Blue Cube Spinco
Inc. (Blue Cube or the Issuer), a wholly-owned subsidiary of Olin Corporation (Olin or the Parent Guarantor), is offering to exchange (i) up to $720,000,000 aggregate principal amount of its
outstanding, unregistered 9.75% Senior Notes due 2023 (the Original 2023 Notes) for an equivalent amount of registered 9.75% Senior Notes due 2023 (the Exchange 2023 Notes) and (ii) up to $500,000,000 aggregate principal
amount of its outstanding, unregistered 10.00% Senior Notes due 2025 (the Original 2025 Notes and, together with the Original 2023 Notes, the Original Notes and each an Original Note) for an equivalent amount of
registered 10.00% Senior Notes due 2025 (the Exchange 2025 Notes and, together with the Exchange 2023 Notes, the Exchange Notes and each an Exchange Note). The Original Notes and the Exchange Notes are sometimes
referred to in this prospectus together as the Notes. The terms of the Exchange Notes are identical in all material respects to the terms of the corresponding series of the Original Notes, except that the Exchange Notes are registered
under the Securities Act of 1933, as amended (the Securities Act), and the transfer restrictions, registration rights and payment of additional interest in case of non-registration applicable to the Original Notes do not apply to the
Exchange Notes. For a more detailed description of the Exchange Notes, see Description of Notes. The Original Notes may only be tendered in minimum denominations of $2,000 in principal or in integral multiples of $1,000 in excess
thereof.
The exchange offers will expire at 11:59 p.m., New York City time, on October 3, 2016, subject to our right to extend the expiration date for any exchange offer.
Upon expiration of the exchange offers, all outstanding Original Notes
that are validly tendered and not properly withdrawn will be exchanged for a like principal amount of the applicable series of the Exchange Notes. You may withdraw tendered Original Notes at any time prior to the expiration date.
The Original Notes are, and the Exchange Notes will be, fully and unconditionally guaranteed on a senior unsecured basis by Olin. All
references to the Notes include references to the related guarantees. The Exchange Notes will not be listed on any securities exchange or any automated dealer quotation system and there is currently no market for the Exchange Notes.
Each broker-dealer that receives Exchange Notes for its own account pursuant to an exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Original
Notes where such Original Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The letter of transmittal states that by so acknowledging and by delivering (or making available) a prospectus,
a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act. We have agreed that, for a period of up to 180 days after the expiration date, we will make this prospectus, as amended and
supplemented, available to any broker-dealer for use in connection with any such resale. See Plan of Distribution.
Description of Notes
The definitions of certain capitalized terms as such terms are used in this section are set forth below under Certain definitions. When used
in this section, (i) the term Issuer refers to Blue Cube Spinco Inc., a Delaware corporation, and not to any of its Subsidiaries and (ii) the term Parent refers to Olin Corporation, a Virginia corporation, and not
to any of its Subsidiaries.
The Exchange 2023 Notes will be issued under an indenture dated October 5, 2015, among the Issuer and U.S. Bank National
Association, as trustee (the Trustee), as supplemented by a first supplemental indenture among the Parent, the Issuer and the Trustee (the 2023 Indenture). The Exchange 2025 Notes will be issued under an indenture dated
October 5, 2015, among the Issuer and the Trustee, as supplemented by a first supplemental indenture among the Parent, the Issuer and the Trustee (the 2025 Indenture).
The 2023 Indenture and the 2025 Indenture are collectively referred to herein as the Indentures. Unless otherwise expressly stated or the context
otherwise requires, the Original Notes and the Exchange Notes are referred to in this Description of Notes together as the Notes. We refer to the Original 2023 Notes and the Exchange 2023 Notes together as the 2023
Notes and the Original 2025 Notes and the Exchange 2025 Notes together as the 2025 Notes. The terms of each series of the Notes include those expressly set forth in the Indentures and those made part of the Indentures by reference
to the Trust Indenture Act of 1939, as amended (the Trust Indenture Act). The Original Notes were issued in a private debt offering pursuant to exemptions from the registration requirements of the Securities Act and are subject to
certain transfer restrictions. See Transfer restrictions.
This Description of Notes section is intended to be an overview of the
material provisions of each series of Notes, the guarantees and the Indentures. Since this Description of Notes section is only a summary, you should refer to the Indentures for a complete description of the obligations of the Issuer,
the Parent and your rights. You may request copies of the Notes and the Indentures at the address set forth under the heading Where You Can Find More Information; Incorporation By Reference.
General
The initial offering of the Original 2023
Notes was for an aggregate principal amount of $720,000,000 and the initial offering of the Original 2025 Notes was for an aggregate principal amount of $500,000,000. The Issuer may issue an unlimited principal amount of additional notes of each
series having identical terms and conditions as the Notes of such series, other than the date of issuance and, under certain circumstances, the first interest payment date and the date from which interest thereon will begin to accrue (any such
additional notes with respect to a series of Notes, the Additional Notes of such series);
provided
that if any Additional Notes of a series are not fungible with the Notes of such series issued in this offering for U.S. federal
income tax purposes, such Additional Notes will have a separate CUSIP number and ISIN from the Notes of such series issued in this offering, as applicable. The Issuer is only permitted to issue such Additional Notes in compliance with the covenant
described under the subheading Certain covenantsLimitation on debt. Any Additional Notes of a series will be part of the same issue as the Notes of such series and will vote on all matters with the Holders of the Notes of
such series. The Notes of a series (and any Additional Notes of such series) will constitute a series of debt securities under the Indenture for such series.
Principal, maturity and interest
Interest on the 2023
Notes is payable at 9.75% per annum. Interest on the 2025 Notes is payable at 10.00% per annum. Interest on the Notes is payable semi-annually in cash in arrears on April 15 and October 15. The Issuer will make each interest
payment to the Holders of record as of the close of business on the immediately preceding April 1 and October 1. Interest on the Exchange Notes will accrue from the most recent date to which interest has been paid on the corresponding
series of Original Notes or, if no interest has been paid on such Original Notes, from and including October 1, 2015. Interest is computed on the basis of a 360-day year comprised of twelve 30-day months.
28
Principal of and premium, if any, and interest on the Notes will be payable, and the Notes will be
exchangeable and transferable, at the office or agency of the Issuer maintained for such purposes, which, initially, will be the corporate trust office designated in each Indenture. If a Holder has given wire instructions to the Issuer or the paying
agent, the paying agent will distribute the payments received of principal, and, if applicable, of interest and premium, if any, on that Holders Notes in accordance with those instructions;
provided
,
however
, that payment of
interest may be made at the option of the Issuer by check mailed to the Person entitled thereto as shown on the security register, subject to the customary procedures of any depository for the Notes.
The Exchange Notes will be issued only in fully registered form without coupons, in denominations of $2,000 and any integral multiple of $1,000 in excess
thereof. No service charge will be made for any registration of transfer, exchange or redemption of Notes, except in certain circumstances for any tax or other governmental charge that may be imposed in connection therewith.
The notes
The Notes are general unsecured senior
obligations of the Issuer. As a result, the Notes:
|
|
rank equally in right of payment with all of the Issuers existing and future senior indebtedness, including its indebtedness under the Credit Agreement and the Sumitomo Credit Agreement;
|
|
|
rank senior in right of payment to all of the Issuers future subordinated indebtedness;
|
|
|
are effectively subordinated to any of the Issuers existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness;
|
|
|
are structurally subordinated to all of the existing and future liabilities (including trade payables) of each of the Issuers Subsidiaries; and
|
|
|
are unconditionally guaranteed on a senior unsecured basis by the Parent. See The guarantees.
|
The guarantees
The Notes are guaranteed on a full and
unconditional senior unsecured basis by the Parent. As a result, each Guarantee:
|
|
ranks equally in right of payment with all of the Parents existing and future senior indebtedness, including its indebtedness under the Credit Agreement, the Sumitomo Credit Agreement and the Existing Notes;
|
|
|
ranks senior in right of payment to all of the Parents future subordinated indebtedness;
|
|
|
is effectively subordinated to any of the Parents existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness; and
|
|
|
is structurally subordinated to all of the existing and future liabilities (including trade payables) of each of the Parents Subsidiaries (other than the Issuer).
|
As of June 30, 2016, the Parent and its subsidiaries had approximately $3,695.8 million of total indebtedness (including the Notes). In addition, as of
June 30, 2016, the Parent and its subsidiaries had revolving commitments available to be borrowed under the Credit Agreement of $481.9 million (after giving effect to $18.1 million of outstanding letters of credit under the Credit Agreement).
None of the Parents Subsidiaries guarantee the Notes as of the date hereof. In the event of a bankruptcy, liquidation or reorganization of any of
the Parents Subsidiaries (other than the Issuer), these Subsidiaries must pay the holders of their debts and their trade creditors in full before they will be permitted to distribute any of their assets to the Issuer or the Parent.
The Issuer is a holding company, and all of the assets of the Issuer consist of direct and indirect ownership interests in, and all of its
business is conducted through, subsidiaries. Prior to the Transactions, the Parent
29
conducted most of its business at Olin Corporation and not through its subsidiaries. However, the Pioneer business, acquired in 2007, is operated through subsidiaries and the SunBelt business is
also operated through subsidiaries. In 2011, Olin acquired the remaining 50% interest in the SunBelt joint venture, which is a chlor-alkali plant located within Olins McIntosh, Alabama facility. In 2007, Olin acquired Pioneer, a manufacturer
of chlorine, caustic soda, bleach and hydrochloric acid. Pioneer consists of three chlor-alkali plants and two bleach manufacturing facilities in North America. The Parents subsidiaries (other than the Issuer) are separate legal entities that
have no obligation to pay any amounts due under the Notes or the guarantees or to make any funds available therefor, whether by dividend, loan or other payment. As a consequence, the Issuers obligations under the Notes will be structurally
subordinated to existing and future indebtedness and other liabilities of subsidiaries of the Issuer and the obligations of the Parent under the guarantees are structurally subordinated to existing and future indebtedness and other liabilities of
the Parents other subsidiaries. In addition, the right of the Issuer and the Parent to participate in any distribution of assets of any of their respective subsidiaries upon their liquidation or reorganization or otherwise, and the ability of
holders of the Notes to benefit indirectly from that kind of distribution, is subject to the prior claims of creditors of that subsidiary, except to the extent the Issuer or the Parent is recognized as a creditor of that subsidiary. All obligations
of the subsidiaries of the Parent and the Issuer will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise.
The Parents Subsidiaries (other than the Issuer) represented approximately 62% of our net sales for the year ended December 31,
2015, and represented approximately 78% of our net sales for the six months ended June 30, 2016, respectively. As of June 30, 2016, the Parents Subsidiaries (other than the Issuer) represented approximately 38% of our total assets
and had 34% of total liabilities, including debt and trade payables but excluding intercompany liabilities.
As of the date hereof, all of
the Parents Subsidiaries are Restricted Subsidiaries. However, under the circumstances described below under the definition of Unrestricted Subsidiary, any of the Parents Subsidiaries may be designated as
Unrestricted Subsidiaries. Unrestricted Subsidiaries are not subject to the restrictive covenants in the Indentures.
Sinking fund
There are no mandatory sinking fund payment obligations with respect to the Notes.
Optional redemption
The Notes are not redeemable until
October 15, 2020.
On and after October 15, 2020, the Issuer may, on any one or more occasions, redeem the Notes of any series, in whole or in
part, upon not less than 30 nor more than 60 days notice mailed or otherwise delivered to each Holder of the Notes of such series in accordance with the applicable procedures of DTC, at the redemption prices (expressed as a percentage of
principal amount of the Notes of such series to be redeemed) set forth below, plus accrued and unpaid interest on the Notes of such series, if any, to the applicable date of redemption, if redeemed during the 12-month period beginning on
October 15 of each of the years indicated below:
2023 Notes:
|
|
|
|
|
Year
|
|
Percentage
|
|
2020
|
|
|
102.438
|
%
|
2021
|
|
|
102.438
|
%
|
2022 and thereafter
|
|
|
100.000
|
%
|
30
2025 Notes:
|
|
|
|
|
Year
|
|
Percentage
|
|
2020
|
|
|
105.000
|
%
|
2021
|
|
|
103.333
|
%
|
2022
|
|
|
101.667
|
%
|
2023 and thereafter
|
|
|
100.000
|
%
|
Unless the Issuer defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue
on the Notes or portions of the Notes called for redemption and those Notes will cease to be outstanding.
If an optional redemption date is on or after
an interest payment record date and on or before the related interest payment date, the accrued and unpaid interest on the Notes being redeemed, if any, will be paid to the Person in whose name such Note is registered at the close of business, on
such record date, and no additional interest will be payable to the Holder of such Note on the redemption date.
In the case of any partial redemption,
selection of the Notes of a series for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes of such series are listed or, if such Notes are not listed,
then on a pro rata basis, by lot in accordance with the applicable procedures of DTC or by such other method as the Trustee in its sole discretion deems to be fair and appropriate, although no Note of $2,000 in principal amount or less will be
redeemed in part. If any Note is to be redeemed in part only, the notice of redemption relating to such Note will state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion
thereof will be issued in the name of the Holder thereof upon cancellation of the original Note.
Any redemption notice may, at the Issuers
discretion, be subject to one or more conditions precedent, including completion of any transaction.
The Issuer may at any time, and from time to time,
acquire Notes by means other than a redemption, whether by tender offer, open market purchases, negotiated transactions or otherwise, in accordance with applicable securities laws.
Change of control
If a Change of Control occurs, unless
the Issuer has exercised its right to redeem the Notes of a series as described above under Optional redemption, the Issuer will make an offer to each Holder of a series to repurchase all or any part (in multiples of $1,000
principal amount) of that Holders Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus any accrued and unpaid interest on the Notes repurchased to the date of purchase.
Within 30 days following any Change of Control, unless the Issuer has exercised its right to redeem the Notes of a series as described above under
Optional redemption, or, at the Issuers option, prior to any Change of Control, but after the public announcement of the Change of Control, the Issuer will mail a notice to each Holder of a series describing the transaction
or transactions that constitute or may constitute the Change of Control and offering to repurchase Notes of such series on the payment date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date
such notice is mailed. The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control occurring on or prior to the payment date specified in the
notice.
The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
31
repurchase of any Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Notes,
the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Notes by virtue of such conflict.
On the Change of Control payment date with respect to a series of Notes, the Issuer will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes (in integral multiples of $1,000) of such series properly tendered pursuant to the
Issuers offer;
provided
that if, following repurchase of a portion of a Note, the remaining principal amount of such Note outstanding immediately after such repurchase would be less than $2,000, then the portion of such Note so
repurchased shall be reduced so that the remaining principal amount of such Note outstanding immediately after such repurchase is $2,000;
(2) deposit with the paying agent an amount equal to the aggregate purchase price in respect of all Notes or portions of Notes of such series
properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes of such series properly accepted, together with an
Officers Certificate stating the aggregate principal amount of Notes of such series being purchased by the Issuer.
The paying agent will
promptly mail (or otherwise deliver in accordance with the applicable procedures of DTC) to each Holder of Notes of such series properly tendered the purchase price for such Notes, and the Trustee will promptly authenticate and mail (or otherwise
deliver in accordance with the applicable procedures of DTC) (or cause to be transferred by book-entry) to each Holder a new Note of such series equal in principal amount to any unpurchased portion of any Notes surrendered;
provided
that each
new Note will be in a principal amount of $2,000 or an integral multiple of $1,000.
If the Change of Control payment date with respect to a series
of Notes is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest to the Change of Control payment date will be paid on the Change of Control payment date to the Person in
whose name such Note is registered at the close of business on such record date.
The Issuer will not be required to make an offer to repurchase the Notes
of any series upon a Change of Control if a third party makes an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Issuer and such third party purchases all Notes of such series properly
tendered and not withdrawn under its offer.
The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease,
transfer, conveyance or other disposition of all or substantially all of the property and assets of the Parent and its Subsidiaries, taken as a whole. Although there is a limited body of case law interpreting the phrase
substantially all, there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder to require the Issuer to repurchase Notes as a result of a sale, lease, transfer, conveyance or other
disposition of less than all of the properties and assets of the Parent and its Subsidiaries, taken as a whole, to another person (as that term is used in Section 13(d)(3) of the Exchange Act) may be uncertain.
The Issuers ability to pay cash to the Holders upon a Change of Control may be limited by the Issuers and the Parents then existing
financial resources. Further, future agreements of the Issuer and the Parent may contain prohibitions of certain events, including events that would constitute a Change of Control. If the exercise by the Holders of their right to require the Issuer
to repurchase the Notes upon a Change of Control occurred at the same time as a change of control event under one or more of the Issuers or the Parents other debt agreements, the Issuers ability to pay cash to the Holders upon a
repurchase may be further limited by the Issuers and the Parents then existing financial resources. See Risk FactorsRisks Related to the Notes and the Exchange OffersWe may not be able to repurchase the notes upon a
change of control.
32
Even if sufficient funds were otherwise available, the terms of future indebtedness may prohibit the
Issuers and the Parents prepayment or repurchase of the Notes before their scheduled maturity. Consequently, if the Issuer or the Parent is not able to prepay obligations under any such other indebtedness or obtain requisite consents,
the Issuer and the Parent will be unable to fulfill its repurchase obligations, resulting in a default under the applicable Indenture. A default under the Indentures may result in a cross-default under the Credit Agreement or other indebtedness.
Holders may not be entitled to require the Issuer to purchase their Notes in certain circumstances involving a significant change in the composition of the Board of Directors of the Parent, including in connection with a proxy contest where the
Board of Directors of the Parent approves them as Continuing Directors, even if the Board of Directors of the Parent initially opposed the directors.
The
provisions of the Indentures will not afford Holders protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction affecting the Parent or the Issuer that may adversely affect Holders, if
such transaction is not the type of transaction included within the definition of Change of Control. A transaction involving the management of the Parent or its affiliates, or a transaction involving a recapitalization of the Parent or the Issuer,
will result in a Change of Control only if it is the type of transaction specified in such definition. Certain provisions under the Indentures relative to the Issuers obligation to make an offer to repurchase the Notes of a series as a result
of a Change of Control may be amended or modified with the written consent of the Holders of a majority in aggregate principal amount of outstanding Notes of such series. See Amendment, supplement and waiver.
In addition, an offer to repurchase may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in
place for a Change of Control at the time of launching the offer to repurchase.
Certain covenants
Set forth below are summaries of certain covenants that are contained in the Indenture for each series of Notes.
Limitation on restricted payments
The Parent will
not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any Restricted Payment unless, at the time of and after giving effect to the proposed Restricted Payment:
(a) no Default shall have occurred and be continuing or will occur as a consequence thereof;
(b) after giving effect to such Restricted Payment on a pro forma basis, the Parent would be permitted to incur at least $1.00 of Coverage Debt
under the Limitation on debt covenant; and
(c) after giving effect to such Restricted Payment on a pro forma basis, the
aggregate amount of all Restricted Payments made after the Issue Date (excluding (x) Restricted Payments permitted by clauses (ii) through (viii) of the next succeeding paragraph and (y) Restricted Payments permitted by clause
(ix) of the next succeeding paragraph to the extent that the amount available for Restricted Payments under this clause (c) would be reduced to less than zero as a result of payments made under such clause (ix)), shall not exceed the sum
(without duplication) of
(1) 50% of the Consolidated Net Income (or, if Consolidated Net Income shall be a deficit, minus 100% of such
deficit) of the Parent accrued on a cumulative basis during the period (taken as one accounting period) from the beginning of the fiscal quarter during which the Issue Date occurs and ending on the last day of the fiscal quarter immediately
preceding the date of such proposed Restricted Payment, plus
(2) 100% of the aggregate net proceeds (including the fair market value of
property other than cash as determined by the Parent in good faith) received by the Parent subsequent to the initial issuance of the Notes either (i) as a contribution to its common equity capital or (ii) from the issuance and sale (other
than to a Subsidiary) of its Qualified Capital Interests, including Qualified Capital Interests issued upon the conversion of Debt, Redeemable Capital Interests or preferred stock of the Parent, and from the
33
|
exercise of options, warrants or other rights to purchase such Qualified Capital Interests (other than, in each case, Capital Stock or Debt sold to a Subsidiary of the Parent and other than
Excluded Contributions), plus
|
(3) to the extent that any Investment (other than Permitted Investments or Investments in
Unrestricted Subsidiaries) that was made on or after the Issue Date is sold for cash or otherwise disposed of, liquidated, redeemed, repurchased or repaid for cash or other assets, or to the extent that the Parent otherwise realizes any proceeds on
the sale of such Investment or proceeds representing the return of capital on such Investment, the lesser of (i) the initial amount of such Investment, or (ii) to the extent not otherwise included in the calculation of Consolidated Net
Income of the Parent for such period, the net cash return of capital or net fair market value of return of capital as determined by the Parent in good faith with respect to such Investment, less the cost of any such disposition or liquidation, plus
(4) to the extent that any Unrestricted Subsidiary of the Parent designated as such on or after the Issue Date is redesignated as a
Restricted Subsidiary, the lesser of (i) the fair market value of the Parents Investment in such Subsidiary as of the date of such redesignation as determined by the Parent in good faith or (ii) such fair market value as of the date
on which such Subsidiary was originally designated as an Unrestricted Subsidiary, plus
(5) $150.0 million.
Notwithstanding whether the foregoing provisions would prohibit the Parent and its Restricted Subsidiaries from making a Restricted Payment, the Parent and
its Restricted Subsidiaries may make the following Restricted Payments:
(i) the payment of any dividend on Capital Stock in the Parent or
a Restricted Subsidiary within 60 days after declaration thereof if at the declaration date such payment was permitted by the provisions of this covenant;
(ii) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of any Qualified Capital Interests of the Parent by
conversion into, or by or in exchange for, Qualified Capital Interests, or out of net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Parent) of other Qualified Capital Interests of the Parent;
(iii) the redemption, defeasance, repurchase or acquisition or retirement for value of any Debt of the Parent or a Subsidiary Guarantor that is
subordinate in right of payment to the Notes or the applicable Guarantee out of the net cash proceeds of a substantially concurrent issue and sale (other than to a Subsidiary of the Parent) of (x) new subordinated Debt of the Parent or such
Subsidiary Guarantor, as the case may be, incurred in accordance with the applicable Indenture or (y) of Qualified Capital Interests of the Parent;
(iv) the purchase, redemption, retirement or other acquisition for value of Capital Stock of the Parent held by employees or former employees
of the Parent or any Restricted Subsidiary (or their estates or beneficiaries under their estates) upon death, disability, retirement or termination of employment or alteration of employment status or pursuant to the terms of any agreement under
which such Capital Stock was issued; provided, however, that the aggregate cash consideration paid for such purchase, redemption, retirement or other acquisition of such Capital Stock does not exceed $5.0 million in any calendar year;
provided
further, however,
that any unused amounts in any calendar year may be carried forward to one or more future periods subject to a maximum aggregate amount of repurchases made pursuant to this clause (iv) not to exceed $10.0 million in any
calendar year; provided, however, that such amount in any calendar year may be increased by an amount not to exceed (A) the cash proceeds received by the Parent or any of its Restricted Subsidiaries from the sale of Qualified Capital Interests
of the Parent to employees of the Parent and its Restricted Subsidiaries that occurs after the Issue Date;
provided, however,
that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend
will not increase the amount available for Restricted Payments under clause (c) of the first paragraph of this covenant; plus (B) the cash proceeds of key man life insurance policies received by the Parent and its Restricted
34
Subsidiaries after the Issue Date (
provided, however
, that the Parent may elect to apply all or any portion of the aggregate increase contemplated by the proviso of this clause
(iv) in any calendar year);
(v) repurchase of Capital Stock deemed to occur upon the exercise of stock options, warrants or other
convertible or exchangeable securities;
(vi) cash payment, in lieu of issuance of fractional shares in connection with the exercise of
warrants, options or other securities convertible into or exchangeable for the Capital Stock of the Parent or a Restricted Subsidiary;
(vii) the declaration and payment of dividends to holders of any class or series of Redeemable Capital Interests of the Parent or any
Restricted Subsidiary issued or incurred in compliance with the covenant described below under Limitation on debt;
(viii) upon the occurrence of a Change of Control or an Asset Sale, the defeasance, redemption, repurchase or other acquisition of any
subordinated Debt pursuant to provisions substantially similar to those described under Change of control and Limitation on asset sales at a purchase price not greater than 101% of the principal amount thereof (in
the case of a Change of Control) or at a percentage of the principal amount thereof not higher than the principal amount applicable to the Notes (in the case of an Asset Sale), plus any accrued and unpaid interest thereon;
provided, however,
that prior to or contemporaneously with such defeasance, redemption, repurchase or other acquisition, the Issuer has made an Offer to Purchase with respect to the applicable Notes and has repurchased all Notes validly tendered for payment and not
withdrawn in connection therewith;
(ix) to the extent no Default in any payment in respect of principal or interest under the Notes or
Event of Default has occurred and is continuing or will occur as a consequence thereof, the payment of regular cash quarterly dividends on the Parents common stock;
provided, however,
that in no event shall the amount of dividends paid
in any calendar year under this clause (ix) exceed $200.0 million;
(x) Restricted Payments that are made with Excluded Contributions;
(xi) to the extent no Default in any payment in respect of principal or interest under the Notes or an Event of Default has occurred and
is continuing or will occur as a consequence thereof, other Restricted Payments not in excess of $50.0 million in the aggregate;
(xii) to
the extent no Default in any payment in respect of principal or interest under the Notes or an Event of Default has occurred and is continuing or will occur as a consequence thereof, any Restricted Payment so long as on the date of such Restricted
Payment, after giving pro forma effect thereto and to any related transactions as if the same had occurred at the beginning of the Parents most recent four consecutive fiscal quarters for which internal financial statements of the Parent are
available, the Consolidated Debt Ratio would not exceed 2.50 to 1.00; and
(xiii) any Restricted Payment made in connection with the
Transactions.
If any Person in which an Investment is made, which Investment constitutes a Restricted Payment when made, thereafter becomes a Restricted
Subsidiary in accordance with the applicable Indenture, all such Investments previously made in such Person shall no longer be counted as Restricted Payments for purposes of calculating the aggregate amount of Restricted Payments pursuant to clause
(c) of the first paragraph under this Limitation on restricted payments covenant, in each case to the extent such Investments would otherwise be so counted.
For purposes of this covenant, if a particular Restricted Payment involves a non-cash payment, including a distribution of assets, then such Restricted
Payment shall be deemed to be an amount equal to the cash portion of such Restricted Payment, if any, plus an amount equal to the fair market value of the non-cash portion of such Restricted Payment as determined by the Parent in good faith.
35
Limitation on debt
The Parent will not, and will not permit any of its Restricted Subsidiaries to, incur any Debt (including Acquired Debt);
provided
,
however
, that the Parent, the Issuer and any Restricted Subsidiary may incur Debt (including
Acquired Debt) if, immediately after giving effect to the incurrence of such Debt and the receipt and application of the proceeds therefrom,
(a) the Consolidated Fixed Charge Coverage Ratio of the Parent and its Restricted Subsidiaries would be greater than 2.00 to 1.00 and (b) no Default shall have occurred and be continuing at the time or as a consequence of the incurrence of
such Debt (any Debt incurred pursuant to this provision being herein referred to as
Coverage Debt
);
provided
,
however
, that the amount of Debt (other than Acquired Debt) that may be incurred or issued pursuant to the
foregoing by Non-Guarantor Subsidiaries shall not exceed $100.0 million at any one time outstanding.
Notwithstanding the first paragraph above,
the Parent and its Restricted Subsidiaries may incur Permitted Debt.
For purposes of determining any particular amount of Debt under this
Limitation on debt covenant, (x) Debt outstanding under the Credit Agreement and the Sumitomo Credit Agreement on the Issue Date shall at all times be treated as incurred pursuant to clause (i) of the definition of
Permitted Debt and shall not be permitted to be reclassified and (y) guarantees or obligations with respect to letters of credit supporting Debt otherwise included in the determination of such particular amount shall not be
included. Except as provided above, for purposes of determining compliance with this Limitation on debt covenant, in the event that an item of Debt meets the criteria of more than one of the types of Debt described above, including any
Coverage Debt and any category of Permitted Debt, the Parent, in its sole discretion, shall classify, and from time to time may reclassify, all or any portion of such item of Debt. For purposes of determining compliance of any non-U.S.
dollar-denominated Debt with this covenant, the amount outstanding under U.S. dollar-equivalent principal amount of Debt denominated in a foreign currency shall at all times be calculated based on the relevant currency exchange rate in effect on the
date such Debt was incurred, in the case of any term Debt, or first committed, in the cases of any revolving credit Debt;
provided, however
, that if such Debt is incurred to Refinance other Debt denominated in the same or different currency,
and such Refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such Refinancing, such U.S. dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such Refinancing Debt does not exceed the principal amount of such indebtedness being Refinanced.
The accrual of interest, the accretion or amortization of original issue discount and the payment of interest on Debt in the form of additional Debt or
payment of dividends on Capital Stock in the forms of additional shares of Capital Stock with the same terms will not be deemed to be an incurrence of Debt or issuance of Capital Stock for purposes of this covenant.
Limitations on liens
(a) The Parent will not, nor
will the Parent permit any Restricted Subsidiary to, issue, assume or guarantee any Debt secured by a Lien upon any Principal Property or upon any shares of stock of any Restricted Subsidiary without effectively providing that the Notes of such
series and the applicable Guarantee, together with, if the Parent so determines, any other indebtedness or obligation then existing or thereafter created, ranking equally in right of payment with such Notes or the applicable Guarantee, shall be
secured equally and ratably with, or, at the Parents option, prior to, such Debt so long as such Debt shall be so secured, except that this restriction will not apply to:
(1) Liens existing on the Issue Date;
(2) Liens affecting property of a Person existing at the time it becomes a Restricted Subsidiary or at the time it is merged into or
consolidated with the Parent or a Restricted Subsidiary;
(3) Liens:
|
|
|
on property existing at the time of acquisition thereof,
|
|
|
|
to secure payment of all or part of the purchase price thereof,
|
36
|
|
|
to secure Debt incurred prior to, at the time of or within 12 months after such acquisition for the purpose of financing all or part of the purchase price thereof, or
|
|
|
|
assumed or incurred in connection with the acquisition of property;
|
(4) Liens on property to
secure all or part of the cost of repairing, altering, constructing, improving, exploring, drilling or developing such property, or to secure Debt incurred to provide funds for such purpose;
(5) Liens in connection with non-recourse Debt;
(6) Liens on current assets or other personal property, other than shares of stock of Subsidiaries, to secure loans maturing not more than one
year from the date of the creation thereof or to secure any renewal thereof for not more than one year at any one time;
(7) Liens which
secure indebtedness owing by a Restricted Subsidiary to the Parent or another Restricted Subsidiary of the Parent;
(8) Liens on property
of any Restricted Subsidiary principally engaged in a financing or leasing business; and
(9) any extension, renewal or replacement, or
successive extensions, renewals or replacements, in whole or in part, of any Lien referred to in the foregoing or of any Debt secured thereby; provided that the principal amount of Debt secured thereby shall not, with respect to Liens referred to in
clauses (1) through (4) above, exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement Lien shall be limited to all or part of substantially the
same property which secured the Lien extended, renewed or replaced, plus improvements on such property.
(b) Notwithstanding the above provisions, the
Parent and any one or more of its Restricted Subsidiaries may, without securing the Notes of such series and the applicable Guarantee, issue, assume or guarantee Debt secured by Liens which would not be permitted by the immediately preceding
paragraph in an aggregate amount which, together with:
(1) the aggregate principal amount of all of the Parents other Debt and Debt
of its Restricted Subsidiaries secured by a Lien upon any Principal Property or upon any shares of stock of any Restricted Subsidiary that would not be permitted to be secured by Liens under the immediately preceding paragraph; and
(2) the Attributable Debt in respect of Sale and Lease-Back Transactions existing at such time (other than Sale and Lease-Back Transactions in
which the property involved would have been permitted to be secured under the immediately preceding paragraph or the proceeds of which have been applied in accordance with clause (a)(2) of the covenant described below under Limitation on
sale and lease-back transactions to the retirement of long-term indebtedness);
does not at the time exceed 10% of Consolidated Net Tangible Assets.
(c) For purposes of this covenant and the covenant described below under Limitation on sale and lease-back transactions, the sale or
other transfer of any interest in property of the character commonly referred to as a production payment, is not considered Debt secured by a Lien.
Limitation on sale and lease-back transactions
(a) The Parent will not, nor will the Parent permit any Restricted Subsidiary to, enter into any arrangement with any Person providing for the leasing by the
Parent or any Restricted Subsidiary of any Principal Property, except for (x) temporary leases for terms of not more than three years, (y) leasing arrangements between the Parent and a Subsidiary or (z) leasing arrangements between
Subsidiaries, title to which property has been or is to be sold or
37
transferred by the Parent or such Restricted Subsidiary to such Person (such transaction, a Sale and Lease-Back Transaction), unless the proceeds of any such sale are at least equal
to the fair value, as determined by the Board of Directors of the Parent, of such property and either:
(1) the Parent or such Restricted
Subsidiary would be permitted under paragraph (a) of the covenant described under Limitation on liens to secure Debt by a Lien on the Principal Property to be leased in an amount at least equal to the Attributable Debt in
respect of such Sale and Lease-Back Transaction without equally and ratably securing the Notes of such series pursuant to the terms of the covenant described under Limitation on liens; or
(2) the Parent applies an amount equal to the fair value of the property so leased to the retirement, within 90 days of the effective date of
any such Sale and Lease-Back Transaction, of the Issuers or the Parents long-term indebtedness which ranks senior or equal to the Notes of such series or the related Guarantee (other than indebtedness held by the Parent or any of its
Subsidiaries).
Sale and Lease-Back Transactions do not include arrangements with governmental bodies entered into for the purpose of financing the
purchase price or the cost of constructing or improving the property subject thereto.
(b) Notwithstanding the provisions of the preceding paragraph (a),
the Parent or any of its Restricted Subsidiaries may enter into any Sale and Lease-Back Transaction which would not be permitted under the preceding paragraph (a) if the amount of the Attributable Debt in respect of such Sale and Lease-Back
Transaction, together with:
(1) all of the Parents Debt and Debt of its Restricted Subsidiaries secured by a Lien on Principal
Property or shares of stock of any Restricted Subsidiary and not permitted under paragraph (a) of the covenant described under Limitations on liens; and
(2) all other Attributable Debt in respect of Sale and Lease-Back Transactions existing at such time (other than Sale and Lease-Back
Transactions in which the property involved would have been permitted to have a Lien in accordance with clause (a) of the covenant described above under Limitations on liens, or the proceeds of which have been applied in
accordance with clause (2) of the preceding paragraph (a) to the retirement of long-term indebtedness) does not at the time exceed 10% of Consolidated Net Tangible Assets.
Limitation on asset sales
The Parent will not,
and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) the Parent (or the Restricted Subsidiary,
as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Capital Stock issued or sold or otherwise disposed of as determined by the Parent in good faith; and
(2) except in the case of a Permitted Asset Swap, at least 75% of the consideration received in the Asset Sale by the Parent or such Restricted
Subsidiary is in the form of cash or Eligible Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash:
(a) any liabilities, as shown on the most recent consolidated balance sheet of the Parent or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or any Guarantee) that are assumed by the transferee of any such assets pursuant to a customary assignment and assumption agreement that releases the Parent or such
Restricted Subsidiary from further liability;
(b) any securities, notes or other obligations received by the Parent or any such Restricted
Subsidiary from such transferee that are converted by the Parent or such Restricted Subsidiary into cash within 180 days of their receipt to the extent of the cash received in that conversion; and
(c) any Designated Non-cash Consideration received by the Parent or such Restricted Subsidiary in such Asset Sale having an aggregate fair
market value as determined by the Parent in good faith, taken
38
together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed $50.0 million at the time of the receipt of
such Designated Non-cash Consideration, with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value.
Within 360 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Parent (or the applicable Restricted Subsidiary, as the case may be) may
apply such Net Cash Proceeds at its option:
(i) to permanently repay (a) Debt under the Credit Agreement and, if the obligation
repaid is revolving credit Debt, to correspondingly reduce commitments with respect thereto and/or (b) other unsecured Debt ranking pari passu in right of payment with the Notes of a series or the Parents Guarantee of such Notes
(
provided
that if the Parent shall so reduce obligations under such other unsecured Debt, other than the Notes of such series, the Parent will (x) equally and ratably reduce obligations under the Notes of such series under any applicable
optional redemption provisions or by open market purchases or (y) make an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders of such series to purchase at a purchase price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest and additional interest, if any, the pro rata principal amount of Notes of such series);
(ii) to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any
such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Parent;
(iii) to make a capital
expenditure in or that is used or useful in a Permitted Business or to make expenditures for maintenance, repair or improvement of existing properties and assets;
(iv) to acquire other assets (other than inventory) that are used or useful in a Permitted Business;
(v) to repay or repurchase Debt secured by the assets of the Parent or any Restricted Subsidiaries; or
(vi) any combination of the foregoing.
Any Net Cash Proceeds from Asset Sales that are not applied, invested or subject to an offer to repurchase as provided in the preceding paragraph of
this covenant will constitute
Excess Proceeds
. When the aggregate amount of Excess Proceeds with respect to a series of Notes exceeds $50.0 million, the Issuer will, within 30 days, make an Offer to Purchase to all Holders of such
Notes (an
Asset Sale Offer
), and to all holders of other Debt containing provisions similar to those set forth in the applicable Indenture with respect to assets sales, to purchase the maximum aggregate principal amount of such
Notes and such other Debt that may be purchased out of the Excess Proceeds. The offer price for the Notes of such series in any Offer to Purchase will be equal to 100% of the principal amount plus accrued and unpaid interest to the date of purchase,
and will be payable in cash. If any Excess Proceeds remain after consummation of an Offer to Purchase in respect of such Notes, the Issuer may use those funds for any purpose not otherwise prohibited by the applicable Indenture and they will no
longer constitute Excess Proceeds. If the aggregate principal amount of Notes of such series and other Debt tendered into such Offer to Purchase exceeds the amount of Excess Proceeds, the Excess Proceeds will be allocated between such Notes and such
other Debt based on the principal amount (or accreted value, if applicable) of such Notes and such other Debt tendered and the Trustee will select the Notes of such series to be purchased on a pro rata basis among all such Notes tendered (subject to
DTC procedures). Upon completion of each Offer to Purchase, the amount of Excess Proceeds will be reset at zero.
The Issuer will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of any Notes as a result of an Asset Sale Offer. To
the extent that the provisions of any securities laws or regulations conflict with the Asset Sale Offer provisions of the Notes, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale Offer provisions of the Notes by virtue of such conflict.
39
Future guarantors
After the Issue Date, the Parent will cause each Restricted Subsidiary of the Parent (other than the Issuer) that guarantees (i) the Credit Agreement or
(ii) any Material Capital Markets Debt issued by the Parent, the Issuer or any Subsidiary Guarantor to, within 45 days of the incurrence of such guarantee, execute and deliver to the Trustee a supplemental indenture to the applicable Indenture
pursuant to which such Restricted Subsidiary will guarantee payment of the applicable series of Notes on the same terms and conditions as those set forth in the applicable Indenture.
The Guarantee of a Subsidiary Guarantor will be automatically released:
(a) upon the sale or other disposition (including by way of a consolidation or merger) of such Subsidiary Guarantor;
(b) upon the sale or disposition of all or substantially all assets of such Subsidiary Guarantor;
(c) at such time as such Subsidiary Guarantor no longer guarantees any (i) Credit Agreement or (ii) Material Capital Markets Debt of
the Parent;
(d) upon defeasance of the Notes, as provided under Satisfaction and discharge of the indentures;
defeasance;
(e) at such time as such Subsidiary Guarantor is no longer a Restricted Subsidiary; or
(f) as described under Amendment, supplement and waiver,
in the case of clause (a) or (b), other than to the Parent or a Restricted Subsidiary of the Parent and as permitted by the Indentures.
Provision of financial information
Whether or not
required by the SEC, so long as any Notes are outstanding, the Parent will furnish to the Holders, or file electronically with the SEC through the SECs Electronic Data Gathering, Analysis and Retrieval System (or any successor system), within
the time periods specified in the SECs rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing by the Parent with the SEC on Forms 10-Q and 10-K if the Parent were required to file such Forms, including a Managements discussion and analysis of financial condition and results of operations
and, with respect to the annual information only, a report on the annual financial statements by the Parents certified independent accountants; and
(2) all current reports that would be required to be filed by the Parent with the SEC on Form 8-K if the Parent were required to file such
reports.
In addition, whether or not required by the SEC, the Parent will file a copy of all of the information and reports referred to in clauses
(1) and (2) above with the SEC for public availability within the time periods specified in the SECs rules and regulations (unless the SEC will not accept such a filing) and make such information available to prospective investors.
In addition, the Parent has agreed that, for so long as any Notes remain outstanding, it will furnish to the Holders of such Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
Consolidation, merger, conveyance, transfer or lease
The Indenture with respect to each series of Notes provides that the Issuer will not merge or consolidate with any other Person or sell or convey all or
substantially all of its assets to any Person, unless:
(1) the successor Person (if other than the Issuer) (the Successor
Issuer) shall be a corporation organized under the laws of the United States or any state thereof and shall expressly assume (a) the due and punctual
40
payment of the principal of and premium, if any, and interest on all the Notes of such series, according to their tenor, and the due and punctual performance and observance of all of the
covenants and conditions under the applicable Indenture to be performed or observed by the Issuer, by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee by such Person and (b) all obligations of
the Issuer under the Registration Rights Agreement, by a written instrument satisfactory in form to the parties thereto, executed and delivered to such parties by such Person;
(2) the Successor Issuer shall not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition;
(3) the Parent and each Subsidiary Guarantor (unless the Parent or such Subsidiary
Guarantor is the other party to the transactions described above, in which case the preceding clause (1) shall apply) shall have by supplemental indenture confirmed that the applicable Guarantee shall apply to such Successor Issuers
obligations under the applicable Indenture and the Notes of such series and shall have by written agreement confirmed that its obligations under the Registration Rights Agreement shall continue to be in effect; and
(4) the Issuer shall have provided the Trustee with an Opinion of Counsel and Officers Certificate confirming compliance with the
applicable Indenture.
Subject to certain limitations, the Successor Issuer will succeed to, and be substituted for, the Issuer under the applicable
Indenture, the Notes of such series and the Registration Rights Agreement.
The Indenture with respect to each series of Notes provides that the Parent
will not merge or consolidate with any other Person or sell or convey all or substantially all of its assets to any Person, unless:
(1)
the successor Person (if other than the Parent) (the Successor Guarantor) shall be a corporation organized under the laws of the United States or any state thereof and shall expressly assume by supplemental indenture satisfactory in form
to the Trustee, executed and delivered to the Trustee by such Person all the obligations of the Parent under the applicable Guarantee, such Indenture and the Registration Rights Agreement;
(2) the Successor Guarantor shall not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the
performance of any such covenant or condition; and
(3) the Successor Guarantor shall have provided the Trustee with an Opinion of Counsel
and Officers Certificate confirming compliance with such Indenture.
The Indenture with respect to each series of Notes provides that the Parent
will not permit any Subsidiary Guarantor to merge or consolidate with any other Person or sell or convey all or substantially all of its assets to any Person, unless:
(1) (A) the successor Person (if other than the Parent, the Issuer or such Subsidiary Guarantor) (the Successor Subsidiary
Guarantor) shall expressly assume by supplemental indenture satisfactory in form to the Trustee, executed and delivered to the Trustee by such Person all the obligations of such Subsidiary Guarantor under the applicable Guarantee and such
Indenture;
(B) the Successor Subsidiary Guarantor shall not, immediately after such merger or consolidation, or such sale or conveyance,
be in default in the performance of any such covenant or condition; and
(C) the Successor Subsidiary Guarantor shall have provided the
Trustee with an Opinion of Counsel and Officers Certificate confirming compliance with such Indenture; or
(2) the merger,
consolidation, sale or conveyance complies with the covenant described under Limitation on asset sales.
Notwithstanding the foregoing,
this covenant shall not apply to any transactions contemplated by the Separation Agreement or by the Merger Agreement.
41
Although there is a limited body of case law interpreting the phrase substantially all, there is no
precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve all or substantially all of the property
or assets of a Person.
Upon any merger, consolidation or sale or conveyance of all or substantially all of the assets of the Parent, any Subsidiary
Guarantor or the Issuer, as the case may be, in accordance with this covenant, the Parent, such Subsidiary Guarantor or the Issuer, as the case may be, will be released from its obligations under the Indentures, the Notes, the Guarantees and the
Registration Rights Agreement, as applicable, and the Successor Issuer, the Successor Guarantor or the Successor Subsidiary Guarantor, as the case may be, will succeed to, and be substituted for, and may exercise every right and power of, the
Parent, such Subsidiary Guarantor or the Issuer, as the case may be, under the Indentures, the Notes, the Registration Rights Agreement and the Guarantees, as applicable.
Effectiveness of covenants
Following the first day (such
date, the Termination Date) (a) the Notes of a series have a rating of Investment Grade from both S&P and Moodys and (b) no Default has occurred and is continuing under the applicable Indenture, the Parent and its
Restricted Subsidiaries will no longer be subject to the provisions of the applicable Indenture summarized under the headings above:
|
|
Limitation on restricted payments,
|
|
|
Limitation on asset sales and
|
In the event that the applicable Notes credit rating is downgraded
from Investment Grade by any Rating Agency, such covenants will not thereafter be reinstated. Promptly following the Termination Date, the Issuer will provide an Officers Certificate to the Trustee regarding such occurrence. The Trustee shall
have no obligation to independently determine or verify if a Termination Date has occurred or notify the Holders of the Termination Date. The Trustee may provide a copy of such Officers Certificate to any Holder upon request. There can be no
assurance that the Notes will ever achieve an Investment Grade rating.
Events of default
Each of the following is an Event of Default with respect to a series of Notes:
(1) default in the payment in respect of the principal of, or premium, if any, on, any Note of such series when due and payable (whether at
Stated Maturity or upon repurchase, acceleration, optional redemption or otherwise);
(2) default in the payment of any interest or
Additional Interest (as required by the Registration Rights Agreement) upon any Note of such series when it becomes due and payable, and continuance of such default for a period of 30 days;
(3) default in the performance, or breach, of any covenant or agreement of the Parent or any Restricted Subsidiary in the applicable Indenture
(other than a covenant or agreement a default in which performance or which breach is specifically dealt with in clauses (1) or (2) above), and continuance of such default or breach for a period of 60 days after written notice thereof has
been given to the Issuer by the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in aggregate principal amount of the outstanding Notes of such series (
provided
that, and without limiting the foregoing in this clause
(3), in the case of a default or breach of any covenant or agreement described under Certain covenantsProvision of financial information, no Event of Default shall occur (and any such default or breach shall be deemed to
42
not have occurred for all purposes under the applicable Indenture) with respect to any failure to furnish or file any information or report required thereunder if the Parent files or furnishes
such information or report within 120 days after the Parent was required (or would have been required) to file the same pursuant to the SECs rules and regulations);
(4) the applicable Guarantee ceases to be in full force and effect (except as contemplated by the terms of the applicable Indenture) or is
declared null and void in a judicial proceeding or the Parent or a Subsidiary Guarantor, as applicable, denies in writing or disaffirms in writing its obligations under the applicable Indenture or Guarantee, other than by reason of the termination
of such Indenture or the release of such Guarantee in accordance with the terms of such Indenture; or
(5) certain events of bankruptcy,
insolvency or reorganization affecting the Parent, the Issuer or any Significant Subsidiary.
A Default or Event of Default with respect to a series of
Notes will not necessarily constitute a Default or Event of Default with respect to the other series of Notes.
If an Event of Default for any series of
Notes (other than an Event of Default specified in clause (5) above with respect to the Parent or the Issuer) occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in aggregate principal amount of
the outstanding Notes of the affected series may declare the principal of, premium, if any, and accrued and unpaid interest on the Notes of such series to be due and payable immediately by a notice in writing to the Issuer (and to the Trustee if
given by such Holders); provided, however, that after such acceleration, but before a judgment or decree based on acceleration, the Holders of a majority in aggregate principal amount of the outstanding Notes of such series may rescind and annul
such acceleration if all Events of Default, other than the nonpayment of accelerated principal of, premium, if any, or accrued and unpaid interest on the Notes of such series, have been cured or waived as provided in the applicable Indenture.
If an Event of Default for any series of Notes specified in clause (5) above occurs with respect to the Parent or the Issuer, the principal of, premium,
if any, and accrued and unpaid interest on the Notes of such series then outstanding shall ipso facto become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of such Notes. For further
information as to waiver of defaults, see Amendment, supplement and waiver. The Trustee may withhold from Holders of a series notice of any Default (except any Default in the payment of principal of, premium, if any, or interest on
the Notes of such series) if the Trustee determines that withholding notice is in the interests of such Holders to do so.
No Holder will have any right
to institute any proceeding with respect to either Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to a series of Notes and unless
also the Holders of at least 25% in aggregate principal amount of the outstanding Notes of such series shall have made written request to the Trustee, and provided security and indemnity satisfactory to the Trustee, to institute such proceeding as
Trustee, and the Trustee shall not have received from the Holders of a majority in aggregate principal amount of the outstanding Notes of such series a direction inconsistent with such request and shall have failed to institute such proceeding
within 60 days. Such limitations do not apply, however, to a suit instituted by a Holder directly (as opposed to through the Trustee) for enforcement of payment of the principal of (and premium, if any) or interest on such Note on or after the
respective due dates expressed in such Note.
The Issuer is required to furnish to the Trustee annually a statement as to the performance of certain
obligations under the Indentures and as to any default in such performance. The Issuer also is required to notify the Trustee if it becomes aware of the occurrence of any Default and the steps to cure such Default.
43
Amendment, supplement and waiver
Without the consent of any Holders, the Parent, the Issuer and the Trustee, at any time and from time to time, may amend or supplement either Indenture for any
of the following purposes:
(1) to evidence the succession of another Person to the Parent, the Issuer or a Subsidiary Guarantor and the
assumption by any such successor of the covenants of the Parent, the Issuer or such Subsidiary Guarantor, as applicable, under such Indenture, the related Notes and the Guarantees thereof;
(2) to add to the covenants of the Parent, the Issuer and the Subsidiary Guarantors for the benefit of the applicable Holders, or to surrender
any right or power herein conferred upon the Parent, the Issuer and the Subsidiary Guarantors;
(3) to add additional Events of Default;
(4) to provide for uncertificated Notes of the relevant series in addition to or in place of the certificated Notes;
(5) to evidence and provide for the acceptance of appointment under such Indenture by a successor Trustee;
(6) to provide for or confirm the issuance of Additional Notes of a series in accordance with the terms of such Indenture;
(7) to add a Subsidiary Guarantor in accordance with such Indenture or release (a) the Parent in accordance with the Consolidation,
merger, conveyance, transfer or lease provisions of such Indenture or (b) a Subsidiary Guarantor from its Guarantee when permitted by the terms of such Indenture;
(8) to cure any ambiguity, defect, omission, mistake or inconsistency;
(9) to make any other provisions with respect to matters or questions arising under such Indenture; provided,
however
, that such actions
pursuant to this clause (9) shall not adversely affect the interests of the Holders of the relevant series in any material respect, as determined in good faith by the Board of Directors of the Parent;
(10) to provide for the issuance of a series of Exchange Notes, which shall be treated, together with any outstanding Notes of such series, as
a single class of securities;
(11) to conform the text of such Indenture or the related Notes to any provision of the Description of
notes section of the offering memorandum dated September 25, 2015 related to the offer and sale of the Original Notes to the extent that the Trustee has received an Officers Certificate stating that such text constitutes an
unintended conflict with the description of the corresponding provision in such Description of notes; or
(12) to effect or
maintain the qualification of such Indenture under the Trust Indenture Act.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the outstanding Notes of each series that would be affected by such amendment or supplement, the Parent, the Issuer and the Trustee may amend or supplement the applicable Indenture for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of such Indenture applicable to the Notes of such series or the related Guarantee, or of the Notes of such series or the related Guarantee, or of modifying in any manner the rights of the
Holders of such series under such Indenture, including the definitions therein; provided, however, that no such amendment or supplement shall, without the consent of the Holder of each outstanding Note affected thereby:
(1) change the Stated Maturity of any Note or of any installment of interest on any Note, or reduce the amount payable in respect of the
principal thereof or the rate of interest thereon or any premium payable thereon, or reduce the amount that would be due and payable on acceleration of the maturity thereof, or change the place of payment where, or the coin or currency in which, any
Note or any premium 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 change the date on which any Notes may be subject to redemption or reduce
the redemption price therefor;
44
(2) reduce the percentage in aggregate principal amount of the outstanding Notes of a series, the
consent of whose Holders is required for any such amendment or supplement, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the applicable Indenture or certain defaults thereunder and their
consequences) provided for in the applicable Indenture;
(3) modify the obligations of the Issuer to make offers to purchase upon a Change
of Control if such modification was done after the occurrence of the related Change of Control;
(4) modify or change any provision of such
Indenture affecting the ranking of the applicable Notes in a manner adverse to the applicable Holders; or
(5) modify any of the provisions
of this paragraph or provisions relating to waiver of defaults or certain covenants, except to increase any such percentage required for such actions or to provide that certain other provisions of such Indenture cannot be modified or waived without
the consent of the Holder of each outstanding Note issued thereunder that is affected thereby.
The Holders of not less than a majority in aggregate
principal amount of the outstanding Notes of a series may on behalf of the Holders of all the Notes of such series waive any past default under the applicable Indenture and its consequences, except a default:
(1) in any payment in respect of the principal of (or premium, if any) or interest on any Notes of such series (including any Note which is
required to have been purchased pursuant to a Change of Control which has been made by the Issuer); or
(2) in respect of a covenant or
provision hereof which under such Indenture cannot be modified or amended without the consent of the Holder of each outstanding Note issued thereunder that is affected.
The consent of the Holders is not necessary under the Indentures to approve the particular form of any proposed amendment, supplement or waiver. It is
sufficient if such consent approves the substance of the proposed amendment or supplement. A consent to any amendment, supplement or waiver under the Indentures by any Holder given in connection with a tender of such Holders Notes will not be
rendered invalid by such tender.
An amendment, supplement or waiver of a provision applicable to one series of Notes will not affect the rights of
holders of the other series of Notes.
Satisfaction and discharge of the indentures; defeasance
The Issuer, the Parent and the Subsidiary Guarantors may terminate their respective obligations under the applicable Indenture with respect to the series of
Notes issued thereunder when either:
(1) all Notes of such series theretofore authenticated and delivered have been delivered to the
Trustee for cancellation; or
|
(2)
|
(a) all such Notes not theretofore delivered to the Trustee for cancellation have become due and payable or will become due and payable within one year or are to be called for redemption within one year (a
Discharge) under irrevocable arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay and discharge the entire indebtedness on the Notes of such series, not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and accrued interest to
the Stated Maturity or date fixed for redemption;
|
(b) the Issuer, the Parent or the applicable Subsidiary Guarantor has paid
or caused to be paid all other sums then due and payable under such Indenture by the Issuer with respect to the Notes of such series;
(c)
the deposit will not result in a breach or violation of, or constitute a default under, any instrument (other than such Indenture) to which the Issuer, the Parent or any Subsidiary Guarantor is a party or by which the Issuer, the Parent or the
applicable Subsidiary Guarantor is bound;
45
(d) the Issuer has delivered irrevocable instructions to the Trustee under the applicable
Indenture to apply the deposited money toward the payment of the Notes of such series at maturity or on the redemption date, as the case may be; and
(e) the Issuer has delivered to the Trustee an Officers Certificate and an Opinion of Counsel each stating that all conditions precedent
under such Indenture relating to the Discharge have been complied with.
The Issuer may elect, at its option, to have the obligations of the Issuer, the
Parent and the Subsidiary Guarantors discharged with respect to the outstanding Notes of any series (defeasance). Such defeasance means that the Issuer will be deemed to have paid and discharged the entire indebtedness represented by the
outstanding Notes of such series, except for:
(1) the rights of Holders of such Notes to receive payments in respect of the principal of
and premium, if any, and interest on such Notes when payments are due;
(2) the Issuers obligations with respect to such Notes
concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee;
(4) the Issuers right of optional redemption; and
(5) the defeasance provisions of the applicable Indenture.
In addition, the Issuer may elect, at its option, to have the obligations of the Issuer, the Parent and the Subsidiary Guarantors released with respect
to certain covenants applicable to a series of Notes, including, without limitation, the Issuers obligation to make offers to purchase in connection with any Change of Control, in the applicable Indenture (
covenant
defeasance
) and any omission to comply with such obligations shall not constitute a Default or an Event of Default with respect to such Notes. In the event covenant defeasance occurs, clauses (3), (4) and (5) (solely with respect
to the Parent or any Significant Subsidiary) described under Events of default will no longer constitute an Event of Default with respect to the Notes of such series.
In order to exercise either defeasance or covenant defeasance with respect to outstanding Notes of any series:
(1) the Issuer must irrevocably have deposited or caused to be deposited with the Trustee 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 Notes: (A) money in an amount, (B) U.S. government obligations, which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not later than the due date of any payment, money in an amount or (C) a combination thereof, in each case sufficient without reinvestment, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee to pay and discharge, the entire indebtedness in respect of the
principal of and premium, if any, and interest on such Notes on the Stated Maturity thereof or (if the Issuer has made irrevocable arrangements satisfactory to the Trustee for the giving of notice of redemption in the name and at the expense of the
Issuer) the redemption date thereof, as the case may be, in accordance with the terms of the applicable Indenture and such Notes;
(2) in
the case of defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of the
applicable Indenture, there has been a change in the applicable United States federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Notes will not
recognize gain or loss for United States federal income tax purposes as a result of the deposit, defeasance and discharge to be effected with respect to such Notes and will be subject to United States federal income tax on the same amount, in the
same manner and at the same times as would be the case if such deposit, defeasance and discharge were not to occur;
46
(3) in the case of covenant defeasance, the Issuer shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders of such outstanding Notes will not recognize gain or loss for United States federal income tax purposes as a result of the deposit and covenant defeasance to be effected with respect to such Notes and will
be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and covenant defeasance were not to occur;
(4) no Default with respect to the outstanding Notes of such series shall have occurred and be continuing at the time of such deposit after
giving effect thereto (other than a Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien to secure such borrowing);
(5) such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement
or material instrument (other than the applicable Indenture) to which the Parent, the Issuer or any Subsidiary Guarantor is a party or by which the Parent, the Issuer or any Subsidiary Guarantor is bound; and
(6) the Issuer shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such defeasance or covenant defeasance have been complied with.
Notwithstanding the foregoing, the Opinion of Counsel required
by clause (2) or (3) above with respect to a defeasance or covenant defeasance need not to be delivered if all Notes of such series not theretofore delivered to the Trustee for cancellation (x) have become due and payable or
(y) will become due and payable at Stated Maturity 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 Issuer.
Concerning the Trustee
U.S. Bank National Association is
the Trustee under the Indentures and has been appointed by the Issuer as registrar and paying agent with regard to the Notes.
If the Trustee becomes a
creditor of the Issuer or the Parent, each Indenture limits the right of the Trustee to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be
permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee (if the applicable Indenture has been qualified under
the Trust Indenture Act) or resign.
The Holders of a majority in principal amount of the outstanding Notes of a series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to the Trustee with respect to the Notes of such series or exercising any trust or power conferred on the Trustee with respect to such Notes, subject to certain exceptions.
Except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the applicable Indenture. During the continuance of an Event of Default that has not been cured or waived, the Trustee
will exercise such of the rights and powers vested in it by the applicable 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 persons
own affairs. Subject to such provisions, the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by the applicable Indenture with respect to the Notes of a series at the request or direction of any of the
holders of the Notes of a series pursuant to the applicable Indenture, unless such holders shall have provided to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction.
Notices
Notwithstanding any other provision of the Indentures or any Note, where the Indentures or any Note provide for notice of any event (including any notice of
redemption) to any Holder of an interest in a global Note (whether
47
by mail or otherwise), such notice shall be sufficiently given if given to DTC or any other applicable depositary for such Note (or its designee) in accordance with the applicable procedures of
DTC or such depositary.
No personal liability of stockholders, partners, officers or directors
No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Issuer or the Parent, as such, shall have any
liability for any obligations of the Issuer or the Parent (other than the Issuer in respect of the Notes and the Parent and the Subsidiary Guarantors in respect of the Guarantees) under the Notes, the Guarantees or the Indentures or for any claim
based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
Governing law
The Indentures, the Notes and the
Guarantees are governed by, and will be construed in accordance with, the laws of the State of New York.
Certain definitions
Set forth below is a summary of certain of the defined terms used in the Indentures. Reference is made to the Indentures for the full definition of all such
terms, as well as any capitalized term used herein for which no definition is provided.
Acquired Debt means Debt (1) of a Person
(including an Unrestricted Subsidiary) existing at the time such Person becomes a Restricted Subsidiary, or is merged with or into the Parent or a Restricted Subsidiary, or (2) assumed in connection with the acquisition of assets from such
Person. Acquired Debt shall be deemed to have been incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the
date of consummation of such acquisition of assets.
Additional Interest means, with respect to a series of Notes, any additional interest
payable under the terms of the Registration Rights Agreement as a consequence of the failure to effectuate in a timely manner the exchange offer and/or shelf registration procedures set forth in the Registration Rights Agreement, as and to the
extent provided for therein.
Asset Acquisition means:
(a) an Investment by the Parent or any Restricted Subsidiary in any other Person pursuant to which such Person shall become a Restricted
Subsidiary, or shall be merged with or into the Parent or any Restricted Subsidiary; or
(b) the acquisition by the Parent or any
Restricted Subsidiary of the assets of any Person which constitute all or substantially all of the assets of such Person, any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary
course of business and consistent with past practices.
Asset Sale means any transfer, conveyance, sale, lease or other disposition
(including, without limitation, dispositions pursuant to any consolidation or merger) by the Parent or any of its Restricted Subsidiaries to any Person in any single transaction or series of transactions of:
(i) Capital Stock in another Person (other than directors qualifying shares or shares or interests required to be held by foreign
nationals pursuant to local law); or
(ii) any other property or assets (other than in the normal course of business, including any sale or
other disposition of obsolete or permanently retired equipment);
48
provided, however
, that the term Asset Sale shall exclude:
(a) any asset disposition permitted by the provisions described under Consolidation, merger, conveyance, transfer or lease that
constitutes a disposition of all or substantially all of the assets of the Parent and its Restricted Subsidiaries taken as a whole;
(b)
any transfer, conveyance, sale, lease or other disposition of property or assets, the gross proceeds of which (exclusive of indemnities) do not exceed $25.0 million in any one or related series of transactions;
(c) sales or other dispositions of cash or Eligible Cash Equivalents;
(d) sales of interests in Unrestricted Subsidiaries;
(e) the sale and lease-back of any assets within 90 days of the acquisition thereof;
provided
that any assets acquired in the
Transactions shall be deemed to have been acquired on the Issue Date;
(f) the disposition of assets that, in the good faith judgment of
the Parent, are no longer used or useful in the business of such entity;
(g) a Restricted Payment or Investment that is otherwise
permitted by the applicable Indenture;
(h) any trade-in of equipment in exchange for other equipment;
provided, however
that in the
good faith judgment of the Parent, the Parent or such Restricted Subsidiary receives equipment having a fair market value equal to or greater than the equipment being traded in;
(i) the creation of a Lien (but not the sale or other disposition of the property subject to such Lien);
(j) leases or subleases in the ordinary course of business to third persons not interfering in any material respect with the business of the
Parent or any of its Restricted Subsidiaries and otherwise in accordance with the provisions of the applicable Indenture;
(k) any
disposition by a Restricted Subsidiary to the Parent or by the Parent or a Restricted Subsidiary to a Restricted Subsidiary;
(l)
dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business and consistent with past practice;
(m) licensing or sublicensing of intellectual property or other general intangibles in accordance with industry practice in the ordinary course
of business;
(n) any transfer of accounts receivable, or a fractional undivided interest therein, by a Receivable Subsidiary in a
Qualified Receivables Transaction; or
(o) sales of accounts receivable to a Receivable Subsidiary pursuant to a Qualified Receivables
Transaction for the fair market value thereof as determined by the Parent in good faith; including cash or other financial accommodation, such as the provision of letters of credit by such Receivable Subsidiary on behalf of or for the benefit of the
transferor of such accounts receivable, in an amount at least equal to 75% of the fair market value thereof as determined by the Parent in good faith (for the purposes of this clause (o), Purchase Money Notes will be deemed to be cash).
For purposes of this definition, any series of related transactions that, if effected as a single transaction, would constitute an Asset Sale, shall be deemed
to be a single Asset Sale effected when the last such transaction which is a part thereof is effected.
Attributable Debt means, with respect
to a series of Notes and as of any particular time, the present value, discounted at a rate per year equal to the weighted average of the interest rate of such Notes, compounded semi-annually, of the obligation of a lessee for rental payments, not
including amounts payable by the lessee for maintenance, property taxes and insurance, due during the remaining term of any lease, including any period for which such lease has been extended or may, at the option of the lessor, be extended.
49
Average Life means, as of any date of determination, with respect to any Debt, the quotient obtained
by dividing (i) the sum of the products of (x) the number of years from the date of determination to the dates of each successive scheduled principal payment (including any sinking fund or mandatory redemption payment requirements) of such
Debt multiplied by (y) the amount of such principal payment by (ii) the sum of all such principal payments.
Board of Directors
means (i) with respect to the Parent or any Subsidiary, its board of directors or any duly authorized committee thereof; (ii) with respect to a corporation, the board of directors of such corporation or any duly authorized committee
thereof; and (iii) with respect to any other entity, the board of directors or similar body of the general partner or managers of such entity or any duly authorized committee thereof.
Business Day means each day that is not a Legal Holiday.
Capital Stock means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing, but excluding any debt securities convertible or exchangeable into such equity.
Change of Control means the occurrence of any of the following after the Issue Date:
(i) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the property and assets of the Parent and its Subsidiaries, taken as a whole, to any person (as that term is used in Section 13(d)(3) of the Exchange Act), other than the
Parent or one of the Parents wholly-owned Subsidiaries;
(ii) the adoption of a plan relating to the liquidation or dissolution of
the Parent or the Issuer;
(iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the
result of which is that any person (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the Parents Voting Stock, measured by voting power
rather than number of shares;
(iv) the merger or consolidation of the Parent with or into another Person or the merger of another Person
with or into the Parent or the merger of any Person with or into a Subsidiary of the Parent, unless the holders of a majority of the aggregate voting power of the Voting Stock of the Parent, immediately prior to such transaction, hold securities of
the surviving or transferee Person that represent, immediately after such transaction, at least a majority of the aggregate voting power of the Voting Stock of the surviving or transferee Person;
(v) the Parent ceases to own, directly or indirectly, 100% of all outstanding equity interests of the Issuer (except as a result of the merger
of the Issuer with and into the Parent); or
(vi) for so long as any of the Existing Notes remain outstanding, the first day on which a
majority of the members of the Parents Board of Directors are not Continuing Directors.
Notwithstanding the foregoing, a transaction effected to
create a holding company for the Parent will not be deemed to involve a Change of Control if (a) pursuant to such transaction the Parent becomes a wholly-owned Subsidiary of such holding company and (b) the holders of the Voting Stock of
such holding company immediately following such transaction are the same as the holders of the Parents Voting Stock immediately prior to such transaction.
Consolidated Cost Savings means, for any period, those synergies, operating expense reductions and cost-savings of the Parent and its
Restricted Subsidiaries that are reasonably identifiable, factually supportable and projected by the Parent in good faith to be realized following the Issue Date as a result of restructurings, reorganizations, divestitures, cost savings initiatives,
production rationalizations and other similar initiatives
50
(collectively, Initiatives) (calculated on a pro forma basis as if such synergies, operating expense reductions and cost-savings had been realized on the first day of such period,
and net of the amount of actual benefits realized during such period from such Initiatives to the extent already included in Consolidated Net Income for such period);
provided
that (i) no synergies, operating expense reductions or
cost-savings shall be added to Consolidated EBITDA pursuant to clause (e) thereof to the extent duplicative of any expenses or charges otherwise added to (or excluded from) Consolidated EBITDA, whether through a pro forma adjustment or
otherwise, for such period and (ii) projected amounts (and not yet realized) (x) may be added (the date on which such amounts are added, the Initiative Commencement Date) once actions in respect of such Initiative have been
taken or are expected to be taken (in the good faith determination of the Parent) within 12 months and (y) may no longer be added back in calculating Consolidated EBITDA pursuant to clause (e) thereof to the extent occurring more than six
full fiscal quarters after the Initiative Commencement Date.
Consolidated Debt Ratio means, as of any date of determination, the ratio
of (1) the aggregate amount of Debt of the Parent and its Restricted Subsidiaries then outstanding as of such date of determination to (2) Consolidated EBITDA for the most recent four consecutive fiscal quarters for which internal
financial statements of the Parent are available, in each case with pro forma and other adjustments to each of Debt and Consolidated EBITDA to reflect any incurrences or repayments of Debt and any acquisitions or dispositions of businesses or assets
since the beginning of such four consecutive fiscal quarter period (which pro forma and other adjustments will be determined in good faith by a responsible financial or accounting officer of the Parent and shall not be required to be made in
accordance with Regulation S-X promulgated by the SEC).
Consolidated EBITDA means, for any period, Consolidated Net Income for such
period (adjusted to exclude all extraordinary or unusual items and any gains or losses on sales of assets outside the ordinary course of business) plus, without duplication and (except with respect to synergies included in Consolidated Cost Savings)
to the extent deducted in calculating such Consolidated Net Income for such period, the sum of (a) income tax
expense, (b) interest expense, amortization or writeoff of debt discount with respect to Debt, (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) Consolidated Cost Savings;
provided
that with respect to any period, the aggregate amount added back in the
calculation of Consolidated EBITDA for such period pursuant to this clause (e) and clause (f) below shall not exceed 20% of Consolidated EBITDA (in each case calculated prior to giving effect to any add-backs pursuant to this clause
(e) and clause (f) below), (f) costs and expenses incurred in connection with the implementation of Initiatives; provided that with respect to any period, the aggregate amount added back in the calculation of Consolidated EBITDA for
such period pursuant to this clause (f) and clause (e) above shall not exceed 20% of Consolidated EBITDA (in each case calculated prior to giving effect to any add-backs pursuant to this clause (f) and clause (e) above),
(g) the sum (without duplication) of all non-recurring fees, costs and expenses incurred by the Parent and its Restricted Subsidiaries, whether before, on or within six months after the Merger Closing Date, in connection with the Transactions
during such period; provided that the aggregate amount added back in the calculation of Consolidated EBITDA pursuant to this clause (g) shall not exceed $100,000,000, (h) all payments triggered in respect of the Parents non-qualified
deferred compensation and post-retirement benefit plans in connection with the Transactions during such period, (i) any other non-cash charges and (j) adjustments and add-backs of the nature set forth in the offering memorandum dated
September 25, 2015 related to the offer and sale of the Original Notes, minus, (x) any cash payments made during such period in respect of items described in clause (i) above subsequent to the fiscal quarter in which the relevant
non-cash charge was reflected as a charge in the statement of Consolidated Net Income and (y) to the extent included in calculating such Consolidated Net Income for such period, any non-cash income (other than amounts accrued in the ordinary
course of business under accrual-based revenue recognition procedures in accordance with GAAP).
Consolidated Fixed Charge Coverage
Ratio means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the four full fiscal quarters for which financial statements are available (the Four Quarter Period) ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the Transaction Date) to Consolidated Fixed Charges of such
51
Person for the Four Quarter Period. In addition to and without limitation of the foregoing, for purposes of this definition, Consolidated EBITDA and Consolidated Fixed
Charges shall be calculated after giving effect on a
pro forma
basis for the period of such calculation to:
(i) the
incurrence of any Debt of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) and the repayment of other Debt, other than the incurrence or repayment of Debt in the ordinary course of business for working
capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence or repayment, as
the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period; and
(ii) any Asset
Sales or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Debt and also including any Consolidated EBITDA attributable to the assets which are the subject of the Asset Acquisition) occurring during
the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence, assumption or liability for any such Acquired
Debt) occurred on the first day of the Four Quarter Period.
For purposes of this definition, pro forma calculations shall be made in good faith by a
responsible financial or accounting officer of the Parent and shall not be required to be made in accordance with Regulation S-X promulgated under the Securities Act, and such pro forma calculations may also include operating expense reductions for
such period resulting from the Asset Sale or Asset Acquisition (as determined in good faith by senior management of the Parent) for which pro forma effect is being given (A) that have been realized or (B) for which steps have been taken or
are reasonably expected to be taken within six months of the date of such transaction and are supportable and quantifiable and, in each case, including, but not limited to (a) reduction in personnel expenses, (b) reduction of costs related
to administrative functions, (c) reduction of costs related to leased or owned properties and (d) reductions from the consolidation of operations and streamlining of corporate overhead.
Furthermore, in calculating Consolidated Fixed Charges for purposes of determining the denominator (but not the numerator) of this
Consolidated Fixed Charge Coverage Ratio:
(i) interest on outstanding Debt determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Debt in effect on the Transaction Date;
(ii) if interest on any Debt actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of
a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four Quarter Period; and
(iii) notwithstanding clause (i) or (ii) above, interest on Debt determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.
Consolidated Fixed Charges means, with respect to any Person for any period, the sum of, without duplication, the amounts for such period of:
(i) Consolidated Interest Expense; and
(ii) the product of (a) all dividends and other distributions accrued during such period in respect of Redeemable Capital Interests and
preferred stock of such Person and its Restricted Subsidiaries (other than dividends paid in Qualified Capital Interests),
times
(b) a fraction, the numerator of which is one and the denominator of which is one
minus
the then
current combined federal, state and local statutory tax rate of such Person, expressed as a decimal.
52
Consolidated Interest Expense means, with respect to any Person for any period, without duplication,
the sum of:
(i) the total interest expense of such Person and its Restricted Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation:
(a) any amortization of debt discount;
(b) the net cost under any Hedging Obligation or Swap Contract in respect of interest rate protection (including any amortization of
discounts);
(c) the interest portion of any deferred payment obligation;
(d) all commissions, discounts and other fees and charges owed with respect to financing activities or similar activities; and
(e) all accrued interest;
(ii)
the interest component of capital lease obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period determined on a consolidated basis in accordance with GAAP; and
(iii) all capitalized interest of such Person and its Restricted Subsidiaries for such period; less interest income of such Person and its
Restricted Subsidiaries for such period;
provided
,
however
, that Consolidated Interest Expense will exclude (I) the amortization or write-off of debt issuance costs and deferred financing fees, commissions, fees and expenses and
(II) any expensing of interim loan commitment and other financing fees.
Consolidated Net Income means, for any period, the consolidated net
income (or loss) of the Parent and its Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a
Restricted Subsidiary of the Parent or is merged into or consolidated with the Parent or any of its Restricted Subsidiaries, (b) the income (or deficit) of any Person (other than a Restricted Subsidiary of the Parent) in which the Parent or any
of its Restricted Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Parent or such Subsidiary in the form of dividends or similar distributions and (c) solely for the purposes of the
covenant described under Certain covenantsLimitation on restricted payments, the undistributed earnings of any Restricted Subsidiary of the Parent to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time permitted by the terms of any contractual obligation or any law applicable to such Restricted Subsidiary.
Consolidated Net Tangible Assets means the total amount of the Parents consolidated assets after deducting therefrom (i) all current
liabilities, excluding any thereof which are by their terms extendible or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed and (ii) unamortized Debt
discount and expense, goodwill, trademarks, brand names, patents and other intangible assets, all as shown on the Parents latest audited consolidated financial statements at the time of the determination.
Continuing Director means, as of any date of determination, any member of the Parents Board of Directors who (i) was a member of such
Board of Directors on the first date that any of the Notes were issued or (ii) was nominated for election or elected to the Parents Board of Directors with the approval (for purposes of the Notes) of a majority of the Continuing Directors
who were members of the Parents Board of Directors at the time of such nomination or election.
Credit Agreement means the credit
agreements, dated as of June 23, 2015 (as amended, supplemented or otherwise modified from time to time), among the Issuer or the Parent, as applicable, the other borrowers party thereto, Wells Fargo Bank, National Association, as
administrative agent, and the other agents and lenders named
53
therein, providing for (i) a revolving credit facility, which, upon the consummation of the Merger on the Merger Closing Date, shall provide for borrowings by the Parent and Olin Canada ULC
and will be guaranteed by the Issuer and (ii) a term loan facility, which shall provide for borrowings by the Issuer and, upon the consummation of the Merger on the Merger Closing Date, will be guaranteed by the Parent, together with all
related notes, letters of credit, guarantees, and any other related agreements and instruments executed and delivered in connection therewith, in each case as amended, modified, supplemented, restated, refinanced, refunded or replaced in whole or in
part from time to time including by or pursuant to any agreement or instrument that exchanges, extends, refinances, renews, replaces, substitutes or otherwise restructures the maturity of any indebtedness thereunder, or increases the amount of
available borrowings thereunder, or adds Subsidiaries of the Parent as additional borrowers or guarantors thereunder, in each case with respect to such agreement or any successor or replacement agreement and whether by the same or any other agent,
lender, group of lenders, purchasers, institutional investors or debt holders.
Debt means any notes, bonds, debentures, loans or other
similar evidences of indebtedness for money borrowed, issued, assumed or guaranteed by the Parent or any Restricted Subsidiary.
Debt Facility
means one or more debt facilities (including, without limitation, the Credit Agreement and the Sumitomo Credit Agreement) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit or issuances of debt securities evidenced by notes,
debentures, bonds or similar instruments, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced (including by means of sales of debt securities) in whole or in part from time to time (and whether or not with the
original administrative agent, lenders or trustee or another administrative agent or agents, other lenders or trustee and whether provided under the original Credit Agreement and the original Sumitomo Credit Agreement or any other credit or other
agreement or indenture).
Default means any event that is, or after notice or passage of time, or both, would be, an Event of Default.
Designated Non-cash Consideration means the fair market value as determined in good faith by the Parent of non-cash consideration received by the
Parent or a Restricted Subsidiary in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation less the amount of cash or Eligible
Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-cash Consideration.
Eligible Bank
means a bank or trust company that (i) is licensed, chartered or organized and existing under the laws of the United States of America, or any state, territory, province or possession thereof, (ii) as of the time of the making or
acquisition of an Investment in such bank or trust company, has combined capital and surplus in excess of $500.0 million and (iii) the senior Debt of which is rated at least A-2 by Moodys or at least A by S&P.
Eligible Cash Equivalents means any of the following Investments: (i) securities issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof (
provided
that the full faith and credit of the United States is pledged in support thereof) maturing not more than one year after the date of acquisition; (ii) time
deposits in and certificates of deposit of any Eligible Bank, provided that such Investments have a maturity date not more than two years after date of acquisition and that the Average Life of all such Investments is one year or less from the
respective dates of acquisition; (iii) repurchase obligations with a term of not more than 180 days for underlying securities of the types described in clause (i) above entered into with any Eligible Bank; (iv) direct obligations
issued by any state of the United States or any political subdivision or public instrumentality thereof, provided that such Investments mature, or are subject to tender at the option of the holder thereof, within 365 days after the date of
acquisition and, at the time of acquisition, have a rating of at least A from S&P or A-2 from Moodys (or an equivalent rating by any other nationally recognized rating agency); (v) commercial paper of any Person other than an
affiliate of the Parent and other than structured
54
investment vehicles, provided that such Investments have one of the two highest ratings obtainable from either S&P or Moodys and mature within 180 days after the date of
acquisition; (vi) overnight and demand deposits in and bankers acceptances of any Eligible Bank and demand deposits in any bank or trust company to the extent insured by the Federal Deposit Insurance Corporation against the Bank Insurance
Fund; (vii) money market funds 95% of the assets of which comprise Investments of the types described in clauses (i) through (vi); and (viii) instruments equivalent to those referred to in clauses (i) through (vi) above or
funds equivalent to those referred to in clause (vii) above denominated in U.S. dollars, Euros or any other foreign currency comparable in credit quality and tender to those referred to in such clauses and customarily used by corporations for
cash management purposes in jurisdictions outside the United States to the extent reasonably required in connection with any business conducted by any Restricted Subsidiary organized in such jurisdiction, all as determined in good faith by the
Parent.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Exchange Notes means, with respect to a series of Notes, notes issued in a registered exchange offer pursuant to the Registration Rights
Agreement.
Excluded Contributions means the net cash proceeds received by the Parent after the Issue Date from:
(1) contributions to its common equity capital, and
(2) the sale (other than to a Restricted Subsidiary of the Parent or to any the Parent management equity plan or stock option plan or any other
management or employee benefit plan or agreement) of Capital Stock (other than Redeemable Capital Interests and preferred stock) of the Parent;
provided, however
that such net cash proceeds will be designated by the Parent as Excluded
Contributions in an Officers Certificate delivered to the Trustee and the net cash proceeds so designated will be excluded from the calculation set forth in clause (c) of the first paragraph of the Limitation on
restricted payments covenant.
Existing Notes means the Parents (i) 5.50% Senior Notes due 2022 (ii) SunBelt Notes due
2012-2017, issued on December 22, 1997 and (iii) Variable-rate 2024 Bonds issued on October 14, 2010, Recovery Zone Bonds issued on December 9, 2010 and Recovery Zone Bonds due 2035 issued on December 27, 2010.
Foreign Restricted Subsidiary means any Restricted Subsidiary other than a Restricted Subsidiary incorporated or otherwise organized or existing
under the laws of the United States, any state thereof or any territory or possession of the United States.
GAAP means generally accepted
accounting principles in the United States as in effect as of the Issue Date, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.
guarantee means, as applied to any Debt of another Person, (i) a guarantee (other than by endorsement of negotiable instruments for
collection in the normal course of business), direct or indirect, in any manner, of any part or all of such Debt, (ii) any direct or indirect obligation, contingent or otherwise, of a Person guaranteeing or having the effect of guaranteeing the
Debt of any other Person in any manner and (iii) an agreement of a Person, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment (or payment of damages in the event of non-payment) of all
or any part of such Debt of another Person (and guaranteed and guaranteeing shall have meanings that correspond to the foregoing).
Guarantee means, with respect to a series of Notes, the Guarantee of the Parent or a Subsidiary Guarantor pursuant to the terms of the applicable
Indenture.
55
Hedging Obligations of any Person means the obligations of such Person pursuant to any interest rate
agreement, currency agreement or commodity agreement.
Holder means a Person in whose name a Note is registered in the security register.
incur means issue, create, assume, guarantee, incur or otherwise become liable for;
provided, however
, that any Debt or Capital
Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary; and the terms incurred and incurrence have meanings correlative to the foregoing.
interest with
respect to each series of Notes means interest with respect thereto and Additional Interest, if any.
Investment by any Person means any
direct or indirect loan, advance, guarantee for the benefit of (or other extension of credit) or capital contribution to (by means of any transfer of cash or other property or assets to another Person or any other payments for property or services
for the account or use of another Person) another Person, including, without limitation, the following: (i) the purchase or acquisition of any Capital Stock or other evidence of beneficial ownership in another Person; (ii) the purchase,
acquisition or guarantee of the Debt of another Person; and (iii) the purchase or acquisition of the business or assets of another Person substantially as an entirety but shall exclude: (a) accounts receivable and other extensions of trade
credit in accordance with the Parents customary practices; (b) the acquisition of property and assets from suppliers and other vendors in the normal course of business; and (c) prepaid expenses and workers compensation,
utility, lease and similar deposits, in the normal course of business.
For purposes of Certain covenantsLimitation on restricted
payments and the definition of Unrestricted Subsidiary:
(1) Investment will include the portion
(proportionate to the Parents equity interest in the Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value as determined by the Parent in good faith of the net assets of such Restricted Subsidiary of
the Parent at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary;
provided
,
however
, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Parent will be deemed to continue to have
a permanent Investment in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Parents Investment in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to
the Parents equity interest in such Subsidiary) of the fair market value as determined by the Parent in good faith of the net assets of such Subsidiary at the time that such Subsidiary is so re-designated as a Restricted Subsidiary; and
(2) any property transferred to or from an Unrestricted Subsidiary will be valued at its fair market value at the time of such transfer, as
determined by the Parent in good faith.
Investment Grade means, with respect to a series of Notes, a rating of Baa3 or better by Moodys
(or its equivalent under any successor rating categories of Moodys) and BBB- or better by S&P (or its equivalent under any successor rating categories of S&P) (or, in each case, if such Rating Agency ceases to rate such Notes for
reasons outside of the Issuers control, the equivalent investment grade credit rating from any Rating Agency selected by the Issuer as a replacement Rating Agency).
Issue Date means October 5, 2015 (the date of issuance of the Original Notes).
Issuer means Blue Cube Spinco Inc. and its successors.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions are not required by law, regulation or executive order to be open
in the State of New York.
56
Lien means, with respect to any property or other asset, any mortgage, deed of trust, deed to secure
debt, pledge, hypothecation, assignment, deposit arrangement, security interest, lien (statutory or otherwise), charge, easement, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or other asset (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).
Material Capital Markets Debt means any Debt consisting of bonds, debentures, notes or other similar debt securities issued in (a) a public
offering registered under the Securities Act, (b) a private placement to initial purchasers that is resold to institutional investors in accordance with Rule 144A or Regulation S of the Securities Act or (c) a placement to institutional
investors, in each case in aggregate principal amount of $100.0 million or more. The term Material Capital Markets Debt shall not include any Debt under commercial bank facilities or similar Debt or any other type of Debt incurred in a
manner not customarily viewed as a securities offering.
Merger means the merger of Blue Cube Acquisition Corp., a wholly-owned
subsidiary of the Parent, with and into the Issuer whereby the separate corporate existence of Merger Sub ceased and the Issuer continued as the surviving company and a wholly-owned subsidiary of the Parent.
Merger Agreement means the Merger Agreement, dated as of March 26, 2015, among TDCC, the Issuer, the Parent and Merger Sub, as amended or
supplemented prior to the Merger Closing Date.
Merger Closing Date means the date the Merger was consummated.
Moodys means Moodys Investors Services, Inc. and any successor to its rating agency business.
Net Cash Proceeds means, with respect to Asset Sales of any Person, cash and Eligible Cash Equivalents received, net of: (i) all reasonable
out-of-pocket costs and expenses of such Person incurred in connection with such a sale, including, without limitation, all legal, accounting, title and recording tax expenses, commissions and other fees and expenses incurred and all federal, state,
foreign and local taxes arising in connection with such an Asset Sale that are paid or required to be accrued as a liability under GAAP by such Person; (ii) all payments made by such Person on any Debt that is secured by such properties or
other assets in accordance with the terms of any Lien upon or with respect to such properties or other assets or that must, by the terms of such Lien or such Debt, or in order to obtain a necessary consent to such transaction or by applicable law,
be repaid to any other Person (other than the Parent or a Restricted Subsidiary thereof) in connection with such Asset Sale; and (iii) all contractually required distributions and other payments made to minority interest holders in Restricted
Subsidiaries of such Person as a result of such transaction; provided, however, that: (a) in the event that any consideration for an Asset Sale (which would otherwise constitute Net Cash Proceeds) is required by (I) contract to be held in
escrow pending determination of whether a purchase price adjustment will be made or (II) GAAP to be reserved against other liabilities in connection with such Asset Sale, such consideration (or any portion thereof) shall become Net Cash Proceeds
only at such time as it is released to such Person from escrow or otherwise; and (b) any non-cash consideration received in connection with any transaction, which is subsequently converted to cash, shall become Net Cash Proceeds only at such
time as it is so converted.
Non-Guarantor Subsidiary means any Restricted Subsidiary that is not a Subsidiary Guarantor or the Issuer.
Offer to Purchase shall have the meaning set forth in the applicable Indenture.
Officers Certificate means a certificate signed by two officers of the Issuer.
Opinion of Counsel means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Parent or the Issuer.
Permitted Asset Swap means the concurrent purchase and sale or exchange of properties or assets (other
than securities) that are used or useful in a Permitted Business or a combination of such assets and cash or Eligible
57
Cash Equivalents between the Parent or any of its Restricted Subsidiaries and another Person; provided, however that any cash and Eligible Cash Equivalents must be applied in accordance with the
covenant described under Limitation on asset sales.
Permitted Business means any business similar in nature to any business
conducted by the Parent and the Restricted Subsidiaries on the Issue Date and any business reasonably ancillary, incidental, complementary or related to, or a reasonable extension, development or expansion of, the business conducted by the Parent
and the Restricted Subsidiaries on the Issue Date, in each case, as determined in good faith by the Parent.
Permitted Debt means
(i) Debt incurred by the Issuer, the Parent or any Subsidiary Guarantor pursuant to any Debt Facilities in an aggregate principal amount at any
one time outstanding not to exceed (x) $2,880.0 million minus (y) any amount used to permanently repay such obligations (or permanently reduce commitments with respect thereto) pursuant to the Limitation on asset sales
covenant;
(ii) Debt under the Notes issued on the Issue Date and any Exchange Notes issued in exchange for such Notes;
(iii) Guarantees of the Notes and any Exchange Notes issued in exchange for such Notes;
(iv) Debt of the Parent or any Restricted Subsidiary outstanding on the Issue Date (other than Debt incurred pursuant to clauses (i),
(ii) or (iii) above) (including the Existing Notes);
(v) guarantees incurred by the Parent of Debt of a Restricted Subsidiary
otherwise permitted to be incurred under the applicable Indenture;
(vi) guarantees by any Restricted Subsidiary of Debt of the Parent or
any other Restricted Subsidiary, including guarantees by any Restricted Subsidiary of Debt under the Credit Agreement and the Sumitomo Credit Agreement;
provided, however
, that (a) such Debt is permitted to be incurred under the
applicable Indenture and (b) if the Debt being guaranteed is subordinated in right of payment to the Notes, such guarantees are subordinated to the Notes to the same extent, if any, as the Debt being guaranteed;
(vii) Debt incurred in respect of workers compensation claims and self-insurance obligations, and, for the avoidance of doubt, indemnity,
bid, performance, warranty, release, appeal, surety and similar bonds, letters of credit for operating purposes and completion guarantees provided or incurred (including guarantees thereof) by the Parent or a Restricted Subsidiary in the ordinary
course of business;
(viii) Debt under Swap Contracts and Hedging Obligations incurred in the ordinary course of business and not for
speculative purposes;
(ix) Debt owed by the Parent to any Restricted Subsidiary, or by any Restricted Subsidiary to the Parent or to any
other Restricted Subsidiary,
provided
that if for any reason such Debt ceases to be held by the Parent or a Restricted Subsidiary, as applicable, such Debt shall cease to be Permitted Debt under this clause (ix) and shall be deemed
incurred as Debt of the Parent for purposes of the Indentures;
(x) Debt of the Parent or a Subsidiary Guarantor pursuant to capital lease
obligations, synthetic lease obligations and Purchase Money Debt and any Refinancing Debt that Refinances any Debt incurred pursuant to this clause (x);
provided
,
however
that the aggregate principal amount of all Debt incurred under
this clause (x) and outstanding at any time may not exceed $100.0 million in the aggregate;
(xi) Debt arising from agreements of the
Parent or a Restricted Subsidiary providing for indemnification, contribution, earnout, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets
or Capital Stock of a Restricted Subsidiary otherwise permitted under the Indentures;
58
(xii) the issuance by any of the Parents Restricted Subsidiaries to the Parent or to any of
its Restricted Subsidiaries of shares of Redeemable Capital Interests or preferred stock; provided, however, that:
(a) any subsequent
issuance or transfer of Capital Stock that results in any such Redeemable Capital Interests being held by a Person other than the Parent or a Restricted Subsidiary; and
(b) any sale or other transfer of any such Redeemable Capital Interests to a Person that is not either the Parent or a Restricted Subsidiary;
shall be deemed, in each case, to constitute an issuance of such Redeemable Capital Interests by such Restricted Subsidiary that was not permitted by
this clause (xii);
(xiii) Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five business days of incurrence;
(xiv) Debt of the Parent or a Restricted Subsidiary not otherwise permitted pursuant to this definition, in an aggregate principal amount not
to exceed $150.0 million at any time outstanding;
(xv) Purchase Money Notes incurred by any Receivable Subsidiary that is a Restricted
Subsidiary in a Qualified Receivables Transaction and Non-Recourse Receivable Subsidiary Indebtedness; provided, however, that the aggregate amounts incurred and outstanding under all Qualified Receivables Transactions shall not exceed $250.0
million;
(xvi) Debt of Foreign Restricted Subsidiaries in an aggregate principal amount not to exceed $50.0 million at any one time
outstanding;
(xvii) (x) Debt of the Parent, the Issuer or any Subsidiary Guarantor incurred or issued to finance an acquisition or
(y) Acquired Debt;
provided
,
however
, that after giving pro forma effect to such acquisition, merger or consolidation, and the incurrence of such Debt (including pro forma application of the proceeds thereof), either:
(a) the Parent would be permitted to incur at least $1.00 of additional Coverage Debt pursuant to the first paragraph of the covenant described
under Certain covenantsLimitation on debt;
(b) the Consolidated Fixed Charge Coverage Ratio of the Parent and its
Restricted Subsidiaries would not be lower than such ratio immediately prior to such acquisition, merger or consolidation; or
(c) such
Debt constitutes Acquired Debt (other than Debt incurred in contemplation of the transaction or series of transactions pursuant to which such Person became a Restricted Subsidiary or was otherwise acquired by the Parent or a Restricted Subsidiary);
provided
that the only obligors with respect to such Debt shall be those Persons who were obligors of such Debt prior to such acquisition, merger or consolidation; and
(xviii) Refinancing Debt that Refinances Coverage Debt or Debt incurred pursuant to clauses (ii), (iv), (xvii) or this clause
(xviii) of this definition of Permitted Debt.
Permitted Investments means:
(a) Investments in existence on the Issue Date;
(b) Investments required pursuant to any agreement or obligation of the Parent or a Restricted Subsidiary, in effect on the Issue Date, to make
such Investments;
(c) Investments in cash and Eligible Cash Equivalents;
(d) Investments in property and other assets, owned or used by the Parent or any Restricted Subsidiary in the normal course of business;
(e) Investments by the Parent or any of its Restricted Subsidiaries in the Parent or any Restricted Subsidiary;
59
(f) Investments by the Parent or any Restricted Subsidiary in a Person, if as a result of such
Investment (A) such Person becomes a Restricted Subsidiary or (B) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated or wound-up into, the Parent or
a Restricted Subsidiary;
(g) Swap Contracts and Hedging Obligations;
(h) receivables owing to the Parent or any of its Restricted Subsidiaries and advances to suppliers, in each case if created, acquired or made
in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;
(i) Investments received in
settlement of obligations owed to the Parent or any Restricted Subsidiary and as a result of bankruptcy or insolvency proceedings or upon the foreclosure or enforcement of any Lien in favor of the Parent or any Restricted Subsidiary;
(j) Investments by the Parent or any Restricted Subsidiary not otherwise permitted under this definition, in an aggregate amount not to exceed
the greater of (i) $250.0 million and (ii) 5% of Consolidated Net Tangible Assets at any one time outstanding;
(k) loans and
advances to officers, directors and employees of the Parent and Restricted Subsidiaries in an aggregate amount not to exceed $10.0 million in the aggregate at any one time outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(l) Investments the payment for which consists solely of Capital Stock of the Parent;
(m) any Investment in any Person to the extent such Investment represents the non-cash portion of the consideration received in connection with
an Asset Sale consummated in compliance with the covenant described under Limitation on asset sales or any other disposition of property not constituting an Asset Sale;
(n) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business and consistent with past practice;
(o) guarantees by the
Parent or any Restricted Subsidiary of Debt of the Parent or a Restricted Subsidiary (other than a Receivables Subsidiary) of Debt otherwise permitted by the covenant described hereunder Limitation on debt;
(p) any Investment by the Parent or any Restricted Subsidiary in a Receivable Subsidiary or any Investment by a Receivable Subsidiary in any
other Person in connection with a Qualified Receivables Transaction, so long as any Investment in a Receivable Subsidiary is in the form of a Purchase Money Note or an Investment in Capital Stock; and
(q) other Investments in any Person that is a joint venture engaged in a Permitted Business (other than an Investment in an Unrestricted
Subsidiary) having an aggregate fair market value as determined by the Parent in good faith (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (q) since the Issue Date and existing at the time of the Investment, which is the subject of the determination, was made, not to exceed the greater of (i) $125 million and (ii) 2.5% of Consolidated Net
Tangible Assets.
Person means any individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Principal Property means any of the Parents properties or
plants or the properties or plants of any Restricted Subsidiary primarily used for the manufacture of products and located within the United States or its territories or possessions, except any such property or plant which the Board of Directors of
the Parent by resolution declares is not of material importance to the total business conducted by the Parent and its Subsidiaries as an entirety.
60
Purchase Money Debt means Debt
(i) incurred to finance the purchase or construction (including additions and improvements thereto) of any assets (other than Capital Stock) of
such Person or any Restricted Subsidiary; and
(ii) that is secured by a Lien on such assets where the lenders sole security is to
the assets so purchased or constructed (or any facility which such assets constitute a part of);
in either case, that does not exceed 100% of the cost.
Purchase Money Note means a promissory note of a Receivable Subsidiary issued to the Parent or any Restricted Subsidiary, to pay all or a
portion of the purchase price of receivables and assets related thereto described in the definition of Qualified Receivables Transaction that are purchased in connection with a Qualified Receivables Transaction. The repayment of a
Purchase Money Note may be subordinated to the repayment of other liabilities of the Receivable Subsidiary on terms determined in good faith by the Parent to be substantially consistent with market practice in connection with Qualified Receivables
Transactions.
Qualified Capital Interests in any Person means a class of Capital Stock other than Redeemable Capital Interests.
Qualified Receivables Transaction means any transaction or series of transactions entered into by the Parent or any of its Restricted Subsidiaries
pursuant to which the Parent or such Restricted Subsidiary transfers to
(a) a Receivable Subsidiary (in the case of a transfer by the
Parent or any of its Restricted Subsidiaries); or
(b) any other Person (in the case of a transfer by a Receivable Subsidiary), or grants a
security interest in, any accounts receivable (whether now existing or arising in the future) of the Parent or any of its Restricted Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are
customarily granted in connection with an accounts receivable financing transaction; provided such transaction is on market terms as determined in good faith by the Parent at the time the Parent or such Restricted Subsidiary enters into such
transaction.
Rating Agency means, with respect to a series of Notes, (i) each of Moodys and S&P and (ii) if either of
Moodys or S&P ceases to rate such Notes or fails to make a rating of such Notes publicly available for reasons outside of the Issuers control, a nationally recognized statistical rating organization within the meaning of
Section 3(a)(62) under the Exchange Act selected by the Issuer as a replacement agency for Moodys or S&P, or both, as the case may be.
Receivable Subsidiary means a Subsidiary of the Parent (other than the Issuer):
(1) that is formed solely for the purpose of, and that engages in no activities other than activities in connection with, financing accounts
receivable of the Parent and/or its Restricted Subsidiaries, including providing letters of credit on behalf of or for the benefit of the Parent and/or its Restricted Subsidiaries;
(2) that is designated by the Board of Directors of the Parent as a Receivable Subsidiary pursuant to an Officers Certificate that is
delivered to the Trustee;
(3) that is either (a) a Restricted Subsidiary or (b) an Unrestricted Subsidiary designated in
accordance with the definition of Unrestricted Subsidiary;
(4) no portion of the Debt or any other obligation (contingent or
otherwise) of which (a) is at any time guaranteed by the Parent or any Restricted Subsidiary (excluding guarantees of obligations (other than any guarantee of Debt) pursuant to Standard Securitization Undertakings), (b) is at anytime
recourse to or obligates the Parent or any Restricted Subsidiary in any way, other than pursuant to Standard Securitization
61
Undertakings or (c) subjects any asset of the Parent or any other Restricted Subsidiary of the Parent, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings (such Debt, Non-Recourse Receivable Subsidiary Indebtedness);
(5) with
which neither the Parent nor any Restricted Subsidiary has any material contract, agreement, arrangement or understanding other than (a) contracts, agreements, arrangements and understandings entered into in connection with a Qualified
Receivables Transaction, (b) fees payable in the ordinary course of business in connection with servicing accounts receivable in connection with such a Qualified Receivables Transaction as determined in good faith by the Board of Directors of
the Parent and (c) any Purchase Money Note issued by such Receivable Subsidiary to the Parent or a Restricted Subsidiary or any letters of credit provided by such Receivable Subsidiary on behalf of or for the benefit of the Parent or any
Restricted Subsidiary; and
(6) with respect to which neither the Parent nor any other Restricted Subsidiary has any obligation (a) to
subscribe for additional shares of Capital Stock therein or make any additional capital contribution or similar payment or transfer thereto except in connection with a Qualified Receivables Transaction or (b) to maintain or preserve the
solvency or any balance sheet term, financial condition, level of income or results of operations thereof.
Redeemable Capital Interests in
any Person means any equity security of such Person that by its terms (or by terms of any security into which it is convertible or for which it is exchangeable), or otherwise (including the passage of time or the happening of an event), is required
to be redeemed, is redeemable at the option of the holder thereof in whole or in part (including by operation of a sinking fund), or is convertible or exchangeable for Debt of such Person at the option of the holder thereof, in whole or in part, at
any time prior to the Stated Maturity of the Notes; provided that only the portion of such equity security which is required to be redeemed, is so convertible or exchangeable or is so redeemable at the option of the holder thereof before such date
will be deemed to be Redeemable Capital Interests. Notwithstanding the preceding sentence, any equity security that would constitute Redeemable Capital Interests solely because the holders of the equity security have the right to require the Parent
to repurchase such equity security upon the occurrence of a Change of Control or an Asset Sale will not constitute Redeemable Capital Interests if the terms of such equity security provide that the Parent may not repurchase or redeem any such equity
security pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption Limitation on restricted payments. The amount of Redeemable Capital Interests deemed to be
outstanding at any time for purposes of the applicable Indenture will be the maximum amount that the Parent and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such
Redeemable Capital Interests or portion thereof, exclusive of accrued dividends.
Refinance means, in respect of any Debt, to refinance,
extend, renew, refund, repay, prepay, purchase, redeem, defease or retire, or to issue other Debt in exchange or replacement for, such Debt. Refinanced and Refinancing shall have correlative meanings.
Refinancing Debt means Debt that Refinances any Debt incurred by the Parent or any Restricted Subsidiary pursuant to the terms of the applicable
Indenture, whether involving the same or any other lender or creditor or group of lenders or creditors, but only to the extent that
(i) if
the Debt being refinanced is subordinated in right of payment to the Notes, the Refinancing Debt is subordinated to the Notes to at least the same extent as the Debt being Refinanced if such Debt was subordinated to the Notes,
(ii) the Refinancing Debt is scheduled to mature either (a) no earlier than the Debt being Refinanced or (b) at least 91 days after
the maturity date of the Notes,
(iii) the Refinancing Debt has an Average Life at the time such Refinancing Debt is incurred that is equal
to or greater than the Average Life of the Debt being Refinanced,
62
(iv) such Refinancing Debt is in an aggregate principal amount (or if incurred with original
issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if incurred with original issue discount, the aggregate accreted value) then outstanding (plus fees and expenses, including any premium and
defeasance costs) with respect to the Debt being Refinanced, and
(v) Refinancing Debt shall not include Debt of a Non-Guarantor Subsidiary
that refinances Debt of the Parent, the Issuer or a Subsidiary Guarantor.
Registration Rights Agreement means, with respect to a series of
Notes, that certain Registration Rights Agreement for such series dated as of the Issue Date among the Issuer, the Parent and the initial purchasers set forth therein, and, with respect to any Additional Notes of such series, one or more
substantially similar registration rights agreements among the Issuer, the Parent and the other parties thereto, as such agreements may be amended from time to time.
Restricted Payment is defined to mean any of the following:
(a) any dividend or other distribution declared and paid on the Capital Stock in the Parent or on the Capital Stock in any Restricted
Subsidiary of the Parent that are held by, or declared and paid to, any Person other than the Parent or a Restricted Subsidiary of the Parent (other than (i) dividends, distributions or payments made solely in Qualified Capital Interests in the
Parent and (ii) dividends or distributions payable to the Parent or a Restricted Subsidiary of the Parent or to other holders of Capital Stock of a Restricted Subsidiary on a pro rata basis);
(b) any payment (including, without limitation, in connection with a merger, consolidation or amalgamation) made by the Parent or any of its
Restricted Subsidiaries to purchase, redeem, acquire or retire any Capital Stock in the Parent (including the conversion into, or exchange for, Debt, of any Capital Stock) other than any such Capital Stock owned by the Parent or any Restricted
Subsidiary (other than a payment made solely in Qualified Capital Interests in the Parent);
(c) any payment made by the Parent or any of
its Restricted Subsidiaries (other than a payment made solely in Qualified Capital Interests in the Parent) to redeem, repurchase, defease (including an in substance or legal defeasance) or otherwise acquire or retire for value (including pursuant
to mandatory repurchase covenants), prior to any scheduled maturity, scheduled sinking fund or mandatory redemption payment, Debt of the Parent or any Subsidiary Guarantor that is subordinate in right of payment to the Notes or Guarantees (excluding
any Debt owed to the Parent or any Restricted Subsidiary); except payments of principal and interest in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case, within one year of the due date
thereof;
(d) any Investment by the Parent or a Restricted Subsidiary in any Person, other than a Permitted Investment; and
(e) any designation of a Restricted Subsidiary as an Unrestricted Subsidiary.
Restricted Subsidiary means any Subsidiary of the Parent (including the Issuer) other than an Unrestricted Subsidiary.
S&P means Standard & Poors Ratings Services, a Standard & Poors Financial Services LLC business, and any
successor to its rating agency business.
SEC means the Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Separation Agreement means the Separation Agreement, dated as of March 26, 2015, between TDCC and the Issuer, as amended or supplemented
prior to the Merger Closing Date.
63
Significant Subsidiary means any Restricted Subsidiary of the Parent that constitutes a
significant subsidiary within the meaning set forth in Rule 1-02 of Regulation S-X promulgated by the SEC.
Standard Securitization
Undertakings means representations, warranties, covenants and indemnities entered into by the Parent or any Restricted Subsidiary which are reasonably customary in an accounts receivable securitization transaction as determined in good faith
by the Parent, including guarantees by the Parent or any Restricted Subsidiary of any of the foregoing obligations of the Parent or a Restricted Subsidiary.
Stated Maturity, when used with respect to (i) any Note or any installment of interest thereon, means the date specified in such Note as the
fixed date on which the principal amount of such Note or such installment of interest is due and payable and (ii) any other indebtedness or any installment of interest thereon, means the date specified in the instrument governing such
indebtedness as the fixed date on which the principal of such indebtedness or such installment of interest is due and payable.
Subsidiary of
any Person means any corporation, association or other business entity of which more than 50%, by number of votes, of the Voting Stock is at the time directly or indirectly owned by such Person. Unless otherwise specified herein, each reference to a
Subsidiary will refer to a Subsidiary of the Parent, including the Issuer.
Subsidiary Guarantor means each Restricted Subsidiary of the
Parent that executes a supplemental indenture providing its Guarantee pursuant to the terms of the applicable Indenture after the Issue Date.
Sumitomo Credit Agreement means the credit agreement, dated as of August 25, 2015 (as amended, supplemented or otherwise modified from time
to time), among the Issuer, the Parent and the agents and lenders named therein, providing for a term loan facility, which shall provide for borrowings by the Parent, together with all related notes, letters of credit, guarantees, and any other
related agreements and instruments executed and delivered in connection therewith, in each case as amended, modified, supplemented, restated, refinanced, refunded or replaced in whole or in part from time to time including by or pursuant to any
agreement or instrument that exchanges, extends, refinances, renews, replaces, substitutes or otherwise restructures the maturity of any indebtedness thereunder, or increases the amount of available borrowings thereunder, or adds Subsidiaries of the
Parent as additional borrowers or guarantors thereunder, in each case with respect to such agreement or any successor or replacement agreement and whether by the same or any other agent, lender, group of lenders, purchasers, institutional investors
or debt holders.
Swap Contract means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including, without limitation, any fuel price caps and fuel price collar or floor agreements and similar agreements or arrangements designed to protect against or manage fluctuations in fuel
prices and any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a Master Agreement), including any such obligations or liabilities under any Master Agreement.
Transactions means the Combination Transactions, the entry into the Senior Credit Facility, the Sumitomo Term Facility and the offering of the
Original Notes and the use of proceeds therefrom.
64
Unrestricted Subsidiary means:
(1) any direct or indirect Subsidiary of the Parent (other than the Issuer) which at the time of determination is an Unrestricted Subsidiary
(as designated by the Board of Directors of the Parent, as provided below) and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Parent may designate any direct or indirect Subsidiary of the Parent (including any existing Subsidiary and any
newly-acquired or newly-formed direct or indirect Subsidiary) (other than the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Debt of, or owns or holds any Lien on, any property
of, the Parent or any Subsidiary of the Parent (other than any Subsidiary of the Subsidiary to be so designated);
provided
that
(a) any Unrestricted Subsidiary must be an entity of which the Capital Stock entitled to cast at least a majority of the votes that may be cast
by all Capital Stock having ordinary voting power for the election of directors or other governing body are owned, directly or indirectly, by the Parent,
(b) such designation complies with the covenants described under Certain covenantsLimitation on restricted payments and
(c) each of
(1) the Subsidiary
to be so designated and
(2) its Subsidiaries
has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Debt pursuant to which the lender has recourse to any of the assets of the Parent or any Restricted Subsidiary.
The
Board of Directors of the Parent may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided
that immediately after giving effect to such designation no Default or Event of Default shall have occurred and be continuing
and either:
(1) the Parent could incur at least $1.00 of additional Debt pursuant to the Consolidated Fixed Charge Coverage Ratio
test described under Certain covenantsLimitation on debt or
(2) the Consolidated Fixed Charge Coverage Ratio for the
Parent and the Restricted Subsidiaries on a consolidated basis would be greater than or equal to such ratio for the Parent and the Restricted Subsidiaries on a consolidated basis immediately prior to such designation, in each case on a pro forma
basis taking into account such designation.
Any such designation by the Board of Directors of the Parent shall be notified by the Issuer to the Trustee
by promptly filing with the Trustee a copy of a resolution of the board of directors of the Issuer giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
Voting Stock of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors (or Persons performing similar functions).
65
Book-Entry, Delivery and Form
The Exchange Notes will be issued in the form of one or more registered notes in global form, without interest coupons (the global notes).
Upon issuance, each of the global notes will be deposited with the trustee as custodian for DTC and registered in the name of Cede & Co., as nominee
of DTC.
Ownership of beneficial interests in each global note will be limited to persons who have accounts with DTC (DTC participants) or
persons who hold interests through DTC participants. We expect that under procedures established by DTC:
|
|
upon deposit of each global note with DTCs custodian, DTC will credit portions of the principal amount of the global note to the accounts of the DTC participants designated by the initial purchasers; and
|
|
|
ownership of beneficial interests in each global note will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC (with respect to interests of DTC
participants) and the records of DTC participants (with respect to other owners of beneficial interests in the global note).
|
Beneficial
interests in the global notes may not be exchanged for notes in physical, certificated form except in the limited circumstances described below.
Book-entry procedures for the global notes
All interests
in the global notes will be subject to the operations and procedures of DTC, Euroclear and Clearstream. We provide the following summaries of those operations and procedures solely for the convenience of investors. The operations and procedures of
each settlement system are controlled by that settlement system and may be changed at any time. Neither we nor the initial purchasers are responsible for those operations or procedures.
DTC has advised us that it is:
|
|
a limited purpose trust company organized under the laws of the State of New York;
|
|
|
a banking organization within the meaning of the New York State Banking Law;
|
|
|
a member of the Federal Reserve System;
|
|
|
a clearing corporation within the meaning of the New York Uniform Commercial Code; and
|
|
|
a clearing agency registered under Section 17A of the Exchange Act.
|
DTC was created to hold
securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes to the accounts of its participants. DTCs participants include securities
brokers and dealers, including the initial purchasers; banks and trust companies; clearing corporations and other organizations. Indirect access to DTCs system is also available to others such as banks, brokers, dealers and trust companies;
these indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. Investors who are not DTC participants may beneficially own securities held by or on behalf of DTC only through DTC
participants or indirect participants in DTC.
So long as DTCs nominee is the registered owner of a global note, that nominee will be considered the
sole owner or holder of the notes represented by that global note for all purposes under the indentures. Except as provided below, owners of beneficial interests in a global note:
|
|
will not be entitled to have notes represented by the global note registered in their names;
|
66
|
|
will not receive or be entitled to receive physical, certificated notes; and
|
|
|
will not be considered the owners or holders of the notes under the indentures for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee under the indentures.
|
As a result, each investor who owns a beneficial interest in a global note must rely on the procedures of DTC to exercise any rights of a
holder of notes under the indentures (and, if the investor is not a participant or an indirect participant in DTC, on the procedures of the DTC participant through which the investor owns its interest).
Payments of principal, premium (if any) and interest with respect to the notes represented by a global note will be made by the trustee to DTCs nominee
as the registered holder of the global note. Neither we nor the trustee will have any responsibility or liability for the payment of amounts to owners of beneficial interests in a global note, for any aspect of the records relating to or payments
made on account of those interests by DTC, or for maintaining, supervising or reviewing any records of DTC relating to those interests.
Payments by
participants and indirect participants in DTC to the owners of beneficial interests in a global note will be governed by standing instructions and customary industry practice and will be the responsibility of those participants or indirect
participants and DTC.
Transfers between participants in DTC will be effected under DTCs procedures and will be settled in same-day funds. Transfers
between participants in Euroclear or Clearstream will be effected in the ordinary way under the rules and operating procedures of those systems.
Cross-market transfers between DTC participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected within DTC
through the DTC participants that are acting as depositaries for Euroclear and Clearstream. To deliver or receive an interest in a global note held in a Euroclear or Clearstream account, an investor must send transfer instructions to Euroclear or
Clearstream, as the case may be, under the rules and procedures of that system and within the established deadlines of that system. If the transaction meets its settlement requirements, Euroclear or Clearstream, as the case may be, will send
instructions to its DTC depositary to take action to effect final settlement by delivering or receiving interests in the relevant global notes in DTC, and making or receiving payment under normal procedures for same-day funds settlement applicable
to DTC. Euroclear and Clearstream participants may not deliver instructions directly to the DTC depositaries that are acting for Euroclear or Clearstream.
Because of time zone differences, the securities account of a Euroclear or Clearstream participant that purchases an interest in a global note from a DTC
participant will be credited on the business day for Euroclear or Clearstream immediately following the DTC settlement date. Cash received in Euroclear or Clearstream from the sale of an interest in a global note to a DTC participant will be
received with value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account as of the business day for Euroclear or Clearstream following the DTC settlement date.
DTC, Euroclear and Clearstream have agreed to the above procedures to facilitate transfers of interests in the global notes among participants in those
settlement systems. However, the settlement systems are not obligated to perform these procedures and may discontinue or change these procedures at any time. Neither we nor the trustee will have any responsibility for the performance by DTC,
Euroclear or Clearstream or their participants or indirect participants of their obligations under the rules and procedures governing their operations.
Certificated notes
Notes in physical, certificated form
will be issued and delivered to each person that DTC identifies as a beneficial owner of the related notes only if:
|
|
DTC notifies us at anytime that it is unwilling or unable to continue as depositary for the global notes and a successor depositary is not appointed within 90 days;
|
67
|
|
DTC ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days;
|
|
|
we, at our option, notify the trustee that we elect to cause the issuance of certificated notes and any participant requests a certificated note in accordance with DTC procedures; or
|
|
|
certain other events provided in the indentures should occur.
|
68