustee should respond
to such request or render any requested performance or response to such
nonperformance or breach. The Trustee shall be fully protected in the taking of
any action recommended or approved by any such expert, consultant, agent or
attorney (including internal counsel) or agreed to by the Holders of a majority
of the aggregate principal amount of the Securities then Outstanding pursuant to
Section 505 hereof.
Section 1507. Trust Moneys.
To the extent Trust Moneys consist of insurance proceeds or
condemnation or other taking awards, any such moneys which may be used, pursuant
to the terms of the Common Security and Intercreditor Agreement, to effect a
restoration of the affected Collateral shall be permitted to be withdrawn by the
Company and paid by the Collateral Agent in accordance with the Common Security
and Intercreditor Agreement. The Company shall deliver (a) an Officers'
Certificate certifying as to expenditures made or costs incurred, the necessity
or desirability in the conduct of the Company's business of the repaired,
rebuilt, or replaced property, and the Fair Market Value of such property as of
the date of the expenditures, (b) an Opinion of Counsel as to the validity and
perfection of the Collateral Agent's lien on the repaired or replaced Collateral
and (c) an architect's certificate as to the costs of such restoration and
compliance with law, all in accordance with the Common Security and
Intercreditor Agreement.
To the extent Trust Moneys consist of Collateral Proceeds, and the
Company intends to reinvest such proceeds in the Company or in one or more
Subsidiaries in a Related Business, such Trust Moneys shall be permitted,
subject to the terms of the Common Security and Intercreditor Agreement, to be
withdrawn by the Company upon delivery to the Trustee and the Collateral Agent
of (a) a Company Order regarding such withdrawal, (b) an Officers' Certificate
certifying compliance with the Indenture, (c) instruments granting the
Collateral Agent first priority Liens, for the benefit of the Trustee (for
itself and the Holders), for the Administrative Agent (for itself and the
Lenders) and for the New Tranche A Notes Indenture Trustee (for itself and the
New Tranche A Note Holders) on the real or personal property interests in which
the
136
Company or any Subsidiary have invested, and (d) an Opinion of Counsel as to
the instruments governing such Liens and security interests, all in accordance
with the Common Security and Intercreditor Agreement.
Subject to the terms of the Common Security and Intercreditor
Agreement, Trust Moneys shall be permitted to be applied from time to time (x)
to the payment of principal, premium, if any, and interest on the Securities, or
(y) to the extent otherwise permitted by the Indenture, to redeem or repurchase
Securities, including, without limitation, pursuant to a Change of Control Offer
or (to the extent such Trust Moneys constitute proceeds from Asset Sales) an
Asset Sale Offer, or (z) at the direction of PCI, the Company and each
Guarantor, to pay any other Indebtedness secured by liens in the Collateral (but
only to the extent such Trust Moneys constitute Collateral Proceeds). In each
case, the Trustee and each Collateral Agent shall receive (a) resolutions of the
Boards of Directors of the PCI, the Company and each Guarantor directing such
application, (b) an Officers' Certificate, and (c) an Opinion of Counsel, and
the Collateral Agent shall receive cash equaling the accrued interest, if any,
required to be paid in connection with such payment or purchase. Trust Moneys
received by each Collateral Agent or the Trustee pursuant to an Asset Sale Offer
remaining after the completion of such Asset Sale Offer shall be permitted to be
withdrawn by the Company upon request of the Company in compliance with Section
103 and delivery of an Officers' Certificate and an Opinion of Counsel, all in
accordance with, and subject to, the Common Security and Intercreditor
Agreement.
Any release of Collateral, including Trust Moneys, will be subject
to the provisions of Section 314(d) of the Trust Indenture Act relating to,
among other things, the delivery of a certificate or an opinion of an engineer,
appraiser or other expert as to the Fair Market Value of Collateral being
released from the Liens of the Security Documents.
Section 1508. Power of Attorney for Collateral in Quebec.
For the purposes of the security on the Collateral located in
Quebec, the validity, publication or perfection of which is governed by the laws
of the province of Quebec, each of the Trustee and the Holders hereby
irrevocably grants to the Collateral Agent, for the purposes of holding, on
behalf of and for the benefit of all present and future Trustees and Holders,
the security constituted by the Company under the Quebec Mortgage and Security
Agreement, a power of attorney within the meaning of the Civil Code of Quebec
(the "Power of Attorney") for all present and future Trustees and Holders. The
Collateral Agent hereby accepts such Power of Attorney for the purposes of
holding such security created under the Quebec Mortgage and Security Agreement
on behalf of and for the benefit of all present and future Trustees and Holders.
To the extent that any such Person becomes a Trustee under this Indenture or a
Holder by accepting, purchasing or acquiring a Security becomes bound by the
terms and conditions of this Indenture, whether by assignment or otherwise, such
Person shall be automatically deemed to have ratified and consented to the
irrevocable granting by the Trustee and the Holders to the Collateral Agent of
the Power of Attorney constituted hereunder. Each Holder agrees (i) with the
other Holders that it will not, without the prior consent of the
137
Trustee and the other Holders, take or obtain any Lien on any property of the
Company to secure the Indenture Obligations of the Company hereunder or under
the Securities, except for the benefit of the Collateral Agent for and on behalf
of, the Trustee and the Holders, or as may otherwise be required by law; and
(ii) that, notwithstanding the provisions of Section 32 of An Act respecting the
Special Powers of Legal Persons (Quebec), the Collateral Agent may, as a Person
holding the Power of Attorney of the Trustee and the Holders, acquire any title
to indebtedness secured by any hypothec in its favor related to this Indenture
or the Securities or any other document contemplated hereunder.
ARTICLE SIXTEEN
UNALLOCATED SECURITIES
Section 1601. Escrow of Unallocated Securities and Unallocated
Payments.
Until such time as a Claimant has claimed its pro rata distribution
of the Securities in accordance with the terms of the Plan of Reorganization,
and as described in the Letters of Transmittals, the Securities issuable to such
Claimant ("Unallocated Securities") shall be held in escrow by the Disbursing
Agent for the benefit of the Claimants, pursuant to the terms of the Custody and
Disbursing Agreement. Any payments of interest, principal, premium or other
amounts that become due and payable with respect to such Unallocated Securities
("Unallocated Payments") shall be paid into an account maintained by the
Disbursing Agent pursuant to the terms of the Custody and Disbursing Agreement.
Section 1602. Cancellation of Unallocated Securities and Release of
Unallocated Payments.
In accordance with the terms of the Plan of Reorganization, all
Unallocated Securities shall be cancelled at the close of business on December
31, 2002 (the "Cancellation Date"). The certificates, if any, evidencing the
Securities to be cancelled shall be returned to the Company for cancellation. In
the event the Securities to be cancelled are evidenced by the Global Security,
the Trustee shall take such actions as may be necessary to cause such
cancellation to be reflected in the position in the Securities maintained by the
Depositary. All Unallocated Payments held by the Disbursing Agent at the close
of business on the Cancellation Date, together with the interest earned on the
investment of such Unallocated Payments by the Disbursing Agent in accordance
with the Custody and Disbursing Agreement, in each case net of all fees and
expenses (collectively, the "Returned Payments") shall deposited with the
Collateral Agent in the Intercreditor Collateral Account for application in
accordance with the Common Security and Intercreditor Agreement. The above to
the contrary notwithstanding, Returned Payments will be deposited with the
Collateral Agent only in the event the aggregate of all Returned Payments
exceeds $500,000. Returned Payments not deposited with the Collateral Agent
pursuant to this Section 1602 will be released to the Company for the Company's
account.
138
[SIGNATURE PAGES FOLLOW]
139
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
PCI CHEMICALS CANADA COMPANY,
as Issuer
By:___________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
PIONEER COMPANIES, INC.,
as Parent of the Issuer
By:___________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
GUARANTORS: PIONEER COMPANIES, INC.,
PIONEER AMERICAS LLC,
IMPERIAL WEST CHEMICAL CO.,
KEMWATER NORTH AMERICA
COMPANY,
PIONEER WATER TECHNOLOGIES, INC.,
KWT, INC.
By:___________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
PIONEER LICENSING, INC.,
PIONEER (EAST), INC.
By:____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and Secretary
TRUSTEE: ▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:_____________________________
Name:________________________
Title:_______________________
SCHEDULE 1
EXISTING INDEBTEDNESS
SCHEDULE 2
EXISTING INVESTMENTS
SCHEDULE 3
ALLOWED SECURED TAX CLAIMS AND ALLOWED OTHER SECURED CLAIMS LIENS
EXHIBIT A
FORMS OF MORTGAGES
EXHIBIT B
FORM OF COMMON SECURITY AND INTERCREDITOR AGREEMENT