DESCRIPTION OF THE EXCHANGE NOTES
The following is a summary of the material terms and provisions of the Exchange Notes and the Indenture. It does not include all of the terms or
provisions of the Indenture. We urge you to read the Indenture because it defines your rights.
You
can find definitions of certain capitalized terms used in this description under "Certain Definitions". The term "
Issuer
"
refers to Tennant Company, a Minnesota corporation, and not any of its Subsidiaries and the terms "
we
",
"
our
" and "
us
" each refer to the Issuer and its Subsidiaries.
The
Issuer does not intend to list the Exchange Notes on any securities exchange. The terms of the Exchange Notes will include those stated in the Indenture and those made part of the
Indenture by
references to the Trust Indenture Act. Copies of the Indenture and the Registration Rights Agreement may be obtained from the Issuer.
On
the Issue Date, the Issuer will offer to exchange up to $300.0 million aggregate principal amount of outstanding 5.625% Senior Notes due 2025 that were issued in a private
offering on April 18, 2017 (the "
Restricted Notes
"), for a like aggregate principal amount of 5.625% Senior Notes due 2025 (the
"
Exchange Notes
"), in a transaction registered under the Securities Act of 1933, as amended (the "
Securities
Act
") (the "
Exchange Offer
"). The Exchange Notes will be issued under an indenture (the
"
Indenture
") dated as of April 18, 2017 among the Issuer, the Initial Guarantors and Wells Fargo Bank, National Association, as trustee (the
"
Trustee
"). The Exchange Notes will evidence the same debt as the Restricted Notes and will be issued under the same Indenture, so the Exchange Notes
and the Restricted Notes will be treated as a single class of debt securities under such Indenture.
From
and after the Issue Date, the Exchange Notes will be senior unsecured obligations of the Issuer, equal in right of payment to all other senior unsecured obligations of the Issuer.
The Exchange Notes and Guarantees will be effectively subordinated to all existing and future secured debt of the Issuer and the Guarantors, to the extent of the assets securing such debt, including
Indebtedness under the Existing Credit Facilities for so long as the Existing Credit Facilities are secured. Exchange Notes and Guarantees will also be structurally subordinated to any debt, preferred
stock obligations and other liabilities of the Issuer's Subsidiaries that are not Guarantors. Exchange Notes and the Guarantees will be senior in right of payment to all future Indebtedness, if any,
of the Issuer and the Guarantors that is, by its terms, expressly subordinated in right of payment to the Exchange Notes and the Guarantees.
As
of September 30, 2017, we had approximately $395.0 million of total debt (excluding debt issuance costs and capital lease obligations), consisting of
$95.0 million under the Senior Secured Credit Facilities and $300.0 million of Restricted Notes previously issued, and we had $175.3 million of availability under the Senior
Secured Credit Facilities after giving effect to the $4.7 million of letters of credit outstanding. As of September 30, 2017, our subsidiaries that will not be guarantors of the Exchange
Notes following the consummation of the Acquisition had $175.2 million of liabilities (to which the Exchange Notes would have been structurally subordinated) and $724.3 million of
assets, excluding intercompany balances.
The
Issuer will issue the Exchange Notes in fully registered form in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The Trustee will initially act as paying
agent and registrar for the Exchange Notes. The Exchange Notes may be presented for registration or transfer and exchange at the corporate trust office of the registrar. The Issuer may change any
paying agent and registrar without notice to holders of the Exchange Notes (the "
Holders
"). The Issuer will pay principal (and premium, if any) on the
Exchange Notes at the Trustee's corporate trust office. If the Exchange Notes are in certificated form, at the Issuer's option, interest may be paid at the Trustee's corporate trust office or by check
mailed to the registered address of Holders. If the Exchange Notes are in global form, payment will be made to the Depository Trust Company ("DTC"). DTC requires payment by wire in immediately
available funds.
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PRINCIPAL, MATURITY AND INTEREST
The Exchange Notes will mature on May 1, 2025. The Exchange Notes will initially be limited to $300.0 million in aggregate
principal amount issued in connection with the Exchange Offer. Additional notes (the "
Additional Notes
") may be issued from time to time, without
consent of holders, subject to the limitations set forth under "Certain CovenantsLimitation on Incurrence of Additional Indebtedness". The Restricted Notes, Exchange Notes
offered hereby and any such Additional Notes will be treated as a single class for all purposes under the Indenture. Interest on the Exchange Notes will accrue at the rate of 5.625% per annum and will
be payable semiannually in cash on each May 1 and November 1, commencing on May 1, 2018, to the persons who are registered Holders at the close of business on the April 15
or October 15 (whether or not a Business Day) immediately preceding the applicable interest payment date. Interest on the Exchange Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from and including the date of issuance. Interest on the Exchange Notes will be computed on the basis of a 360-day year comprised of twelve 30-day
months. If any interest payment date, the maturity date or any earlier required repurchase date upon a fundamental change of an Exchange Note falls on a day that is not a Business Day, the required
payment will be made on the next succeeding Business Day and no interest on such payment will accrue in respect of the delay.
REDEMPTION
Optional Redemption
At any time prior to May 1, 2020, the Exchange Notes will be redeemable, at the Issuer's option, in whole or in part from time to time,
upon not less than 30 nor more than 60 days' written notice, at a price equal to 100% of the principal amount thereof plus the Applicable Premium (as defined below) and accrued and unpaid
interest, if any, to, but excluding, the redemption date
(subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
"
Applicable Premium
" means, with respect to an Exchange Note at any redemption date, the greater of (1) 1.0% of the principal
amount of such Exchange Note and (2) the excess of (a) the present value at such redemption date of (i) the redemption price of such note on May 1, 2020 (such redemption
price being that described in the fourth paragraph of this "Optional Redemption" section) plus (ii) all required remaining scheduled interest payments due on such Exchange Note
through May 1, 2020, computed using a discount rate equal to the Treasury Rate (as defined below) plus 50 basis points; over (b) the then principal amount of such Exchange Note on such
redemption date. Calculation of the Applicable Premium will be made by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate;
provided
,
however
, that such calculation, or determination of the Treasury Rate referenced below, shall
not be a duty or obligation of the Trustee.
"
Treasury Rate
" means, with respect to a redemption date, the weekly average rounded to the nearest 1/100th of a percentage point
(for the most recently completed week for which such information is available as of the date that is two business days prior to the redemption date) of the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and published in Federal Reserve Statistical Release H.15(519) with respect to each applicable day during such week
(or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to May 1, 2020;
provided
,
however
, that if the period from such redemption date to May 1, 2020 is not equal to
the constant maturity of the United States Treasury security for which such a yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from such redemption date to May 1, 2020 is less than one
year, the weekly
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average
yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.
In
addition, the Issuer may redeem the Exchange Notes at its option, in whole or in part, upon not less than 30 nor more than 60 days' written notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) plus accrued and unpaid interest, if any, to, but excluding, the redemption date if redeemed during the 12-month period commencing on
May 1 of the year set forth below:
|
|
|
|
|
Year
|
|
Percentage
|
|
2020
|
|
|
104.219
|
%
|
2021
|
|
|
102.813
|
%
|
2022
|
|
|
101.406
|
%
|
2023 and thereafter
|
|
|
100.000
|
%
|
In
addition, the Issuer must pay accrued and unpaid interest on the Exchange Notes redeemed to, but excluding, the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment date).
Optional Redemption upon Equity Offerings
At any time, or from time to time, on or prior to May 1, 2020 the Issuer may, at its option, use an amount of cash up to the Net Cash
Proceeds of one or more Equity Offerings (as defined below) to redeem, upon not less than 30 nor more than 60 days' written notice up to 35% of the principal amount of the Exchange Notes
(including any Additional Notes) outstanding under the Indenture at a redemption price of 105.625% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to, but excluding,
the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date);
provided
that:
(1) at
least 65% of the principal amount of Exchange Notes (including any Additional Notes) outstanding under the Indenture remains outstanding immediately after any such
redemption; and
(2) the
Issuer makes such redemption not more than 90 days after the consummation of any such Equity Offering.
"
Equity Offering
" means any public or private offering of Qualified Capital Stock of the Issuer (other than offerings registered on
Form S-8 or any successor form).
Mandatory Redemption; Offers to Purchase; Open Market Purchases
The Issuer is not required to make any mandatory redemption or sinking fund payments with respect to the Exchange Notes. However, under certain
circumstances, the Issuer may be required to offer to purchase Exchange Notes as described under "Change of Control" and "Certain CovenantsLimitation on Asset
Sales". We may at any time and from time to time purchase Exchange Notes in the open market or otherwise.
Selection and Notice of Redemption
If less than all of the Exchange Notes are to be redeemed at any time, the Trustee will select the Exchange Notes for redemption (1) in
compliance with the requirements of the principal securities exchange, if any, on which the Exchange Notes are listed, as certified to the Trustee by the Issuer, (2) if the Exchange Notes are
not so listed or such exchange prescribes no method of selection, in compliance with the requirements of DTC, or (3) if the Exchange Notes are not so listed or such exchange prescribes no
method of selection, and the Exchange Notes are not global notes held through DTC or DTC prescribes no method of selection, on a pro rata basis, by lot, subject to adjustments so
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that
no note in an unauthorized denomination remains outstanding after such redemption;
provided
,
however
, that no note of $2,000 in aggregate principal amount
or less shall be redeemed in part.
Notice
of redemption will be sent electronically or mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of Exchange Notes to
be redeemed at its registered address. On and after the redemption date, interest will cease to accrue on Exchange Notes or portions thereof called for redemption as long as the Issuer has deposited
with the paying agent funds in satisfaction of the applicable redemption price.
Notwithstanding
the foregoing, in connection with any Change of Control Offer or Net Proceeds Offer, if Holders of not less than 90% in aggregate principal amount of the outstanding
Exchange Notes validly tender and do not validly withdraw such Exchange Notes in such Change of Control Offer or Net Proceeds Offer and the Issuer, or any third party making a such Change of Control
Offer or Net Proceeds Offer in lieu of the Issuer, purchases all of the Exchange Notes validly tendered and not withdrawn by such Holders, the Issuer or such third party will have the right upon not
less than 30 nor more than 60 days' prior notice, given not more than 30 days following such purchase date, to redeem all Exchange Notes that remain outstanding following such purchase
at a redemption price equal to the price offered to each other Holder in such Change of Control Offer or Net Proceeds Offer plus, to the extent not included, accrued and unpaid interest, if any,
thereon, to, but excluding, such redemption date.
Notice
of any redemption of the Exchange Notes in connection with a corporate transaction (including an Equity Offering, an incurrence of Indebtedness, a consolidation or merger or a
Change of Control) may, at the Issuer's discretion, be given prior to the completion thereof and any such redemption or notice may, at the Issuer's discretion, be subject to one or more conditions
precedent, including, but not limited to, completion of the related transaction. If such redemption or purchase is so subject to satisfaction of one or more conditions precedent, such notice shall
describe each such condition, and if applicable, shall state that, in the Issuer's discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied or
waived by the Issuer (in its sole discretion), or such redemption or purchase may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied
or waived by the redemption date, or by the redemption date as so delayed. The Issuer will provide written notice to the Trustee prior to the close of business two Business Days prior to the
redemption date (or such shorter period as may be acceptable to the Trustee) if any such redemption has been rescinded or delayed, and upon receipt the Trustee shall provide such notice to each holder
of the Exchange Notes in the same manner in which the notice of redemption was given. In addition, the Issuer may provide in such notice that payment of the redemption price and performance of the
Issuer's obligations with respect to such redemption may be performed by another Person.
If
the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest will be paid to the Person in
whose name the note is registered at the close of business on such record date, and no additional interest will be payable to Holders whose Exchange Notes will be subject to redemption by the Issuer.
GUARANTEES
From and after the Issue Date, each of the Initial Guarantors , jointly and severally, fully and unconditionally guarantee (the
"
Guarantees
"), on a senior unsecured basis, all of the Issuer's obligations under the Indenture and the Exchange Notes. The obligations of each
Guarantor under its Guarantee will be limited to prevent the Guarantee from constituting a fraudulent conveyance or fraudulent transfer under applicable law.
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Each Guarantor may consolidate with or merge into or sell its assets to the Issuer or another Guarantor without limitation, or with other Persons, upon the terms
and conditions set forth in the Indenture. See "Certain CovenantsMerger, Consolidation and Sale of Assets". In the event all of the Capital Stock of a Guarantor that is owned by the
Issuer or any of its Subsidiaries is sold and the sale complies with the provisions set forth in "Certain CovenantsLimitation on Asset Sales" or a Restricted Subsidiary that
is a Guarantor is properly designated as an Unrestricted Subsidiary, the Guarantor's Guarantee will be automatically released. Further, the Indenture provides that a Guarantor's Guarantee will be
automatically released upon the earlier of (1) such Guarantor being released from, or discharged of, its guarantee of, and all pledges and security, if any, granted by such Guarantor in
connection with, the Existing Credit Facilities or such other guarantee that resulted in the creation of such Guarantee (except, in the case of the Existing Credit Facilities, a release by or as a
result of a payment thereon), and (2) Legal Defeasance with respect to the Exchange Notes or satisfaction and discharge of the Indenture as described below under the sections titled
"Legal Defeasance and Covenant Defeasance" and "Satisfaction and Discharge".
Not
all of our Subsidiaries will guarantee the Exchange Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, these non-guarantor
Subsidiaries will pay
the holders of their debts and their trade creditors before they will be able to distribute any of their assets to us.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder will have the right to require that the Issuer purchase all or a portion of such
Holder's Exchange Notes pursuant to the offer described below (a "
Change of Control Offer
"), at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the date of purchase.
Within
30 days following the date upon which the Change of Control occurred, the Issuer must send a written notice to each Holder, with a copy to the Trustee, which notice shall
govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which (unless otherwise required by law) must be no earlier than 30 days nor
later than 60 days from the date such notice is sent (the "
Change of Control Payment Date
"). Holders electing to have an Exchange Note purchased
pursuant to a Change of Control Offer will be required to surrender the Exchange Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Exchange Note completed, to the
paying agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date. If the Exchange Note is in global form,
Holders will be required to follow applicable DTC procedures.
If
a Change of Control Offer is made, we cannot assure you that the Issuer will have available funds sufficient to pay the Change of Control purchase price for all the Exchange Notes
that might be delivered by Holders seeking to accept the Change of Control Offer. In the event the Issuer is required to purchase outstanding Exchange Notes pursuant to a Change of Control Offer, the
Issuer may seek third party financing to the extent it does not have available funds to meet its purchase obligations. However, we cannot assure you that the Issuer would be able to obtain such
financing.
Neither
the Board of Directors of the Issuer nor the Trustee may waive the covenant relating to a Holder's right to redemption upon a Change of Control. The Issuer's obligation to make a
Change of Control Offer upon the circumstances described herein, and restrictions in the Indenture described herein on the ability of the Issuer and its Restricted Subsidiaries to incur additional
Indebtedness, to grant liens on its property, to make Restricted Payments and to make Asset Sales may make more difficult or discourage a takeover of the Issuer, whether favored or opposed by the
management of the Issuer. Consummation of any such transaction in certain circumstances may require redemption or repurchase of the Exchange Notes, and we cannot assure you that the Issuer or the
acquiring party will
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have
sufficient financial resources to effect such redemption or repurchase. Such restrictions and the restrictions on transactions with Affiliates may, in certain circumstances, make more difficult
or discourage any leveraged buyout of the Issuer or any of its Subsidiaries by the management of the Issuer. While such restrictions cover a wide variety of arrangements which have traditionally been
used to effect highly leveraged transactions, the Indenture may not afford the Holders protection in all circumstances from the adverse aspects of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction.
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 such laws and regulations
are applicable in connection with the repurchase of Exchange Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the
"Change of Control" provisions of the Indenture, 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 Indenture by virtue thereof.
The
Issuer will not be required to make a Change of Control Offer following a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times
and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Exchange Notes validly tendered and not
withdrawn under such Change of Control Offer or (2) a notice of redemption of all outstanding Exchange Notes has been given pursuant to the Indenture as described above under the caption
"Optional Redemption", unless and until there is a default in the payment of the redemption price on the applicable redemption date or the redemption is not consummated due to the failure
of a condition precedent contained in the applicable redemption notice to be satisfied. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of
Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
The
definition of "Change of Control" includes a disposition of all or substantially all of the property and assets of the Issuer to any Person. 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 a disposition of "all or substantially all" of the property or assets of a Person. As a result, it may be unclear as to whether a
Change of Control has occurred and whether a Holder of Exchange Notes may require the Issuer to make an offer to repurchase the Exchange Notes as described above.
CERTAIN COVENANTS
Changes in Covenants When Exchange Notes Rated Investment Grade
Beginning on the date following the Issue Date that:
-
(1)
-
the
Exchange Notes have an Investment Grade Rating; and
-
(2)
-
no
Default or Event of Default shall have occurred and be continuing,
and
ending on the date (the "
Reversion Date
") that either Rating Agency ceases to have an Investment Grade Rating on the Exchange Notes (such period of
time, the "
Suspension Period
"), the covenants specifically listed under the following captions in this "Description of the Exchange Notes" will no
longer be applicable to the Exchange Notes:
-
(1)
-
"Limitation
on Incurrence of Additional Indebtedness";
-
(2)
-
"Limitation
on Restricted Payments";
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-
(3)
-
"Limitation
on Asset Sales";
-
(4)
-
"Limitation
on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries";
-
(5)
-
"Limitations
on Transactions with Affiliates";
-
(6)
-
clause (2)
of the first paragraph of the covenant listed under "Merger, Consolidation and Sale of Assets".
During
a Suspension Period, the Issuer's Board of Directors may not designate any of its Subsidiaries as Unrestricted Subsidiaries.
On
the Reversion Date, all Indebtedness incurred during the Suspension Period will be deemed to have been outstanding on the Issue Date, so that it is classified as Permitted
Indebtedness under clause (3) of the definition of Permitted Indebtedness and permitted to be refinanced under clause (16) of the definition of Permitted Indebtedness.
Calculations
made after the Reversion Date of the amount available to be made as Restricted Payments under the covenant described under "Limitation on Restricted Payments"
will be made as though the covenant described under "Limitation on Restricted Payments" had been in effect prior to, but not during the Suspension Period and all Restricted Payments made
during the Suspension Period not otherwise permitted pursuant to the second paragraph of the covenant described under the caption "Limitation on Restricted Payments" will reduce the
amount available to be made as Restricted Payments under clause (iii) of the first paragraph of such covenant. In addition, (1) for purposes of the covenant described under
"Limitations on Transactions with Affiliates", all agreements, arrangements and transactions entered into by the Issuer
or any of its Restricted Subsidiaries with an Affiliate of the Issuer during the applicable Suspension Period prior to such Reversion Date will be deemed to have been entered into on or prior to the
Issue Date, (2) for purposes of the covenant described under "Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries", all contracts entered into
during the applicable Suspension Period prior to such Reversion Date that contain any of the restrictions contemplated by such covenant will be deemed to have been existing on the Issue Date, and
(3) all Investments made during the Suspension Period will be deemed to have been outstanding on the Issue Date, so that they are classified as Permitted Investments permitted under
clause (12) of the definition of "Permitted Investments"
Notwithstanding
the fact that covenants suspended during a Suspension Period may be reinstated, (1) no Default or Event of Default will be deemed to have occurred as a result of a
failure to comply with such covenants during the Suspension Period or at the time such covenants are reinstated and (2) following a Reversion Date, the Issuer and each Restricted Subsidiary
will be permitted, without causing a Default or Event of Default to consummate the transactions contemplated by any contract entered into during the Suspension Period, so long as such contract and
such consummation would have been permitted during such Suspension Period.
The
Issuer shall give the Trustee written notice of any Suspension Period and in any event not later than five (5) Business Days after such Suspension Period has occurred. The
Issuer shall give the Trustee written notice of any occurrence of a Reversion Date not later than five (5) Business Days after such Reversion Date. The Trustee shall have no obligation to
independently determine or verify if such events have occurred or notify the holders of the continuance and termination of any Suspension Period. The Trustee may provide a copy of such notice to any
holder of Exchange Notes upon request.
There
can be no assurances that the Exchange Notes will ever achieve or maintain an Investment Grade Rating.
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Limitation on Incurrence of Additional Indebtedness
The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, "
incur
") any
Indebtedness (including, without limitation, Acquired Indebtedness);
provided
,
however
, that, so long as
no Default or Event of Default shall have occurred and be continuing at the time or as a consequence of the incurrence of any such Indebtedness, the Issuer and the Restricted Subsidiaries may incur
Indebtedness (including, without limitation, Acquired Indebtedness) if on the date of the incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof, the Consolidated
Fixed Charge Coverage Ratio of the Issuer is at least 2.0 to 1.0;
provided
,
further
, that any Restricted
Subsidiary of the Issuer that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under this paragraph if, after giving pro forma effect to such incurrence
(including a pro forma application of the net proceeds therefrom), more than an aggregate principal amount equal to $60.0 million of Indebtedness of all such non-Guarantor Restricted
Subsidiaries would be outstanding under this paragraph at such time.
The
foregoing limitations will not apply to each of the following, without duplication (collectively, "
Permitted Indebtedness
"):
(1) Indebtedness
under the Exchange Notes issued on the Issue Date and the Exchange Notes and related exchange guarantees to be issued in exchange for the Exchange Notes and
the guarantees thereof pursuant to the Registration Rights Agreement;
(2) Indebtedness
incurred pursuant to Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the greater of (a) $450 million
and (b) an amount such that, on a pro forma basis after giving effect to the incurrence of such Indebtedness (and application of the net proceeds therefrom), the Consolidated Secured Debt Ratio
would be no greater than 1.75 to 1.0;
provided
that, for purposes of determining the amount of Indebtedness that may be incurred under
clause (2)(b), all Indebtedness incurred under this clause (2) shall be treated as Indebtedness secured by Liens (whether or not is it so secured);
(3) Indebtedness
of the Issuer and its Restricted Subsidiaries outstanding on the Issue Date (other than Indebtedness under clause (1) and (2) above)
(including any amendments or replacements thereof that do not increase the principal amount);
(4) Interest
Swap Obligations of the Issuer or any of its Restricted Subsidiaries covering Indebtedness of the Issuer or such Restricted Subsidiary;
provided
,
however
,
that (a) such Interest Swap Obligations are entered into for the purpose of
mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by the Issuer or such Restricted Subsidiary, or changes in the value of
securities issued by Issuer or such Restricted Subsidiary, and not for purposes of speculation or taking a "market view";
(5) Indebtedness
under Currency Agreements;
provided
that in the case of Currency Agreements which relate to Indebtedness,
such Currency Agreements do not increase the Indebtedness of the Issuer and its Restricted Subsidiaries outstanding other than as a result of fluctuations in currency exchange rates or by reason of
fees, indemnities and compensation payable thereunder;
(6) Indebtedness
of the Issuer owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary of the Issuer owing to and held by the Issuer or any
other Restricted Subsidiary of the Issuer;
provided
,
however
, that: (a) any subsequent issuance
or transfer of Capital Stock or any other event which results in any such Indebtedness being held by a Person other the Issuer or a Restricted Subsidiary of the Issuer, and (b) any sale or
other transfer (excluding Permitted Liens) of any such Indebtedness to a Person other than the Issuer or a
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Restricted
Subsidiary of the Issuer, shall be deemed, in each case, to be the incurrence of Indebtedness by the Issuer or such Restricted Subsidiary, as the case may be, not permitted by this
clause (6);
(7) (a)
obligations pursuant to any cash management agreement and other Indebtedness in respect of netting services, overdraft protections and similar arrangements and
(b) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business;
(8) Indebtedness
of the Issuer or any of its Restricted Subsidiaries represented by letters of credit, pledges or deposits for the account of the Issuer or such Restricted
Subsidiary, and obligations owed to customers for advance payments, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with
self-insurance, the purchase of goods or other requirements in the ordinary course of business;
(9) Indebtedness
represented by guarantees by the Issuer or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under the Indenture;
provided
that, in the case of a guarantee by a Restricted
Subsidiary, such Restricted Subsidiary complies with the covenant described under
"Additional Subsidiary Guarantees" to the extent applicable;
(10) Indebtedness
of the Issuer or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers' acceptances, workers' compensation claims,
surety or appeal bonds, payment obligations in connection with insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business;
(11) Indebtedness
of the Issuer or any Restricted Subsidiary consisting of guarantees, earn-outs, incentives, non-competes, consulting, indemnities or obligations
(contingent or other) in respect of purchase price adjustments in connection with the acquisition or disposition of assets;
(12) Indebtedness
of (x) the Issuer or any Restricted Subsidiary incurred or issued to finance an acquisition or (y) Persons that are acquired by the Issuer or
any Restricted Subsidiary or merged into or consolidated with the Issuer or a Restricted Subsidiary in accordance with the terms of the Indenture;
provided
that after giving effect to such acquisition,
merger or consolidation, either: (a) the Issuer would be permitted to incur at least $1.00
of additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage Ratio test set forth in the first paragraph of this covenant; (b) the Consolidated Fixed Charge Coverage Ratio of
the Issuer and its Restricted Subsidiaries would not be lower than immediately prior to such acquisition, merger or consolidation; or (c) such Indebtedness constitutes Acquired Indebtedness;
provided
that, with respect to this clause (c), the only obligors with respect to such Acquired Indebtedness shall be those Persons who were
obligors of such Acquired Indebtedness prior to such acquisition, merger or consolidation;
provided
,
further
, that any Restricted Subsidiary of the Issuer
that is not or will not, upon such incurrence, become a Guarantor may not incur Indebtedness under
clause (x) of this clause (12) if, after giving pro forma effect to such incurrence (including a pro forma application of the net proceeds therefrom), more than an aggregate principal
amount equal to $60.0 million of Indebtedness of all such non-Guarantor Restricted Subsidiaries would be outstanding under clause (x) of this clause (12) at such time.
(13) Indebtedness
represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Issuer and its Restricted Subsidiaries in an aggregate principal amount
at any time outstanding, including any Refinancing Indebtedness in respect thereof, not to exceed (A) the greater of (i) $30.0 million and (ii) 4.0% of Consolidated Total
Assets plus (B) $45.0 million to finance the acquisition and/or construction of a new headquarters facility for the Issuer;
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(14) Indebtedness
of Foreign Restricted Subsidiaries of the Issuer in connection with letters of credit and bank guarantees in an aggregate principal amount at any time
outstanding not to exceed $50.0 million;
(15) Indebtedness
of the Issuer evidenced by commercial paper issued by the Issuer;
provided
that the aggregate outstanding
principal amount of Indebtedness incurred pursuant to clause (2) above and this clause (15) does not exceed the maximum amount of Indebtedness permitted under clause (2) above;
(16) Refinancing
Indebtedness in respect of Indebtedness described in clauses (1), (3), (4), (5) and (12) above and this clause (16); and
(17) additional
Indebtedness of the Issuer and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding, including any Refinancing Indebtedness
in respect thereof, not to exceed the greater of (A) $100.0 million and (B) 10.0% of Consolidated Total Assets.
For
purposes of determining any particular amount of Indebtedness under this covenant, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included. For purposes of determining compliance with this covenant, in the event that all or a portion of an item of Indebtedness meets the
criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (17) above or is permitted to be incurred pursuant to the Consolidated Fixed Charge
Coverage Ratio provisions of such covenant, the Issuer shall, in its sole discretion, divide, classify (or later reclassify) such item or portion of such item of Indebtedness in any manner that
complies with such covenant, including under the first paragraph of such covenant if such reclassified Indebtedness could then be incurred under such test, except that Indebtedness outstanding under
the Existing Credit Facilities on the Issue Date shall be deemed to have been incurred on the Issue Date under clause (2) above and may not be reclassified. Accrual of interest, accretion or
amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock
in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of
this covenant.
If
at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Issuer as
of such date (and, if such Indebtedness is not permitted to be incurred as of such date under this covenant, the Issuer shall be in default of this covenant).
For
purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a
foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of
revolving credit debt, and the amount of such debt will not be deemed to change as a result of fluctuations in currency exchange rates after such date of incurrence or commitment;
provided
, that if such
Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the
applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar-denominated restriction shall be
deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being refinanced plus
(b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses (including, without
limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing.
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Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Issuer or a Restricted Subsidiary may incur pursuant to this
covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if
incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is
denominated that is in effect on the date of such refinancing.
The
Issuer will not, and will not permit any Guarantor to, directly or indirectly, incur any Indebtedness which by its terms (or by the terms of any agreement governing such
Indebtedness) is expressly subordinated in right of payment to any other Indebtedness of the Issuer or such Guarantor, as the case may be, unless such Indebtedness is also by its terms (or by the
terms of any agreement governing such Indebtedness) made expressly subordinate to the Exchange Notes or the applicable Guarantee, as the case may be, to the same extent and in the same manner as such
Indebtedness is subordinated to other Indebtedness of the Issuer or such Guarantor, as the case may be. For purposes of the foregoing, no Indebtedness will be deemed to be subordinated in right of
payment to any other Indebtedness of the Issuer or any Guarantor solely by virtue of such Indebtedness being unsecured or by virtue of the fact that the holders of such Indebtedness have entered into
one or more intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.
Limitation on Restricted Payments
The Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare
or pay any dividend or make any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Issuer) on or in respect of shares
of the Issuer's Capital Stock to holders of such Capital Stock;
(2) purchase,
redeem or otherwise acquire or retire for value any Capital Stock of the Issuer or any warrants, rights or options to purchase or acquire shares of any class
of such Capital Stock (other than Disqualified Capital Stock within 365 days of the stated maturity thereof);
(3) make
any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, earlier than one year prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Indebtedness; or
(4) make
any Investment (other than Permitted Investments)
(each
of the foregoing actions set forth in clauses (1), (2), (3) and (4) being referred to as a "
Restricted Payment
"), if at the
time of such Restricted Payment or immediately after giving effect thereto,
(i) a
Default or an Event of Default shall have occurred and be continuing; or
(ii) the
Issuer is not able to incur at least $1.00 of additional Indebtedness in compliance with the first paragraph of the covenant described under
"Limitation on Incurrence of Additional Indebtedness"; or
(iii) the
aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the first day of the fiscal quarter of the Issuer during
which the Issue Date occurs (the amount expended for such purposes, if other than in cash, being the fair market value of such
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property
as determined in good faith by the Board of Directors of the Issuer) shall exceed the sum, without duplication, of:
(w) 50%
of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the Issuer earned subsequent to the
first day of the fiscal quarter of the Issuer during which the Issue Date occurs and on or prior to the date the Restricted Payment occurs (the "
Reference
Date
") (treating such period as a single accounting period);
plus
(x) 100%
of the aggregate net cash proceeds and the fair market value of readily marketable securities or other property received by the Issuer from any Person (other than a
Subsidiary of the Issuer) from (i) the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Issuer or (ii) from the
issue and sale subsequent to the Issue Date and on or prior to the Reference Date of Disqualified Capital Stock or convertible or exchangeable debt securities of the Issuer, in the case of this
clause (ii), that has been converted into or exchange for Qualified Capital Stock;
plus
(y) without
duplication of any amounts included in clause (iii)(x) above, 100% of the aggregate net cash proceeds and fair market value of readily marketable
securities or other property, of any equity contribution received by the Issuer subsequent to the Issue Date (excluding, in the case of clauses (iii)(x) and (y), any such net cash proceeds to
the extent used to (i) redeem the Exchange Notes in compliance with the provisions set forth under "RedemptionOptional Redemption upon Equity Offerings" or
(ii) to make a Restricted Payment pursuant to clauses (2) or (3) of the immediately succeeding paragraph);
plus
(z) the
sum of:
(1) the
aggregate amount in cash and fair market value of other property returned on or with respect to Investments (other than Permitted Investments) made subsequent to the
Issue Date whether through interest payments, principal payments, dividends, by merger, consolidation or other distribution, payment or transfer;
(2) the
net cash proceeds received by the Issuer or any of its Restricted Subsidiaries subsequent to the Issue Date from the disposition of all or any portion of such
Investments (other than to the Issuer or a Subsidiary of the Issuer); and
(3) upon
redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary (except to the extent the Investment constituted a Permitted Investment), the fair market
value of such Subsidiary;
provided
,
however
, that the sum of subclauses (z)(1), (z)(2) and (z)(3) above shall not exceed
the aggregate amount of all such Investments made subsequent to the Issue Date.
Notwithstanding
the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit:
(1) the
payment of any dividend or distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or
distribution or giving of the redemption notice, as the case may be, if the dividend, distribution or redemption payment would have been permitted on the date of declaration or giving of the
redemption notice;
(2) if
no Default or Event of Default shall have occurred and be continuing, the acquisition of any shares of Capital Stock of the Issuer, either (i) solely in
exchange for shares of Qualified Capital Stock of the Issuer or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the
Issuer) of shares of Qualified Capital Stock of the Issuer;
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(3) if
no Default or Event of Default shall have occurred and be continuing, the acquisition of any Indebtedness of the Issuer or a Guarantor that is subordinate or junior
in right of payment to the Exchange Notes or such Guarantor's Guarantee, as the case may be, or the acquisition of Disqualified Capital Stock, in each case, either (i) solely in exchange for
shares of Qualified Capital Stock of the Issuer, or (ii) in exchange for, or by conversion into, or through the application of net proceeds of a substantially concurrent sale for cash (other
than to a Subsidiary of the Issuer), of (a) shares of Qualified Capital Stock of the Issuer or (b) Refinancing Indebtedness;
(4) if
no Default or Event of Default shall have occurred and be continuing, repurchases, redemptions or other acquisitions by the Issuer of Common Stock of the Issuer (or
options or warrants to purchase such Common Stock) from directors, officers, employees and consultants of the Issuer or any of its Subsidiaries or their authorized representatives upon the death,
disability, retirement or termination of employment of such directors, officers, employees or consultants, in an aggregate amount not to exceed $5.0 million; provided that any unused amounts
may be carried forward to any succeeding fiscal year in
an amount not to exceed $2.5 million in any such fiscal 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 Issuer or any of its Restricted Subsidiaries from the sale of Qualified Capital Stock of the Issuer to directors, officers, employees
or consultants of the Issuer or its Restricted Subsidiaries subsequent to the Issue Date (
provided
that the amount of cash proceeds utilized for any
such repurchase, redemption or other acquisition or dividend will not increase the amount available for Restricted Payments under clause (iii) of the preceding paragraph); plus
(b) the
cash proceeds of key man life insurance policies received by the Issuer or its Restricted Subsidiaries after the Issue Date;
provided
that cancellation of Indebtedness owing to the Issuer or any of its Restricted Subsidiary from any present or former directors, officers,
employees or consultants of the Issuer or any of its Restricted Subsidiaries in connection with a repurchase of Capital Stock of the Issuer will not be deemed to constitute a Restricted Payment for
purposes of this covenant or any other provision of the Indenture;
(5) if
no Default or Event of Default shall have occurred and be continuing, other Restricted Payments in an amount not to exceed $75.0 million;
(6) additional
Restricted Payments;
provided
,
however
, that (i) after
giving
pro forma
effect to any such Restricted Payment, the Consolidated Debt Ratio shall be less than or equal to 2.50 to 1.00 and (ii) no
Default or Event of Default shall have occurred and be continuing;
(7) in
the event of a Change of Control, and if no Default or Event of Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other
acquisition or retirement of Subordinated Indebtedness of the Issuer or any Guarantor, in each case at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness,
plus accrued and unpaid interest thereon;
provided
,
however
, that prior to, or concurrently with, such
payment, purchase, redemption, defeasance or other acquisition or retirement, the Issuer (or a third party to the extent permitted by the Indenture) has made a Change of Control Offer with respect to
the Exchange Notes as a result of such Change of Control and has repurchased all Exchange Notes validly tendered and not withdrawn in connection with such Change of Control Offer;
(8) in
the event of an Asset Sale that requires the Issuer to offer to repurchase Exchange Notes pursuant to the covenant described under "Limitation on Asset
Sales", and if no Default
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or
Event of Default shall have occurred and be continuing, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Guarantor,
in each case at a purchase price not greater than 100% of the principal amount of such Subordinated Indebtedness, plus accrued and unpaid interest thereon;
provided
,
however
, that (A) prior to, or concurrently with, such payment, purchase, redemption,
defeasance or other acquisition or retirement, the Issuer has made an offer with respect to the Exchange Notes pursuant to the provisions of the covenant described under "Limitation on
Asset Sales" and has repurchased all Exchange Notes validly tendered and not withdrawn in connection with such offer and (B) the aggregate amount of all such payments, purchases, redemptions,
defeasances or other acquisitions or retirements of all such Subordinated Indebtedness may not exceed the amount of the Net Proceeds Offer Amount remaining after the Issuer has complied with
clause (3) of the covenant described under "Limitation on Asset Sales";
(9) repurchases
of Common Stock deemed to occur upon the exercise of stock options, warrants, rights or other Capital Stock if the Common Stock represents a portion of the
exercise price thereof or withholding taxes payable in connection with the exercise thereof;
(10) if
no Default or Event of Default shall have occurred and be continuing, Restricted Payments constituting a quarterly cash dividend to the shareholders of the Issuer in
an amount not to exceed $10.0 million per fiscal quarter; and
(11) if
no Default or Event of Default shall have occurred and be continuing, Restricted Payments paid in cash in connection with the repurchase price of minority interests
in subsidiaries of IPC in an aggregate amount not to exceed €5.0 million.
In
determining the aggregate amount of Restricted Payments made subsequent to the first day of the fiscal quarter of the Issuer during which the Issue Date occurs in accordance with
clause (iii) of the immediately preceding paragraph, amounts expended pursuant to clauses (1), (4) and (5) shall be included in such calculation.
For
purposes of determining compliance with this covenant, in the event that a proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of
Restricted Payments described in clauses (1) through (11) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Issuer will be entitled to divide,
classify or re-classify (based on circumstances existing on the date of such reclassification) such restricted payment or portion thereof
in any manner that complies with this covenant and such Restricted Payment will be treated as having been made pursuant to only such clause or clauses or the first paragraph of this covenant.
Limitation on Asset Sales
The Issuer will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
(1) the
Issuer or the applicable Restricted Subsidiary, as the case may be, receives consideration (including by way of relief from, or by any other Person assuming
responsibility for, any liabilities, contingent or otherwise) at or prior to the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of (as
determined in good faith by the Issuer's Board of Directors);
(2) at
least 75% of the consideration received by the Issuer or the Restricted Subsidiary, as the case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and shall
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be
received at or prior to the time of such disposition. For purposes of this clause (2), each of the following shall be deemed to be cash:
(a) (i)
any liabilities, as shown on the most recent consolidated balance sheet (or in the Exchange Notes thereto) of the Issuer or any Restricted Subsidiary (or would be
shown on such consolidated balance sheet (or in the Exchange Notes thereto) as of the date of such Asset Sale), other than contingent liabilities and liabilities that are by their terms subordinated
to the Exchange Notes or any Guarantee or (ii) any Guarantees of Indebtedness of Persons other than the Issuer or any Restricted Subsidiary, in each case, that are assumed by the person
acquiring such assets to the extent that the Issuer and its Restricted Subsidiaries have no further liability with respect to such liabilities;
(b) any
securities, Exchange Notes or other obligations received by the Issuer or any such Restricted Subsidiary from such transferee that are converted by the Issuer or
such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 180 days after receipt; and
(c) any
Designated Non-Cash Consideration received by the Issuer or its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with
all other Designated Non-Cash Consideration received pursuant to this clause (c) that is at that time outstanding, in the aggregate, not to exceed the greater of $15.0 million and 1.6%
of Consolidated Total Assets at the time of receipt of such Designated Non-Cash Consideration, with the Fair Market Value of each item of Designated Non-Cash Consideration measured at the time
received and without giving effect to subsequent changes in value;
(3) upon
the consummation of an Asset Sale, the Issuer shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
365 days of receipt thereof either:
(a) to
(x) permanently repay Indebtedness of the Issuer and its Restricted Subsidiaries under any Credit Facility and in the case of any such Indebtedness under any
revolving credit facility effect a permanent reduction in the availability under such revolving credit facility (
provided
,
however
, that, if there shall
not be any term loan indebtedness outstanding under any Credit Facility, in the case of such Indebtedness under any
revolving credit facility such prepayment shall not be required to effect a permanent reduction in the availability under such revolving credit facility) or (y) repay or reduce Indebtedness of
a Restricted Subsidiary of the Issuer that does not guarantee the Exchange Notes;
(b) to
make an investment in properties or assets that replace the properties and assets that were the subject of such Asset Sale or in properties or assets (including
Capital Stock) that will be used or are useful, in the good faith judgment of the Board of Directors of the Issuer, in the business of the Issuer and its Restricted Subsidiaries as they are engaged in
on the Issue Date or in businesses reasonably related, incidental, ancillary or complimentary thereto ("
Replacement Assets
");
provided
that, in the case of
this clause (b), a binding commitment within 365 days of the date of the receipt of such Net Cash Proceeds
shall be treated as a permanent application of the Net Cash Proceeds from the date of such commitment so long as the Issuer or such other Restricted Subsidiary enters into such commitment with the
good faith expectation that such Net Cash Proceeds will be applied to satisfy such commitment within 180 days of such commitment ; or
(c) a
combination of prepayment and investment permitted by the foregoing clauses (3)(a) and (3)(b).
Subject
to the immediately succeeding paragraph, if any Net Cash Proceeds have not been applied as provided in clauses (3)(a), (3)(b) and (3)(c) of the preceding paragraph (the
"
Net Proceeds Offer
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Amount
") within the applicable time period or the last provision of this sentence, such Net Cash Proceeds shall be applied by the Issuer or such Restricted Subsidiary to make
an offer to purchase (the "
Net Proceeds Offer
") to all Holders and, to the extent required by the terms of any Pari Passu Indebtedness, to holders of
such Pari Passu Indebtedness, on a date not less than 30 nor more than 45 days following the date that triggered the Issuer's obligation to make such Net Proceeds Offer, from all Holders (and
holders of any such Pari Passu Indebtedness) on a pro rata basis based upon the respective outstanding aggregate principal amounts (or accreted value, as applicable) of the Exchange Notes and Pari
Passu Indebtedness on the date the Net Proceeds Offer is made, the maximum amount (or accreted value, as applicable) of Exchange Notes and Pari Passu Indebtedness that may be purchased with the Net
Proceeds Offer Amount at a price equal to 100% of the principal amount (or accreted value, as applicable) of the Exchange Notes and Pari Passu Indebtedness to be purchased, plus accrued and unpaid
interest thereon, if any, to the date of purchase;
provided
,
however
, that if at any time any non-cash
consideration received by the Issuer or any Restricted Subsidiary of the Issuer, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds
thereof shall be applied in accordance with this covenant. The Issuer will determine the maximum amount (or accreted value, as applicable) of Exchange Notes and Pari Passu Indebtedness that may be
purchased pursuant to any Net Proceeds Offer.
The
Issuer may make a Net Proceeds Offer at any time and from time to time in advance of its obligation to make a Net Proceeds Offer pursuant to the immediately preceding paragraph. The
Issuer may also defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $25.0 million resulting from one or more Asset Sales (at
which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $25.0 million, shall be applied as required pursuant to this paragraph). Upon completion of
each Net Proceeds Offer, the amount of unutilized Net Proceeds Offer Amount will be reset at zero.
In
the event of the transfer of substantially all (but not all) of the property and assets of the Issuer and its Restricted Subsidiaries as an entirety to a Person in a transaction
permitted under "Merger, Consolidation and Sale of Assets", which transaction does not constitute a Change of Control, the successor entity shall be deemed to have sold the properties and
assets of the Issuer and its Restricted Subsidiaries not so transferred for purposes of this covenant and shall comply with the provisions of this covenant with respect to such deemed sale as if it
were an Asset Sale. In addition, the fair market value of such properties and assets of the Issuer or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes
of this covenant.
Notwithstanding
the first two paragraphs of this covenant, the Issuer and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs
to the extent that:
(1) at
least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and
(2) such
Asset Sale is for fair market value;
provided
that any consideration not constituting Replacement Assets received by
the Issuer or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the
first two paragraphs of this covenant.
Each
Net Proceeds Offer will be sent to the record Holders as shown on the register of Holders within 25 days following the date triggering the Issuer obligation to make such Net
Proceeds Offer, with a copy to the Trustee, and shall comply with the procedures set forth in the Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Exchange
Notes in whole or in part in integral multiples of $1,000 in excess of $2,000 in exchange for cash. To the extent Holders properly tender Exchange Notes in an amount exceeding the pro rata portion of
the Net Proceeds
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Offer
Amount applicable to the Exchange Notes, the tendered Exchange Notes will be purchased on a pro rata basis (based on amounts tendered), subject to applicable DTC procedures with respect to
global Exchange Notes. A Net Proceeds Offer shall remain open for a period of at least 20 Business Days or such longer period as may be required by law.
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 such laws and regulations
are applicable in connection with the repurchase of Exchange Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with the "Asset
Sale" provisions of the Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Asset Sale"
provisions of the Indenture by virtue thereof.
Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
The Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary of the Issuer to:
(1) pay
dividends or make any other distributions on or in respect of its Capital Stock to the Issuer or any of its Restricted Subsidiaries;
(2) make
loans or advances or to pay any Indebtedness or other obligation owed to the Issuer or any other Restricted Subsidiary of the Issuer; or
(3) transfer
any of its property or assets to the Issuer or any other Restricted Subsidiary of the Issuer,
in
each case except for such encumbrances or restrictions existing under or by reason of:
(a) applicable
law, rule regulation, decree or order;
(b) the
Exchange Notes and the related Guarantees and the Indenture;
(c) customary
subletting and non-assignment provisions of any contract or any lease governing a leasehold interest of the Issuer or any Restricted Subsidiary of the Issuer;
(d) any
agreement or instrument (including those governing Indebtedness (including Acquired Indebtedness) or Capital Stock) of a Person acquired by the Issuer or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the properties or assets of the Person, or the Capital Stock of
the Person, so acquired;
(e) contractual
encumbrances or restrictions in effect on the Issue Date;
(f) the
Existing Credit Facilities and any related documentation or an agreement governing other Indebtedness permitted to be incurred under the Indenture;
provided
that, with respect to any agreement governing
such other Indebtedness, the provisions relating to such encumbrance or restriction, taken as a
whole, are no less favorable to the Issuer in any material respect as determined by the Board of Directors of the Issuer in its reasonable and good faith judgment than the provisions contained in the
Existing Credit Facilities or the Indenture as in effect on the Issue Date;
(g) restrictions
on the transfer of assets subject to any Lien permitted under the Indenture imposed by the holder of such Lien;
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(h) restrictions
imposed by any agreement to sell assets or Capital Stock permitted under the Indenture to any Person pending the closing of such sale;
(i) restrictions
imposed by agreements governing obligations of Foreign Restricted Subsidiaries which are permitted under the Indenture;
(j) restrictions
on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;
(k) customary
provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the
equity interests therein) entered into in the ordinary course of business;
(l) agreements
evidencing Indebtedness of a Restricted Subsidiary that is not a Guarantor that is permitted under the Indenture for so long as such Restricted Subsidiary is
not a Guarantor;
(m) customary
restrictions on leases, subleases, licenses or asset sale agreements otherwise permitted under the Indenture;
(n) customary
restrictions arising in connection with cash or other deposits in connection with Liens permitted under the Indenture;
(o) customary
restrictions contained in agreements with surety companies that waive or prohibit subrogation claims and/or prohibit parties to such agreements from collecting
obligations to the applicable surety company have been paid or satisfied, in each case after a claim is made upon such surety company; and
(p) any
encumbrances or restrictions imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, restructurings, replacements or
refinancings of those agreements, instruments or obligations referred to in clauses (b) and (d) through (o) above;
provided
,
however
, that
the provisions relating to such encumbrance or restriction contained in any such agreements, taken as a whole, are no less favorable to
the Issuer in any material respect as determined by the Board of Directors of the Issuer in their reasonable and good faith judgment than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clauses (b) and (d) through (m) above.
Nothing contained in this covenant shall prevent the Issuer or any of its Restricted Subsidiaries from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted by the covenant described under the caption "Limitation on Liens" or (2) restricting the sale or other disposition of property or assets of the
Issuer or any of its Restricted Subsidiaries that secure Indebtedness of the Issuer or any of its Restricted Subsidiaries.
Limitation on Preferred Stock of Restricted Subsidiaries
The Issuer will not permit any of its Restricted Subsidiaries that are not Guarantors to issue any Preferred Stock (other than to the Issuer or
to a Wholly Owned Restricted Subsidiary of the Issuer) or permit any Person (other than the Issuer or a Wholly Owned Restricted Subsidiary of the Issuer) to own any Preferred Stock of any Restricted
Subsidiary of the Issuer that is not a Guarantor.
Limitation on Liens
The Issuer will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit
or suffer to exist any Liens of any kind against or upon any property or assets of the Issuer or any of its Restricted Subsidiaries (other than Permitted Liens) (such Lien, the
"
Initial Lien
"), whether owned on the Issue Date or acquired after the Issue Date, or any
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proceeds
therefrom, or assign or otherwise convey any right to receive income or profits therefrom unless:
(1) in
the case of Liens securing Subordinated Indebtedness, the Exchange Notes or the Guarantees are secured by a Lien on such property, assets or proceeds that is senior
in priority to such Liens; and
(2) in
all other cases, the Exchange Notes or Guarantees, as the case may be, are equally and ratably secured.
Any
Lien created for the benefit of the Holders of the Exchange Notes pursuant to the preceding paragraph shall provide by its terms that such Lien shall be automatically and
unconditionally released and discharged upon the release and discharge of the Initial Lien.
For
purposes of determining compliance with this covenant, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens
described in clauses (1) through (36) of the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant but may be permitted in part under any combination
thereof and (B) in the event that a Lien securing an item of Indebtedness meets the criteria of one or more of the categories of permitted Liens described in clauses (1) through
(36) of the definition of "Permitted Liens" or pursuant to the first paragraph of this covenant, the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or
reclassify, such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will only be required to include the amount and type of such Lien
or such item of Indebtedness secured by such Lien in one of the clauses of the definition of
"Permitted Liens" and such Lien securing such item of Indebtedness will be treated as being incurred or existing pursuant to only one of such clauses or pursuant to the first paragraph hereof.
With
respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the incurrence of such Indebtedness, such Lien shall also be permitted to
secure any Increased Amount of such Indebtedness. The "
Increased Amount
" of any Indebtedness shall mean any increase in the amount of such Indebtedness
in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same
terms, the payment of dividends on preferred stock in the form of additional shares of preferred stock of the same class, accretion of original issue discount or liquidation preference and increases
in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in
subclause (7) of the first paragraph of the definition of "Indebtedness".
Merger, Consolidation and Sale of Assets
The Issuer will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary of the Issuer to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all
of the Issuer's assets (determined on a consolidated basis for the Issuer and the Issuer's Restricted Subsidiaries), whether as an entirety or substantially as an entirety, to any Person unless:
(1) either:
(a) the
Issuer shall be the surviving or continuing corporation; or
(b) the
Person (if other than the Issuer) formed by such consolidation or into which the Issuer is merged or the Person which acquires by sale, assignment, transfer, lease,
conveyance
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or
other disposition the properties and assets of the Issuer and of the Issuer's Restricted Subsidiaries substantially as an entirety (the "
Surviving
Entity
"):
(x) shall
be an entity organized or validly existing under the laws of the United States or any State thereof or the District of Columbia;
provided
that in the case where the Surviving Entity is not a corporation,
a co-obligor of the Exchange Notes is a corporation; and
(y) shall
expressly assume, by supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of the Exchange Notes and the performance of every covenant of the Exchange Notes and the Indenture on the part of the Issuer to
be performed or observed;
(2) immediately
after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Issuer or such Surviving Entity, as the case may be, (a) would be able to
incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of the covenant described under "Limitation on Incurrence of Additional Indebtedness" or (b) the
Consolidated Fixed Charge Coverage Ratio of the Issuer and its Restricted Subsidiaries would not be lower than it was immediately prior to such transaction;
(3) immediately
before and immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above, if applicable (including,
without limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no
Default or Event of Default shall have occurred or be continuing; and
(4) the
Issuer or the Surviving Entity shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the
applicable provisions of the Indenture and that all conditions precedent in the Indenture relating to such transaction have been satisfied.
For
purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or
assets of one or more Restricted Subsidiaries of the Issuer, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Issuer, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the Issuer.
The
Indenture provides that upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of the Issuer in accordance with the foregoing, in
which the Issuer is not the continuing corporation, the successor Person formed by such consolidation or into which the Issuer is merged or to which such conveyance, lease or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Indenture and the Exchange Notes with the same effect as if such surviving entity had been named as
such and all financial information and reports required by the Indenture shall be provided by and for such surviving entity.
Each
Guarantor (other than any Guarantor whose Guarantee is to be automatically released in accordance with the terms of its Guarantee and the Indenture in connection with any
transaction complying with the provisions of the covenant described under "Limitation on Asset Sales") will not,
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and
the Issuer will not cause or permit any Guarantor to consolidate with or merge with or into any Person other than the Issuer or any other Guarantor unless:
(1) the
entity formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, lease, conveyance or other disposition shall
have been made is an entity organized or existing under the laws of the United States or any State thereof or the District of Columbia;
(2) such
entity (if other than such Guarantor) assumes by supplemental indenture all of the obligations of the Guarantor on its Guarantee;
(3) immediately
after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and
(4) the
Guarantor or the surviving entity shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of the Indenture and
that all conditions precedent in the Indenture relating to such transaction have been satisfied.
Any
merger or consolidation of, or sale, assignment, transfer, lease, conveyance or other disposition of assets by, a Guarantor with the Issuer (with the Issuer being the surviving
entity in case of a merger of consolidation) or another Guarantor that is a Wholly Owned Restricted Subsidiary of the Issuer need only comply with clause (4) of the first paragraph of this
covenant.
Limitations on Transactions with Affiliates
The Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates involving
aggregate value in excess of $2.0 million (each an "
Affiliate Transaction
"), other than:
(a) Affiliate
Transactions permitted under the second succeeding paragraph below and
(b) Affiliate
Transactions on terms, taken as a whole, that are no less favorable to the Issuer or the relevant Restricted Subsidiary than those that might reasonably have
been obtained in a comparable transaction at such time on an arm's-length basis from a Person that is not an Affiliate of the Issuer or such Restricted Subsidiary.
If
any such Affiliate Transaction (or a series of related Affiliate Transactions which are similar or part of a common plan) (a) involves aggregate payments or other property with
a fair market value in excess of $10.0 million, the Issuer or such Restricted Subsidiary, as the case may be, shall file with the Trustee an Officers' Certificate certifying that such Affiliate
Transaction complies with this covenant and (b) involves aggregate payments or other property with a fair market value in excess of $20.0 million, the Issuer or such Restricted
Subsidiary, as the case may be, shall file with the Trustee a resolution of the Board of Directors of the Issuer or such Restricted Subsidiary, as the case may be, set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of
Directors of the Issuer or such Restricted Subsidiary.
The
restrictions set forth in the first paragraph of this covenant shall not apply to:
(1) indemnification,
employment, consultancy, advisory, services or separation agreements or arrangements and benefit plans or arrangements and any transactions contemplated
by any of the
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foregoing,
including the payment of compensation, fees and reimbursement of expenses to, and customary indemnities (including under customary insurance policies) and employee benefit and pension
expenses, in each case, in respect of or provided on behalf of, current or former directors, officers, consultants or employees of the Issuer or any Restricted Subsidiary (whether directly or
indirectly and including through any Person owned or controlled by any of such directors, officers or employees) as determined in good faith by the Issuer's Board of Directors or senior management;
(2) transactions
exclusively between or among the Issuer and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries (including any
entity that becomes a Restricted Subsidiary of the Issuer as a result of such transaction);
provided
such transactions are not otherwise prohibited by
the Indenture;
(3) (A)
any agreement or arrangement as in effect as of the Issue Date (or transactions pursuant thereto), (B) any other agreements or arrangements pursuant to or in
connection with the Transactions or (C) any amendment, modification or supplement to the agreements referenced in clause (A) or (B) above or any replacement thereof, so long as
the terms of such agreement or arrangement, as so amended, modified, supplemented or replaced, are not more disadvantageous to the Holders when taken as a whole in any material respect compared to the
applicable agreements or arrangements as in effect on the Issue Date or as described in this Offering Circular, as applicable, as determined in good faith by the Issuer;
(4) Restricted
Payments or Permitted Investments not prohibited by the Indenture;
(5) transactions
with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business or consistent with past
practice, which are fair to the Issuer or the relevant Restricted Subsidiary in the reasonable determination of the Board of Directors or the senior management of the Issuer or the relevant Restricted
Subsidiary, or are on terms no less favorable than those that could reasonably have been obtained at such time from an unaffiliated party;
(6) issuances
or sales of Capital Stock (other than Disqualified Capital Stock) of the Issuer or options, warrants or other rights to acquire such Capital Stock and the
granting of registration and other customary rights in connection therewith or any contribution to capital of the Issuer or any Restricted Subsidiary;
(7) transactions
in which the Issuer or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that
such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (b) of the first paragraph of this covenant;
(8) payments
to or the receipt of payments from, and the entry into and the consummation of transactions with, joint ventures (to the extent any such joint venture is only
an Affiliate as a result of Investments by the Issuer and the Restricted Subsidiaries in such joint venture) in the ordinary course of business to the extent otherwise permitted by the Indenture, so
long as such payments or transactions are on terms that are not materially less favorable to the Issuer or such Restricted Subsidiary, as the case may be, than those that could be obtained in a
comparable transaction at the time of such transaction;
(9) the
Transactions, in each case as disclosed in this Offering Circular, and the payment of all fees, expenses, bonuses and awards related thereto;
(10) transactions
with a Person that is an Affiliate of the Issuer solely because the Issuer or one of its Restricted Subsidiaries owns an equity interest in such Person;
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(11) the
pledge of Capital Stock of Unrestricted Subsidiaries or joint ventures to support the Indebtedness thereof;
(12) transactions
between the Issuer or any Restricted Subsidiary of the Issuer and any Person, a director of which is also a director of the Issuer;
provided
, that such director abstains from voting as a director of the
Issuer on any matter involving such other Person; or
(13) transactions
with a Person who is not an Affiliate immediately before the consummation of such transaction that becomes an Affiliate as a result of such transaction.
Additional Subsidiary Guarantees
If any existing or future Restricted Subsidiary of the Issuer shall guarantee any Indebtedness of the Issuer or a Guarantor under (i) a
Credit Facility or (ii) Capital Markets Indebtedness in an aggregate principal amount exceeding $100.0 million, then the Issuer shall cause such Restricted Subsidiary to:
(1) execute
and deliver to the Trustee a supplemental indenture substantially in the form set forth as an exhibit to the Indenture pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all of the Issuer's obligations under the Exchange Notes and the Indenture on the terms set forth in the Indenture; and
(2) deliver
to the Trustee an Officers' Certificate and an Opinion of Counsel that such supplemental indenture has been duly authorized, executed and delivered by such
Restricted Subsidiary and constitutes a legal, valid, binding and enforceable obligation of such Restricted Subsidiary.
Thereafter,
such Restricted Subsidiary shall be a Guarantor for all purposes of the Indenture until such Restricted Subsidiary is released from its Guarantee as provided in the
Indenture.
Conduct of Business
The Issuer will not, and will not permit any of its Restricted Subsidiaries to, engage in any businesses that are not the same, similar or
reasonably related, incidental, ancillary or complimentary to the businesses in which the Issuer and its Restricted Subsidiaries are engaged on the Issue Date.
Designation of Restricted and Unrestricted Subsidiaries
The Issuer may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair market value of all outstanding Investments owned by the Issuer and its Restricted Subsidiaries in the Subsidiary
designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the covenant
described above under the caption "Limitation on Restricted Payments" or under one or more clauses of the definition of Permitted Investments, as determined by the Issuer. The designation
will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Any
designation of a Subsidiary of the Issuer as an Unrestricted Subsidiary will be evidenced to the Trustee by an Officers' Certificate certifying that such designation complies with
the preceding conditions and was permitted by the covenant described above under the caption "Limitation on Restricted Payments". If, at any time, any Unrestricted Subsidiary would fail
to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary will
be deemed to be incurred by a Restricted Subsidiary of the Issuer as of such date and, if such Indebtedness is not permitted to be
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incurred
as of such date under the covenant described under the caption "Limitations on Incurrence of Additional Indebtedness", the Issuer will be in default of such covenant.
The
Issuer may at any time redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Issuer;
provided
that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Issuer of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only
be permitted if (1) such Indebtedness is permitted under the covenant described under the caption "Limitation on Incurrence of Additional Indebtedness", calculated on a pro forma
basis as if such designation had occurred at the beginning of the applicable reference period; and (2) no Default or Event of Default would be in existence following such designation. Any such
designation by the Issuer shall be evidenced to the Trustee by an Officers' Certificate certifying that such designation complies with the preceding conditions.
Reports to Holders
Notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise
report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, from and after the Issue Date, the Issuer
will furnish to the Trustee, within 15 days after the time periods specified below:
(1) within
90 days after the end of each fiscal year, all financial information (including audited financial statements) of the Issuer that would be required to be
contained in an annual report on Form 10-K, or any successor or comparable form, filed with the SEC, including a "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and a report on the annual financial statements by the Issuer's independent registered public accounting firm;
(2) within
45 days after the end of each of the first three fiscal quarters of each fiscal year, all financial information of the Issuer that would be required to be
contained in a quarterly report on Form 10-Q, or any successor or comparable form, filed with the SEC; and
(3) all
current reports to the extent relating to such event that would be required to be filed with the SEC on Form 8-K if the Issuer were required to file such
reports, in each case within the time periods specified in the SEC's rules and regulations;
in
each case, in a manner that complies in all material respects with the requirements specified in such form, except as described above or below and subject to exceptions consistent with the
presentation of information in the Offering Circular.
In
addition, to the extent not satisfied by the foregoing, the Issuer will agree that, for so long as any Exchange Notes are outstanding, it will furnish to Holders and to securities
analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
At
any time that any of the Issuer's Subsidiaries are Unrestricted Subsidiaries, then the annual and quarterly financial information required by the preceding paragraph will include a
reasonably detailed presentation, either on the face of the financial statements or in the Exchange Notes thereto, and in "Management's Discussion and Analysis of Financial Condition and Results of
Operations", of the financial condition and results of operations of the Issuer and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted
Subsidiaries of the Issuer.
Substantially concurrently with the furnishing or making such information available to the Trustee pursuant to this covenant, the Issuer shall also post copies of such information required by this
covenant on a website (which may be nonpublic and may be maintained by the Issuer or a third party) to which access will be given to Holders, prospective investors in the Exchange Notes (which
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prospective
investors shall be limited to "qualified institutional buyers" within the meaning of Rule 144A of the Securities Act or non-U.S. persons (as defined in Regulation S under the
Securities Act) that certify their status as such to the reasonable satisfaction of the Issuer), and securities analysts and market making financial institutions that are reasonably satisfactory to
the Issuer.
The
Trustee shall have no obligation to determine if and when the Issuer's financial statements or reports are publicly available and accessible electronically or appears on any website
under the Indenture, and shall have no obligation to participate in any conference calls. Delivery of these reports, information and documents to the Trustee is for informational purposes only and the
Trustee's receipt of them will not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates).
The
Issuer will also hold quarterly conference calls for the Holders of Exchange Notes to discuss financial information for the previous quarter (it being understood that such quarterly
conference call may be the same conference call as with the Issuer's equity investors and analysts). The conference call will be following the last day of each fiscal quarter of the Issuer and not
later than 15 Business Days from the time that the Issuer distributes the financial information as set forth in the fourth preceding paragraph. No fewer than two days prior to the conference call, the
Issuer will issue a press release announcing the time and date of such conference call and providing instructions for Holders, securities analysts and prospective investors to obtain access to such
call provided however that such press release can be distributed solely to certified users of the website described in the immediately preceding paragraph.
Notwithstanding
anything to the contrary set forth above, if the Issuer has furnished or filed the reports described in the preceding paragraphs with respect to the Issuer with the SEC
via EDGAR, the Issuer shall be deemed to be in compliance with the provisions of this covenant.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "
Events of Default
":
(1) the
failure to pay interest on any Exchange Notes when the same becomes due and payable and the default continues for a period of 30 days;
(2) the
failure to pay the principal on any Exchange Notes, when such principal becomes due and payable, at maturity, upon redemption or otherwise (including the failure to
make a payment to purchase Exchange Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer) on the date specified for such payment in the applicable offer to purchase;
(3) a
default in the observance or performance of any other covenants or agreements which default continues for a period of 60 days after the Issuer receives written
notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Exchange Notes with a copy
to the Trustee (except, in the case of a default with respect to the covenant described under "Certain CovenantsMerger, Consolidation and Sale of Assets", which will
constitute an Event of Default with such notice requirement but without such passage of time requirement);
(4) the
failure to pay at final stated maturity (giving effect to any applicable grace periods and any extensions thereof) the principal amount of any Indebtedness of the
Issuer or any Restricted Subsidiary of the Issuer or the acceleration of the final stated maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within
20 days of receipt by the Issuer or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal amount of such Indebtedness, together with the principal amount of
any other such Indebtedness in default for failure to pay principal at final stated maturity or which has been
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accelerated
(in each case with respect to which the 20-day period described above has passed), aggregates $50.0 million or more at any time; provided that this clause (4) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(5) one
or more final judgments in an aggregate amount of $50.0 million or more (net of any amounts which are covered by enforceable insurance policies issued by
solvent carriers, to the extent such coverage has not been denied) shall have been rendered against the Issuer or any of its Significant Subsidiaries and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become final and non-appealable;
(6) certain
events of bankruptcy affecting the Issuer or any of its Significant Subsidiaries; or
(7) any
Guarantee of a Significant Subsidiary ceases to be in full force and effect or any Guarantee of a Significant Subsidiary is declared to be null and void and
unenforceable or any Guarantee of a Significant Subsidiary is found to be invalid or any Guarantor that is a Significant Subsidiary denies its liability under its Guarantee (other than by reason of
release of a Guarantor in accordance with the terms of the Indenture).
If
an Event of Default (other than an Event of Default specified in clause (6) above with respect to the Issuer) shall occur and be continuing, the Trustee or the Holders of at
least 25% in principal amount of outstanding Exchange Notes may declare the principal of and accrued interest on all the Exchange Notes to be due and payable by notice in writing to the Issuer and the
Trustee specifying the applicable Event of Default and that it is a "notice of acceleration", and the same shall become immediately due and payable.
If
an Event of Default specified in clause (6) above with respect to the Issuer occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid
interest on all of the outstanding Exchange Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.
The
Indenture provides that, at any time after a declaration of acceleration with respect to the Exchange Notes as described in the preceding paragraphs, the Holders of a majority in
aggregate
principal amount of the Exchange Notes then outstanding may rescind and cancel such declaration and its consequences:
(1) if
the rescission would not conflict with any judgment or decree;
(2) if
all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration;
(3) to
the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid;
(4) if
the Issuer has paid the Trustee compensation and reimbursed the Trustee for its expenses, disbursements and advances; and
(5) in
the event of the cure or waiver of an Event of Default of the type described in clause (6) of the description above of Events of Default, the Trustee shall
have received an Officers' Certificate and an Opinion of Counsel that such Event of Default has been cured or waived.
No
such rescission shall affect any subsequent Default or impair any right consequent thereto.
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The Holders of a majority in principal amount of the Exchange Notes may waive any existing Default or Event of Default under the Indenture, and its consequences,
except a default in the payment of the principal of or interest on any Exchange Notes.
Holders
of the Exchange Notes may not enforce the Indenture or the Exchange Notes except as provided in the Indenture. Subject to the provisions of the Indenture relating to the duties
of the Trustee, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request, order or direction of any of the Holders, unless such Holders have
offered to the Trustee security or indemnity satisfactory to it against loss, cost, liability and expense. Subject to all provisions of the Indenture and applicable law, the Holders of a majority in
aggregate principal amount of the then outstanding Exchange Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee.
Under
the Indenture, the Issuer is required to provide an Officers' Certificate to the Trustee promptly upon any such officer obtaining knowledge of any Default or Event of Default
(
provided
that such officers shall provide such certification at least annually whether or not they know of any Default or
Event of Default) that has occurred and, if applicable, describe such Default or Event of Default and the status thereof.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Issuer may, at its option and at any time, elect to have its Obligations and the Obligations of the Guarantors discharged with respect to
the outstanding Exchange Notes ("
Legal Defeasance
"). Such Legal Defeasance means that the Issuer shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Exchange Notes, except for:
(1) the
rights of Holders to receive payments in respect of the principal of, premium, if any, and interest on the Exchange Notes when such payments are due;
(2) the
Issuer's Obligations with respect to the Exchange Notes concerning issuing temporary Exchange Notes, registration of Exchange Notes, mutilated, destroyed, lost or
stolen Exchange Notes and the maintenance of an office or agency for payments;
(3) the
rights, powers, trust duties and immunities of the Trustee and the Issuer's Obligations in connection therewith; and
(4) the
Legal Defeasance provisions of the Indenture.
In
addition, the Issuer may, at its option and at any time, elect to have the obligations of the Issuer released with respect to certain covenants that are described in the Indenture
("
Covenant Defeasance
") and thereafter any omission to comply with such Obligations shall not constitute a Default or Event of Default with respect to
the Exchange Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events) described under
"Events of Default" will no longer constitute an Event of Default with respect to the Exchange Notes.
In
order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the
Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders cash, non-callable U.S. government obligations, rated AAA or better by S&P
and Aaa by Moody's at the date deposited with the Trustee, or a combination thereof (or, in each case, if such Rating Agency ceases to rate such securities, the equivalent investment grade credit
rating from any Rating Agency selected by the Issuer as a replacement Rating Agency), in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public
accountants, investment bank or appraisal firm delivered to the Trustee, to pay the principal of, premium, if
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any,
and interest on the Exchange Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be;
(2) in
the case of Legal Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:
(a) the
Issuer has received from, or there has been published by, the Internal Revenue Service a ruling; or
(b) since
the date of the Indenture, there has been a change in the applicable U.S. federal income tax law,
in
either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders and Beneficial Holders will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(3) in
the case of Covenant Defeasance, the Issuer shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders
and Beneficial Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;
(4) no
Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or an Event of Default resulting from transaction
occurring contemporaneously with the borrowing of funds, or the borrowing of funds, to be applied to such deposit and the grant of any Lien securing such borrowings);
(5) such
Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, the Indenture (other than a Default or an Event
of Default resulting from transaction occurring contemporaneously with the borrowing of funds, or the borrowing of funds, to be applied to such deposit and the grant of any Lien securing such
borrowings) or any other material agreement or instrument (including, without limitation, the Existing Credit Facilities) to which the Issuer or any of its Subsidiaries is a party or by which the
Issuer or any of its Subsidiaries is bound;
(6) the
Issuer shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Issuer with the intent of preferring the Holders
over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others;
(7) the
Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to
the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with;
(8) the
Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that assuming no intervening bankruptcy of the Issuer between the date of deposit and
the 124th day following the date of deposit and that no Holder is an insider of the Issuer, after the 124th day following the date of deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; and
(9) certain
other customary conditions precedent are satisfied.
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SATISFACTION AND DISCHARGE
The Indenture will be discharged and will cease to be of further effect (except as to surviving rights or registration of transfer or exchange
of the Exchange Notes, as expressly provided for in the Indenture) as to all outstanding Exchange Notes when:
(1) either:
(a) all
the Exchange Notes theretofore authenticated and delivered (except lost, stolen or destroyed Exchange Notes that have been replaced or paid and Exchange Notes for
whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the
Trustee for cancellation; or
(b) all
Exchange 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), 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 Exchange Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Exchange Notes to the date of maturity or redemption, as the
case may be, together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;
(2) the
Issuer has paid all other sums payable under the Indenture by the Issuer; and
(3) the
Issuer, upon request for written acknowledgement of such satisfaction and discharge, has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent under the Indenture relating to the satisfaction and discharge of the Indenture have been complied with.
In
the case of satisfaction and discharge, upon any redemption that requires the payment of the Applicable Premium, the amount deposited with the Trustee shall be sufficient for purposes
of clause (1)(b) above and the Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of three Business Days prior to the date of
such deposit, with any deficit as of the date of redemption (any such amount, the "
Applicable Premium Deficit
") only required to be deposited with the
Trustee on or prior to the date of redemption. Any Applicable Premium Deficit shall be set forth in an Officers' Certificate delivered to the Trustee simultaneously
with the deposit of such Applicable Premium Deficit that confirms that such Applicable Premium Deficit shall be applied toward such redemption.
MODIFICATION OF THE INDENTURE
From time to time, the Issuer, the Guarantors and the Trustee, without the consent of the Holders, may amend the Indenture for certain specified
purposes, including curing ambiguities, defects or inconsistencies, so long as such change does not adversely affect the rights of any of the Holders in any material respect. Any supplemental
indenture for the purpose of permitting any existing or future Restricted Subsidiary of the Issuer to provide a Guarantee shall be signed by the Company, the Restricted Subsidiary providing the
Guarantee, and the Trustee. In executing a supplemental indenture, the Trustee will be entitled to conclusively rely on such evidence as it deems appropriate, including, without limitation, an Opinion
of Counsel and an Officers' Certificate stating that all conditions precedent have been complied with, the execution of the supplemental indenture is authorized or permitted by the Indenture and
constitutes the legal, valid and binding obligation of the Issuer and the Guarantors enforceable against them in accordance with its terms. Other modifications and amendments of the Indenture may be
made with the consent of the Holders of a majority in aggregate
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principal
amount of the then outstanding Exchange Notes issued under the Indenture, except that, without the consent of each Holder affected thereby, no amendment may:
(1) reduce
the amount of Exchange Notes whose Holders must consent to an amendment;
(2) reduce
the rate of, or change the time for payment of, interest, including defaulted interest, on any Exchange Notes;
(3) reduce
the principal of, or change the fixed maturity of, any Exchange Notes, or change the date on which any Exchange Notes may be subject to redemption or reduce the
redemption price therefor;
(4) make
any Exchange Notes payable in money other than that stated in the Exchange Notes;
(5) make
any change in provisions of the Indenture protecting the right of each Holder to receive payment of principal of and interest on such note on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders of a majority in aggregate principal amount of Exchange Notes outstanding to waive Defaults or Events of Default;
(6) after
the Issuer's obligation to purchase Exchange Notes arises thereunder, amend, change or modify in any material respect the obligation of the Issuer to make and
consummate a Change of Control Offer in the event of a Change of Control or make and consummate a Net Proceeds Offer with respect to any Asset Sale that has been consummated or, after such Change of
Control has occurred or such Asset Sale has been consummated, modify any of the provisions or definitions with respect thereto;
(7) modify
or change any provision of the Indenture or the related definitions affecting the ranking of the Exchange Notes or any Guarantee in a manner which adversely
affects the Holders;
(8) release
any Guarantor that is a Significant Subsidiary from any of its obligations under its Guarantee or the Indenture otherwise than in accordance with the terms of
the Indenture; or
(9) modify
or change the amendment provisions of the Exchange Notes or the Indenture.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Issuer, as such, will have any liability for any obligations of the Issuer
under the Exchange Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Exchange Notes by accepting a note waives and
releases all such liability. The waiver and release are part of the consideration for issuance of the Exchange Notes. The waiver may not be effective to waive liabilities under the U.S. federal
securities laws.
GOVERNING LAW; JURY TRIAL WAIVER
The Indenture, the Exchange Notes and the Guarantees will be governed by, and construed in accordance with, the laws of the State of New York.
The Indenture provides that the Issuer, the Guarantors and the Trustee, and each holder of a note by its acceptance thereof, irrevocably waives, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or relating to the Indenture, the Exchange Notes, the Guarantees, or any transaction contemplated thereby.
THE TRUSTEE
Except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the Indenture.
During the existence of an Event of Default, the Trustee will
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exercise
such rights and powers vested in it by the Indenture, and use the same degree of care and skill in its exercise as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs. The Trustee in each of its capacities assumes no responsibility for the accuracy or completeness of the information concerning the Issuer, its affiliates or any other party
contained in this document or the related documents or for any failure by the Issuer or any other party to disclose events that may have occurred and may affect the significance or accuracy of such
information. The Trustee shall not be responsible for determining whether any Change of Control or Asset Sale has occurred and whether any Change of Control Offer or Net Proceeds Offer with respect to
the Exchange Notes is required. Neither the trustee nor any paying agent shall be responsible for monitoring our rating status, making any request upon any rating agency, or determining whether any
rating event with respect to the Exchange Notes has occurred.
The
Indenture contains certain limitations in the Trust Indenture Act on the rights of the Trustee, should it become a creditor of the Issuer, to obtain payments of claims in certain
cases or to realize on certain property received in respect of any such claim as security or otherwise. From time to time, the Issuer and the Guarantors may conduct other banking transactions,
including lending transactions, or maintain deposit accounts with the trustee in the ordinary course of business. The Trustee will be
permitted to engage in other transactions;
provided
that if the Trustee acquires any conflicting interest as defined in the Trust Indenture Act, it must
eliminate such conflict or resign as provided in the Indenture.
The
transferor of any note shall provide or cause to be provided to the trustee all information necessary to allow the trustee to comply with any applicable tax reporting obligations,
including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The trustee may rely on information provided to it and shall have no responsibility
to verify or ensure the accuracy of such information. In connection with any proposed exchange of a Certificated Note for a Global Note, the Issuer or DTC shall be required to provide or cause to be
provided to the trustee all information necessary to allow the trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under
Internal Revenue Code Section 6045. The trustee may rely on information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the Indenture. Reference is made to the Indenture for the full definition
of all such terms, as well as any other terms used herein for which no definition is provided.
"
Acquired Indebtedness
" means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Issuer or at the time it merges or consolidates with or into the Issuer or any of its Restricted Subsidiaries or that is assumed in connection with the acquisition of assets from
such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Issuer or such acquisition,
merger or consolidation.
"
Acquisition
" means the acquisition of IPC and its subsidiaries pursuant to the Agreement and Plan of Merger.
"
Additional Interest
" means all additional interest then owing pursuant to the Registration Rights Agreement.
"
Affiliate
" means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified Person. The term "control", means the possession, directly or indirectly, of the power to
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direct
or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative of the foregoing.
"
Agreement and Plan of Merger
" means the Share Purchase Agreement, dated as of February 22, 2017, among Tennant Company, Ambienta
SGR S.p.A., Frederico De Angelis, Pietro Corsano Annibaldi, Antonio Perosa and Giulio Vernazza.
"
Applicable Calculation Date
" means the applicable date of the transaction giving rise to the need to calculate Consolidated EBITDA,
Consolidated Fixed Charge Coverage Ratio, Consolidated Debt Ratio and Consolidated Secured Debt Ratio.
"
Applicable Measurement Period
" means the most recently completed four consecutive fiscal quarters of the Issuer immediately preceding the
Applicable Calculation Date for which internal financial statements are available.
"
Asset Acquisition
" means (1) an Investment by the Issuer or any Restricted Subsidiary of the Issuer in any other Person pursuant
to which such Person shall become a Restricted Subsidiary of the Issuer or any Restricted Subsidiary of the Issuer, or shall be merged with or into the Issuer or any Restricted Subsidiary of the
Issuer, or (2) the acquisition by the Issuer or any Restricted Subsidiary of the Issuer of the assets of any Person (other than a Restricted Subsidiary of the Issuer) that constitute all or
substantially all of the assets of such Person or comprises any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of
business.
"
Asset Sale
" means any direct or indirect sale, issuance, conveyance, transfer, lease, assignment or other transfer for value by the
Issuer or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Issuer or a Restricted Subsidiary of the Issuer of: (1) any Capital
Stock of any Restricted Subsidiary of the Issuer (other than directors' qualifying shares and shares issued to foreign nationals as required under applicable law); or (2) any other property or
assets of the Issuer or any Restricted Subsidiary of the Issuer other than in the ordinary course of business;
provided
,
however
, that Asset Sales or other
dispositions shall not include:
(a) [reserved];
(b) the
sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of the Issuer as permitted under the covenant described under
"Certain CovenantsMerger, Consolidation and Sale of Assets";
(c) the
sale or other disposition of inventory in the ordinary course of business;
(d) the
sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or
collection thereof;
(e) disposals
or replacements of obsolete, worn-out or no longer useful equipment or machinery in the ordinary course of business;
(f) the
sale or other disposition of cash or Cash Equivalents;
(g) any
Restricted Payment that is not prohibited by the covenant described under "Certain CovenantsLimitation on Restricted Payments" or any
Restricted Payment that constitutes a Permitted Investment or foreclosures, condemnation, expropriation, forced dispositions or any similar action with respect to assets or the granting of any
Permitted Lien;
(h) the
abandonment of Intellectual Property Rights no longer used or useful in the conduct of the business of the Issuer or any of its Subsidiaries;
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(i) licenses,
sublicenses, leases or subleases granted to others (including licenses of Intellectual Property Rights), and terminations thereof not interfering in any
material respect with the business of the Issuer and its Subsidiaries;
(j) Dispositions
of property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property or
(ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;
(k) the
surrender or waiver of contractual rights and settlement or waiver of contractual or litigation claims by the Issuer or any Subsidiary in the ordinary course of
business;
(l) the
unwinding of any Interest Swap Obligation or Currency Agreements pursuant to its terms;
(m) Dispositions
of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth
in joint venture arrangements and similar binding arrangements;
(n) Dispositions
of property or assets subject to a Recovery Event;
(o) Dispositions
made in connection with the consummation of the Acquisition that are necessary or advisable to comply with applicable law or to avoid any impediment to the
consummation of the Acquisition under any applicable law; and
(p) the
disposition of property or assets for an aggregate fair market value not to exceed 10.0% of Consolidated Total Assets in any calendar year.
"
Beneficial Holders
" means any person who holds a beneficial interest in Exchange Notes as shown on the books of
the Depository or a participant of such Depository.
"
Board of Directors
" means, as to any Person, the board of directors of such Person or any duly authorized committee thereof or, with
respect to any Person that is not a corporation, the Person or Persons performing corresponding functions.
"
Board Resolution
" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such
Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"
Business Day
" means any day other than a Saturday, Sunday or other day on which the Trustee or commercial banks are authorized to close
under the laws of, or are in fact closed in, the State of New York or the place of payment.
"
Capital Markets Indebtedness
" means any Indebtedness consisting of bonds, debentures, Exchange Notes or other similar debt securities
issued in (a) a public offering registered under the Securities Act, (b) a private placement to institutional investors that is resold in accordance with Rule 144A or
Regulation S under the Securities Act, whether or not it includes registration rights entitling the holders of such debt securities to registration thereof with the SEC or (c) a private
placement to institutional accredited investors.
"
Capital Stock
" means:
(1) with
respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of
corporate stock, including each class of Common Stock and Preferred Stock of such Person; and
(2) with
respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person.
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"
Capitalized Lease Obligation
" means, as to any Person, the obligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such
date, determined in accordance with GAAP.
"
Cash Equivalents
" means:
(1) United
States dollars, Canadian dollars, Euros, British Pounds or any national currency of any participating member state of the European Union or such local currencies
held by the Issuer and its Subsidiaries from time to time in the ordinary course of business;
(2) marketable
direct obligations issued by, or unconditionally guaranteed by, the United States;
(3) marketable
direct obligations issued by any agency of the United States and backed by the full faith and credit of the United States, in each case maturing within one
year from the date of acquisition thereof;
(4) marketable
direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody's (or, in each case, if such
Rating Agency ceases to rate such securities, from any Rating Agency selected by the Issuer as a replacement Rating Agency);
(5) commercial
paper or corporate bonds maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-2
from S&P or at least P-2 from Moody's (or, in each case, if such Rating Agency ceases to rate such securities, the equivalent investment grade credit rating from any Rating Agency selected by the
Issuer as a replacement Rating Agency);
(6) certificates
of deposit or bankers' acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than
$250.0 million;
(7) repurchase
obligations with a term of not more than 30 days for underlying securities of the types described in clause (2) above entered into with any bank
meeting the qualifications specified in clause (6) above;
(8) securities
issued or directly and fully guaranteed or insured by any state of the United States of America or any agency, subdivision or instrumentality thereof (and
that at the time of acquisition have an investment grade rating from S&P or Moody's (or, in each case, if such Rating Agency ceases to rate such securities, the equivalent investment grade credit
rating from any Rating Agency selected by the Issuer as a replacement Rating Agency)) having maturities of not more than two years after the date of acquisition;
(9) marketable
short term money market and similar securities having the highest rating obtainable from S&P or Moody's (or, in each case, if such Rating Agency ceases to
rate such securities, any Rating Agency selected by the Issuer as a replacement Rating Agency) at the time of acquisition and in each case maturing within two years after the date of acquisition;
(10) Investments
in money market funds that invest substantially all their assets in securities of the types described in clauses (1) through (9) above; and
(11) Foreign
Cash Equivalents.
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"
Change of Control
" means the occurrence of one or more of the following events:
(1) any
sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Issuer to any
Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a "
Group
"), together with any Affiliates thereof (whether
or not otherwise in compliance with the provisions of the Indenture); or
(2) the
approval by the holders of Capital Stock of the Issuer of any plan or proposal for the liquidation or dissolution of the Issuer (whether or not otherwise in
compliance with the provisions of the Indenture); or
(3) any
Person or Group shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinary voting
power represented by the issued and outstanding Capital Stock of the Issuer.
"
Code
" means the Internal Revenue Code of 1986, as amended from time to time.
"
Common Stock
" of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and
whether voting or non-voting) of such Person's common stock, and includes, without limitation, all series and classes of such common stock.
"
Consolidated Debt Ratio
" as of any date of determination means, the ratio of (1) Consolidated Total Indebtedness of the Issuer and
its Restricted Subsidiaries as of the end of the Applicable Measurement Period to (2) the Issuer's Consolidated EBITDA for the Applicable Measurement Period, in each case with such
pro forma
adjustments to Consolidated Total Indebtedness and Consolidated EBITDA as are appropriate and consistent with the
pro
forma
adjustment provisions set forth in the definition of "Consolidated Fixed Charge Coverage Ratio".
"
Consolidated EBITDA
" means, for any period, for the Issuer and its Restricted Subsidiaries on a consolidated basis, an amount equal to
Consolidated Net Income plus, without duplication and to the extent deducted from revenues in determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii) expense for
taxes paid or accrued, (iii) depreciation, (iv) amortization, (v) demonstrable cost savings and cost synergies (in each case, net of continued associated expenses) relating to the
Acquisition that, as of the date of calculation with respect to such period, are anticipated by the Issuer in good faith to be realized within 18 months following the Acquisition, net of the
amount of any such cost savings and cost synergies otherwise included, or added back, pursuant to this definition, provided that (a) such cost savings and cost synergies shall be set forth on a
certificate delivered to the Trustee from the Issuer's chief financial officer that outlines the specific actions taken or to be taken and the net cost savings and cost synergies achieved or to be
achieved from each such action and (b) if any cost
savings or cost synergies included in any pro forma calculations based on the anticipation that such cost synergies or cost savings will be achieved by such date shall at any time cease to be
reasonably anticipated by the Issuer to be so achieved, then on and after such time pro forma calculations required to be made under the Indenture shall not reflect such cost synergies or cost
savings, all determined in accordance with GAAP for such period; provided, further that the aggregate amount of such cost savings and cost synergies under this clause (v) in any four fiscal
quarter period shall not exceed ten percent (10%) of Consolidated EBITDA for such four fiscal quarter period (calculated before giving effect to any addbacks and adjustments in this
clause (v)), (vi) one-time non-recurring fees, expenses, costs and charges incurred or paid by the Issuer or any Restricted Subsidiary prior to the closing of, or during the
18 month period immediately following the closing of the Acquisition arising in respect of the Acquisition, net of the amount of any such fees, expenses, costs and charges otherwise included,
or added back, pursuant to this definition, provided that the aggregate amount of such fees, expenses, costs and charges under this clause (vi) shall not exceed $25.0 million,
(vii) all unusual, nonrecurring or extraordinary non-cash losses, charges or expenses for such period (including to the extent related to impairment of goodwill and including the amortization
of the inventory step-up
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acquired
in the Acquisition pursuant to purchase accounting), (viii) cash restructuring charges of not more than $7.5 million for any period of four consecutive fiscal quarters and
(ix) non-cash expenses related to stock based compensation,
minus
, to the extent included in Consolidated Net
Income, (x) interest income and (y) all unusual, nonrecurring or extraordinary non-cash gains and income, all calculated for the Issuer and its Restricted Subsidiaries in accordance with
GAAP on a consolidated basis.
"
Consolidated Fixed Charge Coverage Ratio
" means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the
Applicable Measurement Period to Consolidated Fixed Charges for the Applicable Measurement 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:
(1) the
incurrence or repayment of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the
ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Applicable Measurement Period or at any time subsequent to the last day of the
Applicable Measurement Period and on or prior to the Applicable Calculation 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 Applicable Measurement Period; and
(2) 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
Indebtedness and also including any Consolidated EBITDA (including any
pro forma
expense and cost reductions calculated on a basis consistent with
Regulation S-X promulgated under the Exchange Act attributable to the assets that are the subject of the Asset Acquisition or asset sale during the Applicable Measurement Period) occurring
during the Applicable Measurement Period or at any time subsequent to the last day of the Applicable Measurement Period and on or prior to the Applicable Calculation Date, as if such asset sale or
Asset Acquisition (including the incurrence or assumption of any such Acquired Indebtedness) occurred on the first day of the Applicable Measurement Period. If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any
Restricted Subsidiary of such Person had directly incurred or otherwise assumed such other Indebtedness that was so guaranteed.
Furthermore,
in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of the Consolidated Fixed Charge Coverage Ratio:
(1) interest
on outstanding Indebtedness determined on a fluctuating basis as of the Applicable Calculation Date and which will continue to be so determined thereafter shall
be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Applicable Calculation Date; and
(2) notwithstanding
clause (1) of this paragraph, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements
relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.
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"
Consolidated Fixed Charges
" means, with respect to any Person for any period, the sum, without duplication, of:
(1) Consolidated
Interest Expense;
plus
(2) all
cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of any Restricted Subsidiary;
plus
(3) all
cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Capital Stock.
"
Consolidated Interest Expense
" means, with respect to any Person for any period, the sum of, without duplication:
(1) the
aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP,
including, without limitation: (a) any amortization of debt discount and amortization or write off of deferred financing costs; (b) the net costs under Interest Swap Obligations;
(c) all capitalized interest; and (d) the interest portion of any deferred payment obligation; and
(2) the
interest component of Capitalized Lease Obligations paid and/or scheduled to be paid by such Person and its Restricted Subsidiaries during such period as determined
on a consolidated basis in accordance with GAAP.
"
Consolidated Net Income
" means, for any period, for the Issuer and its Restricted Subsidiaries on a consolidated basis, net income (or
loss) for such period;
provided
that Consolidated Net Income shall exclude:
(a) extraordinary
gains and extraordinary losses for such period,
(b) cash
and non-cash losses, charges and expenses related to termination of the Tennant Company Pension Plan in an aggregate amount not to exceed $10.0 million
during the term of the Indenture and incurred or paid by the Issuer or any Restricted Subsidiary during the 18 month period immediately following the Issue Date,
(c) solely
for the purpose of determining the amount available for Restricted Payments under clause (iii)(w) of the first paragraph of the covenant described under
"Certain CovenantsLimitation on Restricted Payments", any net income (loss) of any Restricted Subsidiary (other than Guarantors) if such Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Issuer or a Guarantor by operation of the
terms of such Restricted Subsidiary's charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or
regulation applicable to such Restricted Subsidiary or its shareholders (other than restrictions that have been waived or otherwise released), except that the Issuer's equity in the net income of any
such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents actually distributed or that could have been
distributed by such Restricted Subsidiary to the Issuer or another Restricted Subsidiary as a dividend or other distribution (subject in the case of a dividend to another Restricted Subsidiary, to the
limitation contained in this clause); and
(d) any
income (or loss) for such period of any Person if such Person is not a Subsidiary, except that the Issuer's equity in the net income of any such Person for such
period shall be included in Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Issuer or a Subsidiary as a dividend or other
distribution.
"
Consolidated Secured Debt Ratio
" as of any date of determination means, the ratio of (1) Consolidated Total Indebtedness of the
Issuer and its Restricted Subsidiaries that is secured by
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Liens
as of the end of the Applicable Measurement Period to (2) the Issuer's Consolidated EBITDA for the Applicable Measurement Period, in each case with such
pro
forma
adjustments to Consolidated Total Indebtedness and Consolidated EBITDA as are appropriate and consistent with the
pro
forma
adjustment provisions set forth in the definition of "Consolidated Fixed Charge Coverage Ratio".
"
Consolidated Total Assets
" means the total consolidated assets of the Issuer and its Restricted Subsidiaries, as shown on the most recent
consolidated balance sheet of the Issuer and its Restricted Subsidiaries.
"
Consolidated Total Indebtedness
" means, as at any date of determination, an amount equal to the sum of (1) the aggregate amount of
all outstanding Indebtedness of the Issuer and its Restricted Subsidiaries on a consolidated basis consisting of Indebtedness for borrowed money, obligations in respect of purchase money Indebtedness
and Capitalized Lease Obligations and debt obligations evidenced by promissory Exchange Notes and similar instruments; (2) all direct or contingent obligations arising under letters of credit
(including standby and commercial), bankers' acceptances, bank guaranties and similar instruments; (3) all obligations in respect of the deferred purchase price of property or services (other
than trade accounts payable in the ordinary course of business) solely to the extent such obligation is evidenced by a note or similar instrument and such obligation is included as a liability on the
balance sheet of the Issuer and its Subsidiaries in accordance with GAAP; (4) all Guarantees with respect to Indebtedness of the types specified in clauses (1) through (3) above
of another Person; and (5) the aggregate amount of all outstanding Disqualified Capital Stock of the Issuer and all Preferred Stock of its Restricted Subsidiaries on a consolidated basis, with
the amount of such Disqualified
Capital Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences and maximum fixed repurchase prices, in each case determined on a
consolidated basis in accordance with GAAP. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock or Preferred Stock that does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capital Stock or Preferred Stock as if such Disqualified Capital Stock or Preferred Stock were purchased on any date on which
Consolidated Total Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock
or Preferred Stock, such fair market value shall be determined reasonably and in good faith by the Issuer.
"
Credit Facilities
" means one or more debt facilities, including the Existing Credit Facilities, or other financing arrangements
(including, without limitation, commercial paper facilities or indentures) providing for revolving credit loans, term loans, receivables financing, bankers acceptances, letters of credit, debt
securities or other indebtedness, including any Exchange Notes, mortgages, guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments,
supplements, modifications, extensions, renewals, restatements, refundings, replacements or refinancings thereof and any indentures or credit facilities or commercial paper facilities that replace,
refund or refinance any part of the loans, Exchange Notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that
increases the amount permitted to be borrowed thereunder or alters the maturity thereof, whether or not by the same or any other agent, investor, lender or group of lenders (whether or not such added
or substituted parties are banks or other institutional lenders), in each case, whether or not any such amendment, supplement, modification, extension, renewal, restatement, refunding, replacement or
refinancing occurs simultaneously with the termination or repayment of a prior Credit Facility.
"
Currency Agreement
" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to
protect the Issuer or any Restricted Subsidiary of the Issuer against fluctuations in currency values.
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"
Default
" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an
Event of Default.
"
Depository
" means The Depository Trust Company and such other Person as is designated in writing by the Issuer eligible to act as a
clearing agency pursuant the Exchange Act to act as depository in respect of the Exchange Notes.
"
Designated Non-Cash Consideration
" means the Fair Market Value of non-cash consideration received by the Issuer or one of its Restricted
Subsidiaries 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 Cash Equivalents received in connection with a subsequent sale of such Designated Non-Cash Consideration.
"
Disposition
" or "
Dispose
" means the sale, transfer, license, lease or other disposition
of any property by the Issuer, any Guarantor or any Subsidiary, including any Sale and Leaseback Transaction and any sale, assignment, transfer or other disposal, with or without recourse, of any
Exchange Notes or accounts receivable or any rights and claims associated therewith, but excluding any Recovery Event.
"
Disqualified Capital Stock
" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event which would constitute a Change of Control), matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except, in each case, upon the occurrence of a Change of Control)
on or prior to the final maturity date of the Exchange Notes;
provided
,
however
, only the portion of
Capital Stock which is so redeemable or repurchasable prior to such date will be deemed to be Disqualified Capital Stock.
"
Exchange Act
" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.
"
Existing Credit Facilities
" means the credit agreement dated as of April 4, 2017 by and among the Issuer, the subsidiary borrowers
party thereto, the guarantors party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto, together with the related documents thereto (including, without
limitation, any guarantee agreements and security documents), in each case as amended to the date of this Offering Circular and as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing
the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Issuer as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders (whether or not such added or substituted parties are banks or other
institutional lenders).
"
Fair Market Value
" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined
by the Board of Directors of the Issuer acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Issuer.
"
Foreign Cash Equivalents
" means certificates of deposit or bankers acceptances of any bank organized under the laws of the United
Kingdom, Canada, Singapore, Australia, China or any country that is a member of the European Union, whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from
Moody's is at least P-1 or the equivalent thereof, in each case with maturities of not more than one year from the date of acquisition.
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"
Foreign Restricted Subsidiary
" means any Restricted Subsidiary that is not a U.S. Restricted Subsidiary.
"
GAAP
" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession of the United States, which were in effect as of the Issue Date.
"
Guarantor
" means: (1) each of the Initial Guarantors and (2) each of the Issuer's Restricted Subsidiaries that in the
future executes a supplemental indenture in which such Restricted Subsidiary agrees to be bound by the terms of the Indenture as a Guarantor;
provided
that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Guarantee is released in accordance with the terms of the Indenture.
"
Indebtedness
" means, with respect to any Person, without duplication:
(1) all
Obligations of such Person for borrowed money;
(2) all
Obligations of such Person evidenced by bonds, debentures, Exchange Notes or other similar instruments;
(3) all
Capitalized Lease Obligations of such Person;
(4) all
Obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all Obligations under any title
retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business);
(5) all
Obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction which is issued in respect of
Indebtedness referred to in clauses (1) through (4) above and clause (8) below;
(6) guarantees
and other contingent obligations in respect of Indebtedness referred to in clauses (1) through (5) above and clause (8) below;
(7) all
Obligations of any other Person of the type referred to in clauses (1) through (6) above that are secured by any Lien on any property or asset of such
Person, the amount of such Obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the Obligation so secured;
(8) all
net Obligations under Currency Agreements and interest swap agreements of such Person; and
(9) all
Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its
voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any.
For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms
of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such
price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the
Issuer.
"
Independent Financial Advisor
" means a firm: (1) that does not, and whose directors, officers and employees or Affiliates do not,
have a direct or indirect financial interest in the Issuer and (2) that, in
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the
judgment of the Board of Directors of the Issuer, is otherwise independent and qualified to perform the task for which it is to be engaged.
"
Initial Guarantors
" means Tennant Coatings, Inc., a Minnesota corporation, and Tennant Sales and Service Company, a Minnesota
corporation.
"
Initial Purchasers
" means Goldman, Sachs & Co., J.P. Morgan Securities LLC, HSBC Securities
(USA) Inc., U.S. Bancorp Investments, Inc., BMO Capital Markets Corp. and SunTrust Robinson Humphrey, Inc.
"
Interest Swap Obligations
" means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for
periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps,
floors, collars and similar agreements.
"
Investment
" means, with respect to any Person, any direct or indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, Exchange Notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. "Investment" shall exclude extensions
of trade credit by the Issuer and its Restricted Subsidiaries on commercially reasonable terms. If the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise disposes of any Common Stock
of any direct or indirect Wholly Owned Restricted Subsidiary of the Issuer such that, after giving effect to any such sale or disposition, the Issuer no longer owns, directly or indirectly, 100% of
the outstanding Common Stock of such Restricted Subsidiary, the Issuer shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the
Common Stock of such Restricted Subsidiary not sold or disposed of.
For
purposes of "Certain CovenantsLimitation on Restricted Payments" and "Designation of Restricted and Unrestricted Subsidiaries":
(1) "Investment"
will include the portion (proportionate to the Issuer's equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the
fair market value of the net assets of such Restricted Subsidiary of the Issuer 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 Issuer will be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Issuer's "Investment" in such
Subsidiary at the time of such redesignation less (b) the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the fair market value of the net assets (as conclusively
determined by the Board of Directors of the Issuer in good faith) of such Subsidiary at the time that such Subsidiary is so re-designated 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, in each case as determined in good
faith by the Board of Directors of the Issuer.
"
Intellectual Property Rights
" mean, collectively the trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights.
"
Investment Grade Rating
" means a rating of Baa3 or better by Moody's 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 the Exchange Notes for reasons outside of the control of the Issuer, the equivalent investment grade
credit rating from any Rating Agency selected by the Issuer as a replacement Rating Agency).
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"
IPC
" means IP Cleaning S.p.A.
"
Issue Date
" means April 18, 2017.
"
Lien
" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest).
"
Moody's
" means Moody's Investors Service, Inc., or any successor to the rating agency business thereof.
"
Net Cash Proceeds
" means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form
of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Issuer or any of its Restricted Subsidiaries from such Asset Sale net of:
(1) out-of-pocket
expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees, brokerage and sales
commissions, and survey, title and recording expenses, transfer taxes and expenses incurred for preparing such asset for sale, and any relocation expenses incurred as a result of the Asset Sale);
(2) taxes
paid or payable, or estimated in good faith to be payable as a result of the Asset Sale, after taking into account any reduction in consolidated tax liability due
to available tax credits or deductions and any tax sharing arrangements;
(3) repayment
of Indebtedness that is secured by the property or assets that are the subject of such Asset Sale; and
(4) appropriate
amounts to be provided by the Issuer or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Issuer or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale.
"
Obligations
" means all obligations for principal, premium, interest, penalties, fees, indemnification, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.
"
Offering Circular
" means this offering circular, dated April 12, 2017, pursuant to which the Exchange Notes are being offered to
potential purchasers.
"
Officer
" means, with respect to any Person, any of the following: the Chairman of the Board of Directors, Vice Chairman of the Board of
Directors, Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Vice President, Treasurer, Secretary, Assistant Secretary or Assistant Treasurer (including interim
officers).
"
Officers' Certificate
" means, with respect to any Person, a certificate signed on behalf of such Person by two Officers of such Person,
one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of such Person, which meets the requirements set forth in the
Indenture.
"
Opinion of Counsel
" means a written opinion from legal counsel, who may be an employee of or counsel to the Issuer, or other counsel who
is reasonably acceptable to the Trustee.
"
Pari Passu Indebtedness
" means any Indebtedness of the Issuer or any Guarantor that is equal in right of payment with the Exchange Notes
or the Guarantee of such Guarantor, as applicable.
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"
Permitted Investments
" means:
(1) Investments
by the Issuer or any Restricted Subsidiary of the Issuer in any Person that is or will become after such Investment a Restricted Subsidiary of the Issuer or
that will merge, consolidate into the Issuer or a Restricted Subsidiary of the Issuer;
(2) Investments
in the Issuer by any Restricted Subsidiary of the Issuer;
(3) Investments
in cash and Cash Equivalents;
(4) loans
and advances to employees and officers of the Issuer and its Subsidiaries in the ordinary course of business for reasonable and customary business-related purposes
not in excess of $10.0 million at any one time outstanding;
(5) Currency
Agreements and Interest Swap Obligations entered into in the ordinary course of the Issuer's or its Restricted Subsidiaries' businesses and otherwise in
compliance with the Indenture;
(6) additional
Investments in an aggregate principal amount at any time outstanding not to exceed the greater of (A) $100 million and (B) 10.0% of
Consolidated Total Assets;
(7) Investments
received (x) pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditors, suppliers or
customers or in good faith settlement of delinquent obligations of such trade creditors, suppliers or customers; (y) as a result of the foreclosure by the Issuer or any of its Restricted
Subsidiaries with respect to any secured Investment or other transfer of title, or (z) as a result of litigation, or other disputes with Persons who are not Affiliates of the Issuer;
(8) Investments
made by the Issuer or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with the covenant
described under "Certain CovenantsLimitation on Asset Sales";
(9) Investments
represented by guarantees that are otherwise permitted under the Indenture;
(10) Investments
the payment for which is Qualified Capital Stock of the Issuer;
(11) Investments
by the Issuer consisting of obligations of one or more officers, directors or other employees of the Issuer or any of its Subsidiaries in connection with
such officers', directors' or employees' acquisition of shares of capital stock of the Issuer so long as no cash is paid by the Issuer or any of its Subsidiaries to such officers, directors or
employees in connection with the acquisition of any such obligations;
(12) any
Investment (x) existing on the Issue Date or made pursuant to binding commitments in effect on the Issue Date or (y) consisting of any replacement,
refinancing, extension, modification or renewal of any Investment existing on the Issue Date;
provided
that the amount of any such Investment may only
be increased (i) as required by the terms of such Investment as in existence on the Issue Date or (ii) as otherwise permitted under the Indenture;
(13) stock,
obligations or securities received in satisfaction of judgments;
(14) advances,
loans, rebates and extensions of credit (including the creation of receivables) to suppliers, customers and vendors, and performance guarantees, in each case
in the ordinary course of business;
(15) Investments
consisting of extensions of credit in the nature of accounts receivable or Exchange Notes receivable arising from the grant of trade credit in the ordinary
course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit
loss;
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(16) Investments
in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers consistent with past
practices;
(17) (i)
intercompany advances among the Issuer and its Subsidiaries arising from their cash management and accounting operations and (ii) intercompany loans,
advances, or Indebtedness among the Issuer and its Subsidiaries having a term not exceeding 364 days (inclusive of any rollover or extensions of terms) and made in the ordinary course of
business;
(18) advances
of payroll payments to employees in the ordinary course of business; and
(19) Investments
in prepaid expenses, negotiable instruments held for collection and lease and utility and worker's compensation deposits provided to third parties in the
ordinary course of business.
"
Permitted Liens
" means the following types of Liens:
(1) Liens
for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as
to which the Issuer or its Restricted Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP;
(2) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen and repairmen, construction Liens and other Liens imposed by law or
pursuant to customary reservations or retentions of title incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate
provision, if any, as shall be required by GAAP has been made in respect thereof;
(3) Liens
incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security,
including any Lien securing letters of credit issued in the ordinary course of business in connection therewith, and pledges and deposits in the ordinary course of business securing liability for
reimbursement or indemnification obligations of insurance carriers or to secure the performance of tenders, trade contracts, statutory obligations, surety, stay, customs and appeal bonds, bids,
leases, government contracts, performance and
return-of-money bonds and other similar obligations (including those to secure health safety and environmental obligations and exclusive of obligations for the payment of borrowed money);
(4) judgment
Liens securing the payment of money (or appeal or other surety bonds relating to such judgments) not giving rise to an Event of Default;
(5) easements,
rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the
ordinary conduct of the business of the applicable Person;
(6) Liens
upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created
for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(7) Liens
securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and
products and proceeds thereof;
(8) Liens
encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Issuer or any of its Restricted
Subsidiaries, including rights of offset and set-off;
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(9) Liens
securing Capitalized Lease Obligations and Purchase Money Indebtedness permitted pursuant to clause (13) of the definition of "Permitted Indebtedness";
provided
,
however
, that in the case of Purchase Money Indebtedness (a) the Indebtedness shall not
be secured by any property or assets of the Issuer or any Restricted Subsidiary of the Issuer other than the property and assets so acquired or constructed and the proceeds thereof and (b) the
Lien securing such Indebtedness shall be created within 270 days of such acquisition or construction or, in the case of a refinancing of any Purchase Money Indebtedness, within 270 days
of such refinancing;
(10) Liens
securing Interest Swap Obligations which Interest Swap Obligations relate to Indebtedness that is otherwise permitted under the Indenture
(11) Liens
securing Indebtedness under Currency Agreements;
(12) Liens
securing Acquired Indebtedness incurred in accordance with the covenant described under "Certain CovenantsLimitation on Incurrence of
Additional Indebtedness";
provided
that:
(a) such
Liens secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Issuer or a Restricted Subsidiary of the
Issuer and were not granted in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer; and
(b) such
Liens do not extend to or cover any property or assets of the Issuer or of any of its Restricted Subsidiaries other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer and are no more favorable to the lienholders than those
securing the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Issuer or a Restricted Subsidiary of the Issuer;
(13) Liens
on assets of a Restricted Subsidiary of the Issuer that is not a Guarantor to secure Indebtedness of such Restricted Subsidiary that is otherwise permitted under
the Indenture;
(14) leases,
subleases, licenses and sublicenses granted to others that do not materially interfere with the ordinary course of business of the Issuer and its Restricted
Subsidiaries;
(15) banker's
Liens, rights of setoff and similar Liens with respect to cash and Cash Equivalents on deposit in one or more bank accounts in the ordinary course of business;
(16) Liens
arising from filing Uniform Commercial Code financing statements regarding leases;
(17) Liens
in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods;
(18) rights
of customers with respect to inventory which arise from deposits and progress payments made in the ordinary course of business;
(19) Liens
on assets of Foreign Restricted Subsidiaries securing Indebtedness permitted pursuant to clause (14) of the definition of "Permitted Indebtedness";
(20) additional
Liens in an aggregate amount at any time outstanding not to exceed the greater of (A) $50.0 million and (B) 7.5% of Consolidated Total
Assets;
(21) [reserved];
(22) Liens
existing as of the Issue Date, to the extent and in the manner such Liens are in effect on the Issue Date;
(23) Liens
securing the Exchange Notes and the Guarantees;
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(24) Liens
of the Issuer or a Wholly Owned Restricted Subsidiary of the Issuer on assets of any Restricted Subsidiary of the Issuer and Liens on assets of the Issuer in
favor of a Wholly Owned Restricted Subsidiary that is a Guarantor;
(25) Liens
deemed to exist in connection with Investments in repurchase agreements;
(26) Liens
of a collection bank arising under the Uniform Commercial Code, or other applicable law, on items in the course of collection;
(27) reservations,
limitations provisos and conditions expressed in any original grants from any governmental authority or other grants of real or immovable property, or
interests therein, which do not materially affect the use of the affected land or detract from the value thereof;
(28) the
rights reserved to or vested in governmental authorities by statutory provisions or by the terms of leases, licenses, franchises, grants or permits, which affect
any land, to terminate the leases, licenses,
franchises, grants or permits or to require annual or other periodic payments as a condition of the continuance thereof;
(29) Liens
in favor of public utilities or to any municipalities or governmental authorities or other public authorities when required by such utilities, municipalities or
governmental authorities or such other public authorities in connection with the supply of services or utilities to the Issuer or any of its Subsidiaries;
(30) Liens
(A) on cash advances or escrow deposits in favor of the seller of any property to be acquired in an Investment permitted under the Indenture to be applied
against the purchase price for such Investment or otherwise in connection with any escrow arrangements with respect to any such Investment or any disposition permitted under the Indenture (including
any letter of intent or purchase agreement with respect to such Investment or disposition) or (B) consisting of an agreement to dispose of any property in a disposition permitted under the
Indenture, in each case, solely to the extent such Investment or disposition, as the case may be, would have been permitted on the date of the creation of such Lien;
(31) Liens
on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto;
(32) in
the case of Indebtedness permitted under the Indenture issued into escrow, Liens on the proceeds of such Indebtedness and any cash or Cash Equivalents consisting of
prefunded interest in respect of such Indebtedness, in each case for so long as such funds remain in escrow;
(33) Liens
securing Refinancing Indebtedness which is incurred to Refinance any Indebtedness that has been secured by a Lien permitted under the Indenture and that has been
incurred without violation of the Indenture;
provided
,
however
, that such Liens: (i) are no less
favorable to the Holders and are not more favorable to the lienholders, in each case in any material respect, with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced;
and (ii) do not extend to or cover any categories of property or assets of the Issuer or any of its Restricted Subsidiaries not securing the Indebtedness so Refinanced.
(34) Liens
securing existing or future borrowings under Credit Facilities incurred pursuant to clause (2) of the definition of Permitted Indebtedness;
(35) Liens
securing Indebtedness incurred pursuant to clause (17) of the definition of Permitted Indebtedness; and
(36) Liens
in favor of a consignor encumbering assets delivered to the Issuer or a Restricted Subsidiary on consignment in the ordinary course of business.
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"
Person
" means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or
a governmental agency or political subdivision thereof.
"
Preferred Stock
" of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.
"
Purchase Money Indebtedness
" means Indebtedness of the Issuer and its Restricted Subsidiaries incurred in the ordinary course of business
for the purpose of financing all or any part of the purchase price, or the cost of installation, construction or improvement, of property or equipment.
"
Qualified Capital Stock
" means any Capital Stock that is not Disqualified Capital Stock.
"
Rating Agency
" means (1) each of Moody's and S&P and (2) if Moody's or S&P ceases to rate the Exchange Notes for reasons
outside of the control of the Issuer, a "nationally recognized statistical rating organization" within the meaning of Section 3(a)(62) of the Exchange Act selected by the Issuer as a
replacement agency for Moody's or S&P, as the case may be.
"
Recovery Event
" means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property of
the Issuer or any Subsidiary.
"
Refinance
" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or
retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness, in whole or in part. "Refinanced" and "Refinancing" shall have correlative meanings;
provided
that the principal amount of such Refinancing Indebtedness does not exceed (a) the principal amount of such Indebtedness being
refinanced plus (b) the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums (including, without limitation, tender premiums) and other costs and expenses
(including, without limitation, original issue discount, upfront fees or similar fees) incurred in connection with such refinancing.
"
Registration Rights Agreement
" means a registration rights agreement with respect to the Exchange Notes dated as of the Issue Date, among
the Issuer, the Guarantors and the representatives of the Initial Purchasers.
"
Restricted Subsidiary
" of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted
Subsidiary.
"
Sale and Leaseback Transaction
" means any direct or indirect arrangement with any Person or to which any such Person is a party,
providing for the leasing to the Issuer or a Restricted Subsidiary of any property, whether owned by the Issuer or any Restricted Subsidiary at the Issue Date or later acquired, which has been or is
to be sold or transferred by the Issuer or such Restricted Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such
property.
"
S&P
" means Standard & Poor's Ratings Group, Inc., or any successor to the rating agency business thereof.
"
SEC
" means the United States Securities and Exchange Commission.
"
Securities Act
" means the United States Securities Act of 1933, as amended.
"
Significant Subsidiary
", with respect to any Person, means any Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the Securities Act.
"
Subordinated Indebtedness
" means Indebtedness of the Issuer or any Guarantor that is contractually subordinated in right of payment to
the Exchange Notes or the Guarantee of such Guarantor, as the case may be.
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"
Subsidiary
" with respect to any Person, means:
(1) any
corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or through another Subsidiary, by such Person; or
(2) any
other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or through another Subsidiary, owned by such
Person.
"
Taxes
" means any present or future tax, duty, levy, impost, assessment or other government charge (including penalties, interest and any
other liabilities related thereto) imposed or levied by or on behalf of a Taxing Authority.
"
Taxing Authority
" means any government or any political subdivision or territory or possession of any government or any authority or
agency therein or thereof having power to tax.
"
Tennant Company Pension Plan
" means that certain Tennant Company Pension Plan (as Amended and Restated Effective January 1, 2016)
dated as of January 14, 2016.
"
Transactions
" means, collectively, (i) the Acquisition, (ii) the initial borrowings under, and effectiveness of, the
Existing Credit Facilities, (iii) the refinancing of certain other indebtedness of each of the Company and IPC as set forth in this offering circular, (iv) the refinancing of the
$300.0 million in aggregate principal amount of the senior secured term loan A-2 under the Existing Credit Facilities and (v) this Offering.
"
Unrestricted Subsidiary
" of any Person means:
(1) any
Subsidiary of such Person that at the time of determination shall be or continue to be designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below; and
(2) any
Subsidiary of an Unrestricted Subsidiary.
The
Board of Directors of the Issuer may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns
any Capital Stock of, or owns or holds any Lien on any property of, the Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated;
provided
that:
(1) the
Issuer certifies to the Trustee that such designation complies with the covenant described under "Certain CovenantsLimitation on Restricted
Payments" and
(2) each
Subsidiary to be so designated and each of its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of its Restricted Subsidiaries.
The
Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if:
(1) immediately
after giving effect to such designation, the Issuer is able to incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of the
covenant described under "Certain CovenantsLimitation on Incurrence of Additional Indebtedness"; and
(2) immediately
before and immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing.
Any
such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the foregoing provisions.
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"
U.S. Restricted Subsidiary
" means any Restricted Subsidiary that is organized under the Laws of any state of the United States or the
District of Columbia.
"
Weighted Average Life to Maturity
" means, when applied to any Indebtedness at any date, the number of years obtained by dividing
(a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of such payment.
"
Wholly Owned Restricted Subsidiary
" of any Person means any Wholly Owned Subsidiary of such Person which at the time of determination is
a Restricted Subsidiary of such Person.
"
Wholly Owned Subsidiary
" of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than in
the case of a Restricted Subsidiary that is incorporated in a jurisdiction other than a State in the United States or the District of Columbia, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are owned by such Person or any Wholly Owned Subsidiary of such Person.
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BOOK-ENTRY, DELIVERY AND FORM
We have obtained the information in this section concerning The Depository Trust Company ("DTC"), Clearstream Banking, S.A., Luxembourg
("Clearstream, Luxembourg") and Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") and their book-entry systems and procedures from sources that we believe to be
reliable. We take no responsibility for an accurate portrayal of this information. In addition, the description of the clearing systems in this section reflects our understanding of the rules and
procedures of DTC, Clearstream, Luxembourg and Euroclear as they are currently in effect. Those systems could change their rules and procedures at any time.
The
Exchange Notes will initially be represented by one or more fully registered global notes. Each such global note will be deposited with, or on behalf of, DTC or any successor thereto
and registered in the name of Cede & Co. (DTC's nominee). You may hold your interests in the global notes in the United States through DTC, or in Europe through Clearstream, Luxembourg
or Euroclear, either as a
participant in such systems or indirectly through organizations which are participants in such systems. Clearstream, Luxembourg and Euroclear will hold interests in the global notes on behalf of their
respective participating organizations or customers through customers' securities accounts in Clearstream, Luxembourg's or Euroclear's names on the books of their respective depositaries, which in
turn will hold those positions in customers' securities accounts in the depositaries' names on the books of DTC.
So
long as DTC or its nominee is the registered owner of the global securities representing the Exchange Notes, DTC or such nominee will be considered the sole owner and holder of the
notes for all purposes of the Exchange Notes and the Indenture. Except as provided below, owners of beneficial interests in the Exchange Notes will not be entitled to have the Exchange Notes
registered in their names, will not receive or be entitled to receive physical delivery of the Exchange Notes in definitive form and will not be considered the owners or holders of the Exchange Notes
under the Indenture, including for purposes of receiving any reports delivered by us or the trustee pursuant to the Indenture. Accordingly, each person owning a beneficial interest in an Exchange Note
must rely on the procedures of DTC or its nominee and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, in order to exercise any
rights of a holder of Exchange Notes.
Unless
and until we issue the Exchange Notes in fully certificated, registered form under the limited circumstances described below under the heading "Certificated
Notes":
-
-
you will not be entitled to receive a certificate representing your interest in the Exchange Notes;
-
-
all references in this prospectus to actions by holders will refer to actions taken by DTC upon instructions from its direct participants; and
-
-
all references in this prospectus to payments and notices to holders will refer to payments and notices to DTC or Cede & Co., as
the registered holder of the Exchange Notes, for distribution to you in accordance with DTC procedures.
The Depository Trust Company
DTC will act as securities depositary for the Exchange Notes. The Exchange Notes will be issued as fully registered notes registered in the name
of Cede & Co. DTC is:
-
-
a limited-purpose trust company organized under the New York Banking Law;
-
-
a "banking organization" under the New York Banking Law;
-
-
a member of the Federal Reserve System;
-
-
a "clearing corporation" under the New York Uniform Commercial Code; and
-
-
a "clearing agency" registered under the provisions of Section 17A of the Exchange Act.
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DTC
holds securities that its direct participants deposit with DTC. DTC facilitates the settlement among direct participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in direct participants' accounts, thereby eliminating the need for physical movement of securities certificates.
Direct
participants of DTC include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its direct
participants. Indirect participants of DTC, such as securities brokers and dealers, banks and trust companies, can also access the DTC system if they maintain a custodial relationship with a direct
participant.
Purchases
of notes under DTC's system must be made by or through direct participants, which will receive a credit for the notes on DTC's records. The ownership interest of each
beneficial owner is in turn to be recorded on the records of direct participants and indirect participants. Beneficial owners will not receive written confirmation from DTC of their purchase, but
beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the direct participants or indirect
participants through which such beneficial owners entered into the transaction. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of participants acting
on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in notes, except as provided below in "Certificated Notes".
To
facilitate subsequent transfers, all notes deposited with DTC are registered in the name of DTC's nominee, Cede & Co. The deposit of notes with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the notes. DTC's records reflect only the
identity of the direct participants to whose accounts such notes are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their
holdings on behalf of their customers.
Conveyance
of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to
beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Book-Entry Format
Under the book-entry format, the paying agent will pay interest or principal payments to Cede & Co., as nominee of DTC. DTC will
forward the payment to the direct participants,
who will then forward the payment to the indirect participants (including Clearstream, Luxembourg or Euroclear) or to you as the beneficial owner.
You
may experience some delay in receiving your payments under this system. Neither we, the trustee under the indenture nor any paying agent has any direct responsibility or liability
for the payment of principal or interest on the notes to owners of beneficial interests in the notes.
DTC
is required to make book-entry transfers on behalf of its direct participants and is required to receive and transmit payments of principal, premium, if any, and interest on the
notes. Any direct participant or indirect participant with which you have an account is similarly required to make book-entry transfers and to receive and transmit payments with respect to the notes
on your behalf. We and the trustee under the indenture have no responsibility for any aspect of the actions of DTC, Clearstream, Luxembourg or Euroclear or any of their direct or indirect
participants. In addition, we and the trustee under the indenture have no responsibility or liability for any aspect of the records kept by DTC, Clearstream, Luxembourg, Euroclear or any of their
direct or indirect participants relating to or payments made on account of beneficial ownership interests in the notes or for maintaining,
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supervising
or reviewing any records relating to such beneficial ownership interests. We also do not supervise these systems in any way.
The
trustee will not recognize you as a holder under the indenture, and you can only exercise the rights of a holder indirectly through DTC and its direct participants. DTC has advised
us that it will only take action regarding a note if one or more of the direct participants to whom the note is credited directs DTC to take such action and only in respect of the portion of the
aggregate principal amount of the notes as to which that participant or participants has or have given that direction. DTC can only act on behalf of its direct participants. Your ability to pledge
notes to non-direct participants, and to take other actions, may be limited because you will not possess a physical certificate that represents your notes.
Neither
DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the notes unless authorized by a direct participant in accordance with DTC's
procedures. Under its usual procedures, DTC will mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights
to those direct participants to whose accounts the notes are credited on the record date (identified in a listing attached to the omnibus proxy).
Clearstream,
Luxembourg or Euroclear will credit payments to the cash accounts of Clearstream, Luxembourg customers or Euroclear participants in accordance with the relevant system's
rules and procedures, to the extent received by its depositary. These payments will be subject to tax reporting in accordance with relevant United States tax laws and regulations. Clearstream,
Luxembourg or the Euroclear Operator, as the case may be, will take any other action permitted to be taken by a holder under the indenture on behalf of a Clearstream, Luxembourg customer or Euroclear
participant only in accordance with its relevant rules and procedures and subject to its depositary's ability to effect those actions on its behalf through DTC.
DTC,
Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of the notes among participants of DTC, Clearstream, Luxembourg and
Euroclear. However, they are under no obligation to perform or continue to perform those procedures, and they may discontinue those procedures at any time.
Transfers Within and Among Book-Entry Systems
Transfers between DTC's direct participants will occur in accordance with DTC rules. Transfers between Clearstream, Luxembourg customers and
Euroclear participants will occur in accordance with its applicable rules and operating procedures.
DTC
will effect cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Clearstream, Luxembourg customers
or Euroclear participants, on the other hand, in accordance with DTC rules on behalf of the relevant European international clearing system by its depositary. However, cross-market transactions will
require delivery of instructions to the relevant European international clearing system by the counterparty in that system in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, instruct its depositary to effect final settlement on its
behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Clearstream, Luxembourg
customers and Euroclear participants may not deliver instructions directly to the depositaries.
Because
of time-zone differences, credits of securities received in Clearstream, Luxembourg or Euroclear resulting from a transaction with a DTC direct participant will be made during
the subsequent securities settlement processing, dated the business day following the DTC settlement date.
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Those
credits or any transactions in those securities settled during that processing will be reported to the relevant Clearstream, Luxembourg customer or Euroclear participant on that business day.
Cash received in Clearstream, Luxembourg or Euroclear as a result of sales of securities by or through a Clearstream, Luxembourg customer or a Euroclear participant to a DTC direct participant will be
received with value on the DTC settlement date but will be available in the relevant Clearstream, Luxembourg or Euroclear cash amount only as of the business day following settlement in DTC.
Although
DTC, Clearstream, Luxembourg and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of debt securities among their respective participants, they
are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time.
Certificated Notes
Unless and until they are exchanged, in whole or in part, for notes in definitive form in accordance with the terms of the Exchange Notes, the
Exchange Notes may not be transferred except (1) as a whole by DTC to a nominee of DTC or (2) by a nominee of DTC to DTC or another nominee of DTC or (3) by DTC or any such
nominee to a successor of DTC or a nominee of such successor.
We
will issue notes to you or your nominees, in fully certificated registered form, rather than to DTC or its nominees, only if:
-
-
we advise the trustee in writing that DTC is no longer willing or able to discharge its responsibilities properly or that DTC is no longer a
registered clearing agency under the Securities Exchange Act of 1934, and the trustee or we are unable to locate a qualified successor within 90 days;
-
-
a default or event of default has occurred and is continuing under the indenture and DTC requests issuance of definitive notes; or
-
-
we, at our option, elect to terminate the book-entry system through DTC.
If
any of the three above events occurs, DTC is required to notify all direct participants that Exchange Notes in fully certificated registered form are available through DTC. DTC will
then surrender the global note representing the Exchange Notes along with instructions for re-registration. The trustee will re-issue the Exchange Notes in fully certificated registered form and will
recognize the registered holders of the certificated debt securities as holders under the Indenture.
Unless
and until we issue the Exchange Notes in fully certificated, registered form, (1) you will not be entitled to receive a certificate representing your interest in the
Exchange Notes; (2) all references in this prospectus to actions by holders will refer to actions taken by the depositary upon instructions from their direct participants; and (3) all
references in this prospectus to payments and notices to holders will refer to payments and notices to the depositary, as the registered holder of the notes, for distribution to you in accordance with
its policies and procedures.
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