<PAGE> 1
As filed with the Securities and Exchange Commission on December 13, 1994
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
CARLISLE PLASTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2891825
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
----------------------
POLY-TECH, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1503086
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
----------------------
1314 N. Third Street
Phoenix, Arizona 85004
(602) 407-2100
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
----------------------
William H. Binnie
CARLISLE PLASTICS, INC.
1314 N. Third Street
Phoenix, Arizona 85004
(602) 407-2100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------
Copies to:
Martin R. Rosenbaum, Esq.
Michael T. Berg, Esq.
Lindquist & Vennum P.L.L.P.
4200 IDS Center
Minneapolis, Minnesota 55402
(612) 371-3211
Approximate date of commencement of proposed sale to public: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to be Offering Price Aggregate Amount of
Securities to Be Registered(1) Registered Per Unit Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Series A 10 1/4% Senior Notes $15,000,000 100% $15,000,000 $5,172.41
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(1) Guarantees by Poly-Tech, Inc. of the payment of principal, premium, if any,
and interest on the New Notes, as defined herein, are also being
registered hereby. Pursuant to Rule 475(n), no registration fee is
required with respect to the Guarantees.
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</TABLE>
THE REGISTRANT AND THE CO-REGISTRANT HEREBY AMEND THIS REGISTRATION STATEMENT
ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT AND THE CO-REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR
UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE> 2
CARLISLE PLASTICS, INC.
Cross Reference Sheet Required by Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
Item Number and Caption Heading in Prospectus
- ----------------------- ---------------------
<S> <C>
1. Forepart of Registration Statement and outside
Front Cover Page of Prospectus . . . . . . . . . . . . Facing Page of Registration Statement; Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . . . . . . . . Inside Front Cover Page of the Prospectus; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information . . . . . . . . . . . . . . . . Prospectus Summary; Risk Factors
4. Terms of the Transaction . . . . . . . . . . . . . . . Prospectus Summary; The Exchange Offer; Description of the New Notes;
Certain Federal Income Tax Consequences
5. Pro Forma Financial Information . . . . . . . . . . . Prospectus Summary
6. Material Contacts with the Company Being Acquired . . . *
7. Additional Information Required for Reoffering by
Persons and Parties Deemed to be Underwriters . . . . . *
8. Interests of Named Experts and Counsel . . . . . . . . Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities . . . . *
10. Information with Respect to S-3 Registrations . . . . *
11. Incorporation of Certain Information by Reference . . . *
12. Information with Respect to S-2 or S-3 Registrants . . Prospectus Summary
13. Incorporation of Certain Information by Reference . . Incorporation of Certain Information by Reference
14. Information with Respect to Registrants Other Than
S-3 or S-2 Registrants . . . . . . . . . . . . . . . . *
15. Information with Respect to S-3 Companies . . . . . . *
16. Information with Respect to S-2 or S-3 Companies . . . *
17. Information with Respect to Companies Other than
S-2 or S-3 Companies . . . . . . . . . . . . . . . . . *
18. Information if Proxies, Consents or Authorizations
are to be Solicited . . . . . . . . . . . . . . . . . *
19. Information if Proxies, Consents or Authorizations
are not to be Solicited in an Exchange Offer . . . . . *
</TABLE>
- ------------------------------
* Not Applicable.
<PAGE> 3
SUBJECT TO COMPLETION, DATED ________________, 1995
PROSPECTUS
OFFER TO EXCHANGE
SERIES A 10 1/4% SENIOR NOTES DUE 1997
FOR ANY AND ALL OF THE OUTSTANDING 10 1/4% SENIOR NOTES DUE 1997 ISSUED IN 1994
OF
CARLISLE PLASTICS, INC.
UNCONDITIONALLY GUARANTEED BY
POLY-TECH, INC.
----------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
___________, 1995, UNLESS EXTENDED.
----------------------
Carlisle Plastics, Inc., a Delaware corporation (the "Company"), hereby
offers, upon the terms and subject to the conditions set forth in this
Prospectus and the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), to exchange its Series A 10 1/4% Senior Notes
due 1997 (the "New Notes") for an equal principal amount of its outstanding 10
1/4% Senior Notes due 1997 issued in November 1994 (the "Old Notes"), of which
$15,000,000 principal amount is outstanding. The terms of the New Notes are
substantially the same as the terms of the Old Notes, except that the New Notes
have been registered under the Securities Act of 1933, as amended. The New
Notes will evidence the same debt as the Old Notes and will be entitled to the
benefits of the Indenture governing the Old Notes (the "Indenture"). The Old
Notes and the New Notes are sometimes referred to herein collectively as the
"Notes." See "The Exchange Offer" and "Description of New Notes."
The New Notes will bear interest at the rate of 10 1/4% per annum and
interest will be payable semiannually on June 15 and December 15, commencing on
June 15, 1995. Holders of the Old Notes whose Old Notes are accepted for
exchange will receive, in cash, accrued interest thereon to, but not including,
the date of issuance of the New Notes, such interest to be payable with the
first interest payment on the New Notes, and will be deemed to have waived the
right to receive any payment in respect of interest on the Old Notes accrued
from and after the date of issuance of the New Notes. Like the Old Notes, the
New Notes will be fully and unconditionally guaranteed by Poly-Tech, Inc., a
wholly-owned subsidiary of the Company ("Poly-Tech").
The issuer will not receive any proceeds from the Exchange Offer. In the
event the Company terminates the Exchange Offer and does not accept for
exchange any Old Notes, the Company will promptly return the Old Notes to the
holders thereof. See "The Exchange Offer."
Prior to this Exchange Offer, there has been no public market for the Old
Notes or the New Notes. If a market for the New Notes should develop, the New
Notes could trade at a discount from their principal amount. The Company does
not currently intend to list the New Notes on any securities exchange. There
can be no assurance that an active public market for the New Notes will
develop. SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD
BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE NEW NOTES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is _________________, 1995.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 4
AVAILABLE INFORMATION
The Company and Poly-Tech have filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement", which term shall include all amendments, exhibits and schedules
thereto) on Form S-4 under the Securities Act of 1933 (the "Securities Act")
with respect to the Notes. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto. Statements made
in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete; with respect to each such
contract, agreement or other document filed as an exhibit or schedule to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
The Company and Poly-Tech are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports and other information with the Commission.
The Registration Statement, including exhibits thereto, as well as such reports
and other information filed with the Commission may be inspected without charge
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the
following regional offices of the Commission: Northwestern Atrium Center, 500
West Madison, Suite 1400, Chicago, Illinois 60661; and World Trade Center, New
York, New York 10048. Copies of all or part of such materials can be obtained
from those offices upon payment of certain fees prescribed by the Commission.
In addition, such reports, proxy statements and other information concerning
the Company may be inspected at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company and Poly-Tech with the
Commission are incorporated by reference in this Prospectus: (i) Annual Report
on Form 10-K for the year ended December 31, 1993 (which incorporates by
reference certain portions of the Company's definitive Proxy Statement relating
to the 1994 Annual Meeting of Shareholders); and (ii) Quarterly Reports on
Form 10-Q for the quarters ended March 31, June 30, and September 30, 1994.
All documents filed by the Company and Poly-Tech pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of this offering shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
In addition to this Prospectus, the Company is delivering without charge to
each recipient of this Prospectus a copy of its Annual Report to Shareholders
and its Annual Report on Form 10-K for the year ended December 31, 1993 and its
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
2
<PAGE> 5
TABLE OF CONTENTS
Page
----
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Information by Reference . . . . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Description of the New Notes . . . . . . . . . . . . . . . . . . . . . . 24
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . 43
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
3
<PAGE> 6
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information included elsewhere in
this Prospectus and the financial statements and documents incorporated by
reference herein.
THE COMPANY
The Company develops, manufactures, sells and distributes national
brand and private label plastic products in three categories: film products,
hangers and containers. The Company's film products include private label
consumer bags, nationally branded trash bags (sold primarily under the
Ruffies(R) brand name), and plastic sheeting used in home improvement,
construction and agriculture. The Company's molded products group produces
plastic clothes hangers, which are sold to retailers and apparel manufacturers,
plastic bottles and containers. In 1993, the Company's film and molded
products groups accounted for 65% and 35% of the Company's consolidated net
sales, respectively.
The Company is a dominant producer of plastic hangers in North America
with an estimated leading one-third share of the United States hanger market in
1993. The Company's film products group is the leading supplier of trash bags
to mass merchandisers, the second largest manufacturer of both private label
and institutional trash bags, and the leading supplier of plastic sheeting sold
through home centers and hardware stores for the do-it-yourself and
construction markets. The Company is also a large regional producer of plastic
bottles supplying the dairy and bottled water markets.
The plastics products industry is highly fragmented with a large
number of small regional competitors. Management believes that the economics
of the industry and the growing importance of national customers create
significant advantages for large, low-cost, diversified plastics
manufacturers. The Company has focused its strategy on meeting the demands of
value-oriented customers and consumers through the manufacture and distribution
of low cost, high quality products. The Company is able to offer customers
excellent value due to its large scale operations, low-cost manufacturing and
national distribution capabilities. This value strategy is augmented by a
continuing emphasis on product innovations such as the Company's rapidly
growing line of high-density trash bags which utilizes 30%-35% less plastic
while offering superior strength at very competitive prices.
The success of the Company's value strategy is demonstrated by the
quality and breadth of its customers. The Company is a leading supplier to
many of the nation's fastest growing retailers. In the mass merchandise
segment, the Company is a leading manufacturer of both hangers and trash bags
for Wal-Mart, K-Mart and Target. The Company has other significant hanger
customers, including Dillards, Neiman Marcus, May Company, Osh Kosh, Health-Tex
and Vanity Fair. The Company's sheeting business supplies nine of the top ten
hardware and home center chains, including Home Depot, Payless Cashways, Home
Base, Cotter & Company and True Value. The Company's effectiveness in
delivering value is further evidenced by its grocery customer base. The
Company sells private label and branded trash bags to the nation's ten largest
grocery chains, including A&P, Kroger, Safeway and Winn Dixie. The Company
also supplies private label trash bag and sheeting products to a number of
non-food retailers including Ace Hardware, Sears and Hardware Wholesalers, Inc.
The Company's executive offices are located at 1314 N. Third Street,
Phoenix, Arizona 85004.
4
<PAGE> 7
THE EXCHANGE OFFER
The Exchange Offer . . . . . . . . The Company is offering to exchange up
to $15,000,000 aggregate principal
amount of the New Notes for a like
principal amount of its Old Notes. The
Company will issue the New Notes to
holders on or promptly after the
Expiration Date (as defined below).
Based on an interpretation by the staff
of the Commission set forth in no-action
letters issued to third parties, the
Company believes that New Notes issued
pursuant to the Exchange Offer in
exchange for Old Notes may be offered
for resale, resold and otherwise
transferred by any holder thereof (other
than any such holder which is an
"affiliate" of the Company within the
meaning of Rule 405 under the Securities
Act and certain broker-dealers and their
affiliates) without compliance with the
registration and prospectus delivery
provisions of the Securities Act,
provided that such New Notes are
acquired in the ordinary course of such
holder's business and that such holder
does not intend to participate and has
no arrangement or understanding with any
person to participate in the
distribution of such New Notes. See
"Plan of Distribution."
The Exchange Offer applies to
$15,000,000 aggregate principal amount
of the Old Notes. The terms of the New
Notes are substantially the same as the
terms of the Old Notes except that the
New Notes have been registered under the
Securities Act. The New Notes will
evidence the same debt as the Old Notes
and will be entitled to the benefits of
the Indenture. See "Description of New
Notes."
Expiration Date . . . . . . . . . . The Exchange Offer will expire at 5:00
p.m., New York City time, on
_____________, 1995, unless the Exchange
Offer is extended, in which case the
term "Expiration Date" means the latest
date and time to which the Exchange
Offer is extended.
Accrued Interest on the
New Notes and Old Notes . . . . . Each New Note will bear interest from
its issuance date. Holders of Old Notes
that are accepted for exchange will
receive, in cash, accrued interest
thereon to, but not including, the
issuance date of the New Notes. Such
interest will be paid on June 15, 1995
with the first interest payment on the
New Notes. Interest on the Old Notes
accepted for exchange will cease to
accrue upon issuance of the New Notes.
Conditions to the
Exchange Offer . . . . . . . . . The Exchange Offer is subject to certain
customary conditions, which may be
waived by the Company. See "The
Exchange Offer - Conditions."
Procedures for Tendering
Old Notes . . . . . . . . . . . . Each holder of Old Notes wishing to
accept the Exchange Offer must complete,
sign and date the accompanying Letter of
Transmittal (the "Letter of Transmittal")
or a facsimile thereof, in accordance
with the
5
<PAGE> 8
instructions contained herein and
therein, and mail or otherwise deliver
such Letter of Transmittal, or such
facsimile, together with the Old Notes
and any other required documentation to
the Exchange Agent (as defined below) at
the address set forth herein. By
executing the Letter of Transmittal,
each holder will represent to the
Company that, among other things, (i)
the New Notes acquired pursuant to the
Exchange Offer are being acquired in
the ordinary course of business of the
person receiving such New Notes, (ii)
neither the holder or any such other
person has an arrangement or
understanding with any person to
participate in the distribution of such
New Notes and (iii) neither the holder
nor any such other person is an
"affiliate," as defined under Rule 405 of
the Securities Act, of the Company. In
the case of a broker-dealer that receives
New Notes for its own account in exchange
for Old Notes which were acquired by it
as a result of market-making or other
trading activities, the Letter of
Transmittal will also include an
acknowledgement that the broker-dealer
will deliver a copy of this Prospectus
in connection with the resale by it of
New Notes received pursuant to the
Exchange Offer. See "The Exchange Offer
- Purpose and Effect of the Exchange
Offer," "The Exchange Offer - Procedures
for Tendering" and "Plan of Distribution.
Following the consummation of the
Exchange Offer, holders of Old Notes not
tendered or tendered and not accepted
will not have any further registration
rights and the Old Notes will continue to
be subject to certain restrictions on
transfer. Accordingly, the liquidity of
the market for the Old Notes could be
adversely affected.
Special Procedures for
Beneficial Owners . . . . . . . . Any beneficial owner whose Old Notes are
registered in the name of a broker,
dealer, commercial bank, trust company or
other nominee and who wishes to tender
should contact such registered holder
promptly and instruct such registered
holder to tender on such beneficial
owner's behalf. If such beneficial
owner wishes to tender on such owner's
own behalf, such owner must, prior to
completing and executing the Letter of
Transmittal and delivering his or her
Old Notes, either make appropriate
arrangements to register ownership of
the Old Notes in such owner's name or
obtain a properly completed bond power
from the registered holder. The
transfer of registered ownership may
take considerable time and may not be
able to be completed prior to the
Expiration Date.
Guaranteed Delivery
Procedures . . . . . . . . . . . Holders of Old Notes who wish to tender
their Old Notes and whose Old Notes are
not immediately available or who cannot
deliver their Old Notes, the Letter of
Transmittal or any other documents
required by the Letter of Transmittal to
the Exchange Agent prior to the
Expiration Date must tender their Old
Notes according to the guaranteed
delivery procedures set forth in "The
Exchange Offer - Guaranteed Delivery
Procedures."
Withdrawal Rights . . . . . . . . . Tenders may be withdrawn at any time
prior to 5:00 p.m., New York City time,
on the Expiration Date by furnishing a
written or facsimile
6
<PAGE> 9
transmission notice of withdrawal to the
Exchange Agent containing the information
set forth in "The Exchange Offer -
Withdrawal Tenders."
Certain Federal Income
Tax Considerations . . . . . . . For a discussion of certain Federal
income tax considerations relating to the
exchange of the Old Notes for the New
Notes, see "Certain Federal Income Tax
Consequences."
Acceptance of Old
Notes and Delivery of
New Notes . . . . . . . . . . . . The Company will accept for exchange any
and all Old Notes which are properly
tendered in the Exchange Offer prior to
5:00 p.m., New York City time, on the
Expiration Date. The New Notes issued
pursuant to the Exchange Offer will be
delivered promptly following the
Expiration Date. See "The Exchange
Offer-Terms of the Exchange Offer."
Exchange Agent . . . . . . . . . . United States Trust Company of New York
(the "Exchange Agent") is serving as
Exchange Agent inconnection with the
Exchange Offer.
THE NEW NOTES
Securities Offered . . . . . . . . $15,000,000 aggregate principal amount of
Series A 10 1/4% Senior Notes Due 1997
(the "New Notes").
Interest Payment Dates . . . . . . June 15 and December 15 of each year,
commencing June 15, 1995.
Optional Redemption . . . . . . . . The Notes are redeemable at the option
of the Company, in whole or in part, on
or after June 15, 1995, at a redemption
price of 102.56% during the 12-month
period commencing June 15, 1995 and at
par commencing June 15, 1996, plus in
each case accrued and unpaid interest to
the date of redemption.
Mandatory Redemption . . . . . . . None.
Guarantees . . . . . . . . . . . . Poly-Tech has unconditionally guaranteed
the due and punctual payment of the
principal of and interest on and all
other amounts due and payable on the
Notes (the "Guarantees").
Ranking . . . . . . . . . . . . . . The Notes will be unsecured,
unsubordinated obligations of the Company
ranking pari passu in right of payment
with all other existing and future
unsecured, unsubordinated indebtedness
ofthe Company. The Guarantees will be
unsecured, unsubordinated obligations of
Poly-Techranking pari passu in right of
payment with all other existing and
future unsecured, unsubordinated
indebtedness of Poly-Tech. The Notes
will be effectively subordinated to
creditors and preferred stockholders (if
any) of the Company's subsidiaries. The
Guarantees will be effectively
subordinated to creditors and preferred
stockholders (if any) of Poly-Tech's
subsidiaries. As of September 30, 1994,
after giving effect to the sale of the
Notes and the application of the net
proceeds therefrom, (the "Note
Offering"): (i) the aggregate outstanding
amount of unsubordinated indebtedness of
the Company would have
7
<PAGE> 10
been approximately $195.4 million (of
which approximately $71.5 million would
have been secured indebtedness); (ii) the
aggregate outstanding amount of total
liabilities (excluding intercompany debt)
of the Company's subsidiaries, including
Poly-Tech's subsidiaries (but excluding
Poly-Tech), would have been approximately
$43.5 million (of which approximately $24.1
million would have been long-term
indebtedness (including the current
portion thereof)); (iii) there would have
been no outstanding preferred stock of the
Company's subsidiaries, including
Poly-Tech's subsidiaries (other than the
outstanding preferred stock of Poly-Tech
held by the Company); and (iv) there would
have been no indebtedness of the Company
outstanding which would have been junior
to the New Notes.
Restrictive Covenants . . . . . . . The Indenture limits the incurrence of
additional debt by the Company, the
incurrence of additional secured debt by
the Company and its subsidiaries, sale and
leaseback transactions, the incurrence of
additional debt and preferred stock by the
Company's subsidiaries, payment of
dividends on and redemptions of capital
stock by the Company and its subsidiaries,
redemptions of certain subordinated
obligations of the Company, sales of
assets and subsidiary stock, transactions
with affiliates and mergers. The
Indenture also prohibits certain
restrictions on distributions from
subsidiaries. However, all of these
limitations and this prohibition are
subject to a number of important
qualifications.
Change of Control or
Fundamental Change . . . . . . . Upon the occurrence of a Change of Control
or a Fundamental Change, each holder of
the Notes will have the right to require
the Company to repurchase its Notes at
101% of the principal amount thereof plus
accrued and unpaid interest to the date of
repurchase. The definition of Change of
Control includes certain transactions
involving or representing a transfer of a
controlling equity interest in the
Company. Other transactions involving or
representing transfers of a controlling
equity interest in the Company not
specified in the definition of Change of
Control (such as, for example, certain
recapitalization transactions or
transactions in which the transferee is
William H. Binnie) would not constitute
Changes of Control as defined and
therefore would not trigger the repurchase
obligation. The definition of Fundamental
Change includes certain acquisitions of
businesses unrelated to the design,
development, manufacture or sale of
plastic products.
RISK FACTORS
Offerees should consider carefully the specific information set forth
under "Risk Factors" and the other information set forth in this Prospectus
before determining whether to accept the Exchange Offer.
8
<PAGE> 11
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
CARLISLE PLASTICS, INC. AND SUBSIDIARIES
The following table summarizes selected consolidated financial data of
the Company and is qualified in its entirety by the Company's consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1993 (the "Form 10-K") and in the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1994 (the "September 1994 10-Q") incorporated herein by reference. See also
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the Form 10-K and the September 1994 10-Q.
<TABLE>
<CAPTION>
Year Ended December 31, Nine Months Ended September 30,
----------------------------------- ------------------------------------
1994 1994
---- ----
1991(1) 1992 1993 1993 Actual Pro Forma(2)
---- ---- ---- ---- ------ ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales . . . . . . . . . . . . . . $343,637 $359,856 $360,895 $273,388 $285,352 $285,352
Cost of goods sold . . . . . . . . . 239,675 263,474 261,987 197,862 215,639 215,639
-------- -------- -------- -------- -------- --------
Gross profit . . . . . . . . . . . . 103,962 96,382 98,908 75,526 69,713 69,713
Operating expenses . . . . . . . . . 69,074 82,311 67,437 51,327 52,944 52,944
-------- -------- -------- -------- -------- --------
Income from operations(3) . . . . . . 34,888 14,071 31,471 24,199 16,769 16,769
Interest expense . . . . . . . . . . 22,648 21,957 22,549 17,156 14,689 15,118
Interest and other income . . . . . . (1,498) (451) (369) (290) (149) (149)
Other . . . . . . . . . . . . . . . . 21 (533) -- -- -- --
-------- -------- -------- -------- -------- --------
Income (loss) before provision for income
taxes, extraordinary item and
cumulative effect of change in
accounting principle(3) . . . . . 13,717 (6,902) 9,291 7,333 2,229 1,800
Provision (benefit) for income taxes(4) 8,324 (688) 3,459 2,933 937 759
-------- -------- -------- -------- -------- --------
Income (loss) before extraordinary item
and cumulative effect of change
in accounting principle . . . . . 5,393 (6,214) 5,832 4,400 1,292 1,041
Extraordinary item - early retirement
of debt (net of taxes) . . . . . . (3,576) (89) (234) (234) (2,462) (2,462)
Cumulative effect of change in accounting
principle relating to income taxes -- -- 1,586 1,586 -- --
-------- -------- -------- -------- -------- --------
Net income (loss) . . . . . . . . . . $ 1,817 $ (6,303) $ 7,184 $ 5,752 $ (1,170) $ (1,421)
======== ======== ======== ======== ======== ========
Depreciation and amortization . . . . $ 13,767 $ 15,562 $ 19,402 $ 14,260 $ 16,055 $ 16,185
Capital expenditures . . . . . . . . $ 26,661 $ 28,256 $ 15,483 $ 11,373 $ 16,610 $ 16,610
Earnings before interest, taxes,
depreciation and amortization
(EBITDA)(5) . . . . . . . . . . . $ 49,073 $ 29,473 $ 50,252 $ 38,008 $ 32,464 $ 32,464
Ratio of earnings to fixed charges(6) 1.6x -- 1.4x 1.4x 1.1x 1.1x
<CAPTION>
December 31, September 30, 1994
---------------------------------- -----------------------------
1991(1) 1992 1993 Actual Pro Forma(2)
---- ---- ---- ------ ---------
(in thousands)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital . . . . . . . . . $ 38,596 61,852 54,257 $ 54,444 $ 54,444
Total assets . . . . . . . . . . 304,596 325,170 325,848 334,604 334,891
Total debt . . . . . . . . . . . 168,645 200,084 194,310 194,930 195,362
Stockholders' equity . . . . . . 68,448 62,179 69,266 68,057 67,806
</TABLE>
9
<PAGE> 12
- ----------------------------------
(1) In May 1991, the Company acquired the remaining 21% of Poly-Tech not
previously owned by the Company. In July 1991, the Company acquired
66.6% of the stock of Rhino-X Industries, Inc. and acquired the
remaining 33.4% on January 1, 1994. Results are included from the
date of each respective purchase.
(2) Assuming $15 million of Notes had been issued at 10.25% as of January
1, 1994 and proceeds of the Notes (net of estimated Note offering
costs of $365) had been used on such date to retire outstanding debt
portion of the 13.75% Senior Notes due 1997 assumed retired for months
of January and February 1994 and portion of Revolving Credit Agreement
and Accounts Receivable Securitization Agreement retired for months of
March 1994 through September 1994).
(3) In 1992, pretax income was reduced by $7.7 million for a new product
introduction and $4.3 million for a restructuring charge. In 1991,
pretax income was reduced by $3.4 million for a restructuring charge.
(4) In 1991, the provision for income taxes includes a $3.0 million
non-recurring deferred tax charge to recognize tax effects of timing
differences on conversion of the Company from a "S" corporation to a
"C" corporation.
(5) EBITDA = Income (loss) before provision for income taxes,
extraordinary item and cumulative effect of change in accounting
principle plus interest expense, plus depreciation and amortization
(excluding amortization of deferred financing expenses, which are a
component of interest expense). This calculation is part of a ratio
required by the Company's debt covenants. It does not represent a
measurement under generally accepted accounting principles ("GAAP")
and is not intended to supplant the GAAP basis statement of cash
flows.
(6) For purposes of these computations, earnings consist of income before
taxes plus fixed charges. Fixed charges consist of interest expense,
amortization of deferred financing fees, and approximately one third
of operating lease expense (representing Management's estimate of the
interest factor of operating lease expense). For the year ended
December 31, 1992, the Company had a net loss, and the deficiency of
earnings compared to fixed charges was $7.4 million.
10
<PAGE> 13
RISK FACTORS
Offerees should consider carefully the following specific information,
as well as other information set forth in this Prospectus, before determining
whether to accept the Exchange Offer.
SUBSTANTIAL LEVERAGE
The Company incurred substantial indebtedness in connection with its
acquisition of operating businesses. As of September 30, 1994, after giving
effect to the issuance of the Notes, the Company's long-term indebtedness would
be approximately $195.4 million (74.2% of total capitalization), including the
current portion of long-term debt. See "Capitalization". Approximately $135.5
million of such indebtedness matures in 1997. In the future, the Company
intends to use a portion of cash generated by operations to reduce its
indebtedness. However, the Company may, from time to time, find it more
advantageous to employ cash generated by operations for capital investments and
acquisitions. In addition, the Company may incur additional indebtedness from
time to time to finance expansion, either through additional acquisitions or
capital expenditures.
The degree to which the Company is leveraged could have important
consequences to holders of its debt securities, including the following: (i)
the Company's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, general corporate purposes or
other purposes may be impaired; (ii) a substantial portion of the Company's
cash flow from operations must be dedicated to the payment of the principal of
and interest on its existing indebtedness; (iii) the Company is more highly
leveraged than a significant portion of its competitors, which may place the
Company at a competitive disadvantage; (iv) a significant portion of the
Company's borrowings are at variable rates of interest, which causes the
Company to be vulnerable to increases in interest rates; and (v) the Company's
substantial degree of leverage may make it more vulnerable to a downturn in the
plastic products industry, a portion of which historically has been sensitive
to changes in general economic conditions, including conditions in the
construction and retail clothing industries.
RAW MATERIALS
The primary materials used by the Company in the manufacture of its
products are various plastic resins, primarily polyethylene. The Company's
financial performance is thus dependent to a substantial extent on the
polyethylene resin market. The primary plastic resins used by the Company are
produced from petrochemical intermediates derived from products of the natural
gas and crude oil refining processes, respectively. Natural gas and crude oil
markets experience substantial cyclical price fluctuations as well as other
market disturbances including shortages of supply, changes in OPEC policy and
crises in oil producing regions of the world. The capacity, supply and demand
for plastic resins and the petrochemical intermediates from which they are
produced are also subject to cyclical and other market factors. Consequently,
plastic resin prices may fluctuate as a result of changes in natural gas and
crude oil prices and the capacity, supply and demand for resin and
petrochemical intermediates from which they are produced. The Company may not
always be able to pass through increases in the cost of its raw materials to
its customers in the form of price increases. To the extent that increases in
the cost of plastic resin cannot be passed on to its customers, such increases
may have a material detrimental impact on the profitability of the Company due
to decreases in its profit margins.
COMPETITION
Competition in the markets for many of the products manufactured by
the Company is largely based upon price, with brand name recognition and
advertising being important for that portion of the Company's business that
consists of nationally branded products. Some of the Company's competitors
have greater
11
<PAGE> 14
financial resources than those available to the Company. In addition, certain
of the Company's competitors manufacture and market nationally branded products
with greater name recognition than the Company's products, including, in
particular, Glad(R) and Hefty(R) bags, and spend substantially greater amounts
for advertising and promotion. Minimal product differentiation among
competitors results in a pricing structure in certain of the Company's markets,
particularly the market for construction film products, resembling "commodity"
pricing (i.e., a pricing structure in which competition is based solely on
price). Additionally, cost of entry into the Company's markets is relatively
low, and competition is intense. The combination of these factors creates the
possibility that sales and profit margins may decline. The pass-through of
cost increases to customers may be impracticable, and it is possible that the
Company may only be able to sell products to customers at prices near or below
the cost of production.
CYCLICAL NATURE OF PORTIONS OF BUSINESS
A portion of the business of the Company's plastic film products group
is dependent upon the levels of new construction in the United States. In
addition, the plastic hanger business of the Company's molded products group is
dependent upon the retail garment market in the United States. A sustained or
severe downturn in construction activity or retail garment sales could have a
material adverse effect on the Company.
IMPEDIMENTS TO FUTURE ACQUISITIONS OF PLASTIC PRODUCTS MANUFACTURING BUSINESSES
Historically, the Company's growth has depended, in part, on its
ability to acquire and thereafter to operate additional plastic products
manufacturing businesses. The Company intends to continue to expand through
capital expenditures as well as additional acquisitions. Some of the Company's
competitors for acquisition opportunities may be larger companies with
significantly greater resources than the Company. Increased competition for
the acquisition of plastics manufacturing businesses may result in acquisitions
on terms that prove to be less advantageous to the Company than attainable in
the past or that may increase acquisition prices to levels beyond the Company's
financial capability which, in turn, may be a function of its ability to access
the debt and equity capital markets. In addition, there can be no assurance
that the Company will find attractive acquisition candidates in the future or
succeed in reducing the costs and increasing the profitability of any business
acquired in the future.
REGULATION; ENVIRONMENTAL CONSIDERATIONS
Actions by Federal, state and local governments concerning
environmental matters could result in laws or regulations that could increase
the cost of producing the products manufactured by the Company or otherwise
adversely affect the demand for its products. At present, environmental laws
and regulations do not have a material adverse effect upon the demand for the
Company's products. The Company is aware, however, that certain local
governments have adopted ordinances prohibiting or restricting the use or
disposal of certain plastic products that are among the types of products
produced by the Company. If such prohibitions or restrictions were widely
adopted, such regulatory and environmental measures could have a material
adverse effect upon the Company. In addition, a decline in consumer preference
for plastic products due to environmental considerations could have a material
adverse effect upon the Company.
In addition, certain of the Company's operations are subject to
Federal, state and local environmental laws and regulations that impose
limitations on the discharge of pollutants into the air and water and establish
standards for the treatment, storage and disposal of solid and hazardous
wastes. While historically the Company has not had to make significant capital
expenditures for environmental compliance, the Company cannot predict with any
certainty its future capital expenditure requirements for environmental
compliance because of continually changing compliance standards and technology.
The Company does not currently have any insurance coverage for environmental
liabilities and does not anticipate obtaining such coverage in the future.
12
<PAGE> 15
ABILITY TO SERVICE DEBT
The Company has substantial interest and principal payment obligations
with respect to the New Notes and other outstanding indebtedness. No assurance
can be given that the Company will be able to generate sufficient cash flow
from operations to meet its debt service obligations. If for any reason the
Company is unable to meet its debt service obligations, it would be in default
under the terms of its indebtedness. In the event of such a default, the
holders of such indebtedness could elect to declare all such indebtedness
immediately due and payable, including accrued and unpaid interest, and to
terminate their commitments (if any) with respect to funding obligations under
such indebtedness. In addition, such holders could proceed against their
collateral (if any). Any such default could have a significant adverse effect
on the market value and marketability of the New Notes.
RANKING OF THE NEW NOTES AND THE GUARANTEES
The New Notes, like the Old Notes, will be unsubordinated obligations
of the Company ranking pari passu in right of payment with all other existing
and future unsubordinated indebtedness of the Company. The New Notes are also
unsecured and thus, in effect, would rank junior to any secured indebtedness of
the Company. Consequently, in the event of the dissolution, liquidation, or
reorganization of, or similar proceeding relating to the Company, the Company's
secured lenders would be entitled to receive payment to the extent of the value
of their collateral or in full, whichever is less, even though the holders of
the New Notes may not receive payment in full. In addition, the New Notes will
be effectively subordinated to creditors and preferred stockholders (if any) of
the Company's subsidiaries, including Poly-Tech's subsidiaries.
The Guarantees, like Poly-Tech's guarantees with respect to the Old
Notes, will be unsubordinated obligations of Poly-Tech ranking pari passu in
right of payment with all other existing and future unsubordinated indebtedness
of Poly-Tech. The Guarantees are also unsecured and thus, in effect, would
rank junior to any secured indebtedness of Poly-Tech. Consequently, in the
event of the dissolution, liquidation, or reorganization of, or similar
proceeding relating to Poly-Tech, Poly-Tech's secured lenders would be entitled
to receive payment to the extent of the value of their collateral or in full,
whichever is less, even though the holders of the Guarantees may not receive
payment in full. In addition, the Guarantees will be effectively subordinated
to creditors and preferred stockholders (if any) of Poly-Tech's subsidiaries,
including American Western.
As of September 30, 1994, after giving effect to the issuance of the
Notes, (i) the aggregate outstanding amount of unsubordinated indebtedness of
the Company would have been approximately $195.4 million (of which
approximately $71.5 million would have been secured indebtedness); (ii) the
aggregate outstanding amount of total liabilities (excluding intercompany debt)
of the Company's subsidiaries, including Poly-Tech's subsidiaries (but
excluding Poly-Tech), would have been approximately $43.5 million (of which
approximately $24.1 million would have been long-term indebtedness (including
the current portion thereof)); (iii) there would have been no outstanding
preferred stock of the Company's subsidiaries, including Poly-Tech's
subsidiaries (other than the outstanding preferred stock of Poly-Tech held by
the Company); and (iv) there would have been no indebtedness of the Company
outstanding which would have been junior to the New Notes. Pursuant to the
Indenture, the Company and its subsidiaries, including Poly-Tech, may issue
additional unsubordinated indebtedness, subject to limitations on incurrence of
additional debt of the Company, additional secured debt of the Company and its
subsidiaries and additional debt of the Company's subsidiaries. See
"Description of the New Notes--Certain Covenants".
PARTIAL HOLDING COMPANY STRUCTURE
The Company and Poly-Tech must rely to a significant degree on
manufacturing services provided by their respective subsidiaries to generate
the funds necessary to meet their respective debt service obligations,
including payment of principal and interest on the New Notes by the Company and
any payments with respect
13
<PAGE> 16
to the Guarantees by Poly-Tech. At September 30, 1994, approximately 53% of
the Company's total assets were held or contributed by the Company's
subsidiaries, including subsidiaries of Poly-Tech (but excluding Poly-Tech).
The ability of the Company's subsidiaries to pay dividends and make other
distributions to the Company and Poly-Tech may be subject to legal and
contractual limitations. The Indenture prohibits the Company and its
subsidiaries from creating or otherwise permitting to exist any consensual
encumbrance or restriction on the ability of any subsidiary to make certain
distributions to the Company or Poly-Tech subject to certain limited
exceptions. See "Description of the New Notes--Certain Covenants--Limitation
on Restrictions on Distributions from Subsidiaries". Pursuant to applicable
corporate law, the payment of dividends of such subsidiaries to the Company and
Poly-Tech is permitted only (i) out of such subsidiaries' surplus, defined
generally under Delaware law as the excess of the net assets of a corporation
less its stated capital or (ii) if no surplus exists, out of their net profits
for the fiscal year in which the dividend is declared and/or the preceding
fiscal year.
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The terms and conditions of the indebtedness of the Company provided
for in various indentures and other loan documents impose restrictions that
affect, among other things, the ability of the Company and its subsidiaries to
(i) incur additional indebtedness (including indebtedness incurred by means of
guarantees); (ii) create liens on assets; (iii) sell or otherwise transfer
assets; (iv) engage in mergers or consolidations; (v) pay dividends and (vi)
engage in certain transactions with affiliates and subsidiaries. The Company
is also required to comply with certain specified financial ratios and tests.
The Company's ability to comply with such provisions may be affected by events
beyond its control. The Company's failure to comply with any of these
covenants and restrictions could result in a default under certain
indebtedness, which in turn could cause such indebtedness to be declared
immediately due and payable.
CONTROL BY PRINCIPAL SHAREHOLDER
The Company is controlled by William H. Binnie, Chairman of the Board
of Directors of the Company. Mr. Binnie beneficially owns shares representing
59.8% of the combined voting power of the Company's outstanding voting stock.
Therefore, Mr. Binnie controls the vote on all matters submitted to
stockholders, except in the few instances where a class vote is required. The
Company is a party to a management agreement (the "Management Agreement") dated
as of September 12, 1994 with Carlisle Plastics Management Corporation
("CPMC"), which is indirectly wholly owned by Mr. Binnie, pursuant to which
CPMC receives a management fee of $750,000 for the one-year period commencing
September 1, 1994. Because Mr. Binnie controls the Company and CPMC, he has
the power to amend, extend or terminate the Management Agreement, including the
power to increase the management fees payable thereunder (subject only to the
terms of the indebtedness agreements).
PUBLIC DEBT MARKET CONDITIONS
As with the Old Notes, there can be no assurance as to the liquidity
of any markets that exist or may develop for the New Notes, the ability of
holders of the New Notes to sell their New Notes or the price at which holders
would be able to sell their New Notes. Any trading in the New Notes might be
limited and sporadic, and the New Notes could trade at prices that may be
higher or lower than the initial offering price thereof depending on many
factors, including prevailing interest rates, the Company's operating results
and the markets for similar securities. Prudential Securities has advised the
Company that they currently intend to make a market in the New Notes; however,
they are not obligated to do so and any market making may be discontinued at
any time in their sole discretion without notice. The Company does not intend
to apply for listing of the New Notes on any securities exchange.
14
<PAGE> 17
Historically, and particularly in recent periods, the market for
non-investment grade debt has been subject to disruptions that have caused
substantial volatility in the prices of securities similar to the New Notes.
There can be no assurance that the market for the New Notes will not be subject
to similar disruptions.
USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of the New
Notes offered hereby. In consideration for the New Notes, as contemplated in
this Prospectus, the Company will receive in exchange a like principal amount
of Old Notes, which were privately placed by the Company on November 10, 1994,
the terms of which are identical in all material respects to the New Notes.
The Old Notes surrendered in exchange for the New Notes will be retired.
Accordingly, the issuance of the New Notes will not result in any substantive
change in the indebtedness of the Issuer. Net proceeds from the sale of the
Old Notes were used to repay certain balances under the Company's revolving
credit agreement and reduce the outstanding balance under its accounts
receivable securitization agreement.
15
<PAGE> 18
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Notes were sold by the Company on November 10, 1994 to
Prudential Securities Incorporated ("Prudential Securities") with further
distribution permitted only to a limited number of institutional investors. In
connection therewith, the Company and Poly-Tech entered into the Exchange and
Registration Rights Agreement with Prudential Securities (the "Registration
Rights Agreement") on November 10, 1994 (the "Closing Date") for the benefit of
Prudential Securities and its transferees, which requires, among other things,
that (i) the Company file with the Commission within 60 days of the Closing
Date a registration statement under the Securities Act with respect to an issue
of new notes of the Company identical in all material aspects to the Old Notes,
(ii) the Company use its best efforts to cause such registration statement to
become effective under the Securities Act within 90 days of the Closing Date
and, (iii) upon the effectiveness of that registration statement, the Company
offer to the holders of the Old Notes the opportunity to exchange their Old
Notes for a like principal amount of New Notes, which will be issued without a
restrictive legend and may be reoffered and resold by the holder without
restrictions or limitations under the Securities Act. A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The term "Holder" with respect
to the Exchange Offer means any person in whose name Old Notes are registered
on the books of the Company or any other person who has obtained a properly
completed bond power from a registered Holder. No securities other than the
New Notes are included in the Exchange Offer Registration Statements.
Based on no-action letters issued by the staff of the Commission to
third parties, the Company believes that the New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by any Holder of such New Notes (other than any such
Holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act and certain broker-dealers and their affiliates)
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such New Notes are acquired in the ordinary
course of such Holder's business and such Holder does not intend to participate
and has no arrangement or understanding with any person to participate in the
distribution of such New Notes. Any Holder who tenders in the Exchange Offer
with the intention to participate, or for the purpose of participating, in a
distribution of the New Notes must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction.
As a result of the filing and effectiveness of the Registration
Statement (within the period specified in the Registration Rights Agreement) of
which this Prospectus is a part, the Company will not be required to pay
certain liquidated damages. Following the consummation of the Exchange Offer,
Holders of Old Notes not tendered will not have any further registration rights
(except as described under "Description of New Notes - Registration Rights;
Liquidated Damages") and Old Notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for the Old
Notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal (together, the "Exchange Offer"),
the Holders may tender some or all of their Old Notes pursuant to the Exchange
Offer. However, Old Notes may be tendered only in integral multiples of
$1,000.
The terms of the New Notes are substantially the same as the terms of
the Old Notes except that the New Notes have been registered under the
Securities Act. The New Notes will evidence the same debt as the Old Notes and
will be entitled to the benefits of the Indenture.
16
<PAGE> 19
As of the date of this Prospectus, $15,000,000 aggregate principal
amount of the Old Notes is outstanding and there is one registered Holder.
This Prospectus, together with the Letter of Transmittal, is being sent to all
such registered Holders as of ____________, 1995.
Holders of Old Notes do not have any appraisal or dissenters' rights
under the General Corporation Law of Delaware or the Indenture in connection
with the Exchange Offer. The Company intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations of the
Commission thereunder.
The Exchange Offer is not conditioned upon there being tendered any
minimum aggregate principal amount of Old Notes. The Company shall be deemed
to have accepted validly tendered Old Notes when, as and if the Company has
given oral or written notice thereof to the Exchange Agent. The Exchange Agent
will act as agent for the tendering Holders for the purposes of receiving the
New Notes from the Company.
If any tendered Old Note are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering Holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions
in the Letter of Transmittal, transfer taxes with respect to the exchange of
Old Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than transfer taxes in certain circumstances, in connection
with the Exchange Offer.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time,
on ___________, 1995, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended. The Expiration Date
will be at least 20 business days after the commencement of the Exchange Offer.
The Company expressly reserves the right, at any time or from time to time, to
extend the period of time during which the Exchange Offer is open, and thereby
delay acceptance for exchange of any Old Notes by giving oral notice (confirmed
in writing) or written notice to the Exchange Agent and by giving written
notice of such extension to the Holders thereof or by timely public
announcement communicated, unless otherwise required by applicable law or
regulation, by making a release through the Dow Jones News Service, in each
case, no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration date. During any such extension, all
Old Notes previously tendered will remain subject to the Exchange Offer.
The Company expressly reserves the right, in its sole discretion, (i)
to delay accepting any Old Notes, to extend the Exchange Offer or to terminate
the Exchange Offer if any of the conditions set forth below under "Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of
the Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof to the registered Holders. If the Exchange Offer is
amended in a manner determined by the Company to constitute a material change,
the Company will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered Holders, and the Company
will extend the Exchange Offer for a period of five to 10 business days,
depending upon the significance of the amendment and the manner of disclosure
to the registered Holders, if the Exchange Offer would otherwise expire during
such five to 10 business day period.
Without limiting the manner in which the Company may choose to make
public announcement of any delay, extension, amendment or termination of the
Exchange Offer, the Company shall have no obligation to
17
<PAGE> 20
publish, advertise, or otherwise communicate any such public announcement,
other than by making a timely release to the Dow Jones News Service.
INTEREST ON THE NEW NOTES
The New Notes will bear interest from their date of issuance. Holders
of Old Notes that are accepted for exchange will receive, in cash, accrued
interest thereon to, but not including, the date of issuance of the New Notes.
Such interest will be paid on June 15, 1995 with the first interest payment on
the New Notes. Interest on the New Notes accepted for exchange will cease to
accrue upon issuance of the New Notes.
The New Notes bear interest at a rate equal to 10 1/4% per annum.
Interest on the New Notes is payable semi-annually on each June 15 and December
15, commencing on the first such date following their date of issuance.
PROCEDURES FOR TENDERING
Only a Holder of Old Notes may tender such Old Notes in the Exchange
Offer. To tender in the Exchange Offer, a Holder must complete, sign and date
the Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile, together with the Old
Note and any other required documents, to the Exchange Agent prior to 5:00
p.m., New York City time, on the Expiration Date. To be tendered effectively,
the Old Notes, Letter of Transmittal and other required documents must be
received by the Exchange Agent at the address set forth below under "Exchange
Agent" prior to 5:00 p.m., New York City time, on the Expiration Date.
The tender by a Holder will constitute an agreement between such
Holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal.
THE LETTER OF TRANSMITTAL WILL INCLUDE REPRESENTATIONS TO THE COMPANY
THAT, AMONG OTHER THINGS, (I) THE NEW NOTES RECEIVED PURSUANT TO THE EXCHANGE
OFFER ARE BEING ACQUIRED IN THE ORDINARY COURSE OF BUSINESS OF THE PERSON
RECEIVING SUCH NEW NOTES (WHETHER OR NOT SUCH PERSON IS THE HOLDER), (II)
NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON HAS AN ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN THE DISTRIBUTION OF SUCH NEW
NOTES, (III) NEITHER THE HOLDER NOR ANY SUCH OTHER PERSON IS AN "AFFILIATE," AS
DEFINED IN RULE 405 UNDER THE SECURITIES ACT, OF THE COMPANY, (IV) THE HOLDER
IS NOT ENGAGED IN AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION OF THE NEW
NOTES, AND (V) IF THE TENDERING HOLDER IS A BROKER OR DEALER (AS DEFINED IN THE
EXCHANGE ACT) (X) IT ACQUIRED THE OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF
MARKET MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND (Y) IT HAS NOT ENTERED
INTO ANY ARRANGEMENT OR UNDERSTANDING WITH THE COMPANY OR ANY "AFFILIATE" OF
THE COMPANY (WITHIN THE MEANING OF RULE 405 UNDER THE SECURITIES ACT) TO
DISTRIBUTE THE NEW NOTES TO BE RECEIVED IN THE EXCHANGE OFFER. IN THE CASE OF
A BROKER-DEALER THAT RECEIVED NEW NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD
NOTES WHICH WERE ACQUIRED BY IT AS A RESULT OF MARKET-MAKING OR OTHER TRADING
ACTIVITIES, THE LETTER OF TRANSMITTAL WILL ALSO INCLUDE AN ACKNOWLEDGEMENT THAT
THE BROKER-DEALER WILL DELIVER A COPY OF THIS PROSPECTUS IN CONNECTION WITH THE
RESALE BY IT OF NEW NOTES RECEIVED PURSUANT TO THE EXCHANGE OFFER. SEE "PLAN
OF DISTRIBUTION."
The method of delivery of Old Notes and the Letter of Transmittal and
all other required documents to the Exchange Agent is at the election and risk
of the Holder. Instead of delivery by mail, it is
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<PAGE> 21
recommended that Holders use an overnight or hand delivery service. In all
cases, sufficient time should be allowed to assure delivery to the Exchange
Agent before the Expiration Date. No Letter of Transmittal or Old Notes should
be sent to the Company. Holders may request their respective brokers, dealers,
commercial banks, trust companies or nominees to effect the above transactions
for such Holders.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered Holder promptly and instruct such
registered Holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering such
owner's Old Notes, either make appropriate arrangements to registered ownership
of the Old Notes in such owner's name or obtain a properly completed bond power
from the registered Holder. The transfer of registered ownership may take
considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed by any Eligible Institution (as defined
below) unless the Old Notes tendered pursuant thereto are tendered (i) by a
registered Holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal
or (ii) for the account of an Eligible Institution (as defined below). In the
event that signatures on a Letter of Transmittal or notice of withdrawal, as
the case may be are required to be guaranteed, such guarantee must be by a
financial institution which is a commercial bank or trust company located or
having an office or correspondence in the United States, or any member firm of
a registered national securities exchange or of the National Association of
Securities Dealers, Inc., which firm or financial institution must also be a
member of or participant in the Securities Transfer Agents Medallion Program,
the Stock Exchanges Medallion Program of the New York Stock Exchange Medallion
Signatures Program (any such firm or financial institution, an "Eligible
Institution.")
If the Letter of Transmittal is signed by a person other than the
registered Holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered Holder as such registered Holder's name appears on such Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by
the Company, evidence satisfactory to the Company of their authority to so act
must be submitted with the Letter of Transmittal.
The Exchange Agent has established accounts with respect to the Old
Notes at the book-entry transfer facility, The Depository Trust Company (the
"Book-Entry Transfer Facility"), for the purpose of facilitating the Exchange
Offer. Any financial institution that is a participant in the Book-Entry
Transfer Facility's system may make book-entry delivery of Old Notes by causing
the Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account with respect to the Old Notes in accordance with the
Book-Entry Transfer Facility's procedures for such transfer. However, although
delivery of Old Notes may be effected through book-entry transfer into the
Exchange Agent's account at the Book-Entry Transfer Facility, an appropriate
Letter of Transmittal properly completed and duly executed with any required
signature guarantee and all other required documents must in each case be
transmitted to and received or confirmed by the Exchange Agent at its address
set forth below on or prior to the Expiration Date, or, if the guaranteed
delivery procedures described below are complied with, within the time period
provided under such procedures. Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Exchange Agent.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old notes and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject
any and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of
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<PAGE> 22
counsel for the Company, be unlawful. The Company also reserves the right to
waive any defects, irregularities or conditions of tender as to particular Old
Notes. The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instruction in the Letter of Transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Old Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify Holders of
defects or irregularities with respect to tenders of Old Notes, neither the
Company, the Exchange Agent nor any other person shall incur any liability for
failure to give such notification. Tenders of Old Notes will not be deemed to
have been made until such defects or irregularities have been cured or waived.
Any Old Notes received by the Exchange Agent that are not properly tendered and
as to which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
In addition, the Company reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date or, as set forth below under "Conditions," to terminate the
Exchange Offer and, to the extent permitted by applicable law, purchase Old
Notes in the open market, in privately negotiated transactions or otherwise.
The terms of any such purchases or offers could differ from the terms of the
Exchange Offer.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available or (ii) who cannot deliver their Old Notes, the
Letter of Transmittal or any other required documents to the Exchange Agent
prior to the Expiration Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent
receives from such Eligible Institution a properly completed and duly
executed Notice of Guaranteed Delivery (by facsimile transmission,
mail or hand delivery) setting forth the name and address of the
Holder, the certificate number(s) of such Old Notes and the principal
amount of Old Notes tendered, stating that the tender is being made
thereby and guaranteeing that, within five New York Stock Exchange
trading days after the Expiration Date, the Letter of Transmittal (or
facsimile thereof) together with the certificate(s) representing the
Old Notes (or a confirmation of book-entry transfer of such Old Notes
into the Exchange Agent's account at the Book-Entry Transfer
Facility), and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with the
Exchange Agent; and
(c) such properly completed and executed Letter of
Transmittal (or facsimile thereof), as well as the certificate(s)
representing all tendered Old Notes (or a confirmation of book-entry
transfer of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility), in proper form for transfer, and all
other documents required by the Letter of Transmittal are received by
the Exchange Agent within five New York Stock Exchange trading days
after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery
will be sent to Holders who wish to tender their Old Notes according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
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<PAGE> 23
To withdraw a tender of Old Notes in the Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time,
on the Expiration Date. Any such notice of withdrawal must (i) specify the
name of the person having deposited the Old Notes to be withdrawn (the
"Depositor"), (ii) identify the Old Notes to be withdrawn (including the
certificate number or numbers and principal amount of such Old Notes, or, in
the case of Old Notes transferred by book-entry transfer, the name and number
of the account at the Book-Entry Transfer Facility to be credited), (iii) be
signed by the Holder in the same manner as the original signature on the Letter
of Transmittal by which such Old Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee with respect to the Old Notes register the transfer of such
Old Notes into the name of the person withdrawing the tender and (iv) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding upon all parties. Any Old Notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the Exchange Offer and no New Notes will be issued with respect thereto unless
the Old Notes so withdrawn are validly retendered. Any Old Notes which have
been tendered but which are not accepted for exchange will be returned to the
Holder thereof without cost to such Holder as soon as practicable after
withdrawal, rejection of tender or termination of the Exchange Offer. Properly
withdrawn Old Notes may be retendered by following one of the procedures
described above under "Procedures for Tendering" at any time prior to the
Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company
shall not be required to accept for exchange, or exchange New Notes for, any
Old Notes, and may terminate the Exchange Offer as provided herein before the
acceptance of such Old Notes, if:
(a) Any action or proceeding is instituted or threatened
in any court or by or before any governmental agency with respect to
the Exchange Offer which, in the sole judgment of the Company, might
materially impair the ability of the Company to proceed with the
Exchange Offer or materially impair the contemplated benefits of the
Exchange Offer to the Company, or any material adverse development has
occurred in any existing action or proceeding with respect to the
Company or any of its subsidiaries;
(b) any change, or any development involving a
prospective change, in the business or financial affairs of the
Company, or any of its subsidiaries has occurred which, in the sole
judgment of the Company, might materially impair the ability of the
Company to proceed with the Exchange Offer or materially impair the
contemplated benefits of the Exchange Offer to the Company;
(c) any law, statute, rule or regulation is proposed,
adopted or enacted which, in the sole judgment of the Company, might
materially impair the ability of the Company to proceed with the
Exchange Offer or materially impair the contemplated benefits of the
Exchange Offer to the Company; or
(d) any governmental approval has not been obtained,
which approval the Company shall in its sole discretion, deem
necessary for the consummation of the Exchange Offer as contemplated
hereby.
If the Company determines in its sole discretion that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Old
Notes and return all tendered Old Notes to the tendering Holders, (ii) extend
the Exchange Offer and retain all Old Notes tendered prior to the expiration of
the Exchange Offer, subject, however, to the rights of Holders to withdraw such
Old Notes (see "Withdrawal of Tenders") or (iii) waive such unsatisfied
conditions with respect to the Exchange Offer and accept all properly tendered
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<PAGE> 24
Old Notes which have not been withdrawn. If such waiver constitutes a material
change to the Exchange Offer, the Company will promptly disclose such waiver by
means of a prospectus supplement that will be distributed to the registered
Holders, and the Company will extend the Exchange Offer or a period of five to
10 business days, depending upon the significance of the waiver and the manner
of disclosure to the registered Holders, if the Exchange Offer would otherwise
expire during such five to 10 business day period.
EXCHANGE AGENT
United States Trust Company of New York has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance, requests
for additional copies of this Prospectus or of the Letter of Transmittal and
requests for Notices of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: By Overnight Courier:
United States Trust Company of New York United States Trust Company of New York
P. O. Box 844 Cooper Station 770 Broadway
New York, New York 10276 New York, New York 10003
Attn: Corporate Trust Operations
By Facsimile: By Hand:
United States Trust Company of New York United States Trust Company of New York
(212) 420-6152 65 Beaver Street
Attn: Customer Service New York, New York 10005
Attn: Ground Level
Corporate Trust Operations
</TABLE>
SOLICITATION OF TENDERS; FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telephone or in person by officers and regular
employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay
the Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer
will be paid by the Company and are estimated in the aggregate to be $40,000.
Such expenses include fees and expenses of the Exchange Agent and Trustee,
accounting and legal fees, and printing costs.
The Company will pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however,
certificates representing New Notes or Old Notes for principal amounts are not
tendered or accepted for exchange or are to be delivered to, or are to be
issued in the name of, any person other than the registered Holder of the Old
Notes tendered, or if tendered Old Notes are registered in the name of any
person other than the person signing the Letter of Transmittal, or if a
transfer tax is imposed for any reason other than the exchange of Old Notes
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other persons) will be payable
by the tendering Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted
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<PAGE> 25
with the Letter of Transmittal, the amount of such transfer taxes will be
billed directly to such tendering Holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old
Notes, as reflected in the Company's accounting records on the date of the
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized. The expenses of the Exchange Offer will be amortized over the term
of the New Notes.
OTHER
Participation in the Exchange Offer is voluntary. Holders of the Old
Notes are urged to consult their financial and tax advisors in making their own
decisions on what action to take.
As a result of the making of, and upon acceptance for exchange of all
validly tendered Old Notes pursuant to the terms of this Exchange Offer, the
Company will have fulfilled a covenant contained in the terms of the
Registration Rights Agreement. Holders of the Old Notes who do not tender
their certificates in the Exchange Offer will continue to hold such
certificates and will be entitled to all the rights, and limitations applicable
thereto, under the Indenture, except for any such rights under the Registration
Rights Agreement which by their terms terminate or cease to have further effect
as a result of the making of this Exchange Offer. See "Description of New
Notes." All untendered Old Notes will continue to be subject to the
restrictions on transfer set forth in the Indenture. To the extent that Old
Notes are tendered and accepted in the Exchange Offer, the trading market for
untendered Old Notes could be adversely affected.
The Company may in the future seek to acquire untendered Old Notes in
open market or through privately negotiated transactions, subject to provisions
of its debt agreements, through subsequent offers or otherwise. The Company
has no present plan to acquire any Old Notes which are not tendered in the
Exchange Offer or to file a registration statement to permit resales of any Old
Notes which are not tendered pursuant to the Exchange Offer.
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<PAGE> 26
DESCRIPTION OF THE NEW NOTES
The New Notes will be issued by the Company under an indenture (the
"Indenture") among the Company, Poly-Tech and United States Trust Company of
New York, as trustee (the "Trustee"), a copy of the form of which is filed as
an exhibit to the Registration Statement of which this Prospectus is a part.
The following summary of certain provisions of the Indenture and the New Notes
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, the Indenture and the New Notes, including the
definitions therein of terms not defined in this Prospectus.
TERMS
The New Notes will mature on June 15, 1997, and will bear interest at
the rate per annum stated on the cover page hereof, payable semi-annually in
arrears on June 15 and December 15 of each year, commencing June 15, 1995, to
the persons who are registered holders thereof at the close of business on the
June 1 or December 1 preceding such interest payment date. The Trustee will
authenticate and deliver the New Notes for original issue in an aggregate
principal amount of $15,000,000.
Interest on the New Notes will be computed on the basis of a 360-day
year of twelve 30-day months. Principal and interest will be payable at the
office of the Trustee, but, at the option of the Company, interest may be paid
by check mailed to the registered holders at their registered addresses. The
New Notes will be transferable and exchangeable at the office of the Trustee
and will be issued in fully registered form, without coupons, in denominations
of $1,000 and any integral multiple thereof.
OPTIONAL REDEMPTION
The New Notes may not be redeemed prior to June 15, 1995. On or after
such date, the New Notes may be redeemed at the option of the Company, at any
time as a whole, or from time to time in part, on not less than 30 nor more
than 60 days' notice, at a redemption price of 102.56% of principal amount
during the 12-month period commencing June 15, 1995 and at par commencing June
15, 1996, plus accrued and unpaid interest (if any) to the date of redemption
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
SINKING FUND
There will be no mandatory sinking fund for the New Notes.
CHANGE OF CONTROL OR FUNDAMENTAL CHANGE
Upon (i) the consummation of (x) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Voting Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
(I) the holders of the Company's Voting Stock immediately prior to the merger
have the same proportionate share of voting power with respect to the Voting
Stock of the surviving corporation immediately after the merger or (II) William
H. Binnie owns more than 50% of the voting power of the Voting Stock of the
surviving corporation immediately after the merger, or (y) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, other than
a sale or other transfer in which (I) the holders of the Company's Voting Stock
immediately prior to such sale or transfer have the same proportionate share of
voting power with respect to the Voting Stock of the transferee corporation
immediately after such sale or other transfer or (II) William H. Binnie owns
more than 50% of the voting power of the Voting Stock of the transferee
corporation immediately after such sale or
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<PAGE> 27
other transfer; (ii) the approval by shareholders of any plan or proposal for
the liquidation or dissolution of the Company other than a liquidation or
dissolution in which (I) the holders of the Company's Voting Stock immediately
prior to such liquidation or dissolution have the same proportionate share of
voting power with respect to the Voting Stock of the corporation which will
hold all or substantially all of the assets of the Company immediately after
such liquidation or dissolution or (II) William H. Binnie owns more than 50% of
the voting power of the Voting Stock of the corporation that will hold all or
substantially all of the assets of the Company immediately after such
liquidation or dissolution; (iii) the failure of individuals who on the date of
the Indenture constitute the board of directors to constitute at least a
majority thereof, unless the election or the nomination for election by the
Company's shareholders of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors on the date
of the Indenture; (iv) the acquisition by a person (other than William H.
Binnie) or entity or group of persons or entities acting in concert as a
partnership, limited partnership, syndicate or other group, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases
or otherwise, of beneficial ownership of Voting Stock of the Company
representing 50% or more of the combined voting power of the outstanding Voting
Stock of the Company (each of the events described in (i), (ii), (iii) or (iv)
above hereby referred to as a "Change of Control"); (v) the direct or indirect
acquisition by the Company or any of its Subsidiaries of a corporation,
partnership, joint venture interest, association, joint-stock company, trust or
unincorporated organization (including any subdivision or ongoing business of
any such entity or substantially all the assets of any such entity, subdivision
or business) engaged primarily in a business not directly related to the
design, development, manufacture or sale of plastic products (each an
"Unrelated Entity") if the consolidated total assets attributable to all
Unrelated Entities acquired (and still held) by the Company and its
Subsidiaries exceeds 25% of the consolidated total assets of the Company after
such acquisition (determined in accordance with generally accepted accounting
principles); or (vi) any Asset Disposition occurring after an acquisition of an
Unrelated Entity if the consolidated total assets attributable to all Unrelated
Entities acquired (and still held) by the Company and its Subsidiaries exceeds
25% of the consolidated total assets of the Company after such Asset
Disposition (determined in accordance with generally accepted accounting
principles) (each of the events described in (v) or (vi) above hereby referred
to as a "Fundamental Change"), each holder of New Notes will have the right to
require the Company to repurchase all or any part of such holder's Notes at a
repurchase price equal to 101% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date of purchase.
Clause (i)(y) of the definition of Change of Control set forth in the
preceding paragraph includes a sale, lease exchange or other transfer of all or
"substantially all" of the Company's assets. Clauses (ii)(I) and (ii)(II) of
such definition exclude certain events involving a corporation that will hold
all or "substantially all" of the assets of the Company immediately after a
liquidation or dissolution. Although there is a developing body of case law
interpreting the phrase "substantially all", there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
holder of New Notes to require the Company to repurchase such New Notes as a
result of one of the events described in this paragraph may be uncertain.
Within 30 days following any Change of Control or Fundamental Change,
the Company will mail a notice to each holder of New Notes and the Trustee
stating (i) that a Change of Control or Fundamental Change, as the case may be,
has occurred and that such holder has the right to require the Company to
repurchase such holder's New Notes at a repurchase price in cash equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if any, to
the date of repurchase; (ii) the circumstances and relevant facts regarding
such Change of Control or Fundamental Change (including, but not limited to,
information with respect to pro forma historical income, cash flow and
capitalization after giving effect to such Change in Control or Fundamental
Change); (iii) the repurchase date (which will be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and (iv) the
instructions determined by the Company, consistent with the Indenture, that a
holder must follow in order to have its New Notes repurchased. Prior to
mailing notice of such Change of Control or Fundamental Change to the holders
of the New Notes, the Company will (x) obtain the requisite consents under the
Credit Agreement (and any other applicable instrument governing Debt of the
Company that would restrict the repurchase of the New Notes) to permit
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<PAGE> 28
the repurchase of the New Notes or (y) repay all Debt under the Credit
Agreement (and any other applicable instrument governing Debt of the Company
that would restrict the repurchase of the New Notes) in full. The Company will
comply with all applicable tender offer rules, including Rules 13e-4 and 14e-1,
if the Change of Control or Fundamental Change repurchase option is triggered.
A Change of Control as defined above includes certain transactions
involving or representing a transfer of a controlling equity interest in the
Company. Other transactions involving or representing transfers of a
controlling equity interest in the Company not specified above (such as, for
example, certain recapitalization transactions or transactions in which the
transferee is William H. Binnie) would not constitute Changes of Control as
defined and therefore would not trigger the repurchase obligation. The fact
that a transaction would constitute a Change of Control as defined does not
mean that the transaction would be permitted under the Indenture unless the
transaction would be otherwise permissible under the Indenture.
The Company's other senior indebtedness contains prohibitions of
certain events which would constitute a Change of Control. In addition, the
exercise by holders of New Notes of their right to require the Company to
repurchase New Notes could cause a default under such other senior
indebtedness, even if the Change of Control itself does not, due to the
financial effect of such repurchase on the Company. Finally, the Company's
ability to pay cash to the holders of Notes upon a repurchase may be limited by
the Company's then existing financial resources.
CERTAIN COVENANTS
Limitation on Secured Debt. The Company may not, and may not permit
any Subsidiary to, issue (as defined), directly or indirectly, any Secured Debt
unless contemporaneously therewith effective provision is made to secure the
Notes equally and ratably with such Secured Debt for so long as such Secured
Debt is secured by a Lien. However, the Company will not be required to
equally and ratably secure the Notes upon the issuance of the following Secured
Debt: (i) Debt of the Company permitted under clause (i) in the second sentence
of "Limitation on Debt" and Debt of a Subsidiary permitted under clause (i) of
"Limitation on Subsidiary Debt and Preferred Stock", so long as such Debt is
not secured by any property or assets of the Company or any Subsidiary other
than inventories or receivables; (ii) Debt of the Company permitted under the
first sentence or clause (v) of the second sentence of "Limitation on Debt"
that is incurred to finance the acquisition of property or assets acquired by
the Company and its Subsidiaries after the date of the Indenture (including any
improvements, alterations or repairs to existing property), so long as (1) such
Debt is incurred and the Lien securing such Debt is created not later than one
year following such acquisition and (2) such Debt is not secured by any
property or assets of the Company or any Subsidiary other than the property and
assets so acquired other than, in the case of construction or improvement, any
theretofore unimproved real property or portion thereof on which the property
so constructed, or the improvement, is located; (iii) Debt of the Company
permitted under the first sentence of "Limitation on Debt" that is secured by
property or assets of a person if such Debt (1) was existing at the time the
obligor thereon was merged or consolidated with the Company or at the time of
sale, lease or other disposition of the properties of such obligor as an
entirety (or substantially as an entirety) to the Company or (2) was issued in
exchange for or the proceeds of which were used to refund or refinance Debt
referred to in clause (1) above or this clause (2), so long as (A) the
principal amount of such Debt so issued does not exceed the Scheduled Principal
Amount of the Debt so exchanged, refunded or refinanced and (B) such Debt so
issued (I) matures after the Stated Maturity of the Debt so exchanged, refunded
or refinanced and (II) has an Average Life greater than the remaining Average
Life of the Debt so exchanged, refunded or refinanced, and so long as such Debt
is not secured by any property or assets of the Company or any Subsidiary other
than (x) in the case of Debt referred to in clause (1), the property subject
thereto at the time such obligor or properties were acquired and (y) in the
case of Debt referred to in clause (2), the property subject to the Debt being
exchanged, refunded or refinanced; (iv)(A) Debt of a Subsidiary permitted under
clause (iii)(A) of "Limitation on Subsidiary Debt and Preferred Stock", so long
as (1) the Debt refunded or refinanced thereby was Secured Debt and (2) the
Debt so permitted shall
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<PAGE> 29
not be secured by any property or assets of the Company or any Subsidiary other
than the property subject to such Secured Debt being refunded or refinanced and
(B) Debt of a Subsidiary permitted under clause (iii)(B) of "Limitation on
Subsidiary Debt and Preferred Stock", so long as the Debt so permitted is not
secured by any property or assets of the Company or any Subsidiary other than
the property that was, or would have been, subject to any Debt incurred, or
that could have been incurred, pursuant to the commitments available to such
Subsidiary under revolving credit facilities on the date such Subsidiary was
acquired by the Company; (v) Non-Recourse Debt of a Non-Recourse Subsidiary
permitted under clause (iv) of "Limitation on Subsidiary Debt and Preferred
Stock" which is secured solely by assets of the issuer thereof or the assets of
other Non-Recourse Subsidiaries; and (vi) Debt (other than Debt described in
clauses (i) through (v) of this covenant) in an aggregate amount at any one
time outstanding not to exceed 5% of Consolidated Tangible Assets of the
Company as of the end of the most recent fiscal quarter of the Company ending
not less than 45 days from the date of determination.
Limitation on Sale and Leaseback Transactions. The Company may not,
and may not permit any Subsidiary to, enter into any arrangement with any
person providing for the leasing by the Company or any Subsidiary of any real
or tangible personal property (except for leases for a term of not more than
three years or between the Company and a Subsidiary or between Subsidiaries),
which property has been or is to be sold or transferred by the Company or such
Subsidiary to such person in contemplation of such leasing, unless (i) the
Company or such Subsidiary would be entitled to create a Lien on such property
securing Debt in an amount equal to the Attributable Debt with respect to such
arrangement without equally and ratably securing the Notes pursuant to
"Limitation on Secured Debt" or (ii) the net proceeds from such sale or
transfer are at least equal to the fair value (as determined by the board of
directors) of such property and the Company or such Subsidiary applies or
causes to be applied an amount in cash equal to the net proceeds from such sale
or transfer to purchase, redeem or otherwise acquire or retire the 10 1/4%
Senior Notes Due 1997 issued on June 1, 1992 (the "Senior Notes Due 1997"), the
Variable Notes Due 1997 or the Notes within 60 days of the effective date of
any such sale or transfer.
Limitation on Debt. The Company may not issue, directly or
indirectly, any Debt unless the Consolidated EBITDA Coverage Ratio for the four
consecutive fiscal quarters immediately preceding the issuance of such Debt (as
shown by a pro forma income statement of the Company for the four most recent
fiscal quarters ending at least 30 days prior to the issuance of such Debt
after giving effect to (i) the issuance of such Debt and (if applicable) the
application of the net proceeds thereof to refinance other Debt as if such Debt
was issued and the application of such proceeds occurred at the beginning of
the period, (ii) the issuance and retirement of any other Debt since the last
day of the most recent fiscal quarter covered by such income statement as if
such Debt was issued or retired at the beginning of the period and (iii) the
acquisition of any company or business acquired by the Company since the first
day of the period, including any acquisition which will be consummated
contemporaneously with the issuance of such Debt, as if such acquisition
occurred at the beginning of the period) exceeds 2.0.
Notwithstanding the foregoing, the Company may issue, directly or
indirectly, the following Debt: (i) Debt issued pursuant to the Credit
Agreement up to the greater of (a) $50.0 million less the aggregate principal
amount of Debt then outstanding incurred by a Subsidiary pursuant to clause (i)
of "Limitation on Subsidiary Debt and Preferred Stock" and (b) the sum of 80%
of Eligible Receivables and 50% of Eligible Inventory as of the month-end prior
to the date of such issuance; (ii) Debt evidenced by the Notes and Debt issued
in exchange for or the proceeds of which are used to refund or refinance Debt
permitted by this clause (ii), so long as (1) the principal amount of such Debt
so issued does not exceed the principal amount of the Debt so exchanged,
refunded or refinanced and (2) such Debt so issued (A) does not mature prior to
the Stated Maturity of the Debt so exchanged, refunded or refinanced, and (B)
has an Average Life equal to or greater than the remaining Life of the Debt so
exchanged, refunded or refinanced; (iii) Debt (other than Debt described in
clauses (i) and (ii)) outstanding on the date of the Indenture and Debt issued
in exchange for or to refund or refinance Debt permitted by this clause (iii),
so long as (1) the principal amount of such Debt
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so issued does not exceed the principal amount of the Debt so exchanged,
refunded or refinanced and (2) such Debt so issued (A) does not mature prior to
the Stated Maturity of the Debt so exchanged, refunded or refinanced and (B)
has an Average Life equal to or greater than the remaining Average Life of the
Debt so exchanged, refunded or refinanced; (iv) Debt owed to and held by a
Wholly Owned Subsidiary or a Guarantor, except that (1) any subsequent issuance
or transfer of any Capital Stock that results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or (2) any transfer of such
Debt, in each case, will be deemed to constitute the issuance of such Debt by
the Company; (v) (1) Debt issued to finance up to 80% of the purchase price of
any assets acquired by the Company and its Subsidiaries (other than from an
Affiliate) after the date of the Indenture if all the purchase price for such
assets is or should be included in "addition to property, plant or equipment"
in accordance with generally accepted accounting principles and the acquisition
of such assets is not part of any acquisition of a business unit, so long as
(A) to the extent that the aggregate principal amount of all Debt previously
incurred under this clause (v)(1) exceeds $15.0 million, such Debt is issued
within one year of such acquisition of such assets and (B) at the time of the
issuance of such Debt, the aggregate amount of such Debt and all Debt
previously incurred under this clause (v)(1) would not exceed the greater of
(x) $35.0 million and (y) 15% of Consolidated Tangible Assets of the Company as
of the end of the most recent fiscal quarter of the Company ending not less
than 45 days from the date of determination and (2) Debt which is exchanged
for, or the proceeds of which are used to refinance or pay at maturity
(including any mandatory sinking fund payment), any Debt issued pursuant to
this clause (v), in an aggregate principal amount not to exceed the principal
amount of the Debt so exchanged, refinanced or paid, so long as such Debt (A)
does not mature prior to the Stated Maturity of the Debt so exchanged,
refinanced or paid and (B) has an Average Life equal to or greater than the
Average Life of the Debt so exchanged, refinanced or paid; (vi) Debt issued in
exchange for, or the proceeds of which are used to refund or refinance, any
Debt incurred pursuant to the first sentence of this covenant and any Debt
permitted by this clause (vi), so long as (A) the principal amount of the Debt
so issued does not exceed the principal amount of the Debt so exchanged,
refunded or refinanced and (B) the Debt so issued (x) does not mature prior to
the Stated Maturity of the Debt so exchanged, refunded or refinanced, (y) has
an Average Life equal to or greater than the remaining Average Life of the Debt
so exchanged, refunded or refinanced and (z) is not issued prior to one year
prior to the Stated Maturity of the Debt so exchanged or refinanced unless the
Debt so issued has an effective interest cost to the Company that is less than
the effective interest cost of the Debt so exchanged, refunded or refinanced;
and (vii) Debt (other than Debt described in clauses (i) through (vi) of this
covenant) in an aggregate amount at any one time outstanding not to exceed 10%
of the Consolidated Tangible Assets of the Company as of the end of the most
recent fiscal quarter of the Company ending not less than 45 days from the date
of determination.
The Indenture provides that, notwithstanding the foregoing provisions,
the Company will not issue any Debt if the proceeds thereof are used, directly
or indirectly, to repay, prepay, redeem, defease, retire or refinance any
Subordinated Obligations unless such Debt (A) is subordinated to the Notes on
terms at least as favorable to the holders of Notes as the Subordinated
Obligations repaid, prepaid, redeemed, defeased, retired or refinanced, (B) has
a Stated Maturity later than the Stated Maturity of the Subordinated
Obligations repaid, prepaid, redeemed, defeased, retired or refinanced and (C)
has an Average Life greater than the remaining Average Life of the Subordinated
Obligations repaid, prepaid, redeemed, defeased, retired or refinanced.
Limitation on Restricted Payments. The Company may not, and may not
permit any Subsidiary to, directly or indirectly, (i) declare or pay any
dividend or make any distribution on its Capital Stock or to the direct or
indirect holders of its Capital Stock (except dividends or distributions
payable solely in Non-Convertible Capital Stock or in options, warrants or
other rights to purchase Non-Convertible Capital Stock and except dividends or
distributions payable to the Company or a Subsidiary (and, if a Subsidiary has
minority stockholders, pro rata to such stockholders)), (ii) purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company or
any direct or indirect parent of the Company, (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled
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repayment or scheduled sinking fund payment, any Subordinated Obligations
(other than the acquisition of Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of acquisition) or
(iv) make any loan or advance (other than a Permitted Investment), acquire any
Capital Stock, equity interest, obligation or other security of, or make any
capital contribution to, or otherwise invest in, any person (other than the
Company or a Subsidiary or a person which will become a Subsidiary as a result
of any such acquisition of Capital Stock or other interests) (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement, loan, advance, contribution or other investment being
hereinafter referred to as a "Restricted Payment") if at the time the Company
or such Subsidiary makes such Restricted Payment: (1) a Default has occurred
and is continuing (or would result therefrom); (2) the aggregate amount of such
Restricted Payment and all other Restricted Payments made since the date of the
Indenture, would exceed the sum of (A) an amount equal to (I) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from March 31, 1992, to the earlier of the end of the most recent
fiscal quarter ending at least 45 days prior to the date of such Restricted
Payment or March 31, 1993 (or minus 100% of any cumulative deficit in
Consolidated Net Income), and minus 100% of the amount of any write-downs,
write-offs, other negative revaluations and other negative extraordinary
charges not otherwise reflected in Consolidated Net Income during such period;
plus (II) 75% of the Consolidated Net Income accrued during the period (treated
as one accounting period) from April 1, 1993, to the end of the most recent
fiscal quarter ending at least 45 days prior to the date of such Restricted
Payment (or minus 100% of any cumulative deficit in Consolidated Net Income),
and minus 100% of the amount of any write-downs, write-offs, other negative
revaluations and other negative extraordinary charges not otherwise reflected
in Consolidated Net Income for such period, (B) the aggregate Net Cash Proceeds
received by the Company from the issuance or sale of its Capital Stock (other
than to a Subsidiary or to an employee stock ownership plan) subsequent to the
date of the Indenture, (C) the aggregate Net Cash Proceeds received by the
Company from the issue or sale of its Capital Stock to an employee stock
ownership plan of the Company subsequent to the date of the Indenture, but only
to the extent that any such proceeds are equal to any decrease in the Company's
unearned employee stock ownership plan compensation equity contra-account
resulting from principal repayments made by such employee stock ownership plan
with respect to indebtedness incurred by it to finance the purchase of such
Capital Stock, as and when such principal payments are made and (D) the amount
by which indebtedness of the Company is reduced on the Company's balance sheet
upon the conversion or exchange (other than by a Subsidiary) subsequent to the
date of the Indenture, of any Debt of the Company convertible or exchangeable
for Capital Stock of the Company (less the amount of any cash, or other
property, distributed by the Company upon such conversion or exchange); or (3)
if such Restricted Payment is a Restricted Payment of the type referred to in
clause (i) above, the Consolidated Adjusted EBITDA Coverage Ratio for the four
consecutive fiscal quarters immediately preceding the making of such Restricted
Payment (as shown by a pro forma income statement of the Company for the four
most recent fiscal quarters ending at least 30 days prior to the making of such
Restricted Payment after giving effect to (i) the issuance and retirement of
any Debt since the last day of the most recent fiscal quarter covered by such
income statement as if such Debt was issued or retired at the beginning of the
period and (ii) the acquisition of any company or business acquired by the
Company since the first day of the period as if such acquisition occurred at
the beginning of the period) is less than 2.00.
The foregoing provisions will not prohibit (i) the payment of
dividends within 60 days of declaration if, at the date of declaration, such
dividend would have complied with this provision, so long as, at the time of
the payment of such dividend, no Default has occurred and is continuing (or
would result therefrom) (and any such dividends will be included in the
calculation of the amount of Restricted Payments); (ii) any purchase or
redemption of Capital Stock of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital stock of the Company
and any purchase or redemption of Capital Stock of a Subsidiary made by
exchange for, or out of the substantially concurrent sale of, Capital Stock of
the Company or a Subsidiary (and (A) any such purchase or redemption will be
excluded from the calculation of the amount of Restricted Payments and (B) the
Net Cash Proceeds from such sale will be excluded from clauses (2)(B) and
(2)(C) of the preceding sentence); (iii) any purchase or redemption of
Subordinated Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Debt of the
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Company, so long as such Debt (A) does not mature prior to the Stated Maturity
of the Subordinated Obligations so exchanged, purchased or redeemed, (B) has an
Average Life equal to or greater than the Average Life of the Subordinated
Obligations so exchanged, purchased or redeemed and (C) is subordinated to the
Notes to at least the same extent as the Subordinated Obligations so exchanged,
purchased or redeemed (and any such purchase or redemption will be excluded
from the calculation of the amount of Restricted Payments); (iv) any purchase
or redemption of Subordinated Obligations from Net Available Cash to the extent
permitted by "Limitation on Sales of Assets and Subsidiary Stock" (and any such
purchase or redemption shall be excluded from the calculation of the amount of
Restricted Payments); (v) the repurchase of Capital Stock from officers and
employees (or their estates) of the Company or the Subsidiaries upon death,
disability or termination of employment of such officers and employees, so long
as the aggregate amount of all such repurchases in any fiscal year does not
exceed $4.0 million (and any such repurchases will be included in the
calculation of the amount of Restricted Payments); (vi) the payment of a
management fee to Carlisle Capital or any Affiliate in an amount not to exceed
1.0% of sales per year (and any such payment will be excluded from the
calculation of the amount of Restricted Payments) or (vii) dividends in an
aggregate amount of $10.0 million (and any such dividend will be excluded from
the calculation of the amount of Restricted Payments).
Limitation on Subsidiary Debt and Preferred Stock. The Company may
not permit any Subsidiary to issue, directly or indirectly, any Debt or
Preferred Stock, except the following Debt and Preferred Stock: (i) Debt
issued pursuant to the Credit Agreement up to the greater of (a) $50.0 million
less the aggregate amount of Debt then outstanding incurred by the Company
pursuant to clause (i) of the second sentence of "Limitation on Debt" and (b)
the sum of 80% of Eligible Receivables and 50% of Eligible Inventory as of the
month-end prior to the date of such issuance; (ii) Debt or Preferred Stock
issued to and held by the Company or a Wholly Owned Subsidiary or a Guarantor,
except that (1) any subsequent issuance or transfer of any Capital Stock that
results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or (2) any transfer of such Debt or Preferred Stock other than to
the Company or a Wholly Owned Subsidiary or a Guarantor will be deemed to
constitute the issuance of such Debt or Preferred Stock by the issuer thereof;
(iii) (A) Debt issued in exchange for or the proceeds of which are used to
refund or refinance Debt (other than Debt issued pursuant to a revolving credit
facility) or Preferred Stock of a Subsidiary (1) issued and outstanding prior
to the date on which such Subsidiary was acquired by the Company (other than
Debt or Preferred Stock issued as consideration in, or to provide all or any
portion of the funds utilized to consummate, the transaction or series of
related transactions pursuant to which such Subsidiary became a Subsidiary or
was acquired by the Company), (2) outstanding on the date of the Indenture or
(3) permitted by this clause (iii), so long as (I) the principal amount of such
Debt so issued does not exceed the principal amount of the Debt or Preferred
Stock so exchanged, refunded or refinanced and (II) the Debt so issued shall
have a Stated Maturity later than the Stated Maturity of the Debt or final
redemption date (if any) of the Preferred Stock so exchanged, refunded or
refinanced, and (B) Debt of a Subsidiary issued pursuant to a revolving credit
facility, so long as the aggregate principal amount of all Debt of such
Subsidiary permitted by, or permitted to be exchanged, refunded or refinanced
by, this clause (iii) that is outstanding at any one time under revolving
credit facilities may not exceed the aggregate available commitments (whether
drawn or undrawn) available to such Subsidiary (individually or jointly) under
revolving credit facilities (but without duplication of such commitments to the
extent such commitments were also available to another Subsidiary) on the date
such Subsidiary was acquired by the Company; (iv) Non-Recourse Debt of a
Non-Recourse Subsidiary issued after the date of the Indenture, except that if
any such Debt thereafter ceases to be Non-Recourse Debt of a Non-Recourse
Subsidiary, then such event shall be deemed for the purpose of this covenant to
constitute the issuance of such Debt by the issuer thereof; (v) Debt issued
with respect to obligations that are tax-exempt pursuant to Section 103 of the
Code and that are issued in connection with pollution control or other
facilities of such Subsidiary; (vi) guarantees of Debt of the Company (other
than Secured Debt) permitted under the first sentence or clause (ii), (iii),
(v), (vi) or (vii) of the second sentence under "Limitation on Debt", so long
as such guarantees rank pari passu in all respects with, or be subordinated in
right of payment to, the guarantees that are required under "Guarantees" below
to be issued prior to the
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issuance of such guarantees; and (vii) Debt in an aggregate principal amount or
Preferred Stock having an aggregate liquidation value which, together with all
other Debt and Preferred Stock of Subsidiaries then outstanding other than Debt
or Preferred Stock permitted under clauses (i) through (vi) above, does not
exceed 5% of the Consolidated Net Tangible Assets of the Company as of the end
of the most recent fiscal quarter of the Company ending not less than 45 days
from the date of determination.
Limitation on Restrictions on Distributions from Subsidiaries. The
Company may not, and may not permit any Subsidiary to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (i) pay dividends or make any
other distributions on its Capital Stock or pay any Debt or other obligation
owed to the Company, (ii) make any loans or advances to the Company or (iii)
transfer any of its property or assets to the Company, except: (1) any
encumbrance or restriction pursuant to an agreement in effect at or entered
into on the date of the Indenture; (2) any encumbrance or restriction with
respect to a Subsidiary pursuant to an agreement relating to any Debt issued by
such Subsidiary on or prior to the date on which such Subsidiary was acquired
by the Company (other than Debt issued as consideration in, or to provide all
or any portion of the funds utilized to consummate, the transaction or series
of related transactions pursuant to which such Subsidiary became a Subsidiary
or was acquired by the Company, but not including Debt to the extent issued to
provide funds to pay transaction fees, expenses, and other similar
miscellaneous costs resulting from, or incurred in connection with, the
acquisition of such Subsidiary); (3) any encumbrance or restriction pursuant to
an agreement effecting a refinancing of Debt issued pursuant to an agreement
referred to in clause (1) or (2) above, so long as the encumbrances and
restrictions under or pursuant to any such refinancing agreement are, in the
good faith judgment of the board of directors, no less favorable to the holders
of the Notes than the encumbrances and restrictions under or pursuant to the
agreement refinanced; (4) any encumbrance or restriction relating to a
Non-Recourse Subsidiary; (5) any encumbrance or restriction consisting of
customary non-assignment provisions in leases governing leasehold interests to
the extent such provisions restrict the transfer of the lease; and (6) in the
case of clause (iii) above, restrictions contained in security agreements
securing Debt permitted by "Limitation on Secured Debt" to the extent such
restrictions restrict the transfer of the property subject to such security
agreements.
Limitation on Sales of Assets and Subsidiary Stock. The Company may
not, and may not permit any Subsidiary to, make any Asset Disposition unless
(i) fair market value (as determined in good faith by the board of directors if
the Asset Disposition involves shares or assets having a fair market value of
more than $5.0 million) is received, (ii) if the fair market value (determined
as aforesaid) of the shares or assets subject to such Asset Disposition exceeds
$10,000,000, an amount in cash or Cash Equivalents is received from such Asset
Disposition equivalent to at least 75% of such fair market value and (iii) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied (A) first, to the extent the Company elects, to prepay, repay or
purchase Debt incurred under any then existing senior bank term loan agreement
of the Company or Debt of a Wholly Owned Subsidiary (in each case other than
Debt owed to the Company or a Subsidiary) within 90 days from the later of the
date of such Asset Disposition or the receipt of such Net Available Cash and to
permanently reduce (and not to subsequently recreate, whether with the same
bank or otherwise) the related loan commitment (if any) in an amount equal to
the principal amount so prepaid, repaid or purchased; (B) second, to the extent
of the balance of such Net Available Cash after application as described above,
to the extent the Company elects, to (I) make open market purchases of the
Senior Notes Due 1997 or (II) the acquisition by the Company or any Subsidiary
of Tangible Property or a majority interest in another corporation (so long as,
after giving effect thereto, the Consolidated EBITDA Coverage Ratio for the
four consecutive fiscal quarters immediately preceding such acquisition (as
shown by a pro forma income statement of the Company for the four most recent
fiscal quarters ending at least 30 days prior to such acquisition after giving
effect to (i) such acquisition as if such acquisition occurred at the beginning
of the period, (ii) the issuance and retirement of any Debt since the last day
of the most recent fiscal quarter covered by such income statement as if such
Debt was issued or retired at the beginning of the period, including the
issuance of Debt in connection with such acquisition and (if applicable) the
application of the net proceeds
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thereof to refinance other Debt and (iii) the acquisition of any other company
or business acquired by the Company since the first day of the period as if
such acquisition occurred at the beginning of the period) exceeds 2.0, in each
case within 6 months from the receipt of such Net Available Cash); (C) third,
to the extent of the balance of such Net Available Cash after application as
described above, to make a tender offer to purchase the Senior Notes Due 1997
at a purchase price of 100% of their principal amount plus accrued interest to
the purchase date, unless the available Net Available Cash (after application
of Net Available Cash as described above) is less than $10.0 million for any
particular Asset Disposition (and if less than $10.0 million, such Net
Available Cash is not carried forward for purposes of determining whether a
tender offer is required with respect to the Net Available Cash of subsequent
Asset Dispositions); (D) fourth, to the extent of the balance of such Net
Available Cash after application as described above, to the extent the Company
elects, to make open market purchases of the Variable Notes Due 1997; (E)
fifth, to the extent of the balance of such Net Available Cash after
application as described above, to make a tender offer to purchase Variable
Notes Due 1997 at a purchase price of 100% of their principal amount plus
accrued interest to the purchase date, unless the available Net Available Cash
(after application of Net Available Cash as described above) is less than $10.0
million for any particular Asset Disposition (and if less than $10.0 million,
such Net Available Cash is not carried forward for purposes of determining
whether a tender offer is required with respect to the Net Available Cash of
subsequent Asset Dispositions); (F) sixth, to the extent of the balance of such
Net Available Cash after application as described above, to the extent the
Company elects, to make open market purchases of the Notes; (G) seventh, to the
extent of the balance of such Net Available Cash after application as described
above, to make a tender offer to purchase Notes at a purchase price of 100% of
their principal amount plus accrued interest to the purchase date, unless the
available Net Available Cash is less than $10.0 million for any particular
Asset Disposition (and if less than $10.0 million, such Net Available Cash is
not carried forward for purposes of determining whether a tender offer is
required with respect to the Net Available Cash of subsequent Asset
Dispositions); and (H) eighth, to the extent of the balance of such Net
Available Cash after application as described above, to (x) the acquisition by
the Company or any Wholly Owned Subsidiary of Tangible Property or (y) the
prepayment, repayment or purchase of Debt of the Company (including the Notes)
or any Subsidiary, in each case within one year from the later of the receipt
of such Net Available Cash and the date such tender offer is consummated.
Limitation on Transactions with Affiliates. The Company may not, and
may not permit any Subsidiary to, conduct any business or enter into any
transaction or series of related transactions in an aggregate amount greater
than $100,000 per transaction or related transaction (including the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any legal or beneficial owner of 5% or more of any class of Capital Stock of
the Company or with any Affiliate of any such owner or the Company (other than
(i) a Wholly Owned Subsidiary or a Guarantor, (ii) a Subsidiary at least 51% of
the Capital Stock of which is owned by the Company or one or more Wholly Owned
Subsidiaries so long as no portion of the minority interest in such Subsidiary
is owned by any Affiliate (other than the Company or another Wholly Owned
Subsidiary) of either the Company or any Wholly Owned Subsidiary or any legal
or beneficial owner of 5% or more of any class of Capital Stock of the Company
or any Affiliate of such owner or (iii) an employee stock ownership plan for
the benefit of the Company's or any Subsidiary's employees) unless (x) the
terms of such business, transaction or series of transactions are (A) set forth
in writing and (B) as favorable to the Company or such Subsidiary as terms that
would be obtainable at the time for a comparable transaction or series of
related transactions in arm's-length dealings with an unrelated third person
and (y) the board of directors has, by resolution, determined that such
business or transaction or series of transactions meets the criterion set forth
in (x)(B) above. This covenant, however, will not prohibit (i) a management
fee payable by the Company to Carlisle Capital or any Affiliate in an amount
not to exceed 2.0% of sales per year, so long as the Company and Carlisle
Capital or such Affiliate execute and deliver to the Trustee a management fee
subordination agreement (in the form attached to the Indenture as an exhibit)
or (ii) transactions between the Company or any Subsidiary and certain
underwriters.
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Guarantees. The Company will cause each Subsidiary that guarantees
Debt of the Company (other than Secured Debt) permitted under the first
sentence or clause (ii), (iii), (v), (vi) or (vii) of the second sentence under
"Limitation on Debt" to execute and deliver to the Trustee, prior to or
concurrently with the issuance of such guarantee, a supplemental indenture, in
form satisfactory to the Trustee, pursuant to which such Subsidiary
unconditionally guarantees the Notes, and such guarantee of Debt of the Company
must rank pari passu in all respects with, or be subordinated in right of
payment to, such guarantee of the Notes, and also such Subsidiary is not
required to issue such guarantee of the Notes if such Subsidiary has previously
guaranteed the Notes and such previous guarantee (i) satisfies the requirements
of this covenant with respect to such guarantee of Debt of the Company and (ii)
is in full force and effect.
SEC Reports. The Company will file with the Trustee and provide
holders of Notes within 15 days after it files them with the Commission copies
of its annual reports and of the information, documents and reports which the
Company or any Subsidiary is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company will continue to file with the SEC
and provide the Trustee and Securityholders with such annual reports and such
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) which are
specified in Sections 13 and 15(d) of the Exchange Act. The Company will also
comply with the other provisions of TIA Section 314(a).
LIMITATION ON MERGER
The Company may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, another person unless
(i) the resulting, surviving or transferee person is a person organized and
existing under the laws of the United States, any State thereof or the District
of Columbia, and such entity expressly assumes by a supplemental indenture all
the obligations of the Company under the Notes and the Indenture, (ii)
immediately prior to and after giving effect to such transaction, no Default
has occurred and is continuing, (iii) the resulting, surviving or transferee
person has Consolidated Net Worth after giving effect to such transaction which
is not less than the Consolidated Net Worth of the Company prior to such
transaction, (iv) immediately after giving effect to such transaction, the
resulting, surviving or transferee person would be able to issue an additional
$1.00 of Debt pursuant to the first sentence of "Limitation on Debt" and (v)
the Company delivers to the Trustee an officers' certificate and an opinion of
counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture comply with the Indenture.
GUARANTEE
Poly-Tech and each other Guarantor which may become a Guarantor
pursuant to the covenant described under "Guarantees" above jointly and
severally, unconditionally and irrevocably guarantees to each holder of New
Notes and to the Trustee and its successors (a) the due and punctual payment of
principal of and premium and interest on the New Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under the Indenture and the New Notes and (b) the
due and punctual performance within applicable grace periods of all other
obligations of the Company under the Indenture and the New Notes (all the
foregoing being collectively called the "Obligations"). Each Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from such Guarantor, and that such Guarantor
will remain bound notwithstanding any extension or renewal of any Obligation.
Each Guarantor waives presentation to, demand of, payment from and protest to
the Company of any of the Obligations, and also waives notice of protest for
nonpayment. Each Guarantor waives notice of any default under the New Notes or
the Obligations.
Concurrently with any sale or other disposition (other than to the
Company or any Affiliate of the Company) by way of merger, consolidation or
otherwise of all or substantially all the assets of a Guarantor
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or all the Capital Stock of a Guarantor permitted by and in accordance with the
terms of the Indenture, such Guarantor (in the event of such a sale or other
disposition of all the Capital Stock of such Guarantor) or the corporation
acquiring the property (in the event of such a sale or other disposition, by
way of a merger, consolidation or otherwise, of all or substantially all the
assets of such Guarantor) will be released and relieved of its Obligations.
Except as provided in the preceding sentence, this guarantee will be binding
upon each Guarantor and its successors and assigns and will inure to the
benefit of the successors and assigns of the Trustee and the holders of the
Notes and, in the event of any transfer or assignment of rights by any holder
or the Trustee, the rights and privileges conferred upon that party in the
Indenture and in the Notes will automatically extend to and be vested in such
transferee or assignees, all subject to the terms and conditions of the
Indenture.
DEFAULTS
An Event of Default is defined in the Indenture as (i) default in the
payment of principal or premium, if any, of any Note when due at its Stated
Maturity, upon redemption, upon declaration or otherwise, including any failure
by the Company to repurchase any of the Notes when required pursuant to "Change
in Control or Fundamental Change", (ii) default in the payment of interest on
any Note when due, continued for 30 days, (iii) failure by the Company to
comply with "Limitation on Merger", (iv) failure by the Company for 30 days
after notice to comply with its obligations under the covenants described above
under "Limitation on Secured Debt", "Limitation on Sale and Leaseback
Transactions", "Limitation on Debt", "Limitation on Restricted Payments",
"Limitation on Subsidiary Debt and Preferred Stock", "Limitation on
Restrictions on Distributions from Subsidiaries", "Limitation on Sales of
Assets and Subsidiary Stock", "Limitation on Transactions with Affiliates",
"Guarantees" and "Change of Control or Fundamental Change" (other than a
failure to repurchase Notes when required pursuant to the covenant described
under "Change of Control or Fundamental Change"), (v) failure by the Company
for 60 days after notice to comply with its other agreements contained in the
Indenture, (vi) acceleration of Debt of the Company or any Significant
Subsidiary by the holders thereof because of a default on such Debt having an
outstanding principal amount of $2.0 million or more in the aggregate and not
annulled within 10 days after notice, or failure to make any payment on Debt of
the Company or a Significant Subsidiary when due (without regard to any
applicable grace period) and the total amount of such Debt exceeds $2.0 million
and such default is not cured in 10 days after notice (the "cross-acceleration
provision"), (vii) certain events of bankruptcy, insolvency or reorganization
of the Company or any Significant Subsidiary or (viii) one or more judgments or
decrees for the payment of money of $2.0 million or more is rendered against
the Company or a Significant Subsidiary and is not fully bonded and/or covered
by insurance and there is a period of 60 consecutive days during which a stay
of enforcement of such judgment or decree by reason of a pending appeal or
otherwise is not in effect or during which such judgment or decree is not
vacated or discharged and such default is not cured within 10 days after notice
(the "judgment default provisions").
A Default under clause (iv), (v), (vi) or (viii) is not an Event of
Default until the Trustee or the holders of at least 25% in principal amount of
the New Notes notify the Company of the Default and the Company does not cure
the Default within the specified time.
If an Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the outstanding New Notes may
declare the principal of and accrued but unpaid interest on all New Notes to be
due and payable. If an Event of Default relating to certain events of
bankruptcy, insolvency or reorganization of the Company occurs and is
continuing, the principal of and interest on all the New Notes will ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any holders of the New Notes. Under certain
circumstances, the holders of a majority in principal amount of the outstanding
New Notes may rescind any such acceleration with respect to such New Notes and
its consequences.
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The Company is required to deliver to the Trustee within 120 days
after the end of each fiscal year of the Company an officers' certificate
stating whether such officers have knowledge of any Default that occurred
during such period and, if they do know of such Default, the certificate will
describe the Default and what action the Company is taking or proposes to take
with respect thereto. Promptly after an officer of the Company learns of a
Default, the Company will deliver to the Trustee an officers' certificate
specifying such Default and what action the Company is taking or proposes to
take with respect thereto.
Subject to the provisions of the Indenture relating to the duties of
the Trustee, in case an Event of Default thereunder should occur and be
continuing, the Trustee will be under no obligation to exercise any of the
rights or powers under the Indenture at the request or direction of any of the
holders of the New Notes unless such holders have offered to the Trustee
reasonable indemnity or security against any loss, liability or expense.
Subject to such provisions for security or indemnification and certain
limitations contained in the Indenture, the holders of a majority in principal
amount of the New Notes at the time outstanding have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee.
AMENDMENT, SUPPLEMENT, WAIVER
Subject to certain exceptions, the Indenture may be amended or
supplemented without notice to any holder of New Notes but with the consent of
the holders of at least a majority in principal amount of the New Notes then
outstanding, and any past default or compliance with any provision may be
waived with the consent of the holders of at least a majority in principal
amount of the New Notes then outstanding. However, without the consent of each
holder of an outstanding New Note affected thereby, no amendment may, among
other things, (i) reduce the amount of New Notes whose holders must consent to
any amendment; (ii) reduce the rate of or extend the time for payment of
interest on any New Note; (iii) reduce the principal of or extend the fixed
maturity of any Note, (iv) reduce the premium payable upon redemption of any
Note or change the time at which any Note may or shall be redeemed; (v) change
the currency for payment of principal of, or premium or interest on, any Note;
(vi) make any change to the covenant entitled "Change of Control or Fundamental
Change"; (vii) impair the right to institute suit for the enforcement of any
payment on or with respect to any New Note; (viii) waive certain payment
defaults with respect to the New Notes; or (ix) make any change in the
amendment provisions which require each holder's consent or in the waiver
provisions. Without the consent of any holder of the New Notes, the Company
and the Trustee may amend or supplement the Indenture to cure any ambiguity,
omission, defect or inconsistency, to provide for the assumption by a successor
corporation of the obligations of the Company under the Indenture, to provide
for uncertificated New Notes in addition to or in place of certificated New
Notes so long as such uncertificated New Notes are in registered form for
purposes of the Internal Revenue Code of 1986, as amended, to add guarantees
with respect to the New Notes, to add to the covenants of the Company for the
benefit of holders of the New Notes, to surrender any right conferred upon the
Company, to make any change that does not adversely affect the rights of any
holder of the New Notes or to comply with any requirement of the Commission in
connection with the qualification of the Indenture under the Trust Indenture
Act.
After an amendment described in the preceding sentence becomes
effective, the Company must mail to holders of the New Notes notice briefly
describing such amendment. However, the failure to give such notice to all
holders of the New Notes, or any defect therein, will not impair or affect the
validity of the amendment.
The consent of the holders of the New Notes is not necessary to
approve the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.
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TRANSFER
The New Notes will be issued in registered form and will be
transferable only upon the surrender of the New Notes being transferred for
registration of transfer. The Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge payable in
connection with certain transfers and exchanges.
PAYMENT FOR CONSENT
Neither the Company, any Affiliate of the Company nor any Subsidiary
may, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any holder of a New Note for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of the Indenture or the Notes unless such consideration is offered
to be paid or agreed to be paid to all holders which so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.
DEFEASANCE
The Company at any time may terminate all its obligations under the
Notes and the Indenture ("legal defeasance"), except for certain obligations,
including those respecting the defeasance trust and obligations to register the
transfer or exchange of the Notes, to replace mutilated, destroyed, lost or
stolen Notes and to maintain a registrar and paying agent in respect of the
Notes. The Company at any time may terminate its obligations under the
covenants described under "Certain Covenants" (other than "SEC Reports") and
"Change of Control or Fundamental Change" and the operation of the
cross-acceleration provision and the judgment default provision described under
"Defaults" ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option. If the Company exercises
its legal defeasance option, payment of the Notes may not be accelerated
because of an Event of Default with respect thereto. If the Company exercises
its covenant defeasance option, payment of the Notes may not be accelerated
because of an Event of Default specified in clause (iv), (vi) or (viii) under
"Defaults".
In order to exercise either defeasance option, the Company must
irrevocably deposit in trust (the "defeasance trust") with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Notes to redemption or maturity, as the case may be, and must comply with
certain other conditions including delivering to the Trustee an Opinion of
Counsel to the effect that holders of the Notes will not recognize income, gain
or loss for Federal income tax purposes as a result of such deposit and
defeasance and will be subject to Federal income tax on the same amount and in
the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred (and, in the case of legal defeasance
only, such Opinion of Counsel must be based on a ruling of the Internal Revenue
Service or other change in applicable Federal income tax law).
CONCERNING THE TRUSTEE
United States Trust Company of New York is to be the Trustee under the
Indenture and has been appointed by the Company as Registrar and Paying Agent
with regard to the New Notes.
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GOVERNING LAW
The Indenture provides that it will be governed by the laws of the
State of New York without giving effect to applicable principles of conflicts
of law to the extent that the application of the law of another jurisdiction
would be required thereby.
CERTAIN DEFINITIONS
The following definitions apply to the covenants described above:
"Affiliate" of any specified person means (i) any other person which,
directly or indirectly, is in control of, is controlled by or is under common
control with such specified person, (ii) any other person who is a director or
officer (A) of such specified person, (B) of any subsidiary of such specified
person or (C) of any person described in clause (i) above or (iii) any
corporation or other organization of which persons described in (i) or (ii)
above collectively own more than 10% of the equity. For purposes of this
definition, control of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person whether by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
shares of Capital Stock of a Subsidiary (other than directors' qualifying
shares), property or other assets (each referred to for the purposes of this
definition as a "disposition") by the Company or any of its Subsidiaries (other
than (i) a disposition by a Subsidiary to the Company or by the Company or a
Subsidiary to a Wholly Owned Subsidiary or a Guarantor, (ii) a disposition of
property or assets that is at fair market value and in the ordinary course of
business and (iii) a disposition of obsolete assets in the ordinary course of
business), including any disposition by means of a merger, consolidation or
similar transaction.
"Attributable Debt" in respect of a sale and leaseback arrangement
means, as at the time of determination, the greater of (i) the fair value of
the property subject to such arrangement (as determined by the board of
directors) and (ii) the present value (discounted at the interest rate borne by
the Notes, compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such
arrangement (including any period for which such lease has been extended).
"Attributed Income Tax Liabilities" means liabilities (including
estimated liabilities to the extent amounts are required to be paid on an
estimated basis) for Federal income taxes and for all state and local income
taxes that are imposed on shareholders of the Company with respect to the
earnings of the Company under the provisions of Subchapter S or analogous state
and local income tax laws.
"Average Life" means, as of the date of determination, with respect to
any Debt, the quotient obtained by dividing (i) the sum of the products of the
numbers of years from the date of determination to the dates of each successive
scheduled principal payment of such Debt multiplied by the amount of such
principal payment by (ii) the sum of all such principal payments.
"Capital Lease Obligations" of a person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
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"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock, including any Preferred
Stock.
"Consolidated Adjusted EBITDA Coverage Ratio" with respect to any
period means the ratio of (i)(a) the aggregate amount of Consolidated Net
Income before Consolidated Interest Expense, income taxes, depreciation expense
and amortization expense (but without giving effect to any extraordinary gain
or loss) less (b) Consolidated Capital Expenditures to (ii) the aggregate
amount of Consolidated Interest Expense for such period.
"Consolidated EBITDA Coverage Ratio" with respect to any period means
the ratio of (i) the aggregate amount of Consolidated Net Income before
Consolidated Interest Expense, income taxes, depreciation expense and
amortization expense (i.e., all noncash charges subtracted in determining
operating income) (but without giving any effect to any extraordinary gain or
loss) and the management fees payable to Carlisle Capital and Affiliates
thereof to (ii) the aggregate amount of Consolidated Interest Expense for such
period.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated subsidiaries, including
(i) interest expense attributable to capital leases, (ii) amortization of debt
discount and debt issuance cost, (iii) capitalized interest, (iv) noncash
interest payments, (v) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, (vi) net
costs under Interest Rate Protection Agreements (including amortization of
discount) and (vii) Preferred Stock dividends in respect of all Preferred Stock
of Subsidiaries held by persons other than the Company or a Wholly Owned
Subsidiary.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles. However,
Consolidated Net Income will not include:
(i) any net income of any person if such person is not a
Subsidiary, except that (A) the Company's equity in the net income of
any such person for such period will be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed by
such person during such period to the Company or a Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or
other distribution to a Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in a net loss of any
such person for such period will be included in determining such
Consolidated Net Income,
(ii) any net income of any person acquired by the Company or a
Subsidiary in a pooling of interests transaction for any period prior
to the date of such acquisition,
(iii) any net income of any Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the Company, except that (A) the Company's equity in
the net income of any such Subsidiary for such period will be included
in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Subsidiary during such period to the
Company or another Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another
Subsidiary, to the limitation contained in this clause) and (B) the
Company's equity in a net loss of any such Subsidiary for such period
will be included in determining such Consolidated Net Income, and
(iv) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its
consolidated subsidiaries which is not sold or otherwise disposed
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of in the ordinary course of business and any gain (but not loss)
realized upon the sale or other disposition of any capital stock of
any person.
"Consolidated Net Tangible Assets" means the total assets shown on the
balance sheet of the Company and its consolidated subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting principles,
as of any date selected by the Company not more than 90 days prior to the
taking of any action for the purpose of which the determination is being made
less (i) all current liabilities and amounts applicable to minority interests
of the Company and (ii) goodwill and other intangibles.
"Consolidated Net Worth" means, with respect to any person, the total
of the amounts shown on the balance sheet of such person and its consolidated
subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles, as of any date selected by the Company not more
than 90 days prior to the taking of any action for the purpose of which the
determination is being made, as (i) the par or stated value of all outstanding
Capital Stock of such person plus (ii) paid-in capital or capital surplus
relating to such Capital Stock plus (iii) any retained earnings or earned
surplus less (A) any accumulated deficit, (B) any amounts attributable to
Redeemable Stock and (C) any amounts attributable to Exchangeable Stock.
"Consolidated Tangible Assets" means (i) the total assets shown on the
balance sheet of the Company and its consolidated subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting principles,
as of any date selected by the Company not more than 90 days prior to the
taking of any action for the purpose of which the determination is being made
less (ii) goodwill and other intangibles.
"Credit Agreement" means one or more revolving credit agreements,
entered into after the date of the Indenture pursuant to which the Company or
any Subsidiary finances working capital borrowings, as any such agreement or
agreements may be amended, refinanced or replaced from time to time.
"Debt" of any person means, without duplication,
(i) the principal of and premium (if any) in respect of (A)
indebtedness of such person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar interests for
the payment of which such person is responsible or liable;
(ii) all Capital Lease Obligations of such person;
(iii) all obligations of such person issued or assumed as the
deferred purchase price of property, all conditional sale obligations
of such person and all obligations of such person under any title
retention agreement (but excluding trade accounts payable arising in
the ordinary course of business);
(iv) all obligations of such person issued or contracted for
as payment in consideration of the purchase by such person of the
stock or substantially all of the assets of other persons or a merger
or consolidation to which such person was a party;
(v) all obligations of such person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i),
(ii), (iii) and (iv) above) entered into in the ordinary course of
business of such person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third business day following receipt by
such person of a demand for reimbursement following payment on the
letter of credit);
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(vi) all obligations of the type referred to in clauses (i)
through (v) of other persons and all dividends of other persons for
the payment of which, in either case, such person is responsible or
liable as obligor, guarantor or otherwise; and
(vii) all obligations of the type referred to in clauses (i)
through (vi) of other persons secured by any Lien on any property or
asset of such person (whether or not such obligation is assumed by
such person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the
obligation so secured.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Eligible Inventory" will mean inventory which qualifies as "Eligible
Inventory" as such term may be defined in an applicable Credit Agreement and
which serves as the borrowing base for working capital loans.
"Eligible Receivables" will mean receivables which qualify as
"Eligible Receivables" as such term will be defined in the Credit Agreement and
which serves as the borrowing base for working capital loans.
"Exchangeable Stock" means any Capital Stock which is exchangeable or
convertible into another security (other than Capital Stock of the Company
which is neither Exchangeable Stock or Redeemable Stock).
"Guarantor" means Poly-Tech and each other Subsidiary (if any) that
delivers to the Trustee a supplemental indenture, in form satisfactory to the
Trustee, pursuant to which such person expressly agrees to unconditionally
guarantee the Notes on the terms and conditions set forth in the Indenture.
"Interest Rate Protection Agreement" means any interest swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Subsidiary against
fluctuations in interest rates.
"Issue" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Secured Debt, Debt or Preferred Stock
issued as consideration in, or to provide all or any portion of the funds
utilized to consummate, the transaction or series of related transactions
pursuant to which the issuer thereof becomes a Subsidiary shall be deemed for
the purposes of the covenant described under "Limitation on Secured Debt" (in
the case of Secured Debt) and the covenant described under "Limitation on
Subsidiary Debt and Preferred Stock" (in the case of Debt or Preferred Stock) to
be issued by such Subsidiary at the time it becomes a Subsidiary, except that
this proviso shall not apply to Secured Debt, Debt or Preferred Stock to the
extent issued to provide funds to pay transaction fees, expenses, and other
similar miscellaneous costs resulting from, or incurred in connection with, the
acquisition of such issuer.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or assets (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only
as and when received, but excluding any other consideration received in the
form of assumption by the acquiring person of Debt or other obligations
relating to such properties or assets or received in any other noncash form)
therefrom, in each case net of all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes
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required to be accrued as a liability under generally accepted accounting
principles, as a consequence of such Asset Disposition, and in each case net of
all payments made on any Debt which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any lien upon or other
security agreement of any kind with respect to such assets, or which must by
its terms, or in order to obtain a necessary consent to such Asset Disposition
or by applicable law be repaid out of the proceeds from such Asset Disposition,
and net of all distributions and other payments made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset
Disposition.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, brokerage, consultant and other fees actually incurred
in connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Convertible Capital Stock" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible
Capital Stock of such corporation. However, Non-Convertible Capital Stock will
not include any Redeemable Stock or Exchangeable Stock.
"Non-Recourse Debt" means Debt or that portion of Debt (a) as to which
neither the Company nor its Subsidiaries (other than a Non-Recourse Subsidiary)
(i) provide credit support (including any undertaking, agreement or instrument
that would cause such Debt or portion of Debt to be considered Debt of the
Company or a Subsidiary (other than a Non-Recourse Subsidiary)) or (ii) is
directly or indirectly liable and (b) no default with respect to which
(including any rights which the holders thereof may have to take enforcement
action against a Non-Recourse Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Debt issued after the date of this
Indenture of the Company or any Subsidiary (other than a Non-Recourse
Subsidiary) to declare a default on such other Debt or cause the payment
thereof to be accelerated or payable prior to its stated maturity.
"Non-Recourse Subsidiary" means a Subsidiary that (i) has not acquired
any assets (other than cash acquired while such Subsidiary is a Non-Recourse
Subsidiary and materials, supplies and equipment purchased in the ordinary
course of business) from the Company or any Subsidiary and (ii) has no Debt
other than Non-Recourse Debt.
"Permitted Investments" means (a) investments in direct obligations of
the United States of America maturing within 90 days of the date of acquisition
thereof, (b) investments in certificates of deposit maturing within 90 days of
the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States or any state thereof having
capital, surplus and undivided profits aggregating in excess of $500.0 million,
and (c) investments in commercial paper given the highest rating by two
nationally recognized statistical rating organizations (as defined in Rule 436
under the Securities Act) and maturing not more than 90 days from the date of
acquisition thereof.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Redeemable Stock" means any Capital Stock that by its terms or
otherwise is required to be redeemed prior to the first anniversary of the
maturity of the Notes or is redeemable at the option of the holder thereof at
any time prior to the first anniversary of the maturity of the Notes.
"Scheduled Principal Amount", when used with respect to any Debt or
Preferred Stock, means the sum of (i) the principal amount of such Debt or
liquidation value of such Preferred Stock plus (ii) amounts paid as voluntary
repayments of such Debt or voluntary redemptions of such Preferred Stock.
However, (A) any
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mandatory repayment or redemption made pursuant to any provision of such Debt
or Preferred Stock requiring mandatory repayments or redemptions based upon the
Company's or a Subsidiary's excess cash flow or favorable financial performance
(except to the extent that excess cash flow or favorable financial performance
is attributable to the net proceeds of Asset Dispositions) will be deemed to be
voluntary repayments, (B) any payment made pursuant to a provision of a
revolving credit agreement requiring a reduction in the amount outstanding
thereunder for a specified period of time in each year that is not related to a
reduction in the commitment of the lenders thereunder will be deemed to be a
voluntary repayment and (C) to the extent any voluntary repayment or
redemption discharges or satisfies a succeeding mandatory repayment or
redemption, such voluntary repayment or redemption will be deemed to be a
mandatory repayment or redemption only at the time and to the extent such
succeeding mandatory repayment or redemption would otherwise have been
required to have been made.
"Secured Debt" means any Debt of the Company or a Subsidiary secured
by a Lien on any property or assets of the Company or any Subsidiary.
"Significant Subsidiary" means (i) any domestic Subsidiary of the
Company (other than a Non-Recourse Subsidiary) which at the time of
determination either (A) had assets which, as of the date of the Company's most
recent quarterly consolidated balance sheet, constituted at least 3% of the
Company's total assets on a consolidated basis as of such date, or (B) had
revenues for the 12-month period ending on the date of the Company's most
recent quarterly consolidated statement of income which constituted at least 3%
of the Company's total revenues on a consolidated basis for such period, or
(ii) any foreign Subsidiary of the Company (other than a Non-Recourse
Subsidiary) which at the date of determination either (A) had assets which, as
of the date of the Company's most recent quarterly consolidated balance sheet,
constituted at least 5% of the Company's total assets on a consolidated basis
as of such date, in each case determined in accordance with generally accepted
accounting principles, or (B) had revenues for the 12-month period ending on
the date of the Company's most recent quarterly consolidated statement of
income which constituted at least 5% of the Company's total revenues on a
consolidated basis for such period. If two or more Subsidiaries (other than
Non-Recourse Subsidiaries) which are not at the respective times of
determination relevant to each thereof Significant Subsidiaries within the
meaning of clause (i) or (ii) above (a) take or suffer action of the type
described in clause (vii) of "Defaults" or, in the aggregate, take or suffer
action of the type described in clauses (vi) or (viii) of "Defaults" and (b)
have at such time of determination total assets or revenues as described above
which represent percentages which when added together equal either 10% or more
of the Company's total assets on a consolidated basis or of the Company's total
revenues for the 12-month period ending on the date of the Company's most
recent quarterly consolidated statement of income as described above, the
Subsidiary which last takes or suffers the type of action described in clauses
(vii) of "Defaults" shall be deemed a Significant Subsidiary and the Subsidiary
taking or suffering action of the type described in clauses (vi) or (viii) of
"Defaults" to the greatest extent shall be deemed a Significant Subsidiary.
"Stated Maturity", when used with respect to any security or any
installment of interest thereon, means the date specified in such security as
the fixed date on which the principal of such security or such installment of
interest is due and payable.
"Subordinated Obligation" means any Debt of the Company (whether
outstanding on the date hereof or hereafter incurred) which is subordinate or
junior in right of payment to the Notes.
"Subsidiary" means any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Company, (ii) the Company and one or more
Subsidiaries or (iii) one or more Subsidiaries.
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<PAGE> 45
"Tangible Property" means all land, buildings, machinery and equipment
and leasehold interest and improvements which would be reflected on a balance
sheet of the Company prepared in accordance with generally accepted accounting
principles, excluding (i) all such tangible property located outside the United
States of America, (ii) all rights, contracts and other intangible assets of
any nature whatsoever and (iii) all inventories and other current assets.
"Voting Stock" means, with respect to a corporation, all classes of
capital stock then outstanding of such corporation normally (and apart from
rights accruing under special circumstances) entitled to vote in elections of
directors.
"Wholly Owned Subsidiary" means a Subsidiary (other than a
Non-Recourse Subsidiary) all the Capital Stock of which (other than directors'
qualifying shares) is owned by the Company or another Wholly Owned Subsidiary.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain United States federal income tax
consequences of the exchange of Old Notes for New Notes. The discussion set
forth below is based upon the Internal Revenue Code of 1986, as amended,
regulations and announcements promulgated thereunder and published rulings and
court decisions, all as in effect on the date hereof and without giving effect
to changes to the federal tax laws, if any, enacted after the date hereof.
Legislative, judicial or administrative changes or interpretations may be
forthcoming that could alter or modify the statements or conclusions set forth
below. This summary does not discuss all the federal income tax consequences
that may be relevant to a particular holder or to certain holders subject to
special treatment under the federal income tax laws.
The exchange of Old Notes for New Notes should not be treated as a
sale or exchange of Old Notes for federal income tax purposes. Consequently,
noteholders who exchange Old Notes for New Notes will not recognize gain or
loss upon receipt of the New Notes. For purposes of computing original issue
discount on the New Notes, the original issue discount, if any, of the Old
Notes will carry over to the New Notes as if the New Notes were issued on the
same issue date and for the same issue price as the Old Notes. A noteholder's
tax basis in and market discount, if any, on the New Notes will be the same as
such noteholder's tax basis in and market discount, if any, on the Old Notes
exchanged therefor. Noteholders will be considered to have held the New Notes
from the time of their original acquisition of the Old Notes.
There will be no federal income tax consequences of the Exchange
Offer to nonexchanging noteholders.
THE FOREGOING SUMMARY OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS
INCLUDED HEREIN FOR GENERAL INFORMATION PURPOSES ONLY. HOLDERS OF OLD NOTES
ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE SPECIFIC FEDERAL
INCOME TAX CONSEQUENCES OF ACCEPTING THE EXCHANGE OFFER, AS WELL AS THE EFFECT
OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
Prospectus in connection with any resale of such New Notes. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange for
Old Notes where such Old Notes were acquired
43
<PAGE> 46
as a result of market-making activities or other trading activities. The
Company has agreed that, for a period of 180 days after the Expiration Date, it
will make this Prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale.
The Company will not receive any proceeds from any sale of New Notes
by broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer and any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of New Notes and any
commissioner concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The Company has agreed to pay all expenses incident to the Exchange
Offer other than commissions or concessions of any brokers or dealers and
expenses of counsel for the holders of the New Notes and will indemnify the
Holders of the New Notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
Certain legal matters regarding the validity of the New Notes will be
passed upon for the Company by Lindquist & Vennum P.L.L.P., Minneapolis,
Minnesota.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this Prospectus by reference from the Company's Annual Report
on Form 10-K for the year ended December 31, 1993 have been audited by Deloitte
& Touche, independent auditors, as stated in their report which is incorporated
herein by reference (which report expresses an unqualified opinion and includes
an explanatory paragraph referring to a change in the accounting for income
taxes to conform with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes") and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
With respect to the unaudited interim financial information for the
periods ended March 31,1994 and 1993, June 30, 1994 and 1993 and September 30,
1994 and 1993, which is incorporated herein by reference, Deloitte & Touche and
Deloitte & Touche LLP have applied limited procedures in accordance with
professional standards for a review of such information. However, as stated in
their reports included in the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1994, June 30, 1994 and September 30, 1994 and
incorporated by reference herein, they did not audit and they do not express an
opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche and
Deloitte & Touche LLP are not subject to the liability provisions of Section 11
of the Securities Act of 1933 for their reports on the unaudited interim
financial information because those reports are not
44
<PAGE> 47
"reports" or a "part" of the registration statement prepared or certified by an
accountant within the meaning of Sections 7 and 11 of the Act.
45
<PAGE> 48
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's By-Laws require indemnification of directors and
officers of the Company to the fullest extent permitted by Delaware law.
Section 145 of the Delaware General Corporation Law generally provides that any
person who was or is a director or officer may be indemnified against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with the defense or settlement
of any threatened, pending or completed legal proceedings in which he is
involved by reason of the fact that he is or was a director or officer if he
acted in good faith and in a manner that he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, if he had no reasonable cause to believe that
his conduct was unlawful. However, if the legal proceeding is by or in the
right of the corporation, the director or officer may not be indemnified in
respect of any claim, issue or matter as to which he shall have been adjudged
to be liable to the corporation unless the court in which such action was
brought deems it proper.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
4.1 -- Indenture dated November 10, 1994 relating to the Company's
Series A 10 1/4% Senior Notes Due 1997 (the "New Notes")
among the Company, Poly-Tech, as guarantor, and United States
Trust Company of New York, as trustee (a specimen of the New
Notes is contained as Exhibit A thereto).
5.1 -- Opinion and Consent of Lindquist & Vennum P.L.L.P., counsel
to the Company.
10.1(a) -- Securities Purchase Agreement dated as of March 23, 1990
between the Company and Kawajitsu Leasing (H.K.) Ltd.
(incorporated by reference to Exhibit 10.1(a) to the
Registration Statement on Form S-1, Registration No.
33-35966, as filed with the Securities and Exchange
Commission on October 30, 1990 (hereinafter, the "1990 S-1")).
10.1(b) -- Securities Purchase Agreement dated as of March 23, 1990
between the Company and Show Leasing America, Inc.
(incorporated by reference to Exhibit 10.1(b) to the 1990
S-1).
10.2 -- Securities Purchase Agreement dated as of March 23, 1990
between the Company and each purchaser of the 1997 Notes
(incorporated by reference to Exhibit 10.2 to the 1990 S-1).
10.3 -- Carlisle Acquisition Corp.'s Senior Subordinated Note in the
principal amount of $35,000,000, dated April 7, 1989
(incorporated herein by reference to Exhibit A to Exhibit
4.1 of the 1989 S-1).
10.4 -- Poly-Tech's Senior Subordinated Promissory Note in the
principal amount of $55,000,000, dated March 23, 1990
(incorporated by reference to Exhibit 10.21 to the 1990 S-1).
II-1
<PAGE> 49
10.5 -- Indenture dated March 23, 1990, as supplemented by First
Supplemental Indenture dated as of October 9, 1990, relating
to the Company's Senior Variable Notes Due 1997 among the
Company, Poly-Tech, Inc., as guarantor, and the Bank of
Montreal Trust Company, as trustee (incorporated by
reference to Exhibits 4.2 and 4.3 to the 1990 S-1,
respectively).
10.6 -- Management Agreement dated as of September 12, 1994 between
the Company and Carlisle Plastics Management Corporation
(incorporated by reference to Exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994 (the "September 1994 10-Q")).
10.7 -- Restated 1991 Employee Incentive Plan (incorporated by
reference to Exhibit 4(a) to the Registration Statement on
Form S-8, Registration No. 33-64890, as filed with the
Securities and Exchange Commission on June 24, 1993).
10.8 -- Lease between the Company and One Union Realty Trust dated
September 1, 1991, as amended by Addendum Number 1 to the
Lease dated June 29, 1993 (incorporated by reference to
Exhibits 10.35 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991 (the "1991 10-K")
and 10.10 to the Annual Report on Form 10-K for the fiscal
year ended December 31, 1993).
10.9 -- Stockholders' Agreement dated as of July 16, 1991 by and
among High-D Acquisition Corp., Carlisle Plastics, Inc.
and certain individuals and institutions relating to Rhino-X
Industries, Inc. (incorporated by reference to Exhibit 10.45
to the 1991 10-K).
10.10 -- Employment Agreement dated September 1, 1992 between the
Company and David E. Wilbur, Jr. (incorporated by reference
to Exhibit I to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1992) as amended by the
Amendment dated September 20, 1994.
10.11 -- Indenture relating to the Company's 10 1/4% Senior Notes Due
1997 among the Company, Poly-Tech, as Guarantor, and United
States Trust Company of New York, as Trustee (a form of the
Notes is contained as Exhibit A thereto) (incorporated by
reference to Exhibit 4.1 to the Registration Statement on
Form S-1, as amended, Registration No. 33-47627, as filed
with the Securities and Exchange Commission on May 1, 1992).
10.12 -- Credit Agreement dated as of March 9, 1994 by and among the
Company, as borrower, Poly-Tech, A&E Products (Far East)
Ltd. ("Far East"), Plasticos Bajacal S.A. de C.V.
("Plasticos"), Rhino-X Industries, Inc. ("Rhino-X"), A&E
Korea, Ltd. ("Korea"), American Western Corporation
("American Western") and AWC Transportation Corporation
("AWCT"), as co-obligors, and General Electric Capital
Corporation ("GECC"), as agent and lender, as amended by the
First, Second and Third Amendments to Credit Agreement and
Security Agreement dated as of April 14, April 15, and
October 25, 1994 by and among the same parties (incorporated
by reference to Exhibits 10.14 to the Company's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1994
(the "March 1994 10-Q") and June 30, 1994 and the September
1994 10-Q).
10.13 -- Revolving Credit Note dated March 9, 1994 in the amount of
$55,000,000 issued by the borrowers under the Credit
Agreement referenced in Exhibit 10.12 to GECC (incorporated
by reference to Exhibit 10.15 to the March 1994 10-Q).
10.14 -- Security Agreement dated as of March 9, 1994 by and among the
borrowers under the Credit Agreement referenced in Exhibit
10.12 and GECC, as administrative agent, as amended by
II-2
<PAGE> 50
the First Amendment to Credit Agreement and Security
Agreement dated as of April 14, 1994 by and among the same
parties (included in Exhibit 10.12).
10.15 -- Asset Purchase Agreements dated March 9, 1994 by and between
the Company and American Western, Poly-Tech and Rhino-X
(incorporated by reference to Exhibit 10.17 to the March 1994
10-Q).
10.16 -- Contract Manufacturing Agreements dated March 9, 1994 by and
between the Company and American Western, Poly-Tech and
Rhino-X (incorporated by reference to Exhibit 10.18 to the
March 1994 10-Q).
10.17 -- Subordination Agreement dated as of March 9, 1994 by and
among GECC, the Company, Poly-Tech, Far East, Plasticos,
Rhino-X, Korea, American Western and AWCT (incorporated by
reference to Exhibit 10.19 to the March 1994 10-Q).
10.18 -- Equipment Lease Agreement dated as of April 4, 1994, as
amended by the First Amendment and Amendment No. 2 dated as
of August 17 and October 25, respectively, by and between the
Company and GECC (incorporated by reference to Exhibits
10.20 to the March 10-Q and September 1994 10-Q).
10.19 -- Equipment Sublease Agreements dated as of April 4, 1994, as
amended by Amendments dated as of August 17 and October 25,
1994, by and between the Company and American Western,
Poly-Tech and Rhino-X (incorporated by reference to Exhibits
10.21 to the March 10-Q and September 1994 10-Q).
10.20 -- Bills of Sale dated April 4, 1994 by the Company, Poly-Tech,
American Western and Rhino-X (incorporated by reference to
Exhibit 10.22 to the March 1994 10-Q).
10.21 -- Subordination Agreement dated as of April 4, 1994 by and
among GECC, the Company, Poly-Tech, Far East, Plasticos,
Rhino-X, Korea, American Western and AWCT (incorporated by
reference to Exhibit 10.23 to the March 1994 10-Q).
10.22 -- Subsidiary Guarantees dated as of April 4, 1994 by Poly-Tech,
American Western and Rhino-X in favor of GECC (incorporated
by reference to Exhibit 10.24 to the March 1994 10-Q).
10.23 -- Receivables Funding and Servicing Agreement dated as of
April 14, 1994, as amended by Amendment No. 1 dated as of
October 25, 1994, by and among Carlisle Plastics Funding
Corporation ("CPFC"), as Borrower, Redwood Receivables
Corporation ("Redwood"), as Lender, the Company, as Servicer,
and GECC, as Operating Agent and Collateral Agent
(incorporated by reference to Exhibits 10.25 to the March
1994 10-Q and September 1994 10-Q).
10.24 -- Note dated October 25, 1994 in the amount of $45,000,000
issued by CPFC to Redwood pursuant to the Receivables
Funding and Servicing Agreement referenced in Exhibit 10.23
(incorporated by reference to Exhibit 10.26 to the September
1994 10-Q).
10.25 -- Receivables Sale Agreement dated as of April 14, 1994, as
amended by Amendment No. 1 dated as of October 25, 1994,
by and between the Company and CPFC (incorporated by
reference to Exhibits 10.27 to the March 1994 10-Q and
September 1994 10-Q).
II-3
<PAGE> 51
10.26 -- Note dated October 25, 1994 in the amount of $45,000,000
issued by the Company to CPFC pursuant to the Receivables
Sale Agreement referenced in Exhibit 10.25 (incorporated by
reference to Exhibit 10.28 to the September 1994 10-Q).
10.27 -- Employment Agreement dated September 12, 1994 by and between
the Company and Clifford A. Deupree.
12.1 -- Statement of ratio of earnings to fixed charges of the Company
13.1 -- Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994 (incorporated by reference to the September
1994 10-Q as filed with the Commission on November 10, 1994).
15.1 -- Letter of Deloitte & Touche LLP regarding unaudited interim
financial information
23.1 -- Consent of Lindquist & Vennum P.L.L.P. (See exhibit 5.1 above)
23.2 -- Consent of Deloitte & Touche LLP
24.1 -- A Power of Attorney is set forth on the signature pages of
this Registration Statement.
25.1 -- Statement of Eligibility and Qualification on Form T-1, dated
November 29, 1994, by the Company and United States Trust
Company of New York, as trustee, relating to the New Notes.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
(b) Financial Statement Schedules
Not applicable.
ITEM 22. UNDERTAKINGS.
The Company and Poly-Tech hereby undertake:
1. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company and Poly-Tech pursuant to the foregoing provisions, or
otherwise, the Company and Poly-Tech have been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
or Poly-Tech of expenses incurred or paid by a director, officer or controlling
person of the Company or Poly-Tech in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company or Poly-Tech,
as the case may be, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-4
<PAGE> 52
2. (a) To file, during any period in which offers or sales are
being made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
3. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-5
<PAGE> 53
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Phoenix, State of
Arizona, on December 12, 1994.
CARLISLE PLASTICS, INC.
By: /s/ William H. Binnie
----------------------------------
William H. Binnie
Chairman of the Board of Directors
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints William H. Binnie and Patrick J.
O'Leary, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting upon said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on December 12, 1994, by the following
persons in the capacities indicated.
Signature Title
- --------- -----
/s/ William H. Binnie Chairman of the Board of Directors
- -------------------------------- (principal executive officer)
William H. Binnie
/s/ Patrick J. O'Leary Chief Financial Officer, Secretary
- -------------------------------- (principal financial and accounting
Patrick J. O'Leary officer) and Director
/s/ Clifford A. Deupree Director
- --------------------------------
Clifford A. Deupree
/s/ Yehochai Schneider Director
- --------------------------------
Yehochai Schneider
/s/ Clarence M. Schwerin III Director
- --------------------------------
Clarence M. Schwerin III
/s/ Samuel H. Smith, Jr. Director
- --------------------------------
Samuel H. Smith, Jr.
/s/ David E. Wilbur, Jr. Director
- --------------------------------
David E. Wilbur, Jr.
/s/ Grant M. Wilson Director
- --------------------------------
Grant M. Wilson
II-6
<PAGE> 54
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Phoenix, State of
Arizona, on December 12, 1994.
POLY-TECH, INC.
By: /s/ William H. Binnie
----------------------------------
William H. Binnie
Chairman of the Board of Directors
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints William H. Binnie and Patrick J.
O'Leary, and each of them, his true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting upon said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on December 12, 1994, by the following
persons in the capacities indicated.
Signature Title
- --------- -----
/s/ William H. Binnie Chairman of the Board of Directors
- ------------------------------------ (principal executive officer)
William H. Binnie
/s/ Patrick J. O'Leary Vice President, Secretary, and Chief
- ------------------------------------ Financial Officer (principal
Patrick J. O'Leary financial and accounting officer)
II-7
<PAGE> 55
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
4.1 Indenture dated November 10, 1994 relating to the Company's
Series A 10 1/4% Senior Notes Due 1997 (the "New Notes") among
the Company, Poly-Tech, as guarantor, and United States Trust
Company of New York, as trustee (a specimen of the New Notes
is contained as Exhibit A thereto).
5.1 Opinion and Consent of Lindquist & Vennum P.L.L.P., counsel
to the Company.
10.10 Amendment dated September 20, 1994 to the Employment Agreement
dated September 1, 1992 by and between the Company and David
E. Wilbur, Jr.
10.27 Employment Agreement dated September 12, 1994 by and between
the Company and Clifford A. Deupree.
12.1 Statement of ratio of earnings to fixed charges of the Company.
15.1 Letter of Deloitte & Touche LLP regarding unaudited interim
financial information.
23.1 Consent of Lindquist & Vennum P.L.L.P. (see Exhibit 5.1 above).
23.2 Consent of Deloitte & Touche LLP.
25.1 Statement of Eligibility and Qualification on Form T-1, dated
November 29, 1994, by the Company and United States Trust
Company of New York, as trustee, relating to the New Notes.
99.1 Form of Letter of Transmittal.
99.2 Form of Notice of Guaranteed Delivery.
<PAGE> 1
Exhibit 4.1
================================================================================
CARLISLE PLASTICS, INC.,
Issuer
POLY-TECH, INC.,
Guarantor
10-1/4% Senior Notes Due 1997
____________________
INDENTURE
Dated as of November 10, 1994
____________________
United States Trust Company of New York,
Trustee
================================================================================
<PAGE> 2
TABLE OF CONTENTS(1)
Page
<TABLE>
<S> <C>
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions and Incorporation by Reference . . . . . . . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . 1
SECTION 1.02. Other Definitions . . . . . . . . . 14
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . 14
SECTION 1.04. Rules of Construction . . . . . . . 15
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
The Securities . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.01. Form and Dating . . . . . . . . . . 15
SECTION 2.02. Execution and Authentication . . . 15
SECTION 2.03. Registrar and Paying Agent . . . . 16
SECTION 2.04. Paying Agent To Hold Money in
Trust . . . . . . . . . . . . . . . 16
SECTION 2.05. Securityholder Lists . . . . . . . 17
SECTION 2.06. Transfer and Exchange . . . . . . . 17
SECTION 2.07. Replacement Securities . . . . . . 18
SECTION 2.08. Outstanding Securities . . . . . . 18
SECTION 2.09. Temporary Securities . . . . . . . 19
SECTION 2.10. Cancellation . . . . . . . . . . . 19
SECTION 2.11. Defaulted Interest . . . . . . . . 19
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.01. Notices to Trustee . . . . . . . . 19
SECTION 3.02. Selection of Securities To Be
Redeemed . . . . . . . . . . . . . 20
SECTION 3.03. Notice of Redemption . . . . . . . 20
SECTION 3.04. Effect of Notice of Redemption . . 21
SECTION 3.05. Deposit of Redemption Price . . . . 21
SECTION 3.06. Securities Redeemed in Part . . . . 21
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 4.01. Payment of Securities . . . . . . . 21
SECTION 4.02. SEC Reports . . . . . . . . . . . . 22
SECTION 4.03. Limitation on Secured Debt . . . . 22
SECTION 4.04. Limitation on Sale and Leaseback
Transactions . . . . . . . . . . . 23
SECTION 4.05. Limitation on Debt . . . . . . . . 24
SECTION 4.06. Limitation on Restricted Payments . 26
SECTION 4.07. Limitation on Subsidiary Debt and
Preferred Stock . . . . . . . . . . 29
</TABLE>
____________________
(1)This Table of Contents is not part of the Indenture
<PAGE> 3
<TABLE>
<S> <C>
SECTION 4.08. Limitation on Restrictions on
Distributions from Subsidiaries . . 31
SECTION 4.09. Limitation on Sales of Assets and
Subsidiary Stock . . . . . . . . . 32
SECTION 4.10. Limitation on Transactions with
Affiliates . . . . . . . . . . . . 35
SECTION 4.11. Guarantees . . . . . . . . . . . . 36
SECTION 4.12. Change of Control and Fundamental
Change . . . . . . . . . . . . . . 36
SECTION 4.13. Compliance Certificate . . . . . . 38
SECTION 4.14. Further Instruments and Acts . . . 38
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Successor Company . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.01. When the Company May Merge or
Transfer Assets. . . . . . . . . . 38
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Defaults and Remedies . . . . . . . . . . . . . . . . . . . 39
SECTION 6.01. Events of Default . . . . . . . . . 39
SECTION 6.02. Acceleration . . . . . . . . . . . 41
SECTION 6.03. Other Remedies . . . . . . . . . . 41
SECTION 6.04. Waiver of Past Defaults . . . . . . 42
SECTION 6.05. Control by Majority . . . . . . . . 42
SECTION 6.06. Limitation on Suits . . . . . . . . 42
SECTION 6.07. Rights of Holders To Receive
Payment . . . . . . . . . . . . . . 43
SECTION 6.08. Collection Suit by Trustee . . . . 43
SECTION 6.09. Trustee May File Proofs of Claim . 43
SECTION 6.10. Priorities . . . . . . . . . . . . 43
SECTION 6.11. Undertaking for Costs . . . . . . . 44
SECTION 6.12. Waiver of Stay or Extension Laws . 44
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.01. Duties of Trustee . . . . . . . . . 44
SECTION 7.02. Rights of Trustee . . . . . . . . . 45
SECTION 7.03. Individual Rights of Trustee . . . 46
SECTION 7.04. Trustee's Disclaimer . . . . . . . 46
SECTION 7.05. Notice of Defaults . . . . . . . . 46
SECTION 7.06. Reports by Trustee to Holders . . . 47
SECTION 7.07. Compensation and Indemnity . . . . 47
SECTION 7.08. Replacement of Trustee . . . . . . 47
SECTION 7.09. Successor Trustee by Merger . . . . 48
SECTION 7.10. Eligibility; Disqualification . . . 49
SECTION 7.11. Preferential Collection of Claims
Against Company . . . . . . . . . . 49
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Discharge of Indenture; Defeasance . . . . . . . . . . . . . 49
SECTION 8.01. Discharge of Liability on
Securities . . . . . . . . . . . . 49
SECTION 8.02. Conditions to Defeasance . . . . . 50
SECTION 8.03. Application of Trust Money . . . . 51
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
SECTION 8.04. Repayment to Company . . . . . . . 52
SECTION 8.05. Indemnity for Government
Obligations . . . . . . . . . . . . 52
SECTION 8.06. Reinstatement . . . . . . . . . . . 52
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 9.01. Without Consent of Holders . . . . 52
SECTION 9.02. With Consent of Holders . . . . . . 53
SECTION 9.03. Compliance with Trust Indenture
Act . . . . . . . . . . . . . . . . 54
SECTION 9.04. Revocation and Effect of Consents
and Waivers . . . . . . . . . . . . 54
SECTION 9.05. Notation on or Exchange of
Securities . . . . . . . . . . . . 54
SECTION 9.06. Trustee To Sign Amendments . . . . 55
SECTION 9.07. Payment for Consent . . . . . . . . 55
ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10.01. Trust Indenture Act Controls . . . 55
SECTION 10.02. Notices . . . . . . . . . . . . . . 55
SECTION 10.03. Communication by Holders with Other
Holders . . . . . . . . . . . . . . 56
SECTION 10.04. Certificate and Opinion as to
Conditions Precedent . . . . . . . 56
SECTION 10.05. Statements Required in Certificate
or Opinion . . . . . . . . . . . . 56
SECTION 10.06. When Treasury Securities
Disregarded . . . . . . . . . . . . 57
SECTION 10.07. Rules by Trustee, Paying Agent and
Registrar . . . . . . . . . . . . . 57
SECTION 10.08. Legal Holidays . . . . . . . . . . 57
SECTION 10.09. Governing Law . . . . . . . . . . . 57
SECTION 10.10. No Recourse Against Others . . . . 57
SECTION 10.11. Successors . . . . . . . . . . . . 58
SECTION 10.12. Multiple Originals . . . . . . . . 58
SECTION 10.13. Table of Contents; Headings . . . . 58
ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 11.01. Guarantee . . . . . . . . . . . . . 58
SECTION 11.02. Release Following Sale of Assets . 60
SECTION 11.03. Successors and Assigns . . . . . . 60
SECTION 11.04. No Waiver, etc. . . . . . . . . . . 61
SECTION 11.05. Modification, etc. . . . . . . . . 61
SECTION 11.06. Contribution . . . . . . . . . . . 61
EXHIBIT A - Form of Security . . . . . . . . . . . . . . . . . . . . 63
EXHIBIT B - Form of Management Fee Subordination Agreement . . . . . 72
</TABLE>
<PAGE> 5
CROSS-REFERENCE TABLE(2)
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- -------
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(c) . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . . . . . . 10.03
313(a) . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . 10.02
(d) . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . 4.02; 10.02
(b) . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . 4.13
315(a) . . . . . . . . . . . . . . . . . . . . . 7.01
(b) . . . . . . . . . . . . . . . . . . . . . 7.05; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . 7.01
(d) . . . . . . . . . . . . . . . . . . . . . 7.01
(e) . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . . . . . . . . . 10.06
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . 6.07
317(a)(1) . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . 10.01
</TABLE>
N.A. means Not Applicable.
____________________
(2)This Cross-Reference Table is not part of the Indenture.
<PAGE> 6
INDENTURE dated as of November 10, 1994,
among CARLISLE PLASTICS, INC., a Delaware corporation
(the "Company"), POLY-TECH, INC., a Minnesota
corporation ("Poly-Tech"), as a Guarantor, and United
States Trust Company of New York, a New York banking
corporation (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 10-1/4%
Senior Notes Due 1997 (the "Securities"):
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Affiliate" of any specified person means (i) any other person which,
directly or indirectly, is in control of, is controlled by or is under common
control with such specified person, or (ii) any other person who is a director
or officer (A) of such specified person, (B) of any subsidiary of such
specified person or (C) of any person described in clause (i) above or (iii)
any corporation or other organization of which persons described in (i) or (ii)
above collectively own more than 10% of the equity. For purposes of this
definition, control of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person whether by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) of
shares of Capital Stock of a Subsidiary (other than directors' qualifying
shares), property or other assets (each referred to for the purposes of this
definition as a "disposition") by the Company or any of its Subsidiaries (other
than (i) a disposition by a Subsidiary to the Company or by the Company or a
Subsidiary to a Wholly Owned Subsidiary or a Guarantor, (ii) a disposition of
property or assets that is at fair market value and in the ordinary course of
business and (iii) a disposition of obsolete assets in the ordinary course of
business), including any disposition by means of a merger, consolidation or
similar transaction.
"Attributable Debt" in respect of a sale and leaseback arrangement
means, as at the time of determination, the greater of (i) the fair value of
the property subject to such arrangement (as determined by the Board of
Directors) and (ii) the present value (discounted at the interest rate borne by
the Securities, compounded annually) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in
<PAGE> 7
such arrangement (including any period for which such lease has been extended).
"Attributed Income Tax Liabilities" means liabilities (including
estimated liabilities to the extent amounts are required to be paid on an
estimated basis) for Federal income taxes and for all state and local income
taxes that are imposed on shareholders of the Company with respect to the
earnings of the Company under the provisions of Subchapter S or analogous state
and local income tax laws.
"Average Life" means, as of the date of determination, with respect to
any Debt, the quotient obtained by dividing (i) the sum of the products of the
numbers of years from the date of determination to the dates of each successive
scheduled principal payment of such Debt multiplied by the amount of such
principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day that is not a Legal Holiday.
"Capital Lease Obligations" of a person means any obligation that is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such person prepared in accordance with generally accepted
accounting principles; the amount of such obligation shall be the capitalized
amount thereof, determined in accordance with generally accepted accounting
principles; and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock, including any Preferred
Stock.
"Cash Equivalent" means (a) a direct obligation of the United States
of America maturing within 90 days of the date of acquisition thereof, (b) a
certificate of deposit maturing within 90 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States or any state thereof having capital, surplus and undivided
profits aggregating in excess of $500,000,000 or (c) commercial paper given the
highest rating by two nationally recognized statistical rating organizations
(as defined in Rule 436 under the Securities Act of 1933) and maturing not more
than 90 days from the date of acquisition thereof.
2
<PAGE> 8
"Change of Control" means the occurrence of one or more of the
following events: (A) a person (other than William H. Binnie) or entity or
group of persons or entities acting in concert as a partnership, limited
partnership, syndicate or other group shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of Voting Stock of the Company representing 50% or more
of the combined voting power of the outstanding Voting Stock of the Company;
(B) there shall be consummated (x) any consolidation or merger of the Company
in which the Company is not the continuing or surviving corporation or pursuant
to which shares of the Company's Voting Stock would be converted into cash,
securities or other property, other than a merger of the Company in which (i)
the holders of the Company's Voting Stock immediately prior to the merger have
the same proportionate share of voting power with respect to the Voting Stock
of the surviving corporation immediately after the merger or (ii) William H.
Binnie owns more than 50% of the voting power of the Voting Stock of the
surviving corporation immediately after the merger, or (y) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company, other than
a sale or other transfer in which (i) the holders of the Company's Voting Stock
immediately prior to such sale or transfer have the same proportionate share of
voting power with respect to the Voting Stock of the transferee corporation
immediately after such sale or other transfer or (ii) William H. Binnie owns
more than 50% of the voting power of the Voting Stock of the transferee
corporation immediately after such sale or other transfer; (C) the shareholders
of the Company shall approve any plan or proposal for the liquidation or
dissolution of the Company, other than a liquidation or dissolution in which
(i) the holders of the Company's Voting Stock immediately prior to such
liquidation or dissolution have the same proportionate share of voting power
with respect to the Voting Stock of the corporation which will hold all or
substantially all of the assets of the Company immediately after such
liquidation or dissolution or (ii) William H. Binnie owns more than 50% of the
voting power of the Voting Stock of the corporation that will hold all or
substantially all of the assets of the Company immediately after such
liquidation or dissolution; or (D) individuals who at the date of this
Indenture constitute the Board of Directors shall cease for any reason to
constitute at least a majority thereof, unless the election or the nomination
for election by the Company's shareholders of each new director was approved by
a vote of at least two-thirds of the directors then still in office who were
directors at the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means all classes of common stock of the Company.
3
<PAGE> 9
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, includes the successor and for purposes
of any provision contained herein and required by the TIA, each other obligor
on the indenture securities.
"Consolidated Adjusted EBITDA Coverage Ratio" with respect to any
period means the ratio of (i)(a) the aggregate amount of Consolidated Net
Income before Consolidated Interest Expense, income taxes, depreciation expense
and amortization expense (but without giving effect to any extraordinary gain
or loss) less (b) Consolidated Capital Expenditures to (ii) the aggregate
amount of Consolidated Interest Expense for such period.
"Consolidated Capital Expenditures" for any period means the sum of
all amounts that would, in accordance with generally accepted accounting
principles, be included as capital expenditures on plant, property and
equipment for such period on a statement of changes in financial position of
the Company and its consolidated subsidiaries.
"Consolidated EBITDA Coverage Ratio" with respect to any period means
the ratio of (i) the aggregate amount of Consolidated Net Income before
Consolidated Interest Expense, income taxes, depreciation expense and
amortization expense (but without giving any effect to any extraordinary gain
or loss) and the management fees payable to Carlisle Capital Corporation and
Affiliates thereof to (ii) the aggregate amount of Consolidated Interest
Expense for such period.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated subsidiaries, including
(i) interest expense attributable to capital leases, (ii) amortization of debt
discount and debt issuance cost, (iii) capitalized interest, (iv) noncash
interest payments, (v) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, (vi) net
costs under Interest Rate Protection Agreements (including amortization of
discount) and (vii) Preferred Stock dividends in respect of all Preferred Stock
of Subsidiaries held by persons other than the Company or a Wholly owned
Subsidiary.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles; provided, however,
that there shall not be included in such Consolidated Net Income
(i) any net income of any person if such person is not a
Subsidiary, except that (A) the Company's equity in the net income of
any such person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of
4
<PAGE> 10
cash actually distributed by such person during such period to the
Company or a Subsidiary as a dividend or other distribution (subject,
in the case of a dividend or other distribution to a Subsidiary, to
the limitations contained in clause (iii) below) and (B) the Company's
equity in a net loss of any such person for such period shall be
included in determining such Consolidated Net Income,
(ii) any net income of any person acquired by the Company
or a Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition,
(iii) any net income of any Subsidiary if such Subsidiary
is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the Company, except that (A) the Company's equity in
the net income of any such Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Subsidiary during such period to the
Company or another Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another
Subsidiary, to the limitation contained in this clause) and (B) the
Company's equity in a net loss of any such Subsidiary for such period
shall be included in determining such Consolidated Net Income, and
(iv) any gain (but not loss) realized upon the sale or
other disposition of any property, plant or equipment of the Company
or its consolidated subsidiaries which is not sold or otherwise
disposed of in the ordinary course of business and any gain (but not
loss) realized upon the sale or other disposition of any capital stock
of any person.
"Consolidated Net Tangible Assets" means the total assets shown on the
balance sheet of the Company and its consolidated subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting principles,
as of any date selected by the Company not more than 90 days prior to the
taking of any action for the purpose of which the determination is being made
less (i) all current liabilities and (ii) goodwill and other intangibles.
"Consolidated Net Worth" of any person means the total of the amounts
shown on the balance sheet of such person and its consolidated subsidiaries,
determined on a consolidated basis in accordance with generally accepted
accounting principles, as of any date selected by the Company not more than 90
days prior to the taking of any action for the purpose of which the
determination is being made, as (i) the par or stated value of all outstanding
Capital Stock of such person plus (ii) paid-in capital or capital surplus
relating to such Capital Stock plus (iii) any retained
5
<PAGE> 11
earnings or earned surplus less (A) any accumulated deficit, (B) any amounts
attributable to Redeemable Stock and (C) any amounts attributable to
Exchangeable Stock.
"Consolidated Tangible Assets" means (i) the total assets shown on the
balance sheet of the Company and its consolidated subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting principles,
as of any date selected by the Company not more than 90 days prior to the
taking of any action for the purpose of which the determination is being made
less (ii) goodwill and other intangibles.
"Credit Agreement" means one or more revolving credit agreements
entered into after the date of this Indenture pursuant to which the Company or
any Subsidiary finances working capital borrowings, as any such agreement or
agreements may be amended, refinanced or replaced from time to time.
"Debt" of any person means, without duplication.
(i) the principal of and premium (if any) in respect of
(A) indebtedness of such person for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar
interests for the payment of which such person is responsible or
liable;
(ii) all Capital Lease Obligations of such person;
(iii) all obligations of such person issued or assumed as
the deferred purchase price of property, all conditional sale
obligations of such person and all obligations of such person under
any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business);
(iv) all obligations of such person issued or contracted
for as payment in consideration of the purchase by such person of the
stock or substantially all of the assets of other persons or a merger
or consolidation to which such person was a party;
(v) all obligations of such person for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i),
(ii), (iii) and (iv) above) entered into in the ordinary course of
business of such person to the extent such letters of credit are not
drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by
such person of a demand for reimbursement following payment on the
letter of credit);
6
<PAGE> 12
(vi) all obligations of the type referred to in clauses
(i) through (v) of other persons and all dividends of other persons
for the payment of which, in either case, such person is responsible
or liable as obligor, guarantor or otherwise; and
(vii) all obligations of the type referred to in clauses
(i) through (vi) of other persons secured by any Lien on any property
or asset of such person (whether or not such obligation is assumed by
such person), the amount of such obligation being deemed to be the
lesser of the value of such property or assets or the amount of the
obligation so secured.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Eligible Inventory" will mean inventory which qualifies as "Eligible
Inventory" as such term may be defined in an applicable Credit Agreement and
which serves as the borrowing base for working capital loans.
"Eligible Receivables" will mean receivables which qualify as
"Eligible Receivables" such term may be defined in an applicable Credit
Agreement and which serves as the borrowing base for working capital loans.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchangeable Stock" means any Capital Stock which is exchangeable or
convertible into another security (other than Capital Stock of the Company
which is neither Exchangeable Stock or Redeemable Stock).
"Fundamental Change" means the occurrence of either or both of the
following events: (i) the direct or indirect acquisition by the Company or any
of its Subsidiaries of a corporation, partnership, joint venture interest,
association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all the assets of any such entity, subdivision or business)
engaged primarily in a business not directly related to the design,
development, manufacture or sale of plastic products (each an "Unrelated
Entity") if the consolidated total assets attributable to all Unrelated
Entities acquired (and still held) by the Company and its Subsidiaries exceeds
25% of the consolidated total assets of the Company after such acquisition
(determined in accordance with generally accepted accounting principles) or
(ii) any Asset Disposition occurring after an acquisition of an Unrelated
Entity if the consolidated total assets attributable to all Unrelated Entities
acquired (and still held) by the Company and its Subsidiaries exceeds 25% of
the consolidated total assets of the Company after
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<PAGE> 13
such Asset Disposition (determined in accordance with generally accepted
accounting principles).
"Guarantee" means each guarantee given by Poly-Tech as a Guarantor
pursuant to Article 11 or by any Subsidiary which becomes a Guarantor
subsequent to the date of this Indenture pursuant to a Guarantee Agreement.
"Guarantee Agreement" means any supplemental indenture executed by a
Subsidiary, pursuant to which such Subsidiary guarantees payment of the
Securities and the performance of the Company's other obligations hereunder on
the terms and conditions set forth in Article 11.
"Guarantor" means Poly-Tech and each other Subsidiary (if any) that
delivers to the Trustee an indenture supplemental hereto, in form satisfactory
to the Trustee, pursuant to which such Subsidiary unconditionally guarantees
the Securities on the terms and conditions set forth in Article 11.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Subsidiary against
fluctuations in interest rates.
"issue" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Secured Debt, Debt or Preferred Stock
issued as consideration in, or to provide all or any portion of the funds
utilized to consummate, the transaction or series of related transactions
pursuant to which the issuer thereof becomes a Subsidiary shall be deemed for
the purposes of Section 4.03 (in the case of Secured Debt) and Section 4.07 (in
the case of Debt or Preferred Stock) to be issued by such Subsidiary at the
time it becomes a Subsidiary, except that this proviso shall not apply to
Secured Debt, Debt or Preferred Stock to the extent issued to provide funds to
pay transaction fees, expenses, and other similar miscellaneous costs resulting
from, or incurred in connection with, the acquisition of such issuer.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or assets
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<PAGE> 14
(including, without limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing).
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only
as and when received, but excluding any other consideration received in the
form of assumption by the acquiring person of Debt or other obligations
relating to such properties or assets or received in any other noncash form)
therefrom, in each case net of all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
generally accepted accounting principles, as a consequence of such Asset
Disposition, and in each case net of all payments made on any Debt which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law be repaid out of the
proceeds from such Asset Disposition, and net of all distributions and other
payments made to minority interest holders in Subsidiaries or joint ventures as
a result of such Asset Disposition.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale net of attorneys'
fees, accountants' fees, brokerage, consultant and other fees actually incurred
in connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Non-Convertible Capital Stock" means, with respect to any
corporation, any non-convertible Capital Stock of such corporation and any
Capital Stock of such corporation convertible solely into non-convertible
Capital Stock of such corporation; provided, however, that Non-Convertible
Capital Stock shall not include any Redeemable Stock or Exchangeable Stock.
"Non-Recourse Debt" means Debt or that portion of Debt (a) as to which
neither the Company nor its Subsidiaries (other than a Non-Recourse Subsidiary)
(i) provide credit support (including any undertaking, agreement or instrument
that would cause such Debt or portion of Debt to be considered Debt of the
Company or a Subsidiary (other than a Non-Recourse Subsidiary)) or (ii) is
directly or indirectly liable and (b) no default with respect to which
(including any rights which the holders thereof may have to take enforcement
action against a Non-Recourse Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Debt issued after the date of this
Indenture of the Company or any Subsidiary (other than a Non-Recourse
Subsidiary) to declare a
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<PAGE> 15
default on such other Debt or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Non-Recourse Subsidiary" means a Subsidiary that (i) has not acquired
any assets (other than cash acquired while such Subsidiary is a Non-Recourse
Subsidiary and materials, supplies and equipment purchased in the ordinary
course of business) from the Company or any Subsidiary and (ii) has no Debt
other than Non-Recourse Debt.
"Officer" of a corporation means the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of such
corporation.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Investments" shall mean (a) investments in direct
obligations of the United States of America maturing within 90 days of the date
of acquisition thereof, (b) investments in certificates of deposit maturing
within 90 days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States or any state
thereof having capital, surplus and undivided profits aggregating in excess of
$500,000,000, and (c) investments in commercial paper given the highest rating
by two nationally recognized statistical rating organizations (as defined in
Rule 436 under the Securities Act) and maturing not more than 90 days from the
date of acquisition thereof.
"person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a security means the principal of the security plus the
premium, if any, payable on the security.
"Redeemable Stock" means any Capital Stock that by its terms or
otherwise is required to be redeemed prior to the first anniversary of the
maturity of the Securities or is redeemable at
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<PAGE> 16
the option of the holder thereof at any time prior to the first anniversary of
the maturity of the Securities.
"Scheduled Principal Amount", when used with respect to any Debt or
Preferred Stock, means the sum of (i) the principal amount of such Debt or
liquidation value of such Preferred Stock plus (ii) amounts paid as voluntary
repayments of such Debt or voluntary redemptions of such Preferred Stock;
provided, however, that (A) any mandatory repayment or redemption made pursuant
to any provision of such Debt or Preferred Stock requiring mandatory repayments
or redemptions based upon the Company's or a Subsidiary's excess cash flow or
favorable financial performance (except to the extent that excess cash flow or
favorable financial performance is attributable to the net proceeds of Asset
Dispositions) shall be deemed to be voluntary repayments, (B) any payment made
pursuant to a provision of a revolving credit agreement requiring a reduction
in the amount outstanding thereunder for a specified period of time in each
year that is not related to a reduction in the commitment of the lenders
thereunder shall be deemed to be a voluntary repayment and (C) to the extent
any voluntary repayment or redemption discharges or satisfies a succeeding
mandatory repayment or redemption, such voluntary repayment or redemption shall
be deemed to be a mandatory repayment or redemption only at the time and to the
extent such succeeding mandatory repayment or redemption would otherwise have
been required to have been made.
"Registration Rights Agreement" shall mean the Exchange and
Registration Rights Agreement, dated November 10, 1994, among the Company,
Poly-Tech and Prudential Securities Incorporated.
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means any Debt of the Company or a subsidiary secured
by a Lien on any property or assets of the Company or any Subsidiary.
"Securities" means the securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Notes Due 1997" means the Company's outstanding 10 1/4% Senior
Notes Due 1997.
"Senior Note Indenture" means the Indenture dated as of June 1, 1992,
between the Company and United States Trust Company of New York, as such
Indenture has been supplemented to the date of this Indenture.
"Significant Subsidiary" means (i) any domestic Subsidiary of the
Company (other than a Non-Recourse Subsidiary) which at the time of
determination either (A) had assets which, as of the date
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<PAGE> 17
of the Company's most recent quarterly consolidated balance sheet, constituted
at least 3% of the Company's total assets on a consolidated basis as of such
date, or (B) had revenues for the 12-month period ending on the date of the
Company's most recent quarterly consolidated statement of income which
constituted at least 3% of the Company's total revenues on a consolidated basis
for such period or (ii) any foreign Subsidiary of the Company (other than a
Non-Recourse Subsidiary) which at the time of determination either (A) had
assets which, as of the date of the Company's most recent quarterly
consolidated balance sheet, constituted at least 5% of the Company's total
assets on a consolidated basis as of such date, in each case determined in
accordance with generally accepted accounting principles, or (B) had revenues
for the 12-month period ending on the date of the Company's most recent
quarterly consolidated statement of income which constituted at least 5% of the
Company's total revenues on a consolidated basis for such period. If two or
more Subsidiaries (other than Non-Recourse Subsidiaries) which are not at the
respective times of determination relevant to each thereof Significant
Subsidiaries within the meaning of clause (i) or (ii) above (a) take or suffer
action of the type described in clauses (7) or (8) of Section 6.01 or, in the
aggregate, take or suffer action of the type described in clauses (6) or (9) of
Section 6.01 and (b) have at such time of determination total assets or
revenues as described above which represent percentages which when added
together equal either 10% or more of the Company's total assets on a
consolidated basis or of the Company's total revenues for the 12-month period
ending on the date of the Company's most recent quarterly consolidated
statement of income as described above, the Subsidiary which last takes or
suffers the type of action described in clauses (7) or (8) of Section 6.01
shall be deemed a Significant Subsidiary and the Subsidiary taking or suffering
action of the type described in clauses (6) or (9) of Section 6.01 to the
greatest extent shall be deemed a Significant Subsidiary.
"Special Non-Recourse Subsidiary" means a NonRecourse Subsidiary that
(i) is not a successor (whether by merger, consolidation, transfer or
otherwise) to any person other than another Special Non-Recourse Subsidiary,
(ii) was not a Subsidiary prior to its becoming a Special Non-Recourse
Subsidiary, and (iii) does not directly or indirectly own any Capital Stock or
other interest (including partnership interests) in any Subsidiaries other than
Special Non-Recourse Subsidiaries.
"Stated Maturity", when used with respect to any security or any
installment of interest thereon, means the date specified in such security as
the fixed date on which the principal of such security or such installment of
interest is due and payable.
"Subordinated Obligation" means any Debt of the Company (whether
outstanding on the date hereof or hereafter incurred) that is subordinate or
junior in right of payment to the Securities.
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<PAGE> 18
"Subsidiary" means any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) the Company, (ii) the Company and one or more
Subsidiaries or (iii) one or more Subsidiaries.
"Tangible Property" means all land, buildings, machinery and equipment
and leasehold interests and improvements which would be reflected on a balance
sheet of the Company prepared in accordance with generally accepted accounting
principles, excluding (i) all such tangible property located outside the United
States of America, (ii) all rights, contracts and other intangible assets of
any nature whatsoever and (iii) all inventories and other current assets.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section Section
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect in New York from time to time.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Variable Note Due 1997 Indenture" means the Indenture dated as of
March 23, 1990, between the Company and Bank of Montreal Trust Company pursuant
to which the Variable Notes Due 1997 were issued.
"Variable Notes Due 1997" means the Company's outstanding Senior
Variable Rate Notes Due 1997.
"Voting Stock" means, with respect to a corporation, all classes of
capital stock then outstanding of such corporation normally (and apart from
rights accruing under special circumstances) entitled to vote in elections of
directors.
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<PAGE> 19
"Wholly Owned Subsidiary" means a Subsidiary that is a corporation
(other than a Non-Recourse Subsidiary) all the Capital Stock of which (other
than directors' qualifying Shares) is owned by the Company or another Wholly
Owned subsidiary.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
------------------------------------------------------
<S> <C>
"Bankruptcy Law" . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Event of Default" . . . . . . . . . . . . . . . . . . . . . . . . 6.01
"Exchange Securities" . . . . . . . . . . . . . . . . . . . . . . 2.06
"Guarantor Net Worth" . . . . . . . . . . . . . . . . . . . . . . 11.06
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . 10.08
"Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
"Offer" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09(b)
"Offer Amount" . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09(c)
"Offer Period" . . . . . . . . . . . . . . . . . . . . . . . . . . 4.09(c)
"Parent Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . 4.08(b)
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Percentage" . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.06
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . 4.09(c)
"Register" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.03
"Restricted Payment" . . . . . . . . . . . . . . . . . . . . . . . 4.06
</TABLE>
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the TIA provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the Guarantor
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
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<PAGE> 20
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural and words in
the plural include the singular.
ARTICLE II
The Securities
SECTION 2.01. Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in Exhibit A are part of
the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two officers of the
Company shall sign the Securities for the Company by manual or facsimile
signature. The Company's seal shall be impressed, affixed, imprinted or
reproduced on the Securities and may be in facsimile form.
If an officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee or an authenticating agent shall authenticate and deliver
Securities for original issue in an aggregate principal amount of $15,000,000,
upon a written order of the Company signed by two Officers or by an Officer and
an Assistant Treasurer or an Assistant Secretary of the Company. Such order
shall specify the
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<PAGE> 21
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed that amount except as
provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency in the City of New York where Securities may be presented
for registration of transfer or for exchange ("Registrar") and the Company
shall maintain a common office or agency where Securities may be presented for
payment ("Paying Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange (the "Register"). The Company
may have one or more coregistrars and one or more additional paying agents.
The term "Paying Agent" includes any additional paying agent. The term
"Registrar" includes any coregistrar.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or coregistrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
7.07. The Company or any domestically incorporated Wholly Owned Subsidiary may
act as Paying Agent, Registrar, coregistrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent in immediately available funds a sum sufficient to pay
such principal and interest when so becoming due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that the Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities and shall notify the Trustee of any default by the Company in
making any such payment.
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<PAGE> 22
If the Company or a domestically incorporated Wholly Owned Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to account for any funds
disbursed by it. Upon complying with this Section, the Paying Agent (other
than the Company) shall have no further liability for the money delivered to
the Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee in writing, at least five
Business Days before each interest payment date but not less frequently than
semiannually and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of such
Security for registration of transfer. When a Security is presented to the
Registrar or a coregistrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section
8-401(1) of the Uniform Commercial Code are met. When Securities are presented
to the Registrar or a coregistrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or coregistrars
request; provided that any such Security executed and authenticated after the
effective date of any Shelf Registration Statement (as defined in the
Registration Rights Agreement) relating to a transfer of the Securities
pursuant to such Shelf Registration Statement shall not bear the legend
appearing on the "Form of Face of Security" in Exhibit A. The Company may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges. The Company shall not be required to make and the
Registrar need not register transfers or exchanges of Securities selected for
redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment
date.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Paying Agent, the Registrar or any coregistrar may
deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, and none of the
17
<PAGE> 23
Company, the Paying Agent, the Registrar or any coregistrar shall be affected
by notice to the contrary.
Upon receipt by the Company, in accordance with the terms of the
Registration Rights Agreement, of Securities from a Securityholder to be
exchanged pursuant to the Registration Rights Agreement, the Company shall
deliver such Securities to the Trustee for cancellation and shall issue, and
the Trustee shall authenticate and mail to such Securityholder, securities that
are identical to such Securities in all respects ("Exchange Securities") except
that the Exchange Securities (i) shall not bear the legend appearing on the
"Form of Face of Security" in Exhibit A and (ii) shall not contain the second
paragraph of Section 1 of the "Form of Reverse Side of Security" in Exhibit A.
All Exchange Securities issued pursuant to this paragraph shall upon their
issuance become "Securities" for purposes of this Indenture.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the Holder
satisfies any other reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company, the
Trustee, the Paying Agent, the Registrar and any coregistrar from any loss
which any of them may suffer if a Security is replaced. The Company and the
Trustee may charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate holds the Security.
If a security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent holds (or if the Company or a Subsidiary is the
Paying Agent, segregates and holds in trust), in accordance with this
Indenture, on a redemption date or maturity date in immediately available funds
money sufficient to pay Securities
18
<PAGE> 24
payable on that date, then on and after that date such Securities cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee and no one else shall cancel and destroy
(subject to the record-retention requirements of the Exchange Act) all
Securities surrendered for transfer, exchange, payment or cancellation and
deliver a certificate of such destruction to the Company unless the Company
directs the Trustee to deliver canceled Securities to the Company. The Company
may not issue new Securities to replace Securities it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, the Company shall pay the defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date. The Company shall fix or
cause to be fixed any such special record date and payment date, and, at least
15 days before any such special record date, the Company shall mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
ARTICLE III
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of
Securities to be redeemed.
The Company shall give each notice to the Trustee provided for in this
Section, together with an Officers' Certificate and an Opinion of Counsel to
the effect that such redemption will comply
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with the conditions contained herein, at least 60 days before the
redemption date. If fewer than all the Securities are to be redeemed, the
record date relating to such redemption shall be selected by the Company and
given to the Trustee, which record date shall be not less than 15 days after the
date of notice to the Trustee.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any. The Trustee shall make the
selection from outstanding Securities not previously called for redemption.
The Trustee may select for redemption portions of the principal of Securities
that have denominations larger than $1,000. Securities and portions of
Securities the Trustee selects shall be in amounts of $1,000 or a whole
multiple of $1,000. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to
be redeemed, the identification and principal amounts of the
particular Securities to be redeemed as selected by the Trustee in
accordance with Section 3.02;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on
Securities called for redemption ceases to accrue on and after the
redemption date;
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(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(8) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by clauses
(1) through (3) and (7).
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable
on the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date.
SECTION 3.05. Deposit of Redemption Price. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or if the Company or a
domestically incorporated Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of
and accrued interest on all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE IV
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the rate borne
by the Securities plus 1% per annum, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
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No interest shall be payable hereunder in excess of the maximum rate
permitted by applicable law.
SECTION 4.02. SEC Reports. The Company shall file with the Trustee and
provide Securityholders within 15 days after it files them with the SEC copies
of its annual report and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company or any Subsidiary is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall continue to file with the SEC and provide the Trustee and Securityholders
with such annual reports and such information, documents and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which are specified in Section 13 and 15(d) of the
Exchange Act. The Company shall also comply with the other provisions of TIA
Section 314(a).
SECTION 4.03. Limitation on Secured Debt. The Company shall not, and
shall not permit any Subsidiary to, issue, directly or indirectly, any Secured
Debt unless contemporaneously therewith effective provision is made to secure
the Securities equally and ratably with such Secured Debt for so long as such
Secured Debt is secured by a Lien. The preceding sentence shall not require
the Company and its Subsidiaries to equally and ratably secure the Securities
upon the issuance of the following Secured Debt:
(1) Debt of the Company permitted under Section
4.05(b)(1) and Debt of a Subsidiary permitted under Section 4.07(1);
provided, however, that any such Debt shall not be secured by any
property or assets of the Company or any Subsidiary other than
inventories or receivables;
(2) Debt of the Company permitted under Section 4.05(a)
or 4.05(b)(5) that is incurred to finance the acquisition of property
or assets acquired by the Company and its Subsidiaries after the date
of this Indenture (including any improvements, alterations or repairs
to existing property); provided, however, that (i) such Debt shall be
incurred and the Lien securing such Debt shall be created not later
than one year following such acquisition and (ii) such Debt shall not
be secured by any property or assets of the Company or any Subsidiary
other than the property and assets so acquired other than, in the case
of construction or improvement, any theretofore unimproved real
property or portion thereof on which the property so constructed, or
the improvement, is located;
(3) Debt of the Company permitted under Section 4.05(a)
that is secured by property or assets of a person if such Debt
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(i) was existing at the time the obligor thereon was merged or
consolidated with the Company or at the time of sale, lease or other
disposition of the properties of such obligor as an entirety (or
substantially as an entirety) to the Company or (ii) was issued in
exchange for or the proceeds of which were used to refund or refinance
Debt referred to in clause (i) above or this clause (ii); provided,
however, that (A) the principal amount of such Debt so issued does not
exceed the Scheduled Principal Amount of the Debt so exchanged,
refunded or refinanced and (B) such Debt so issued (I) shall mature
after the Stated Maturity of the Debt so exchanged, refunded or
refinanced and (II) shall have an Average Life greater than the
remaining Average Life of the Debt so exchanged, refunded or
refinanced; provided further, however, that such Debt shall not be
secured by any property or assets of the Company or any Subsidiary
other than (x) in the case of Debt referred to in clause (i), the
property subject thereto at the time such obligor or properties were
acquired and (y) in the case of Debt referred to in clause (ii), the
property subject to the Debt being exchanged, refunded or refinanced;
(4) (i) Debt of a Subsidiary permitted under Section
4.07(3)(i), provided, however, that (A) the Debt refunded or
refinanced thereby was Secured Debt and (B) the Debt so permitted
shall not be secured by any property or assets of the Company or any
Subsidiary other than the property subject to such Secured Debt being
refunded or refinanced and (ii) Debt of a Subsidiary permitted under
Section 4.07(3)(ii), provided, however, that the Debt so permitted
shall not be secured by any property or assets of the Company or any
Subsidiary other than the property that was, or would have been,
subject to any Debt incurred, or that could have been incurred,
pursuant to the commitments available to such Subsidiary under
revolving credit facilities on the date such Subsidiary was acquired
by the Company;
(5) Non-Recourse Debt of a Non-Recourse Subsidiary
permitted under Section 4.07(4) which is secured solely by assets of
the issuer thereof or the assets of other Non-Recourse Subsidiaries;
and
(6) Debt (other than Debt described in clauses (1)
through (5) of this Section) in an aggregate amount at any one time
outstanding not to exceed 5% of Consolidated Tangible Assets of the
Company as of the end of the most recent fiscal quarter of the Company
ending not less than 45 days from the date of determination.
SECTION 4.04. Limitation on Sale and Leaseback Transactions. The
Company shall not, and shall not permit any Subsidiary to, enter into any
arrangement with any person providing for the leasing by the Company or any
Subsidiary of any real or tangible
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personal property (except for leases for a term of not more than three years or
between the Company and a Subsidiary or between Subsidiaries), which property
has been or is to be sold or transferred by the Company or such Subsidiary to
such person in contemplation of such leasing, unless (i) the Company or such
Subsidiary would be entitled to create a Lien on such property securing Debt in
an amount equal to the Attributable Debt with respect to such arrangement
without equally and ratably securing the Securities pursuant to Section 4.03 or
(ii) the net proceeds from such sale or transfer are at least equal to the fair
value (as determined by the Board of Directors) of such property and the
Company or such Subsidiary shall apply or cause to be applied an amount in cash
equal to the net proceeds from such sale or transfer to purchase, redeem or
otherwise acquire or retire the Senior Notes Due 1997, the Variable Notes Due
1997 or the Securities within 60 days of the effective date of any such sale or
transfer.
SECTION 4.05. Limitation on Debt. (a) The Company shall not issue,
directly or indirectly, any Debt unless the Consolidated EBITDA Coverage Ratio
for the four consecutive fiscal quarters immediately preceding the issuance of
such Debt (as shown by a pro forma income statement of the Company for the four
most recent fiscal quarters ending at least 30 days prior to the issuance of
such Debt after giving effect to (i) the issuance of such Debt and (if
applicable) the application of the net proceeds thereof to refinance other Debt
as if such Debt was issued and the application of such proceeds occurred at the
beginning of the period, (ii) the issuance and retirement of any other Debt
since the last day of the most recent fiscal quarter covered by such income
statement as if such Debt was issued or retired at the beginning of the period
and (iii) the acquisition of any company or business acquired by the Company
since the first day of the period, including any acquisition which will be
consummated contemporaneously with the issuance of such Debt, as if such
acquisition occurred at the beginning of the period) exceeds 2.0.
(b) Notwithstanding Section 4.05(a), the Company may
issue the following Debt:
(1) Debt issued pursuant to the Credit Agreement in an
aggregate amount outstanding at any one time not to exceed the greater
of (a) $50 000,000 less the aggregate principal amount of Debt then
outstanding incurred by a Subsidiary pursuant to Section 4.07(1) and
(b) the sum of 80% of Eligible Receivables and 50% of Eligible
Inventory as of the month-end prior to the date of such issuance;
(2) Debt evidenced by the Securities and Debt issued in
exchange for or the proceeds of which are used to refund or refinance
Debt permitted by this clause (2); provided, however, that (i) the
principal amount of such Debt so issued shall not exceed the principal
amount of the Debt so exchanged, refunded or refinanced and (ii) such
Debt so issued (A) shall not mature prior to the Stated Maturity of
the Debt so
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exchanged, refunded or refinanced and (B) shall have an Average Life
equal to or greater than the remaining Average Life of the Debt so
exchanged, refunded or refinanced;
(3) Debt (other than Debt described in clauses (1) and
(2) of this Section) outstanding on the date of this Indenture and
Debt issued in exchange for or the proceeds of which are used to
refund or refinance Debt permitted by this clause (3); provided,
however, that (i) the principal amount of such Debt so issued shall
not exceed the principal amount of the Debt so exchanged, refunded or
refinanced and (ii) such Debt so issued (A) shall not mature prior to
the Stated Maturity of the Debt so exchanged, refunded or refinanced
and (B) shall have an Average Life equal to or greater than the
remaining Average Life of the Debt so exchanged, refunded or
refinanced;
(4) Debt owed to and held by a Wholly Owned Subsidiary
or a Guarantor; provided, however, that (i) any subsequent issuance or
transfer of any Capital Stock that results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or (ii) any
transfer of such Debt, in each case, shall be deemed for the purposes
of this Section to constitute the issuance of such Debt by the
Company;
(5) (i) Debt issued to finance up to 80% of the purchase
price of any assets acquired by the Company and its Subsidiaries
(other than from an Affiliate) after the date of this Indenture if all
the purchase price for such assets is or should be included in
"addition to property, plant or equipment" in accordance with
generally accepted accounting principles and the acquisition of such
assets is not part of any acquisition of a business unit; provided,
however, that (A) to the extent that the aggregate principal amount
of all Debt previously incurred under this Section 4.05(b)(5)(i)
exceeds $15 million, such Debt shall be issued within one year of such
acquisition of such assets and (B) at the time of the issuance of such
Debt, the aggregate amount of such Debt and all Debt previously
incurred under this Section 4.05(b)(5)(i) would not exceed the greater
of (x) $35,000,000 and (y) 15% of Consolidated Tangible Assets of the
Company as of the end of the most recent fiscal quarter of the Company
ending not less than 45 days from the date of determination and (ii)
Debt which is exchanged for, or the proceeds of which are used to
refinance or pay at maturity (including any mandatory sinking fund
payment), any Debt issued pursuant to (i) above or this clause (ii),
in an aggregate principal amount not to exceed the Scheduled Principal
Amount of the Debt so exchanged, refinanced or paid; provided,
however, that such Debt so issued (A) shall not mature prior to the
Stated Maturity of the Debt so exchanged, refinanced or paid and (B)
shall have
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an Average Life equal to or greater than the remaining Average Life of
the Debt so exchanged, refinanced or paid;
(6) Debt issued in exchange for, or the proceeds of which
are used to refund or refinance, any Debt incurred pursuant to Section
4.05(a) and any Debt permitted by this clause (6); provided, however,
that (i) the principal amount of the Debt so issued shall not exceed
the principal amount of the Debt so exchanged, refunded or refinanced
and (ii) the Debt so issued (A) shall not mature prior to the Stated
Maturity of the Debt so exchanged, refunded or refinanced, (B) shall
have an Average Life equal to or greater than the remaining Average
Life of the Debt so exchanged, refunded or refinanced and (C) shall
not be issued prior to one year prior to the Stated Maturity of the
Debt so exchanged or refinanced unless the Debt so issued has an
effective interest cost to the Company that is less than the effective
interest cost of the Debt so exchanged, refunded or refinanced; and
(7) Debt (other than Debt described in clauses (1)
through (6) of this Section) in an aggregate amount at any one time
outstanding not to exceed 10% of the Consolidated Tangible Assets of
the Company as of the end of the most recent fiscal quarter of the
Company ending not less than 45 days from the date of determination.
(c) Notwithstanding the foregoing provisions of this
Section, the Company shall not issue any Debt if the proceeds thereof are used,
directly or indirectly, to repay, prepay, redeem, defease, retire or refinance
any Subordinated Obligations unless such Debt (A) shall be subordinated to the
Securities on terms at least as favorable to the Securityholders as the
Subordinated Obligations repaid, prepaid, redeemed, defeased, retired or
refinanced, (B) shall have a Stated Maturity later than the Stated Maturity of
the Subordinated Obligations repaid, prepaid, redeemed, defeased, retired or
refinanced and (C) shall have an Average Life greater than the remaining
Average Life of the Subordinated Obligations repaid, prepaid, redeemed,
defeased, retired or refinanced.
SECTION 4.06. Limitation on Restricted Payments. (a) The Company shall
not, and shall not permit any subsidiary, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on its Capital Stock or to
the direct or indirect holders of its Capital Stock (except dividends or
distributions payable solely in its Non-Convertible Capital Stock or in
options, warrants or other rights to purchase its Non-Convertible Capital Stock
and except dividends or distributions payable to the Company or a Subsidiary
(and, if a Subsidiary has minority stockholders, pro rata to such
stockholders)), (ii) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company or of any direct or indirect parent of the
Company, (iii) purchase,
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repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than the acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year of
the date of acquisition) or (iv) make any loan or advance (other than a
Permitted Investment), acquire any Capital Stock, equity interest, obligation
or other security of, or make any capital contribution to, or otherwise invest
in, any person (other than the Company or a Subsidiary or a person which will
become a Subsidiary as a result of any such acquisition of Capital Stock or
other interests) (any such dividend, distribution, purchase, redemption,
repurchase, defeasance, other acquisition, retirement, loan, advance,
contribution or other investment being hereinafter referred to as a "Restricted
Payment") if at the time the Company or such Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom);
(2) the aggregate amount of such Restricted Payment and
all other Restricted Payments made since the date of this Indenture
would exceed the sum of:
(A) an amount equal to (I) 50% of the
Consolidated Net Income accrued during the period (treated as
one accounting period) from March 31, 1992, to the earlier of
the end of the most recent fiscal quarter ending at least 45
days prior to the date of such Restricted Payment or March 31,
1993 (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit), and minus 100% of the
amount of any write-downs, write-offs, other negative
revaluations and other negative extraordinary charges not
otherwise reflected in Consolidated Net Income during such
period; plus (II) 75% of the Consolidated Net Income accrued
during the period (treated as one accounting period) from
April 1, 1993, to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted
Payment (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit), and minus 100% of the
amount of any write-downs, write-offs, other negative
revaluations and other negative extraordinary charges not
otherwise reflected in Consolidated Net Income during such
period;
(B) the aggregate Net Cash Proceeds received by
the Company from the issue or sale of its Capital Stock (other
than to a Subsidiary or an employee stock ownership plan)
subsequent to the date of this Indenture;
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(C) the aggregate Net Cash Proceeds received by
the Company from the issue or sale of its Capital Stock to an
employee stock ownership plan subsequent to the date of this
Indenture, but only to the extent that any such proceeds are
equal to any decrease in the Company's unearned employee stock
ownership plan compensation equity contra-account resulting
from principal repayments made by such employee stock
ownership plan with respect to indebtedness incurred by it to
finance the purchase of such Capital Stock, as and when such
principal payments are made; and
(D) the amount by which indebtedness of the
Company is reduced on the Company's balance sheet upon the
conversion or exchange (other than by a Subsidiary) subsequent
to the date of this Indenture, of any Debt of the Company
convertible or exchangeable for Capital Stock of the Company
(less the amount of any cash, or other property, distributed
by the Company upon such conversion or exchange); or
(3) if such Restricted Payment is a Restricted Payment of
the type referred to in Section 4.06(a)(i), the Consolidated Adjusted
EBITDA Coverage Ratio for the four consecutive fiscal quarters
immediately preceding the making of such Restricted Payment (as shown
by a pro forma income statement of the Company for the four most
recent fiscal quarters ending at least 30 days prior to the making of
such Restricted Payment after giving effect to (i) the issuance and
retirement of any Debt since the last day of the most recent fiscal
quarter covered by such income statement as if such Debt was issued or
retired at the beginning of the period and (ii) the acquisition of any
company or business acquired by the Company since the first day of the
period as if such acquisition occurred at the beginning of the period)
is less than 2.00.
(b) The provisions of Section 4.06(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the
Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company and any
purchase or redemption of Capital Stock of a Subsidiary made by
exchange for, or out of the substantially concurrent sale of, Capital
Stock of the Company or a Subsidiary; provided, however, that (A) such
purchase or redemption shall be excluded from the calculation of the
amount of Restricted Payments and (B) the Net Cash Proceeds from such
sale shall be excluded from clauses (2)(B) and (2)(C) above;
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(ii) any purchase or redemption of Subordinated
Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Debt of the Company; provided,
however, that such Debt (A) shall be subordinated to the Securities to
at least the same extent as the Subordinated Obligations so exchanged,
purchased or redeemed, (B) shall have a Stated Maturity later than the
Stated Maturity of the Subordinated Obligations so exchanged,
purchased or redeemed and (C) shall have an Average Life greater than
the remaining Average Life of the Subordinated Obligations so
exchanged, purchased or redeemed; provided further, however, that such
purchase or redemption shall be excluded from the calculation of the
amount of Restricted Payments;
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with this Section; provided however, that at the time of
payment of such dividend, no Default shall have occurred and be
continuing (or result therefrom); provided further, however, that such
dividends shall be included in the calculation of the amount of
Restricted Payments;
(iv) any purchase or redemption of Subordinated
obligations from Net Available Cash to the extent permitted by Section
4.09; provided, however that such purchase or redemption shall be
excluded from the calculation of the amount of Restricted Payments;
(v) the repurchase of Capital Stock from officers and
employees (or their estates) of the Company or the Subsidiaries upon
death, disability or termination of employment of such officers and
employees; provided, however, that the aggregate amount of all such
repurchases in any fiscal year shall not exceed $4,000,000; provided
further, however, that such repurchases shall be included in the
calculation of the amount of Restricted Payments;
(vi) the payment of a management fee to Carlisle Capital
Corporation or any Affiliate in an amount not to exceed 1.0% of sales
per year; provided, however, that such payment shall be excluded from
the calculation of the amount of Restricted Payments; or
(vii) dividends in an aggregate amount of $10,000,000;
provided, however, that such dividends shall be excluded from the
calculation of the amount of Restricted Payments.
SECTION 4.07. Limitation on Subsidiary Debt and Preferred Stock. The
Company shall not permit any Subsidiary to issue, directly or indirectly, any
Debt or Preferred Stock except the Debt and Preferred Stock set forth below:
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(1) Debt issued pursuant to the Credit Agreement in an
aggregate amount outstanding at any one time not to exceed the greater
of (a) $50,000,000 less the aggregate principal amount of Debt then
outstanding incurred by the Company pursuant to Section 4.05(b)(1) and
(b) the sum of 80% of Eligible Receivables and 50% of Eligible
Inventory as of the month-end prior to the date of such issuance;
(2) Debt or Preferred Stock issued to and held by the
Company or a Wholly Owned Subsidiary or a Guarantor; provided,
however, that (i) any subsequent issuance or transfer of any Capital
Stock that results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or (ii) any transfer of such Debt or Preferred
Stock other than to the Company or a Wholly Owned Subsidiary or a
Guarantor shall be deemed for the purposes of this Section to
constitute the issuance of such Debt or Preferred Stock by the issuer
thereof;
(3) (i) Debt issued in exchange for or the proceeds of
which are used to refund or refinance Debt (other than Debt issued
pursuant to a revolving credit facility) or Preferred Stock of a
Subsidiary (A) issued and outstanding prior to the date on which such
Subsidiary was acquired by the Company (other than Debt or Preferred
Stock issued as consideration in, or to provide all or any portion of
the funds utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary or
was acquired by the Company), (B) outstanding on the date of this
Indenture or (C) permitted by this clause (3); provided, however, that
(I) the principal amount of such Debt so issued shall not exceed the
Scheduled Principal Amount of the Debt or Preferred Stock so
exchanged, refunded or refinanced and (II) the Debt so issued shall
have a Stated Maturity later than the Stated Maturity of the Debt or
final redemption date (if any) of the Preferred Stock so exchanged,
refunded or refinanced, and (ii) Debt of a Subsidiary issued pursuant
to a revolving credit facility; provided, however, that the aggregate
principal amount of all Debt of such Subsidiary permitted by, or
permitted to be exchanged, refunded or refinanced by, this Section
4.07(3) that is outstanding at any one time under revolving credit
facilities may not exceed the aggregate available commitments (whether
drawn or undrawn) available to such Subsidiary (individually or
jointly) under revolving credit facilities (but without duplication of
such commitments to the extent such commitments were also available to
another Subsidiary) on the date such Subsidiary was acquired by the
Company;
(4) Non-Recourse Debt of a Non-Recourse Subsidiary issued
after the date of this Indenture; provided, however, that if any such
Debt thereafter ceases to be Non-Recourse Debt of a Non-Recourse
Subsidiary, then such event shall be
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deemed for the purpose of this Section to constitute the issuance of
such Debt by the issuer thereof;
(5) Debt issued with respect to obligations that are
tax-exempt pursuant to Section 103 of the Code and that are issued in
connection with pollution control or other facilities of such
Subsidiary;
(6) guarantees of Debt of the Company (other than Secured
Debt) permitted under Section 4.05(a) or Section 4.05(b)(2), (3), (5),
(6), or (7); provided, however, that such guarantees shall rank pari
passu in all respects with, or be subordinated in right of payment to,
the guarantees that are required by Section 4.11 to be issued prior to
the issuance of such guarantees; and
(7) Debt in an aggregate principal amount or Preferred
Stock having an aggregate liquidation value which, together with all
other Debt and Preferred Stock of Subsidiaries then outstanding other
than Debt or Preferred Stock permitted under clauses (1) through (6)
above, does not exceed 5% of Consolidated Net Tangible Assets of the
Company as of the end of the most recent fiscal quarter of the Company
ending not less than 45 days from the date of determination.
SECTION 4.08. Limitation on Restrictions on Distributions from
Subsidiaries. The Company shall not, and shall not permit any Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (i) pay
dividends or make any other distributions on its Capital Stock or pay any Debt
or other obligation owed to the Company, (ii) make any loans or advances to the
Company or (iii) transfer any of its property or assets to the Company, except:
(1) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the date of this Indenture;
(2) any encumbrance or restriction with respect to a
Subsidiary pursuant to an agreement relating to any Debt issued by
such Subsidiary on or prior to the date on which such Subsidiary was
acquired by the Company (other than Debt issued as consideration in,
or to provide all or any portion of the funds utilized to consummate,
the transaction or series of related transactions pursuant to which
such Subsidiary became a Subsidiary or was acquired by the Company,
but not including Debt to the extent issued to provide funds to (i)
pay transaction fees, expenses, and other similar miscellaneous costs
resulting from, or incurred in connection with, the acquisition of
such Subsidiary, (ii) make payments to acquire options to purchase
equity securities of American Western
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Corporation and (iii) make the required payments under the "best
price" provisions of the securities purchase agreement dated March 31,
1989, pursuant to which the American Western Corporation Employee
Stock Ownership Trust acquired certain shares of American Western
Corporation's equity securities) and outstanding on such date;
(3) any encumbrance or restriction pursuant to an
agreement effecting a refinancing of Debt issued pursuant to an
agreement referred to in clause (1) or (2) of this Section; provided,
however, that the encumbrances and restrictions contained in any such
refinancing agreement are, in the good faith judgment of the Board of
Directors, no less favorable to the Securityholders than encumbrances
and restrictions contained in such agreements;
(4) any encumbrance or restriction relating to a Special
Non-Recourse Subsidiary;
(5) any encumbrance or restriction consisting of
customary nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the
lease; and
(6) in the case of clause (iii) above, restrictions
contained in security agreements securing Debt permitted by Section
4.03 to the extent such restrictions restrict the transfer of the
property subject to such security agreements.
SECTION 4.09. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company shall not, and shall not permit any Subsidiary to, make any Asset
Disposition unless (i) the Company or such Subsidiary receives consideration at
the time of such Asset Disposition at least equal to the fair market value of
the shares and assets subject to such Asset Disposition (which, in the case of
any Asset Disposition involving shares or assets having a fair market value of
more than $5,000,000, must be determined in good faith by the Board of
Directors), (ii) if the fair market value (determined as aforesaid) of the
shares or assets subject to such Asset Disposition exceeds $10,000,000, an
amount in cash or Cash Equivalents is received from such Asset Disposition
(upon consummation thereof) equivalent to at least 75% of such fair market
value and (iii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Subsidiary as the case may
be) (A) first, to the extent the Company elects, to prepay, repay or purchase
Debt incurred under any then existing senior bank term loan agreement of the
Company or Debt of a Wholly Owned Subsidiary (in each case other than Debt owed
to the Company or a Subsidiary) within 90 days from the later of the date of
such Asset Disposition or the receipt of such Net Available Cash; provided,
however, that in connection with any such prepayment, repayment or purchase,
the Company shall cause the
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related loan commitment (if any) to be permanently reduced (and not
subsequently recreated, whether with the same bank or otherwise) in an amount
equal to the principal amount so prepaid, repaid or purchased; (B) second, to
the extent of the balance of such Net Available Cash after application in
accordance with clause (A), to the extent the Company elects, to (1) make open
market purchases of the Senior Notes Due 1997 or (2) the acquisition by the
Company or any Subsidiary of Tangible Property or a majority interest in
another corporation; provided, however, that after giving effect thereto, the
Consolidated EBITDA Coverage Ratio for the four consecutive fiscal quarters
immediately preceding such acquisition (as shown by a pro forma income
statement of the Company for the four most recent fiscal quarters ending at
least 30 days prior to such acquisition after giving effect to (i) such
acquisition as if such acquisition occurred at the beginning of the period,
(ii) the issuance and retirement of any Debt since the last day of the most
recent fiscal quarter covered by such income statement as if such Debt was
issued or retired at the beginning of the period, including the issuance of
Debt in connection with such acquisition and (if applicable) the application of
the net proceeds thereof to refinance other Debt and (iii) the acquisition of
any other company or business acquired by the Company since the first day of
the period as if such acquisition occurred at the beginning of the period)
exceeds 2.0, in each case within 6 months from the receipt of such Net
Available Cash; (C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B), to make an offer
to purchase the Senior Notes Due 1997 pursuant to and subject to the conditions
contained in Section 4.09(b) of the Senior Note Indenture; (D) fourth, to the
extent of the balance of such Net Available Cash after application in
accordance with clauses (A), (B) and (C), to the extent the Company elects, to
make open market purchases of the Variable Notes Due 1997; (E) fifth, to the
extent of the balance of such Net Available Cash after application in
accordance with clauses (A), (B), (C) and (D), to make an offer to purchase
Variable Notes Due 1997 pursuant to and subject to the conditions contained in
Section 4.09 of the Variable Notes Due 1997 Indenture; (F) sixth, to the extent
of the balance of such Net Available Cash after application in accordance with
clauses (A), (B), (C), (D) and (E), to the extent the Company elects, to make
open market purchases of the Securities; (G) seventh, to the extent of the
balance of such Net Available Cash after application in accordance with clauses
(A), (B), (C), (D), (E) and (F), to make an offer to purchase Securities
pursuant to and subject to the condition of Section 4.09(b) and (H) eighth, to
the extent of the balance of such Net Available Cash after application in
accordance with clauses (A), (B), (C), (D), (E), (F) and (G), to (x) the
acquisition by the Company or any Wholly Owned Subsidiary of Tangible Property
or (y) the prepayment, repayment or purchase of Debt of the Company (including
Securities) or any Subsidiary, in each case within one year from the later of
the receipt of such Net Available Cash and the date the offer described in
Section 4.09(b) is consummated.
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(b) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to Section 4.09(a)(iii)(G), the Company will be
required to purchase Securities tendered pursuant to a tender offer by the
Company for the Securities (an "Offer") at a purchase price of 100% of their
principal amount plus accrued interest to the Purchase Date in accordance with
the procedures (including prorationing in the event of oversubscription) set
forth in Section 4.09(c). If the aggregate purchase price of Securities
tendered pursuant to the Offer is less than the Net Available Cash allotted to
the purchase of the Securities, the Company shall apply the remaining Net
Available Cash in accordance with Section 4.09(a)(iii)(D). The Company shall
not be required to make an Offer for Securities pursuant to this Section if the
Net Available Cash available therefor is less than $10,000,000 for any
particular Asset Disposition (which lesser amounts need not be carried forward
for purposes of determining whether an Offer is required with respect to the
Net Cash Proceeds of any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 90 days, after each
Asset Disposition as to which the Company must make an Offer, the Company shall
be obligated to deliver to the Trustee and send, by first-class mail to each
Holder, a written notice stating that the Holder may elect to have his
Securities purchased by the Company either in whole or in part (subject to
prorationing as hereinafter described in the event the Offer is oversubscribed)
in integral multiples of $1,000 of principal amount, at the applicable purchase
price. The notice shall specify a purchase date not less than 30 days nor more
than 60 days after the date of such notice (the "Purchase Date") and shall
contain information concerning the business of the Company which the Company in
good faith believes will enable such Holders to make an informed decision
(which will include (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company, the most
recent subsequently filed Quarterly Report on Form 10-Q and any Current Report
on Form 8-K of the Company filed subsequent to such Quarterly Report, other
than Current Reports describing Asset Dispositions otherwise described in the
offering materials (or corresponding successor reports), or if the Company is
not required to file such reports, information similar to that required by such
reports, (ii) a description of material developments in the Company's business
subsequent to the date of the latest of such Reports, and (iii) if material,
appropriate pro forma financial information) and all instructions and materials
necessary to tender Securities pursuant to the Offer, together with the
information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer
is delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to
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which such Offer is being made and (iii) the compliance of such allocation with
the provisions of Section 4.09(a). On the Purchase Date the Company shall also
irrevocably deposit with the Trustee or with a paying agent (or, if the Company
is acting as its own paying agent, segregate and hold in trust) in immediately
available funds an amount equal to the Offer Amount to be held for payment in
accordance with the provisions of this Section; provided, however, that such
funds may be invested in Permitted Investments with maturities not to exceed
the time at which such funds will be needed under this Section. Upon the
expiration of the period for which the Offer remains open (the "Offer Period"),
the Company shall deliver to the Trustee the Securities or portions thereof
which have been properly tendered to and are to be accepted by the Company.
The Trustee shall, on the Purchase Date, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that the
aggregate purchase price of the Securities delivered by the Company to the
Trustee is less than the Offer Amount, the Trustee shall deliver the excess to
the Company immediately after the expiration of the Offer Period.
(3) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Trustee at the address specified in the notice at least ten Business Days prior
to the Purchase Date. Holders will be entitled to withdraw their election if
the Trustee or the Company receives not later than three Business Days prior to
the Purchase Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. If at the expiration
of the Offer Period the aggregate principal amount of Securities surrendered by
Holders exceeds the Offer Amount, the Company shall select the Securities to be
purchased on a pro rata basis (which such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders whose Securities
are purchased only in part will be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company will also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A
Security shall be deemed to have been accepted for purchase at the time the
Trustee, directly or through an agent, mails or delivers payment therefor to
the surrendering Holder.
SECTION 4.10. Limitation on Transactions with Affiliates. The Company
shall not, and shall not permit any Subsidiary to, conduct any business or
enter into any transaction or series of related
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transactions in an aggregate amount greater than $100,000 per transaction or
related transaction (including the purchase, sale, lease or exchange of any
property or the rendering of any service) with any legal or beneficial owner of
5% or more of any class of Capital Stock of the Company or with any Affiliate
of any such owner or of the Company (other than a (i) a Wholly Owned Subsidiary
or a Guarantor, (ii) a Subsidiary at least 51% of the Capital Stock of which is
owned by the Company or one or more Wholly Owned Subsidiaries so long as no
portion of the minority interest in such Subsidiary is owned by any Affiliate
(other than the Company or another Wholly Owned Subsidiary) of either the
Company or any Wholly Owned Subsidiary or any legal or beneficial owner of 5%
or more of any class of Capital Stock of the Company or any Affiliate of such
owner or (iii) an employee stock ownership plan for the benefit of the
Company's or any Subsidiary's employees) unless (x) the terms of such business,
transaction or series of transactions are (A) set forth in writing and (B) as
favorable to the Company or such Subsidiary as terms that would be obtainable
at the time for a comparable transaction or series of related transactions in
arm's-length dealings with an unrelated third person and (y) the Board of
Directors has, by resolution, determined that such business or transaction or
series of transactions meets the criterion set forth in (x)(B) above. This
Section will not prohibit (i) the payment of a management fee by the Company to
Carlisle Capital Corporation or any Affiliate in an amount not to exceed 2.0%
of sales per year; provided, however, that the Company and Carlisle Capital
Corporation or such Affiliate shall have executed and delivered to the Trustee
a management fee subordination agreement in the form attached hereto as Exhibit
B or (ii) transactions between the Company or any Subsidiary and Prudential
Securities Incorporated, The First Boston Corporation or Citicorp Securities
Markets, Inc.
SECTION 4.11. Guarantees. The Company shall cause each Subsidiary that
guarantees Debt of the Company (other than Secured Debt) permitted under
Section 4.05(a) or Section 4.05(b)(2), (3), (5), (6) or (7) to execute and
deliver to the Trustee, prior to or concurrently with the issuance of such
guarantee, an indenture supplemental hereto, in form satisfactory to the
Trustee, pursuant to which such Subsidiary unconditionally guarantees the
Securities; provided, however, that such guarantee of Debt of the Company shall
rank pari passu in all respects with, or be subordinated in right of payment
to, such guarantee of the securities; provided further, however, that such
Subsidiary shall not be required to issue such guarantee of the Securities if
such Subsidiary has previously guaranteed the Securities and such previous
guarantee (i) satisfies the requirements of this Section 4.11 with respect to
such guarantee of Debt of the Company and (ii) is in full force and effect.
SECTION 4.12. Change of Control and Fundamental Change. (a) Upon a
Change of Control or Fundamental Change, each Holder of the
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Securities shall have the right to require that the Company repurchase such
Holder's securities at a repurchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase, in accordance with the terms contemplated in paragraph (b)
below.
(b) Within 30 days following any Change of Control or Fundamental
Change, the Company shall mail a notice to each Holder with a copy to the
Trustee stating:
(1) that a Change of Control or Fundamental Change, as
the case may be, has occurred and that such Holder has the right to
require the Company to repurchase such Holder's Securities at a
repurchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of repurchase;
(2) the circumstance and relevant facts regarding such
Change of Control or Fundamental Change (including, but not limited
to, information with respect to pro forma historical income, cash flow
and capitalization after giving effect to such Change of Control or
Fundamental Change);
(3) the repurchase date (which shall be no earlier than
30 days nor later than 60 days from the date such notice is mailed);
and
(4) the instructions determined by the Company,
consistent with this Section, that a Holder must follow in order to
have its Securities repurchased.
(c) Holders electing to have a Security repurchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least 10 Business Days
prior to the repurchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than three Business
Days prior to the repurchase date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder and a statement that
such Holder is withdrawing his election to have such Security repurchased.
(d) On the repurchase date, all Securities repurchased by the
Company under this Section shall be delivered to the Trustee for cancellation,
and the Company shall pay the purchase price plus accrued and unpaid interest,
if any, to the Holders entitled thereto.
(e) Prior to mailing notice of such Change of Control or
Fundamental Change to the Holders of the Securities, the Company will (1)
obtain the requisite consents under the Credit Agreement
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(and any other applicable instrument governing Debt of the Company that would
restrict the repurchase of the Securities) to permit the repurchase of the
Securities or (2) repay all Debt under the Credit Agreement (and any other
applicable instrument governing Debt of the Company that would restrict the
repurchase of the Securities) in full.
SECTION 4.13. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default by the Company and whether or not the signers know of
any Default that occurred during such period. If they do know of such Default,
the certificate shall describe the Default, its status and what action the
Company is taking or proposes to take with respect thereto.
Promptly after an Officer of the Company obtains knowledge of a
Default, the Company will deliver to the Trustee an Officers' Certificate
specifying such Default and what action the Company is taking or proposes to
take with respect thereto.
SECTION 4.14. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE V
Successor Company
SECTION 5.01. When the Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into, or convey, transfer
or lease all or substantially all its assets to, any person, unless:
(i) the resulting, surviving or transferee person (if not
the Company) shall be organized and existing under the laws of the
United States of America, or any State thereof or the District of
Columbia and such entity shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under
the Securities and this Indenture;
(ii) immediately prior to and after giving effect to such
transaction (and treating any Debt which becomes an obligation of the
resulting, surviving or transferee person or any Subsidiary as having
been incurred by such person or such
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Subsidiary at the time of such transaction), no Default shall have
happened and be continuing;
(iii) immediately after giving effect to such transaction,
the resulting, surviving or transferee person could issue an
additional $1.00 of Debt pursuant to Section 4.05(a);
(iv) immediately after giving effect to such transaction,
the resulting, surviving or transferee person shall have Consolidated
Net Worth in an amount which is not less than the Consolidated Net
Worth of the Company prior to such transaction; and
(v) the Company shall have delivered to the Trustee an
officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture
comply with this Indenture.
ARTICLE VI
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on
any Security when the same becomes due and payable, and such default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal
or premium, if any, of any Security when the same becomes due and
payable at its Stated Maturity, upon optional redemption, upon
declaration or otherwise, including any failure by the Company to
redeem or repurchase any of the Securities when required pursuant to
Section 4.12 or paragraph 7 of the Securities;
(3) the Company fails to comply with Article V;
(4) the Company fails to comply with Section 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 or 4.12 (other than a
failure to repurchase Securities when required pursuant to Section
4.12) and such failure continues for 30 days after the notice
specified below;
(5) the Company fails to comply with any of its
agreements in the Securities or this Indenture (other than those
referred to in (1), (2), (3) or (4) above) and such failure continues
for 60 days after the notice specified below;
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(6) Debt of the Company or any Significant Subsidiary is
accelerated by the holders thereof because of a default, the total
amount of such Debt accelerated exceeds $2,000,000 and such
acceleration is not annulled within 10 days after notice; or any
payment (including any payment of principal or interest) on Debt of
the Company or any Significant Subsidiary is not made when due
(without regard to any applicable grace period), the total amount of
such Debt exceeds $2,000,000 and such payment default is not cured
within 10 days after the notice specified below;
(7) the Company or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of
it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of
its creditors;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days; or
(9) one or more judgments or decrees for the payment of
money in excess of $2,000,000 shall be rendered against the Company or
any Significant Subsidiary and shall not be fully bonded and/or
covered by insurance, there is a period of 60 days following such
judgment during which such judgment or decree is not discharged,
waived or the execution thereof stayed (or such shorter period ending
one day prior to the date on which the judgment creditor could attach
assets of the Company or such Subsidiary) and such default continues
for 10 days after the notice specified below.
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The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.
A Default under clause (4), (5), (6) or (9) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such Notice. Such Notice
must specify the Default, demand that it be remedied and state that such notice
is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (4), (5), (6), or (9), its status and what action
the Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued interest on
all the Securities to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs
and is continuing, the principal of and interest on all the Securities shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute
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a waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (1) a Default in the payment of
the principal of or interest on a Security or (2) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
or, subject to Section 7.01, that the Trustee determines is unduly prejudicial
to the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of
the Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested,
provide to the Trustee reasonable security or indemnity against any
loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
provision of security or indemnity; and
(5) the Holders of a majority of principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
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A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of interest or principal specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount of principal and
interest remaining unpaid (together with interest on such unpaid interest to
the extent lawful) and the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant
to this Article VI, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section
7.07;
SECOND: to Securityholders for amounts due and unpaid
on the Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
THIRD: to the Company.
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The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company shall
not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company hereby expressly waives all
benefit or advantage of any such law, and shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE VII
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
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certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture. However, in the case of any
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;
and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of
this Section.
(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with
the Company.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds and/or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section and to the
provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively
rely upon, and shall be protected in acting or refraining from acting based
upon, any document believed by it to
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be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Trustee's conduct does
not constitute wilful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or
coregistrar may do the same with like rights. However, the Trustee must comply
with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for
any statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security), the Trustee may withhold the notice and shall be protected from
withholding the notice if and so long as a committee of its Trust
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Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each January 1 beginning with the January 1 following the
date of this Indenture, and in any event prior to February 1 in each year, the
Trustee shall mail to each Securityholder a brief report dated as of January 1
that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company agrees to notify a Trust Officer whenever the Securities
become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it
without negligence or bad faith on its part in connection with the
administration of this trust and the performance of its duties hereunder. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder. The Company shall defend the claim
and the Trustee may have separate counsel and the Company shall pay the fees
and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss or liability incurred by the Trustee through
negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of and
interest on particular Securities.
The Company's obligations pursuant to this Section shall survive the
satisfaction and discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8), the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority
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in principal amount of the Securities may remove the Trustee by so notifying
the Trustee in writing and may appoint a successor Trustee. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or insol-
vent;
(3) a receiver or other public officer takes
charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of
acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, subject to the
lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
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In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); provided, however, that there shall
be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities. (a) When (i) the
Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity all outstanding
Securities, including interest thereon (other than Securities replaced pursuant
to Section 2.07), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 8.01(c)
and 8.06, cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
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(b) Subject to Sections 8.01(c), 8.02 and 8.06, the
Company at any time may terminate (i) all its obligations under the Securities
and this Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and 4.12 and the
operation of Sections 6.01(4), 6.01(6) and 6.01(9) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option, payment of the Securities
may not be accelerated because of an Event of Default specified in Sections
6.01(4), 6.01(6) or 6.01(9).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the
Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08,
8.04, 8.05 and 8.06 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust
with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a
certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on
the deposited U.S. Government Obligations plus any deposited
money without investment will provide cash at such times and
in such amounts (but, in the case of the legal defeasance
option only, not more than such amounts) as will be sufficient
to pay principal and interest when due on all the Securities
to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and
during the 123-day period no Default specified in Section
6.01(7) or (8) occurs which is continuing at the end of the
period;
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(4) no Default has occurred and is continuing on
the date of such deposit and after giving effect thereto;
(5) the deposit does not constitute a default
under any other agreement binding on the Company;
(6) the Company delivers to the Trustee an
Opinion of Counsel to the effect that the trust resulting from
the deposit does not constitute, or is not qualified as, a
regulated investment company under the Investment Company Act
of 1940;
(7) in the case of the legal defeasance option,
the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a
ruling, or (ii) since the date of this Indenture there has
been a change in the applicable Federal income tax law, in
either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not
recognize income, gain or loss for Federal income tax purposes
as a result of such defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance had
not occurred;
(8) in the case of the covenant defeasance
option, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Securityholders will
not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if
such covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent to the defeasance and discharge
of the Securities as contemplated by this Article VIII have
been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.02. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent
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and in accordance with this Indenture to the payment of principal of and
interest on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
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provided, however, that the uncertificated Securities are
issued in registered form for purposes of Section 163(f) of
the Internal Revenue Code of 1986, as amended, or in a manner
such that the uncertificated Securities are described in
Section 163(f)(2)(B) of the Internal Revenue Code of 1986, as
amended;
(4) to add guarantees with respect to the Securities;
(5) to add to the covenants of the Company for
the benefit of the Holders or to surrender any right or power
herein conferred upon the Company;
(6) to comply with any requirements of the SEC in
connection with qualifying this Indenture under the TIA; or
(7) to make any change that does not adversely
affect the rights of any Securityholder.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities. However, without the consent of each Securityholder
affected, an amendment may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment;
(2) reduce the rate of or extend the time for
payment of interest on any Security;
(3) reduce the principal of or extend the fixed
maturity of any Security;
(4) reduce the premium payable upon the
redemption of any Security or change the time at which any
Security may or shall be redeemed;
(5) make any Security payable in money other than
that stated in the Security;
(6) make any change in Section 4.12; or
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(7) make any change in Section 6.04 or 6.07 or
the second sentence of this Section.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein,
shall not impair or affect the validity of an amendment under this section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in
effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent
or take any other action described above. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those persons who were
Securityholders at such record date (or their duly designated proxies), and
only those persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
persons continue to be Holders after such record date. No such consent shall
be valid or effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
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SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment
the Trustee shall be entitled to receive indemnity reasonably satisfactory to
it and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company, any
Affiliate of the Company nor any Subsidiary shall, directly or indirectly, pay
or cause to be paid any consideration, whether by way of interest, fee or
otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid or agreed to be paid to all
Holders which so consent, waive or agree to amend in the time frame set forth
in solicitation documents relating to such consent, waiver or agreement.
ARTICLE X
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 10.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or Poly-Tech:
Carlisle Plastics, Inc.
1314 North Third Street
Phoenix, AZ 85004
Attention of: Chief Financial Officer
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Attention of: Corporate Trust Division
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The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or
refrain from taking any action under this Indenture, the Company shall furnish
to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 10.05) stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action
have been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include
the statements set forth in Section 10.05) stating that, in
the opinion of such counsel, all such conditions precedent
have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
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(3) a statement that, in the opinion of such
person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
(4) a statement as to whether or not, in the
opinion of such person, such covenant or condition has been
complied with.
SECTION 10.06. When Treasury Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or any Guarantor or any Affiliate of the Company or any Guarantor shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 10.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in
the State of New York. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION 10.09. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State
of New York but without giving effect to applicable principles of conflicts of
law to the extent that the application of the laws of another jurisdiction
would be required thereby.
SECTION 10.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or the Trustee shall not have
any liability for any obligations of the Company or the Trustee under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
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SECTION 10.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 10.13 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
ARTICLE XI
Guarantee
SECTION 11.01. Guarantee. Each Guarantor hereby, jointly and
severally, unconditionally and irrevocably guarantees to each Holder and to the
Trustee and its successors and assigns (a) the due and punctual payment of
principal of and premium and interest on the Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture and the Securities and (b) the
due and punctual performance within applicable grace periods of all other
obligations of the Company under this Indenture and the Securities (all the
foregoing being hereinafter collectively called the "Obligations"). Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from such Guarantor, and
that such Guarantor will remain bound upon this Article notwithstanding any
extension or renewal of any Obligation.
Each Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Obligations, and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of each Guarantor hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to assert
any claim or demand or to enforce any right or remedy against the Company or
any other person under this Indenture, the Securities or any other agreement or
otherwise; (b) any extension or renewal of any thereof; (c) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Securities or any other agreement; (d) the release of any
security held by any Holder or the Trustee for the Obligations or any of them;
(e) the failure of any Holder or the Trustee to exercise any right or remedy
against any other guarantor of the Obligations or (f)
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(except as provided in Section 11.02) any change in the ownership of any
Guarantor.
Each Guarantor further agrees that its Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guaranty
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Obligations.
The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and shall
not be subject to any defense of setoff, counterclaim, and recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor herein shall not
be discharged or impaired or otherwise affected by the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Securities or any other agreement, by any waiver or modification
of any thereof, by any default, failure or delay, wilful or otherwise, in the
performance of the Obligations or by any other act or thing or omission or
delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of such Guarantor or would otherwise operate as a
discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Guarantee herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment,
or any part thereof, of principal of or premium or interest on any Obligation
is rescinded or must otherwise be restored by any Holder or the Trustee upon
the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against each
Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of or premium or interest on any Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, each Guarantor
hereby, jointly and severally, promises to and will, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (i) the unpaid principal
amount of and premium on such Obligations, (but only to the extent not
prohibited by law) and (iii) all other monetary Obligations of the Company to
the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders or the Trustee in
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respect of any Obligations guaranteed hereby until payment in full of all
Obligations and that it will never have any claim or right against the Company
by way of subrogation or otherwise that would constitute it a "creditor" of the
Company for purposes of any Bankruptcy Law during the period of one year prior
to filing a petition under any Bankruptcy Law by or against the Company. Each
Guarantor further agrees that, as between such Guarantor, on the one hand, and
the Holders and the Trustee, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of such Guarantor's Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article VI, such Obligations
(whether or not due and payable) shall forthwith become due and payable by such
Guarantor for purposes of this Section.
Each Guarantor also agrees, jointly and severally, to pay any and all
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in, and any amounts payable to the Trustee pursuant to
Section 7.07 in connection with, enforcing any rights under this Section.
SECTION 11.02. Release Following Sale of Assets. Concurrently with
any sale or other disposition (other than to the Company or any Affiliate of
the Company) by way of merger, consolidation or otherwise of all or
substantially all the assets of a Guarantor or all the Capital Stock of a
Guarantor permitted by and in accordance with the terms of this Indenture, such
Guarantor (in the event of such a sale or other disposition of all the Capital
Stock of such Guarantor) or the corporation acquiring the property (in the
event of such a sale or other disposition, by way of a merger, consolidation or
otherwise, of all or substantially all the assets of such Guarantor) shall be
released and relieved of its Guarantee Obligations. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, the Trustee shall execute any
documents reasonably required and reasonably acceptable in form and substance
to the Trustee to evidence the release of such Guarantor from its Guarantee
Obligations.
SECTION 11.03. Successors and Assigns. Except as provided in Section
11.02, this Article shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Securities shall automatically extend
to
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and be vested in such transferee or assignees, all subject to the terms and
conditions of this Indenture.
SECTION 11.04. No Waiver, etc. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of
any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies and benefits which either may have
under this Article 11 at law, in equity, by statute or otherwise.
SECTION 11.05. Modification, etc. No modification, amendment or
waiver of any provision of this Article, nor the consent to any departure by
any Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Trustee, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice to or demand on any Guarantor in any case shall entitle such
Guarantor or any other guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 11.06. Contribution. To the extent any Guarantor makes any
payment under Section 11.01 or a Guarantee Agreement which, when added to all
preceding payments made by such Guarantor under Section 11.01 or a Guarantee
Agreement, would result in the aggregate payments under Section 11.01 or a
Guarantee Agreement by such Guarantor exceeding its Percentage (as defined
below) of all payments then or theretofore made by all Guarantors under Section
11.01 and Guarantee Agreements, such Guarantor shall have a right of
contribution against each other Guarantor whose aggregate payments under
Section 11.01 or a Guarantee Agreement at any time of determination are less
than its Percentage of all payments made by all Guarantors under Section 11.01
and Guarantee Agreements, in an amount such that after giving effect to any
such contribution rights each Guarantor will have paid only its Percentage of
all payments made under Section 11.01 and Guarantee Agreements by all
Guarantors. As used in this Section, a Guarantor's "Percentage" shall mean the
percentage obtained by dividing (i) the amount by which the present fair
saleable value of the assets of such Guarantor on the date hereof exceeds its
liabilities (without giving effect to this Article or any Guarantee Agreement)
(such excess for each Guarantor defined as its "Guarantor Net Worth") by (ii)
the sum of the Guarantor Net Worth of all Guarantors; provided, however, that
upon the release of any Guarantor pursuant to Section 11.02, the Percentage of
each remaining Guarantor shall be adjusted to give effect to such release.
Each Guarantor agrees that this right to contribution from any other Guarantor
is subordinated in right of payment to all Senior
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Guarantor Debt of such other Guarantor and that such subordination is for the
benefits of the holders of Senior Guarantor Debt.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
Dated: CARLISLE PLASTICS, INC.
--------------------------
by /s/ Patrick J. O'Leary
------------------------------------
Title: Chief Financial Officer
ATTEST:
- ----------------------------------
Title:
POLY-TECH, INC., as a Guarantor
by /s/ Patrick J. O'Leary
-----------------------------------------
Title: Chief Financial Officer
ATTEST:
- ----------------------------------
Title:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee,
by /s/ Patricia Stermer
-----------------------------------------
Title: Assistant Vice President
ATTEST:
/s/ John Guiliano
- ----------------------------------
Title: Vice President
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THIS SECURITY (INCLUDING THE RELATED GUARANTEE) HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (2) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (3) IF
AVAILABLE, PURSUANT TO RULE 144 UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. EACH HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY, REPRESENTS THAT IT
UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.
[FORM OF FACE OF SECURITY]
No. $
10-1/4% Senior Notes Due 1997
CARLISLE PLASTICS, INC., a Delaware corporation, promises to
pay to __________________, or registered assigns, the principal sum of
___________________ Dollars on June 15, 1997.
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
CARLISLE PLASTICS, INC.,
by
---------------------------------------------
Chairman and Chief
Executive Officer
-----------------------------------------------
Chief Financial Officer
and Secretary
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
United States Trust Company of New York,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture
by
----------------------------------
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
10-1/4% Senior Notes Due 1997
1. Interest
Carlisle Plastics, Inc., a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. The Company will pay interest
semiannually on June 15 and December 15 of each year. Interest on the
Securities will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from November 10, 1994. Interest will
be computed on the basis of a 360-day year of 12 30-day months. The Company
shall pay interest on overdue principal at the rate borne by the Securities
plus 1% per annum, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
If and to the extent required pursuant to Section 2(e) of the
Registration Rights Agreement, the Company will pay liquidated damages to the
Holder of this Security in the form of one or more Interest Rate Increases (as
defined in the Registration Rights Agreement), upon the occurrence of a
Registration Default (as defined in the Registration Rights Agreement).
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the persons who are registered holders of Securities at the close
of business on the June 1 or December 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may pay principal
and interest by check payable in such money. It may mail an interest check to
a Holder's registered address.
3. Paying Agent and Registrar
Initially, United States Trust Company of New York, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
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4. Indenture
The Company issued the Securities under an Indenture dated as of
November 10, 1994 ("Indenture"), among the Company, Poly-Tech Inc., a
Minnesota corporation ("Poly-Tech"), and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Section
Section 77aaa- 77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings
specified in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company
limited to $15,000,000 aggregate principal amount (subject to Section 2.07 of
the Indenture).
The Indenture imposes certain limitations on the issuance of secured
debt of the Company and the Subsidiaries, sale and leaseback transactions
involving the Company or the Subsidiaries, the issuance of debt by the Company,
the issuance of debt and preferred stock by the Subsidiaries, the payment of
dividends and certain other distributions by the Company and the Subsidiaries,
the sale or transfer of assets and Subsidiary stock, transactions with
Affiliates, investments in Non-Recourse Subsidiaries and investments in persons
that are not Subsidiaries. In addition, the Indenture limits the ability of
the Company and the Subsidiaries to restrict dividends from Subsidiaries and
certain other payments to the Company and provides for the guarantee of the
Securities by Subsidiaries and the release thereof all under circumstances set
forth in the Indenture.
The payment of principal, premium, if any, and interest on the
Securities has been guaranteed by Poly-Tech on the terms and subject to the
limitations contained in the Indenture. Such guarantees are general unsecured
obligations of Poly-Tech.
5. Optional Redemption
The Securities may not be redeemed prior to June 15, 1995. On and
after that date, the Company may redeem the Securities at any time as a whole,
or from time to time in part, at the following redemption prices
(expressed in percentages of principal amount) plus accrued interest to the
redemption date:
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Optional
Redemption
Period Percentage
From June 15, 1995 through June 14, 1996 102.56%
From June 15, 1996 and thereafter 100.00%
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may
be redeemed in part, but only in integral multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date, on and after
such date interest ceases to accrue on such Securities (or portions thereof)
called for redemption.
7. Put Provisions
Upon a Change of Control or a Fundamental Change, any Holder of
Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a repurchase price equal to 101% of
the principal amount of the Securities to be repurchased plus accrued interest
to the date of repurchase as provided in, and subject to the terms of, the
Indenture.
8. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for a period of
15 days before a selection of Securities to be redeemed or before an interest
payment date.
9. Persons Deemed Owners
The registered holder of this Security may be treated as the owner of
it for all purposes.
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10. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
11. Defeasance
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity.
12. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the
Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal
amount outstanding of the Securities. Subject to certain exceptions set forth
in the Indenture, without the consent of any Securityholder, the Company and
the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, to comply with Article 5 of the Indenture,
to provide for uncertificated Securities in addition to or in place of
certificated Securities, to add guarantees with respect to the Securities, to
add to the covenants of the Company for the benefit of Securityholders or to
surrender any right or power conferred upon the Company, to comply with any SEC
requirements in connection with qualifying the Indenture under the Act, or to
make any change that does not adversely affect the right of any Securityholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on the Securities at maturity, upon redemption pursuant to paragraph 5 hereof,
upon declaration or otherwise, including any failure to repurchase any of the
Securities when required pursuant to paragraph 7 hereof; (iii) failure by the
Company to comply with other agreements in the Indenture or the Securities, in
certain cases subject to notice and lapse of time; (iv) certain accelerations
(including failure to pay within any grace period after final maturity) of
other Debt of the Company or certain Subsidiaries if the amount accelerated (or
so unpaid) exceeds $2,000,000 and continues for 10 days after the required
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notice to the Company; (v) certain events of bankruptcy or insolvency of the
Company or certain Subsidiaries; and (vi) certain judgments or decrees for the
payment of money in excess of $2,000,000 that are not discharged, waived or
stayed within 10 days after notice. Certain defaults under (iii), (iv) and
(vi) are not Events of Default until the Trustee or the Holders of at least 25%
in principal amount of the Securities notify the Company of the default and the
Company does not cure the default within the specified time. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency with respect
to the Company are Events of Default that will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding such notice is in the Securityholders' interest.
14. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
or the Trustee under the Securities or the Indenture or for any claim based on,
in respect of or by reason of such obligations or their creation. By accepting
a security, each Securityholder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
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16. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the face of this security.
17. Abbreviations
Customary abbreviations may be used in the name of a securityholder or
an assignee, such as TEN COM (=tenants in common) TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
18. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation
is made as to the accuracy of such numbers either as printed on the Securities
or as contained in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request
and without charge a copy of the Indenture which has in it the text of this
Security in larger type. Requests may be made to:
Carlisle Plastics, Inc.
1314 North Third Street
Phoenix, AZ 85004
Attention of: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ____________________________________ agent to transfer
this Security on the books of the Company. The agent may substitute another to
act for him.
________________________________________________________________________________
Date: ___________________ Your Signature: ______________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.09 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.09 of the Indenture, state the amount and
check the box: $ ____________
[ ]
If you want to elect to have this Security repurchased by the Company
pursuant to Section 4.12 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security repurchased by
the Company pursuant to Section 4.12 of the Indenture, state the amount and
check the box: $____________
[ ]
Date: Your Signature:
------------ --------------------------------
(sign exactly as your name appears on the other
side of the Security)
Signature Guarantee: -----------------------------------------------
(Signature must be guaranteed by a member firm
of the New York Stock Exchange or a commercial
bank or trust company)
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EXHIBIT B
SUBORDINATION AGREEMENT dated as of _______________________, between
CARLISLE PLASTICS, INC., a Delaware corporation ("Plastics"), and
________________________, a ___________________corporation (the "Company").
Plastics and United States Trust Company of New York, a New York
banking corporation, (the "Trustee"), have entered into an indenture dated as
of November 10, 1994 (the "Indenture") relating to Plastics' 10-1/4% Senior
Notes Due 1997 (the "Securities"). Capitalized terms used herein and not
defined shall have the meanings assigned in the Indenture. Section 4.10 of the
Indenture, which prohibits certain transactions with Affiliates, does not
prohibit the payment of management fees to Affiliates of Plastics in an amount
not to exceed 2.0% of sales per year so long as such fees are subordinated to
the Securities on the terms described therein. The Company is an Affiliate of
Plastics and wishes to provide for such subordination.
NOW THEREFORE, in consideration of the foregoing, the parties hereto
agree as follows:
SECTION 1. Agreement To Subordinate. The Company and Plastics agree
that any obligation of Plastics to pay any management fee to the Company,
whether now existing or hereafter created, any accrued and unpaid management
fees and all other claims or interests in respect thereof (collectively, the
"Subordinated Obligations") are subordinated in right of payment, to the extent
and in the manner provided herein, to the prior payment of any and all amounts
payable under or in respect of the Indenture and the Securities, including
principal, premium (if any), interest and all other amounts payable thereunder
or in respect thereof and that the subordination is for the benefit of the
holders of the Securities.
SECTION 2. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of Plastics to creditors in a total or partial
liquidation or a total or partial dissolution of Plastics or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to
Plastics or its property:
(1) holders of the Securities shall be entitled
to receive payment in full of the Securities before the
holders of the Subordinated Obligations shall be entitled
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to receive any payment of principal of, premium (if any) or
interest on the Subordinated Obligations; and
(2) until the Securities are paid in full, any
distribution to which the holders of the Subordinated
obligations would be entitled but for this Agreement shall be
made to holders of the Securities as their interests may
appear, except that the holders of the Subordinated
Obligations may receive equity securities or debt securities
that are subordinated to the Securities to at least the same
extent as the Subordinated Obligations.
SECTION 3. Default on Securities. Plastics may not pay principal of,
premium (if any) or interest on the Subordinated Obligations and may not
repurchase, redeem or otherwise retire any Subordinated Obligations ("pay the
Subordinated Obligations") if (i) any Securities are not paid when due or (ii)
any other default on the Securities occurs and the maturity of such Securities
is accelerated in accordance with its terms unless, in either case, the default
has been cured or waived, any such acceleration has been rescinded or such
Securities have been paid in full; provided, however, Plastics may pay the
Subordinated Obligations without regard to the payment default with respect to
such Securities if Plastics receives written notice approving such payment from
the Trustee. During the continuance of a default (other than a default
described in the previous sentence) with respect to any Securities pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration) or
the expiration of any applicable grace periods, Plastics may not pay the
Subordinated Obligations for a period of 120 days from the receipt by Plastics
of written notice of such default from the Trustee, specifying an election to
effect such 120-day prohibition (a "Payment Notice"). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the Trustee
shall have accelerated the maturity of the Securities, Plastics may resume
payments on the Subordinated Obligations (including all accrued and unpaid
Subordinated Obligations) after such 120-day period. No more than two Payment
Notices may be given in any consecutive 360- day period, irrespective of the
number of defaults with respect to the Securities during such period.
SECTION 4. When Distribution Must Be Paid Over. If a distribution is
made to the holders of the Subordinated Obligations that because of this
Agreement should not have been made to them, the holders of the Subordinated
Obligations who receive the distribution shall hold it in trust for holders of
the Securities and pay it over to them as their interests may appear.
73
<PAGE> 79
SECTION 5. Subrogation. After all the Securities are paid in full and
until the holders of the Subordinated Obligations are paid in full, such
holders shall be subrogated to the rights of holders of the Securities to
receive distributions applicable to the Securities. A distribution made under
this Agreement to holders of the Securities which otherwise would have been
made to the holders of the Subordinated Obligations is not, as between Plastics
and the holders of the Subordinated Obligations, a payment by Plastics on the
Securities.
SECTION 6. Relative Rights. This Agreement defines the relative
rights of the holders of the Subordinated Obligations and holders of the
Securities. Nothing in this Agreement shall:
(1) impair as between Plastics and the holders of
the Subordinated Obligations, the obligation of Plastics, to
pay the Subordinated Obligations in accordance with their
terms; or
(2) prevent any holder of the Subordinated
Obligations from exercising its available remedies, subject to
the rights of holders of the Securities to receive
distributions otherwise payable to the holders of the
Subordinated Obligations.
SECTION 7. Subordination May Not Be Impaired by Plastics. No right of
any holder of the Securities or the Trustee to enforce the subordination of the
obligations evidenced by the Subordinated Obligations shall be impaired by any
act or failure to act by Plastics or by its failure to comply with this
Agreement.
SECTION 8. Distribution or Notice to Trustee. Whenever a distribution
is to be made or a notice given to holders of the Securities, the distribution
may be made and the notice given to the Trustee in accordance with the terms of
the Indenture.
SECTION 9. Reliance by Holders of the Securities on Subordination
Provisions. Each holder of Subordinated Obligations acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of the Securities, to acquire and
continue to hold, or to continue to hold, such Securities and such holder shall
be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Securities.
The terms and provisions of this Agreement shall accrue to the benefit of, and
the enforceable by, the holders of the Securities and the Trustee.
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<PAGE> 80
IN WITNESS WHEREOF, the parties have caused this Subordination
Agreement to be duly executed as of the date first above written.
CARLISLE PLASTICS, INC.,
by
---------------------------------------------
Name:
Title:
[COMPANY],
by
---------------------------------------------
Name:
Title:
75
<PAGE> 1
Exhibit 5.1
December 12, 1994
Carlisle Plastics, Inc.
1314 N. Third Street
Phoeniz, AZ 85004
Re: Registration Statement on Form S-4
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-4 filed by
Carlisle Plastics, Inc. (the "Company") with the Securities and Exchange
Commission on December 12, 1994 relating to the offering by the Company of
$15,000,000 aggregate amount of Series A 10 1/4% Senior Notes Due 1997 (the
"New Notes") in exchange for an aggregate amount of $15,000,000 of 10 1/4%
Senior Notes due 1997 which were issued in 1994 (the "Old Notes"), please be
advised that as counsel to the Company, upon examination of such corporate
documents and records as we have deemed necessary or advisable for the purposes
of this opinion, it is our opinion that:
1. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Delaware.
2. The New Notes being offered by the Company, when issued in
exchange for the Old Notes as contemplated by the Registration
Statement, will be legally issued and will be binding
obligations of the Company, enforceable in accordance with
their terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting the enforceability of creditors' remedies and
general principles of equity.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
Very truly yours,
LINDQUIST & VENNUM P.L.L.P.
<PAGE> 1
Exhibit 10.10
September 20, 1994
PERSONAL & CONFIDENTIAL
Mr. David E. Wilbur, Jr.
Vice Chairman
Carlisle Plastics, Inc.
1401 West 94th Street
Minneapolis, MN 55431
Dear Dave:
This letter is to serve as an amendment to the EXECUTIVE EMPLOYMENT AGREEMENT
dated September 1, 1992 between Carlisle Plastics, Inc. and David E. Wilbur,
Jr. As was agreed upon between the Board of Directors of Carlisle Plastics,
Inc. and yourself during a closed session on September 7, 1994, effective
immediately your position as C.O.O. of Carlisle Plastics, Inc. is to be vacated
and you are hereby assigned, by unanimous approval of the Board, to the
position of Vice Chairman Carlisle Plastics, Inc. and have been elected to the
Executive Committee in accordance with a motion approved by the Board in open
session later on the same date.
As was agreed by the Board and approved by you verbally, all non-qualified
stock options that were granted to you on September 1, 1992 will remain in
effect during your term as Vice Chairman. The incentive stock option that was
granted on January 2, 1994 for 200,000 shares at $7.00 per share is to be
cancelled. Additionally, you agreed to spend not less than six months per year
engaged in Carlisle Plastics, Inc. activities which will include but not be
limited to service to the Executive Committee, strategic oversight of the
business, various specific activities to be determined related to product
development, market development, and key customer relationships and Board
Meetings on a regular basis. Compensation for these activities was agreed upon
to be $150,000 per year and all previous perquisites and expenses are to remain
in place.
In consideration for accepting this assignment, the term of this agreement is
to be from September 7, 1994 through September 6, 1995 and may only be
terminated under clauses 8(a), 8(b), 8(c), and 8(e) of the Employment Agreement
dated September 1, 1992.
With respect to the Employment Agreement of September 1, 1992, this Agreement
supersedes the following paragraphs:
<PAGE> 2
1. Employment.
2. Executive Capacity.
3. Location.
4. Term of Employment.
5. Compensation.
6. Incentive Compensation.
7. Benefits (vacation to be eliminated; all remaining items as
agreed upon).
8. Termination (as covered previously in the body of this letter).
9. Severance.
All other paragraphs as listed below remain in effect as agreed upon in the
September 1, 1992, Executive Employment Agreement:
10. Confidential Information.
11. Disclosure of Product Developments.
12. Transfer of Product Developments.
13. Non-Competition.
14. Delivery of Company Property.
15. Equitable Remedies.
16. Severable Provisions.
17. Miscellaneous.
Dave, I hope that this agreement meets with your approval. I look forward to
your continued contribution to the value enhancement of Carlisle Plastics, Inc.
and look forward to working with you in this new capacity.
If you agree that this letter completely and accurately states our
understandings on the subjects covered above, please sign and return one of the
enclosed copies, whereupon it will become an agreement between us, legally
binding in accordance with its terms.
CARLISLE PLASTICS, INC.
By /s/ William H. Binnie
---------------------------
William H. Binnie, Chairman
I hereby accept and agree to the foregoing.
Dated: September 20, 1994 /s/ David E. Wilbur, Jr.
---------------------------
David E. Wilbur, Jr.
<PAGE> 1
Exhibit 10.27
EMPLOYMENT AGREEMENT
This Agreement is made as of September 12, 1994 (the "Effective Date") between
CARLISLE PLASTICS, INC., a Delaware corporation ("Carlisle") and Clifford A.
Deupree ("Deupree").
WHEREAS, Carlisle considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interest of Carlisle and its shareholders; and
WHEREAS, Deupree has made and is expected to continue to make, due to
his experience and knowledge of the plastics market, a significant contribution
to the profitability, growth and financial strength of Carlisle; and
WHEREAS, Carlisle, as a publicly held corporation, recognizes that the
possibility of a change of control may exist and that such possibility, and the
uncertainty and questions which it may raise among management, may result in
the departure or distraction of the performance of Deupree's duties to the
detriment of Carlisle and its shareholders; and
WHEREAS, Deupree is willing to continue his employment with Carlisle
upon the understanding that Carlisle will provide income security if Deupree's
employment is terminated under certain terms and conditions;
WHEREAS, it is in the best interests of Carlisle and its stockholders
to employ Deupree and to reinforce and encourage his continued attention and
dedication to his assigned duties without distraction and to ensure his
continued availability to Carlisle in the event of a Change in Control; and
WHEREAS, it is further in Carlisle's best interests to receive certain
assurances from Deupree regarding Carlisle's confidentiality and competition
concerns;
THEREFORE, in consideration of the foregoing and of the increased
compensation, change in control protection, continued employment and other
benefits hereunder, as well as other mutual covenants and obligations
hereinafter set forth, Carlisle and Deupree agree as follows:
1. Employment. Carlisle agrees to continue to employ Deupree as
President of Carlisle under the terms, conditions and benefits set forth herein
and Deupree accepts continued employment with Carlisle on said terms,
conditions and benefits.
2. Term. The term of Deupree's employment shall continue until
terminated pursuant to paragraphs 7, 8, or 9 herein.
3. Duties. In his position as President, Deupree will continue to
faithfully and diligently exercise overall operating responsibility for
Carlisle and perform such responsibilities as may be assigned to him from time
to time by the Board of Directors of Carlisle (the "Board"); devote his full
time, energy and skill to Carlisle's business, as is reasonably necessary to
execute fully his duties hereunder, except for vacations, absences made
necessary because of illness, and service on other corporate, civic, or
charitable boards or committees not significantly interfering with his
<PAGE> 2
duties hereunder; and promote Carlisle's best interests. The principal place
of employment and the location of Deupree's principal office and normal place
of work shall be in the Phoenix, Arizona metropolitan area. Deupree will be
expected to travel to other locations, as necessary, in the performance of his
duties during the term of this Agreement. Deupree shall not engage in any
other business activity inconsistent with his duties and obligations hereunder,
whether personal or for gain, profit or pecuniary advantage.
4. Compensation. For all services rendered by Deupree, Carlisle shall
pay Deupree a base annual salary of $400,000, payable at such times as salaried
employees of Carlisle are customarily paid. The Board shall, from time to time
during Deupree's employment, review his annual salary in connection with
possible increases, giving consideration to inflation factors, performance of
Deupree and Carlisle, salaries paid for positions of similar responsibility for
other companies, and other relevant factors, and shall provide for such
increase when deemed appropriate. Deupree shall in addition be eligible to
receive annual executive incentive bonuses up to 100% of Deupree's annual base
salary, which are given solely at the discretion of the Board acting through
its Compensation Committee, commensurate with the performance of Carlisle and
Deupree's contribution as President of Carlisle in furthering the strategic
goals and objectives of the Company. Such bonus may be payable in cash or in
stock of the Company. In the event of termination of this Agreement by
Carlisle without Good Cause, as defined in paragraph 8 herein, or by Deupree
for Good Reason, as defined in paragraph 7 herein, the Board shall, in its sole
discretion, in good faith determine and cause to be paid the proportionate
amount of any bonus earned by Deupree through the date of termination, provided
however that such determination shall be final and binding.
5. Benefits. Deupree shall be entitled to an annual paid vacation of up
to six (6) weeks per year, which may not be carried over beyond the end of any
fiscal year, and such insurance, 401(k) program and other benefits described in
Carlisle's employee manual, as are available to all salaried employees of
Carlisle, subject to any limitations on such benefits to officers, directors or
highly paid employees in order that such benefit programs qualify under federal
or state law for favored tax or other treatment. Such benefit programs may be
changed from time to time by the Board. Deupree shall also be entitled to
reimbursement of his reasonable and necessary expenses incurred in connection
with the performance of his duties hereunder.
6. Deferred Compensation. As of January 1, 1994, Deupree shall accrue
$83.33 for every full calendar month after the Effective Date during which he
is employed by Carlisle, up to a maximum of 12 months to be paid to Deupree in
120 monthly installments beginning at the later of his separation date or his
62nd birthday. The terms and conditions of this deferred compensation benefit
are set forth in the Deferred Compensation Agreements, attached hereto as
Exhibit A, and executed contemporaneously with this Agreement.
7. Termination by Deupree. Deupree may resign his employment with
Carlisle effective upon 15 days' advance written notice to the Board. If
Deupree resigns under this paragraph, the Board retains the right to terminate
his employment, effective upon written notice to Deupree, at anytime during the
15-day notice period, provided, however, that base salary and the employer
portion of his health insurance premiums will continue to be paid by Carlisle
for the duration of the 15-day notice period. In connection with his
termination, Deupree will receive any accrued unused vacation pay to which he
is entitled.
Deupree may also terminate his employment with Carlisle at any time
for Good Reason, effectively immediately upon written notice to the Board.
Good Reason shall exist if Carlisle has materially breached any of the terms of
this Agreement or if Deupree is assigned duties which are
<PAGE> 3
materially inconsistent with his position, duties, responsibilities and status
as President of Carlisle. If Deupree terminates his employment for Good
Reason, he is entitled to Salary Continuation for 24 months following his
resignation date. Salary Continuation will be computed at the annual rate of
$400,000 (or such higher salary as then may be in effect) and will be payable
to Deupree on the same schedule and in the same amount as the payment of salary
prior to termination of his employment, until such time as the full Salary
Continuation obligation shall be discharged, as provided in this paragraph 7.
During the period when Salary Continuation is payable to Deupree, Carlisle will
also continue to provide to Deupree all medical and health benefits provided to
its other senior executives. Deupree shall also receive any accrued unused
vacation pay to which he is entitled. Receipt of Salary Continuation is
subject to Deupree's compliance with his obligations under paragraphs 10, 11,
and 12 of this Agreement.
Payment of the employer portion of Deupree's group health insurance
premiums under this paragraph and under paragraphs 8 and 9 herein shall cease
as of the date Deupree is covered under another group health plan if such
coverage occurs prior to termination of any salary continuation periods set
forth in said paragraphs.
8. Termination by Carlisle. Carlisle shall have the right to terminate
Deupree's employment in any of the following ways:
a. If Deupree dies during the term, his employment under this
Agreement shall thereupon terminate, except that Carlisle shall pay to the
legal representative of Deupree's estate all compensation due hereunder up to
the date of his death, including salary and any other compensation, prorated
through the last day of the month during which his death has occurred.
b. Carlisle, by written notice to Deupree, may terminate
Deupree's employment under this Agreement if he becomes physically or mentally
disabled during the term so that he shall not be able to perform, for a period
of 120 consecutive days, with reasonable accommodation, substantially the usual
duties assigned to him hereunder ("Disability"). In such event, Carlisle shall
pay to Deupree all compensation due hereunder up to the date of such
termination, including salary and any other compensation (prorated through the
last day of the month during which such termination has occurred).
c. Carlisle, by written notice to Deupree, may terminate his
employment for Good Cause, as defined below. In the event of termination under
this subparagraph 8.c., Deupree shall be paid his salary and any other
compensation hereunder, prorated up to the date of termination.
"Good Cause" for the purpose of this Agreement shall mean on or more
of the following: (i) willful and premeditated failure or refusal of Deupree
to render services to Carlisle in accordance with his obligations under
paragraph 3; (ii) the commission by Deupree of an act of fraud or embezzlement
against Carlisle; (iii) the commission of any other willful or reckless act
which injures Carlisle in a substantial or material way (it being understood
that mere negligence in performance of duties is not Good Cause under this
Agreement); or (iv) the commission of a substantial act or moral turpitude by
Deupree which is deemed by Carlisle's Board to have a material adverse effect
on Carlisle.
Termination for Good Cause shall only be made by a decision of the
full Board (excluding Deupree) after providing Deupree a full hearing before
the Board after ten (10) days advance written notice of the meeting, which
states that among its purposes is consideration of terminating
3
<PAGE> 4
Deupree's employment for Good Cause. Deupree shall have the right to appear at
such meeting and to have counsel, other advisers and witnesses attend the same.
d. In addition, Carlisle may, by written notice to Deupree, terminate his
employment without Good Cause, in which event Deupree will be paid his salary
and any other compensation up to the date of termination (prorated through the
last day of the month during which Deupree has been terminated) on the date of
such termination. Deupree is also entitled to receive Salary Continuation for
24 months from his termination date. Salary Continuation will be computed at
the annual rate of $400,000 (or such higher salary as then may be in effect)
and will be payable to Deupree on the same schedule and in the same amount as
the payment of salary prior to termination of his employment, until such time
as the full Salary Continuation obligation shall be discharged, as provided in
this paragraph 7. During the period when Salary Continuation is payable to
Deupree, Carlisle will also continue to provide to Deupree all medical and
health benefits provided to its other senior executives. Deupree shall also
receive any accrued unused vacation pay to which he is entitled. Receipt of
Salary Continuation is subject to Deupree's compliance with his obligations
under paragraphs 10, 11, or 12 of this Agreement.
9. Termination Following a Change in Control.
a. Definition. Change in Control shall mean a change in control
which would be required to be reported in response to Item 1 of Form 8-K
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not Carlisle is then subject to such reporting
requirement including, without limitation, if:
i. any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) becomes a "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act). directly or indirectly, of securities of
Carlisle representing 50% or more of the combined voting power of Carlisle's
then outstanding securities. For purposes of this subparagraph, a person
becomes a beneficial owner as of the date on which an option to purchase
Carlisle securities is granted to such person; or
ii. there ceases to be a majority of the Board of
Directors comprised of (A) individuals who on the date hereof constituted the
Board of Carlisle, and (B) any new director who subsequently was elected or
nominated for election by a majority of the directors who held such office
immediately prior to a Change in Control.
Deupree agrees that, subject to the terms and conditions of
this Agreement, in the event of a Change in Control of Carlisle occurring after
the date hereof, Deupree will remain in the employ of Carlisle for a period of
30 days from the occurrence of such Change in Control.
b. Applicability. In the event of a Change of Control, Deupree
shall be entitled to receive the benefits set forth in subparagraph f below if
his employment terminates within 36 months of such Change in Control for any
reason other than death, Good Cause, retirement or resignation other than for
Good Reason. Notwithstanding anything herein to the contrary, Deupree may
voluntarily terminate his employment for any reason during the period
commencing on the 31st day following a Change of Control and ending on the
360th day following the Change in Control, and such termination shall be deemed
"Good Reason" for all purposes of this Agreement. Deupree shall, in return for
the benefits provided under this subparagraph f, sign a severance agreement
with Carlisle, in which he agrees to release any and all claims and causes
4
<PAGE> 5
which he might have against Carlisle and in which he affirms and acknowledges
his obligations under paragraphs 10, 11 or 12 of this Agreement.
c. Notice of Termination. Any purported termination of
employment shall be communicated by written Notice of Termination to the other
party hereto in accordance with paragraph 20 hereunder. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which indicates the
specific termination provision in this Agreement relied upon and which sets
forth the facts and circumstances claimed to provide a basis for termination of
Deupree's employment.
d. Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean:
i. if Deupree's employment is terminated for Disability,
as defined in paragraph 8.b. hereunder, 30 days after Notice of Termination is
given (provided that Deupree shall not have returned to the full-time
performance of Deupree's duties during such 30-day period); and
ii. if Deupree's employment is terminated pursuant to a
provision contained in paragraph 7 or 8 herein or for any other reason (other
than Disability), the date specified in the Notice of Termination, consistent
with the provisions in said paragraphs.
e. Dispute of Termination. If, within ten days after any Notice
of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, or by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or the time for appeal therefrom having expired and no appeal having
been perfected); provided, that the Date of Termination shall be extended by a
notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable
diligence. Notwithstanding the pendency of any such dispute, Carlisle shall
continue to pay Deupree full compensation in effect when the notice giving rise
to the dispute was given (including, but not limited to, base salary) and
continue Deupree as a participant in all compensation, benefit and insurance
plans in which Deupree was participating when the notice giving rise to the
dispute was given, until the dispute is finally resolved in accordance with
this subsection. Amounts paid under this subsection are in addition to all
other amounts due under this Agreement and shall not be offset against or
reduce any other amounts under this Agreement.
f. Compensation Upon Termination. Following a Change in Control,
as defined in subparagraph 9.a. above, to the extent provided in subparagraph
9.b. above, Deupree shall be entitled to the following benefits in lieu of any
benefits which would otherwise be available to him upon termination under
paragraphs 7 or 8 hereunder:
i. Carlisle shall pay Deupree through the Date of
Termination Deupree's base salary at the rate in effect at the time the Notice
of Termination is given and any other form or type of other compensation
otherwise payable for such period, including an executive incentive bonus,
commensurate with his performance and the performance of Carlisle.
5
<PAGE> 6
ii. In lieu of any further salary payments for periods
subsequent to the Date of Termination, Carlisle shall pay a severance payment
(the "Severance Payment") equal to 24 months of Deupree's Compensation as
defined below based on the average monthly Compensation paid to Deupree during
the 12 month period ending immediately prior to the date of Termination
(without given effect to any reduction in such Compensation which would
constitute a breach of this Agreement). For purposes of this subparagraph,
Compensation shall mean and include every type and form of compensation paid to
Deupree by Carlisle (or any corporation ("Affiliate") affiliated with Carlisle
within the meaning of Section 1504 of the Internal Revenue Code of 1986, as may
be amended from time to time (the "Code")) and included in Deupree's gross
income for federal income tax purposes, but excluding compensation income
recognized as a result of the exercise of stock options or sale of the stock so
acquired. All of Deupree's contributions to any qualified plan pursuant to
Section 401(k) of the Code or any flexible benefit plan pursuant to Section 125
of the Code shall be deemed to be included in gross income for federal tax
purposes for purposes of this subparagraph. The Severance Payment shall be
made in a single lump sum within 60 days after the Date of Termination.
iii. For the period of time after the Date of Termination
on which the Severance Payment is based in accordance with paragraph (ii) above
(two years), Carlisle shall arrange to provide, at its sole expense, Deupree
with life, disability and health insurance benefits substantially similar to
those which Deupree is receiving or entitled to receive immediately prior to
the Notice of Termination. The cost of providing such benefits shall be in
addition to (and shall not reduce) the Severance Payment. Benefits otherwise
receivable by Deupree pursuant to this paragraph (iii) shall be reduced to the
extent comparable benefits are actually received by Deupree during such period
from any third party, any such benefits actually received by Deupree shall be
reported to Carlisle.
iv. Carlisle shall also pay to Deupree all legal fees and
expenses incurred by Deupree as a result of such termination (including all
such fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this paragraph).
v. The Severance Payment shall be reduced and offset by
the amount of any other payment received or to be received by Deupree in
connection with his termination of employment pursuant to any policies of
Carlisle.
vi. If a determination is made by legislation,
regulations, rulings directed to Carlisle or Deupree, or court decision that
the aggregate amount of any payment made to Deupree hereunder, or pursuant to
any plan, program or policy of Carlisle in connection with, on account of, or
as a result of, a Change of Control constitutes "excess parachute payments" as
defined in Section 280G of the code subject to the excise tax provisions of
Section 4999 of the Code, or any successor sections thereof, Deupree shall be
entitled to receive from Carlisle, in addition to any other amounts payable
hereunder, an amount which shall be equal to such excise tax, plus, on a net
after-tax basis, an amount equal to the aggregate amount of any interest,
penalties, fines or additions to any tax, including income tax, which are
imposed in connection with the imposition of such excise tax. Such amount
shall be payable to Deupree as soon as may be practicable after such final
determination is made. Deupree and Carlisle shall mutually and reasonably
determine whether or not such determination has occurred or whether any appeal
to such determination should be made.
6
<PAGE> 7
vii. Deupree shall be entitled to receive all benefits
payable to Deupree under the Carlisle Plastics, Inc. Retirement Investment
Plan and Trust or any successor of such Plan and Trust and any other plan or
agreement relating to retirement benefits, and, in addition, if Deupree is not
fully vested in his account balance under such Plan, a single lump sum payment
in cash from Carlisle representing the nonvested portion of his account, which
shall be in addition to, and not reduced by, any other amounts payable to
Deupree under this paragraph 9.
viii. Deupree shall not be required to mitigate the amount
of any payment provided for in this paragraph 9 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
paragraph 9 be reduced by any compensation earned by Deupree as the result of
employment by another employer or by retirement benefits after the Date of
Termination, or otherwise except as specifically provided in this paragraph 9.
ix. In order to assure the performance of Carlisle or its
successor of its obligations under this paragraph, Carlisle may deposit in
trust an amount equal to the maximum payment that will be due Deupree under the
terms hereof. Under a written trust instrument, the Trustee shall be
instructed to pay to Deupree (or Deupree's legal representative, as the case
may be) the amount to which Deupree shall be entitled under the terms hereof,
and the balance, if any, of the trust no so paid or reserved for payment shall
be repaid to Carlisle. If Carlisle deposits funds in trust, payment shall be
made no later than the occurrence of a Change in Control. If and to the extent
there are not amounts in trust sufficient to pay Deupree under this agreement,
Carlisle shall remain liable for any and all payments due to Deupree. In
accordance with the terms of such trust, at all times during the term of this
Agreement, Deupree shall have no rights, other than as an unsecured general
creditor of Carlisle, to any amounts held in trust and all trust assets shall
be general assets of Carlisle and subject to the claims or creditors of
Carlisle. Failure of Carlisle to establish or fully fund such trust shall not
be deemed a revocation or termination of this Agreement by Carlisle.
g. Stock Options. Deupree shall, immediately upon a Change in
Control, vest in all stock options which have been granted to him and he shall
be entitled to exercise all rights and to receive all benefits accruing to him
under any and all Carlisle stock purchase and stock option plans or programs,
including the Restated Carlisle Plastics, Inc. 1991 Employee Incentive Plan, or
any successor to any such plan or program, which shall be in addition to and
not reduced by any other amounts payable to Deupree under this paragraph 9.
10. Confidential Information. All knowledge and information not already
available to the public which Deupree may acquire or has acquired with respect
to product development, improvements, modifications, discoveries, designs,
methods, systems, computer software, programs, codes and documentation,
research, designs, formulas, instructions, methods, inventions, trade secrets,
services or other private or confidential matters of Carlisle (such as those
concerning sales, costs, profits, organizations, customer lists, pricing
methods, etc.) or of any third party which Carlisle is obligated to keep
confidential, shall be regarded by Deupree as strictly confidential and shall
not be used by Deupree directly or indirectly or disclosed to any persons,
corporations or firms. All of the foregoing knowledge and information are
collectively termed "Confidential Information" herein. Deupree's obligations
under this paragraph will not apply to any information which (a) is or becomes
known to the general public under circumstances involving no breach by Deupree
of the terms of this paragraph, (b) is generally disclosed to third parties by
Carlisle as a continuing practice without restriction on such third parties,
(c) is approved for release by written authorization of Carlisle's Board, or
(d) Deupree is obligated by law to disclose.
7
<PAGE> 8
11. Disclosed and Transfer of Product Developments, etc.
a. Deupree will make full and prompt disclosure to Carlisle of
all product developments, improvements, modifications, discoveries, computer
software, programs, codes and documentation, research, designs, formulas,
configurations, instructions, methods and inventions (all of which are
collectively termed "Developments" herein), whether patentable or not, made,
discovered, conceived or first reduced to practice by Deupree or under his
direction during his employment, alone or with others, whether or not made or
conceived during normal working hours or on the premises of Carlisle which
relate in any material way to the business or to research or development work
of Carlisle. Deupree confirms by his acceptance of this Agreement that
Carlisle owns and shall own all of the Developments.
b. Deupree also agrees on behalf of himself and his heirs and
legal representatives that he will promptly communicate, disclose and transfer
to Carlisle, free of encumbrances and restrictions, all of his right, title and
interest in the Developments covered by subparagraph 10.a. and any patents or
patent applications covering such Developments and to execute and deliver such
assignments, patents and applications, and any other documents as Carlisle may
direct, and to cooperate fully with Carlisle to enable it to secure any patents
or otherwise protect such Developments in any and all countries. However, this
paragraph shall not apply to Developments which do not relate to the actual or
anticipated business or research and development of Carlisle or its
subsidiaries or affiliates, provided that such Developments are made or
conceived by Deupree entirely outside of Carlisle's working hours, outside or
Carlisle's premises and without the use of Carlisle's Confidential Information.
Deupree shall assign to Carlisle any and all copyrights and reproduction rights
to all material prepared by Deupree in connection with his employment. This
will confirm that Deupree's obligations to Carlisle under paragraphs 10, 11,
and 12 will continue after the termination of Deupree's employment.
12. Non-Competition. During the term of Deupree's employment by Carlisle
and, if Deupree's employment with Carlisle is terminated for any reason other
than as provided in paragraph 8.d., for a period of twenty-four (24) months
thereafter, Deupree shall not directly or indirectly engage in, enter into or
participate in the business of Carlisle or in any business or commercial
activity which does or is reasonably likely to compete with or adversely affect
the Business or products of Carlisle, either as an individual for Deupree's own
account, as a partner or a joint venturer, or as an officer, director,
consultant or holder of more than five percent (5%) of the entity interest in,
any other person, firm, partnership or corporation, or an employee, agent or
salesman for any person. In addition, during such period Deupree shall not:
avail himself of any advantages or acquaintances he has made with any person
who has, within the twelve (12) month period ended on the date of termination
of his employment, been a customer of Carlisle or its affiliates, and which
would, directly or indirectly, materially divert business from or materially
and adversely affect the Business of Carlisle; interfere with the contractual
relations between Carlisle and any of its employees.
For purposes of this Agreement, the "Business of Carlisle" or "Business" means
and includes the business of the manufacture, production and distributions of
plastic garment hangers, trash bags, sheeting, bottles and any other products
currently offered or currently under development by Carlisle during two (2)
years prior to the date of termination of Deupree's employment.
Inasmuch as the activities of Carlisle are conducted on a North American basis,
the restrictions of this paragraph 12 shall apply throughout the United States,
Canada, and Mexico.
8
<PAGE> 9
13. Remedies. Deupree acknowledges that the restrictions set forth in
paragraphs 10, 11, and 12 hereof are reasonably necessary to protect legitimate
business interests of Carlisle.
14. Severability. The parties intend that the covenants and agreements
contained herein shall be deemed to be a series of separate covenants and
agreements, one for each and every state of the United States and political
subdivision outside the United States where the business described is
conducted. If, in any judicial proceeding, a court shall refuse to enforce any
of the separate covenants deemed included in such action, then such enforceable
covenants shall be deemed eliminated from the provisions of this Agreement for
the purpose of such proceeding to the extent necessary to permit the remaining
covenants to be enforced in such proceeding. Further, in the event that any
provision is held to be overbroad as written, such provision shall be deemed
amended to narrow its application to the extent necessary to make the provision
enforceable according to applicable law and enforced as amended.
15. Binding Effect.
a. Carlisle will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Carlisle to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Carlisle would be required to perform it if no such succession had taken
place. Failure of Carlisle to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Deupree to compensation from Carlisle in the same amount and
on the same terms as he would be entitled hereunder if he terminated his
employment for Good Reason following a Change of Control, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
b. This Agreement shall inure to the benefit of and be
enforceable by Deupree's personal or legal representatives, successors, heirs,
and designated beneficiaries. If Deupree should die while any amount would
still be payable to Deupree hereunder if Deupree had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Deupree's designated beneficiaries, or, if
there is no such designated beneficiary, to Deupree's estate.
16. Entire Agreement. From and after the date of this Agreement the terms
and provisions of this Agreement constitute the entire agreement between the
parties and this Agreement supersedes any previous oral or written
communications, representations, or agreements with respect to any subject,
including the subject matter of compensation, bonus, participation and profit
sharing and termination compensation.
17. Waiver and Interpretation. The waiver by either party of a breach of
any provision of this Employment Agreement by the other party shall not operate
or be construed as a waiver of any subsequent breach by the breaching party.
No waiver shall be valid unless in writing and signed by the party providing
such waiver. If any provision of this Agreement is held by any court to be
unenforceable, then such provision shall be deemed to be eliminated from the
Agreement to permit enforceability of the remaining provisions. If any
provision is held to be overbroad, such provision shall be amended to narrow
its application to the extent necessary for enforceability.
9
<PAGE> 10
18. Application Law. All questions pertaining to the validity,
construction, execution and performance of this Agreement shall be construed
and governed in accordance with the laws of the Commonwealth of Massachusetts.
The parties consent to the personal jurisdiction of the Commonwealth of
Massachusetts, waive any argument that such a forum is not convenient, and
agree that any litigation relating to this Agreement shall be venued in Boston,
Massachusetts.
19. Tax Withholding. Carlisle may withhold from any payment of benefits
under this Agreement (and forward to the appropriate taxing authority) any
taxes required to be withheld under applicable law.
20. Notice. Any notice required or desired to be given under this
Employment Agreement shall be deemed given if in writing sent by certified mail
to his residence in the case of Deupree, or to its principal office in the case
of Carlisle.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement as of the date and year first set forth above.
CARLISLE PLASTICS, INC.
By /s/ William H. Binnie
-------------------------
Its Chairman of the Board
CLIFFORD A. DEUPREE
/s/ Clifford A. Deupree
---------------------------
10
<PAGE> 11
EXHIBIT A
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT is made and entered into effective September 12, 1994, by and
between Carlisle Plastics, Inc., a Delaware corporation ("Carlisle") and
Clifford A. Deupree ("Deupree").
WHEREAS, Deupree is, and has been, an employee of Carlisle and is
presently serving in the capacity of President; and
WHEREAS, Deupree does now, and has, rendered valuable services to
Carlisle and as a result is now making, and has made, a substantial
contribution to the success and growth of Carlisle; and
WHEREAS, Carlisle has determined that Deupree's continued services are
necessary and desirable to the anticipated pattern of growth and success of
Carlisle; and
WHEREAS, Carlisle wishes to reward the past and future services of
Deupree, to retain the services of Deupree, and to provide assistance for the
contingencies of disability or death of Deupree;
THEREFORE, in consideration for the continued and loyal service to Carlisle by
Deupree and subject to the terms and conditions set forth in this Agreement, IT
IS AGREED AS FOLLOWS:
1. Best Efforts. The benefits to be paid to Deupree under this Agreement
are contingent upon Deupree continuing to exert his best efforts on behalf of
Carlisle.
2. Definitions.
a. Beneficiary means any person designated by Deupree on the
beneficiary form attached as Exhibit 1, to receive benefits under this
Agreement which may be payable following Deupree's death, and includes any
contingent beneficiary designated by Deupree on said form.
b. Disability means a physical or mental condition of Deupree
which renders him incapable of performing his duties for Carlisle for a period
of at least 120 days and which, according to certification by Deupree's
qualified physician, will continue to render Deupree substantially incapable of
performing any full-time employment for an additional twelve months past the
120 days. The onset of Disability shall be day one of the 120-day period.
c. Monthly Benefit means $83.33 multiplied by the number of
Deupree's Months of Service.
d. Month of Service means each full calendar month beginning with
January 1994, during which Deupree performs full-time services for Carlisle,
up to a maximum of 12 months.
3. Benefits
a. Calculation. Beginning on the first day of the first month
following Deupree's separation of employment with Carlisle or his 62nd
birthday, whichever occurs later, Carlisle shall
1
<PAGE> 12
pay to Deupree a Monthly Benefit for 120 consecutive months. Each Monthly
Benefit shall be paid to Deupree no later than the first day of each month
during the 120 month period.
4. Forfeiture of Benefits. Any entitlement which Deupree has to Monthly
Benefits under this Agreement shall be forfeited if Deupree's employment is
terminated for Good Cause as defined in paragraph 8.c. of the Employment
Agreement dated September 12, 1994. Forfeiture of all benefits hereunder shall
also occur if Deupree violates any obligation which he has under paragraph 10,
11, or 12 of the Employment Agreement dated September 12, 1994.
5. Disability Benefit. If Deupree comes under a Disability while
employed by Carlisle and prior to commencement of his Monthly Benefit payments
pursuant to paragraph 3.a. hereunder, and Deupree terminates active service
with Carlisle due to said Disability, Carlisle shall commence payment to
Deupree of his Monthly Benefits, beginning on the first day of the first month
after Deupree's termination of service on account of Disability. For purposes
of any individual group disability plan or policy under which Deupree is an
insured and for all other purposes as well, this Deferred Compensation
Agreement is neither a disability nor retirement plan which would offset
disability benefits to which Deupree is entitled under any such plan or policy.
6. Death Prior to Commencement of Monthly Benefits. If Deupree dies
while in the employ of Carlisle and prior to commencement of his Monthly
Benefit payments, Carlisle shall make Deupree's Monthly Benefit payments to
Deupree's designated Beneficiary, if said Beneficiary survives Deupree. If the
Beneficiary dies before receiving all payments under this Agreement, the
remaining payments shall be made to the Beneficiary's estate in a lump sum
discounted to present value on the basis of the prime rate published in the
Wall Street Journal on the date of death of the Beneficiary. If the
Beneficiary does not survive Deupree, all payments due hereunder shall be paid
to Deupree's estate in a lump sum discounted to present value on the basis of
the prime rate published in the Wall Street Journal on Deupree's date of death.
Deupree shall designate his Beneficiary on the beneficiary designation form
attached to this Agreement as Exhibit 1.
7. Death After Commencement of Monthly Benefits. If Deupree dies after
payment of his Monthly Benefits has commenced under this Agreement, but prior
to receiving all Monthly Benefits to which he is entitled, Deupree's remaining
Monthly Benefits shall continue to be paid to Deupree's Beneficiary, if said
Beneficiary survives Deupree, beginning on the first day of the first month
following Deupree's death. If Deupree's Beneficiary survives Deupree but dies
before receiving all of Deupree's remaining Monthly Benefits, then Deupree's
remaining Monthly Benefits shall be paid to the Beneficiary's estate in a
single lump sum within 60 days following Deupree's death. Any lump sum payment
to the estate of Deupree or of Deupree's Beneficiary under this paragraph or
paragraph 6 shall consist of the remaining Monthly Benefits to be paid
hereunder discounted to present value in accordance with paragraph 6 above and
shall be a full discharge of Carlisle hereunder.
8. Claims Procedure. If Deupree or his Beneficiary (the "Claimant") is
denied all or a portion of an expected benefit under this Agreement for any
reason, he or she may file a claim with Carlisle. Carlisle shall notify the
Claimant within 60 days of allowance or denial of the claim, unless the
Claimant receives written notice from Carlisle prior to the end of the 60-day
period stating that special circumstances require an extension of the time for
decision. The notice of Carlisle's decision shall be in writing, sent by mail
to Claimant's last known address, and, if a denial of the claim, must contain
the following information:
2
<PAGE> 13
c. the specific reasons for the denial;
d. specific reference to pertinent provisions of the Agreement on
which the denial is based; and
e. if applicable, a description of any additional information or
material necessary to perfect the claim, an explanation of why such information
or material is necessary, and an explanation of the claims review procedure.
9. Review Procedure. A Claimant is entitled to request a review of any
denial of his claim in writing within 60 days of notice of denial. Absent such
a request, the claim will be deemed to be conclusively denied. Upon a request
for review, Carlisle's Board of Directors shall afford the Claimant a hearing
and the opportunity to review all pertinent documents and submit issues and
comments orally and in writing and shall render a review decision in writing,
all within 60 days after receipt of a request for a review. The Board may
extend the time for decision by not more than 60 days upon written notice to
the Claimant. The Claimant shall receive written notice of the Board's review
decision, with specific reasons for the decision and reference to the pertinent
provisions of the Agreement.
10. Life Insurance and Funding. Carlisle in its discretion may apply for
and procure as owner and for its own benefit, insurance on the life of Deupree,
in such amounts and in such forms as Carlisle may choose. Deupree shall have
no interest whatsoever in any such policy or policies, but at the request of
Carlisle shall submit to medical examinations and supply such information and
execute such documents as may be required by the insurance company or companies
to whom Carlisle has applied for insurance.
The rights of Deupree, his Beneficiary or estate to benefits under the
Agreement shall be solely those of an unsecured creditor of Carlisle. Any
insurance policy or other assets acquired by or held by Carlisle in connection
with the liabilities assumed by it pursuant to the Agreement shall not be
deemed to be held under any trust for the benefit of Deupree, his beneficiary,
or his estate, or to be security for the performance of the obligations of
Carlisle but shall be, and remain, a general, unpledged, and unrestricted asset
of Carlisle.
11. Assignment; Successors. Deupree shall have no right to assign the
right to receive any benefits under this Agreement and any such assignment
shall be invalid. Carlisle shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or asset of Carlisle to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Carlisle would be required to perform it if no such succession had taken
place. Failure of Carlisle to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Deupree to full benefits hereunder from Carlisle, subject
only to the forfeiture provisions set forth in paragraph 4 herein.
12. Taxes. Carlisle shall deduct from all payments made hereunder all
applicable federal or state taxes required by law to be withheld from such
payments.
13. Benefits and Burdens. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of any and all parties
hereto, present and future. Transfers
3
<PAGE> 14
of Deupree within the Company or its subsidiaries and successor organizations
shall not terminate this Agreement.
14. Communications. All communications regarding this Agreement by and
between Carlisle and Deupree shall be in writing and shall be deemed duly
given, made, delivered or transmitted when mailed first class with postage
prepaid and addressed to the appropriate party at the address last appearing on
the books of the Company. Deupree may change his address from time to time by
giving written notice to Carlisle. Carlisle may rely upon all such information
so furnished, including Deupree's current mailing address.
15. Acceleration of Benefit Payments. Carlisle hereby reserves the right,
in its sole discretion, to accelerate the payment of any sums specified in this
Agreement, and such accelerated payments shall be paid in a single lump sum and
discounted to present value on the basis of the prime rate published in the
Wall Street Journal on the date of such accelerated payment.
16. Amendment or Termination. This Agreement may be amended or revoked at
any time, in whole or in part, by the mutual agreement of Carlisle and Deupree.
17. Construction. All questions pertaining to the validity, construction,
execution and performance of this Agreement shall be construed and governed in
accordance with the laws of the Commonwealth of Massachusetts. The parties
consent to the personal jurisdiction of the Commonwealth of Massachusetts,
waive any argument that such a forum is not convenient, and agree that any
litigation relating to this Agreement shall be venued in Boston, Massachusetts.
18. Severability. The invalidity of any portion of this Agreement shall
not invalidate the remainder hereof, and said remainder shall continue in full
force and effect.
19. Duplicate Copies. Two copies of this Agreement shall be executed by
the parties and each copy shall be considered an original.
IN WITNESS WHEREOF, Carlisle, through its officer who has been duly authorized
by its Board of Directors, and Deupree have hereunto set their hands as of the
date first above written.
CARLISLE PLASTICS, INC.
By /s/ William H. Binnie
-------------------------
Its Chairman of the Board
CLIFFORD A. DEUPREE
By /s/ Clifford A. Deupree
--------------------------
4
<PAGE> 1
EXHIBIT 12.1
CARLISLE PLASTICS, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands except ratio amounts)
<TABLE>
<CAPTION>
Nine Months Ended
Fiscal Year Ended December 31, September 30,
------------------------------------------------------ ---------------------
1989 1990 1991 1992 1993 1993 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income Before Taxes and
Minority Interest . . . . . . . $ 9,685 $ 6,905 $13,738 $(7,435) $ 9,291 $ 7,333 $ 2,229
Add:
Fixed Charges:
Interest Expense, Including
Amortization of Deferred
Financing Costs . . . . . . $12,193 $26,383 $22,648 $21,957 $22,549 $17,156 $14,689
One Third of Operating Base
Rent Expense . . . . . . . . 912 1,381 1,609 1,656 1,492 928 1,475
------- ------- ------- ------- ------- ------- -------
Total Fixed Charges . . . . . . $13,105 $27,764 $24,257 $23,613 $24,041 $18,084 $16,164
======= ======= ======= ======= ======= ======= =======
Net Earnings:
Available for Fixed Charges . . $22,790 $34,669 $37,995 $16,178 $33,332 $25,652 $18,393
======= ======= ======= ======= ======= ======= =======
Ratio of Earnings to Fixed
Charges . . . . . . . . . . 1.7x 1.2x 1.6 -- 1.4x 1.4 1.1x
======== ======== ======== ======= ======== ======= ========
</TABLE>
<PAGE> 1
EXHIBIT 15.1
Carlisle Plastics, Inc.
1314 North Third Street, Suite 300
Phoenix, Arizona 85004
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of Carlisle Plastics, Inc. and subsidiaries for the periods ended
March 31, 1994 and 1993, June 30, 1994 and 1993 and September 30, 1994 and
1993, as indicated in the reports of Deloitte & Touche dated May 5, 1994, July
27, 1994, and in our report dated October 25, 1994, respectively; because we
did not perform an audit, we expressed no opinion on that information.
We are aware that the reports of Deloitte & Touche and our report referred to
above, which were included in your Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1994, June 30, 1994 and September 30, 1994, are being
used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to Rule 436(c)
under the Securities Act of 1933, are not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
December 7, 1994
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Carlisle Plastics, Inc. and subsidiaries on Form S-4 of the report of Deloitte
& Touche dated February 9, 1994 (which expresses an unqualified opinion and
includes an explanatory paragraph relating to a change in accounting for income
taxes to conform with Statement of Financial Accounting Standards No. 109)
appearing in the Annual Report on Form 10-K of Carlisle Plastics, Inc. and
subsidiaries for the year ended December 31, 1993, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
December 7, 1994
<PAGE> 1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
__________________________
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ____
__________________________
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5459866
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
114 West 47th Street 10036
New York, New York (Zip Code)
(Address of principal
executive offices)
__________________________
CARLISLE PLASTICS, INC.
(Exact name of OBLIGOR as specified in its charter)
Delaware 04-2891825
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Union Street 02108
Boston, Massachusetts (Zip Code)
(Address of principal executive offices)
__________________________
POLY-TECH, INC.
(Exact name of GUARANTOR as specified in its charter)
Minnesota 41-1503086
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Union Street 02108
Boston, Massachusetts (Zip Code)
(Address of principal executive offices)
__________________________
10-1/4% Senior Notes due 1997
(Title of the indenture securities)
================================================================================
<PAGE> 2
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Reserve Bank of New York (2nd District), New York, New
York (Board of Governors of the Federal Reserve
System).
Federal Deposit Insurance Corporation, Washington, D.C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3. Voting Securities of the Trustee
2,999,020 shares of Common Stock - par value $5 per share
4. Trusteeships under Other Indentures
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, furnish the
following information:
(a) Title of the securities outstanding under each such indenture.
Carlisle Plastics, Inc. 10-1/4% Senior Notes due 1997
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of
Section 310(b)(1) of the Act arises as a result of the
trusteeship under any such indenture, including a statement as
to how the indenture securities will rank as compared with the
securities issued under such other indenture.
-2-
<PAGE> 3
4. Trusteeships under Other Indentures
(cont'd)
The fact relied upon as a basis that no conflicting interest
within the meaning of Section 310(b)(1) of the Act arises as a
result of a trusteeship under the indenture dated as of June
1, 1992, as supplemented (the "other indenture"), under which
the 10-1/4% Senior Notes due 1997 were issued and under the
indenture under which Carlisle Plastics Inc. 10-1/4% Senior
Notes due 1997 (the "indenture to be qualified") will be
issued is that the indenture to be qualified and the other
indenture are wholly unsecured. The securities to be issued
under the indenture to be qualified will rank equally as to
the right of payment with the other indenture.
5. Interlocking Directorates and Similar Relationships with the Obligor
or Underwriters
Not applicable.
6. Voting Securities of the Trustee Owned by the Obligor or its Officials
Not applicable.
7. Voting Securities of the Trustee Owned by Underwriters or their
Officials
Not applicable.
8. Securities of the Obligor Owned or Held by the Trustee
Not applicable.
9. Securities of Underwriters Owned or Held by the Trustee
Not applicable.
10. Ownership or Holdings by the Trustee of Voting Securities of Certain
Affiliates or Securities Holders of the Obligor
Not applicable.
-3-
<PAGE> 4
11. Ownership or Holdings by the Trustee of any Securities of a Person
Owning 50 Percent or More of the Voting Securities of the Obligor
Not applicable.
12. Indebtedness of the Obligor to the Trustee
Not applicable.
13. Defaults by the Obligor
Not applicable.
14. Affiliations with the Underwriters
Not applicable.
15. Foreign Trustee
Not applicable.
16. List of Exhibits
T-1.1 -- "Chapter 204, Laws of 1853, An Act to Incorporate the
United States Trust Company of New York, as Amended",
is incorporated by reference to Exhibit T-1.1 to Form
T-1 filed on September 20, 1991 with the Securities
and Exchange Commission (the "Commission") pursuant
to the Trust Indenture Act of 1939 (Registration No.
2221291).
T-1.2 -- The trustee was organized by a special act of the New
York Legislature in 1853 prior to the time that the
New York Banking Law was revised to require a
Certificate of authority to commence business.
Accordingly, under New York Banking Law, the Charter
(Exhibit T-1.1) constitutes an equivalent of a
certificate of authority to commence business.
T-1.3 -- The authorization of the trustee to exercise
corporate trust powers is contained in the Charter
(Exhibit T- 1.1).
-4-
<PAGE> 5
16. List of Exhibits
(cont'd)
T-1.4 -- The By-laws of the United States Trust Company of New
York, as amended to date, are incorporated by
reference to Exhibit T-1.4 to Form T-1 filed on
September 20, 1991 with the Commission pursuant to
the Trust Indenture Act of 1939 (Registration No.
2221291).
T-1.6 -- The consent of the trustee required by Section 321(b)
of the Trust Indenture Act of 1939.
T-1.7 -- A copy of the latest report of condition of the
trustee published pursuant to law or the requirements
of its supervising or examining authority.
-5-
<PAGE> 6
NOTE
As of November 29, 1994, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U. S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility, as to matters peculiarly
within the knowledge of the obligor or its directors, the trustee has relied
upon information furnished to it by the obligor and will rely on information to
be furnished by the obligor and the trustee disclaims responsibility for the
accuracy or completeness of such information.
________________________
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
United States Trust Company of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of New York, and State of New York, on the 29th day
of November 1994.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By: /s/ Patricia Stermer
------------------------
Patricia Stermer
Assistant Vice President
-6-
<PAGE> 7
Exhibit T-1.6
The consent of the trustee required by Section 321(b)
of the Act.
United States Trust Company of New York
114 West 47th Street
New York
NY 10036
March 19, 1992
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of
1939, and subject to the limitations set forth therein, United States Trust
Company of New York ("U.S. Trust") hereby consents that reports of examinations
of U.S. Trust by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
By: /s/ Gerald F. Ganey
---------------------
Gerard F. Ganey
Senior Vice President
<PAGE> 8
EXHIBIT T-1.7
Consolidated Report of Condition of
UNITED STATES TRUST
COMPANY OF NEW YORK
and Foreign and Domestic Subsidiaries, a member of
the Federal Reserve System, at the close of business
June 30, 1994, published in accordance with a call
made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve
Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN THOUSANDS
<S> <C>
Cash and balances due from depository institutions:
a. Noninterest bearing balances
and currency and coin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 356,398
b. Interest bearing balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,469,445
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBF's:
a. Federal funds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,448
b. Securities purchased under
agreements to resell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Loans and lease financing receivables:
a. Loans and leases, net of
unearned income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,392,864
b. LESS: Allowance for loan and
lease losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,619
c. Loans and leases, net of unearned income,
allowance and reserve: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,380,245
Premises and fixed assets (including capitalized
leases) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,900
Other real estate owned: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,418
Investments in unconsolidated subsidiaries and
associated companies: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581
Intangible assets: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,854
Other assets: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123,230
----------
TOTAL ASSETS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,533,519
==========
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits:
a. In domestic offices: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,032,684
(1) Non interest bearing: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898,457
(2) Interest bearing: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,134,227
b. In foreign offices, Edge and Agreement
subsidiaries, and IBF's: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,611
(1) Interest bearing: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,611
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement
subsidiaries, and in IBF's:
a. Federal funds purchased: . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,148,301
b. Securities sold under agreements
to repurchase: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,099
Demand notes issued to the U.S. Treasury: . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Other Borrowed Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,035
Mortgage indebtedness and obligations under
capitalized leases: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,243
Subordinated notes and debentures: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,453
Other liabilities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,934
----------
TOTAL LIABILITIES: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,332,360
==========
EQUITY CAPITAL
Common Stock: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,995
Surplus: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,500
Undivided profits and capital reserves: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148,014
Net unrealized holding gains (losses) on
available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,350)
----------
TOTAL EQUITY CAPITAL: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 201,159
==========
TOTAL LIABILITY AND EQUITY CAPITAL: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,533,519
==========
</TABLE>
-2-
<PAGE> 10
I, Daniel M. Clavin, Senior Vice President of the above-named bank do hereby
declare that this report of condition has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true to the best of my knowledge and belief.
/s/ Daniel M. Clavin, SVP
--------------------------
September 30, 1994
We, the undersigned trustees, attest the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
By: /s/ H. MARSHALL SCHWARZ
---------------------------
H. MARSHALL SCHWARZ, TRUSTEE
By: /s/ JEFFREY S. MAURER
---------------------------
JEFFREY S. MAURER, TRUSTEE
By: /s/ FREDERICK S. WONHAM
----------------------------
FREDERICK S. WONHAM, TRUSTEE
<PAGE> 1
Exhibit 99.1
LETTER OF TRANSMITTAL
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
___________, 1995, UNLESS EXTENDED (THE "EXPIRATION DATE").
CARLISLE PLASTICS, INC.
LETTER OF TRANSMITTAL
SERIES A 10 1/4% SENIOR NOTES DUE 1997
To: United States Trust Company of New York, The Exchange Agent
<TABLE>
<S> <C>
By Registered or Certified Mail: By Overnight Courier:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 844 Cooper Station 770 Broadway
New York, New York 10276 New York, New York 10003
Attention: Corporate Trust Operations
By Hand: By Facsimile:
United States Trust Company of New York (212) 420-6152
65 Beaver Street Attention: Customer Service
New York, New York 10005
Attention: Ground Level Confirm by telephone:
Corporate Trust Operations (800) 548-6565
</TABLE>
Delivery of this instrument to an address other than as set forth
above or transmission of instructions via a facsimile number other than the one
listed above will not constitute a valid delivery. The instructions
accompanying this Letter of Transmittal should be read carefully before this
Letter of Transmittal is completed.
The undersigned acknowledges that he or she has received the
Prospectus dated ________________, 1995 (the "Prospectus") of Carlisle
Plastics, Inc. (the "Company") and this Letter of Transmittal (the "Letter of
Transmittal"), which together constitute the Company's offer (the "Exchange
Offer") to exchange $1,000 principal amount of its Series A 10 1/4% Senior
Notes due 1997 (the "New Notes") which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
Registration Statement of which the Prospectus is a part, for each $1,000
principal amount of its outstanding 10 1/4% Senior Notes due 1997 which were
issued in 1994 (the "Old Notes"), of which $15,000,000 principal amount is
outstanding. Other capitalized terms used but not defined herein have the
meaning given to them in the Prospectus.
The Letter of Transmittal is to be used by Holders of Old Notes (i) if
certificates representing the Old Notes are to be physically delivered
herewith, or (ii) if the guaranteed delivery procedures described in the
Prospectus are to be utilized.
The term "Holder" with respect to the Exchange Offer means any person
in whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
holder. The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must
complete this letter in its entirety.
<PAGE> 2
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE CHECKING ANY BOX BELOW
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
| DESCRIPTION OF 10 1/4% SENIOR NOTES DUE 1997 ("OLD NOTES") |
|--------------------------------------------------------------------------------------------------------------------|
| Principal Amount |
| Name(s) and Address(es) of Aggregate Principal Tendered (must be in |
| Registered Holder(s) Certificate Amount Represented integral multiple of |
| (Please fill in, if blank) Number(s) by Certificate(s) $1,000)* |
|--------------------------------------------------------------------------------------------------------------------|
|<S> |<C> |<C> |<C> |
| |------------------------|-----------------------|--------------------------|
| | | | |
| |------------------------|-----------------------|--------------------------|
| | | | |
| |------------------------|-----------------------|--------------------------|
| | | | |
| |------------------------|-----------------------|--------------------------|
| | | | |
| |------------------------|-----------------------|--------------------------|
| | | | |
| |------------------------|-----------------------|--------------------------|
| | Total | | |
|--------------------------------------------------------------------------------------------------------------------|
| |
| |
| * Unless indicated in the column labeled "Principal Amount Tendered," any |
| tendering Holder of Old Notes will be deemed to have tendered the entire |
| aggregate principal amount represented by the columns labeled "Aggregate |
| Principal Amount Represented by Certificate(s)." |
| |
| If the space provided above is inadequate, list the certificate numbers |
| and principal amounts on a separate signed schedule and affix the list to |
| this Letter of Transmittal. |
| |
| The minimum permitted tender is $1,000 in principal amount of Old Notes. |
| All other tenders must be in integral multiples of $1,000. |
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
- ------------------------------------------------------ --------------------------------------------------------
| | | |
| | | |
| SPECIAL PAYMENT INSTRUCTIONS | | SPECIAL DELIVERY INSTRUCTIONS |
| (See Instructions 4, 5 and 6) | | (See Instructions 4, 5 and 6) |
| | | |
| To be completed ONLY if certificates for Old Notes | | To be completed ONLY if certificates for Old Notes |
| in a principal amount not tendered or not | | in a principal amount not tendered or not |
| purchased, or New Notes issued in exchange for Old | | purchased, or New Notes issued in exchange for Old |
| Notes accepted for exchange are to be issued in | | Notes accepted for exchange, are to be sent to |
| the name of someone other than the undersigned. | | someone other than the undersigned, or to the |
| | | undersigned at an address other than that shown |
| | | above. |
| | | |
| Issue certificate(s) to: | | Mail to: |
| | | |
| | | |
| Name | | Name |
| ---------------------------------------------- | | ----------------------------------------------- |
| (Please Print) | | (Please Print) |
| | | |
| | | |
| Address | | Address |
| ------------------------------------------- | | -------------------------------------------- |
| | | |
| | | |
| -------------------------------------------------- | | --------------------------------------------------- |
| (Include Zip Code) | | (Include Zip Code) |
| | | |
| -------------------------------------------------- | | --------------------------------------------------- |
| (Tax Identification or Social Security No.) | | (Tax Identification or Social Security No.) |
| | | |
- -------------------------------------------------------- ---------------------------------------------------------
</TABLE>
2
<PAGE> 3
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the principal amount of Old Notes
indicated above. Subject to and effective upon the acceptance for exchange of
the principal amount of Old Notes tendered in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the order
of, the Company all right, title and interest in and to the Old Notes tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent its agent and attorney-in-fact (with full knowledge that the
Exchange Agent also acts as the agent of the Company) with respect to the
tendered Old Notes with full power of substitution to (i) deliver certificates
for such Old Notes to the Company and deliver all accompanying evidences of
transfer and authenticity to, or upon the order of, the Company and (ii)
present such Old Notes for transfer on the books of the Company and receive all
benefits and otherwise exercise all rights of beneficial ownership of such Old
Notes all in accordance with the terms of the Exchange Offer. The power of
attorney granted in this paragraph shall be deemed irrevocable and coupled with
an interest.
The undersigned hereby represents and warrants that he or she has full
power and authority to tender, sell, assign and transfer the Old Notes tendered
hereby and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim, when the same are acquired by the Company. The
undersigned hereby further represents that any New Notes acquired in exchange
for Old Notes tendered hereby will have been acquired in the ordinary course of
business of the Holder receiving such New Notes, whether or not the
undersigned, that neither the Holder nor any such other person has an
arrangement with any person to participate in the distributions of such New
Notes and that neither the Holder nor any such other person is an "affiliate,"
as defined under Rule 405 of the Securities Act, of the Company or any of its
subsidiaries. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Exchange Agent or the Company to be
necessary or desirable to complete the assignment, transfer and purchase of the
Old Notes tendered hereby.
For purposes of the Exchange Offer, the Company shall be deemed to
have accepted validly tendered Old Notes when, as and if the Company has given
oral or written notice thereof to the Exchange Agent.
If any tendered Old Notes are not accepted for exchange pursuant to
the Exchange Offer for any reason, certificates for any such unaccepted Old
Notes will be returned, without expense, to the undersigned at the address
shown below or at a different address as may be indicated herein under "Special
Payment Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer.
3
<PAGE> 4
Unless otherwise indicated under "Special Payment Instructions,"
please issue the certificates representing the New Notes issued in exchange for
the Old Notes accepted for exchange and return any Old Notes not tendered or
not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise
indicated under "Special Delivery Instructions," please send the certificates
representing the New Notes issued in exchange for the Old Notes accepted for
exchange and any certificates for Old Notes not tendered or not exchanged (and
accompanying documents, as appropriate) to the undersigned at the address shown
below the undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the certificates representing the New Notes issued in exchange for the Old
Notes accepted for exchange and return any Old Notes not tendered or not
exchanged in the name(s) of, and send said certificates to, the person(s) so
indicated. The undersigned recognizes that the Company has no obligation
pursuant to the "Special Payment Instructions" and "Special Delivery
Instructions" to transfer any Old Notes from the name of the registered
holder(s) thereof if the Company does not accept for exchange any of the Old
Notes so tendered.
Holders of Old Notes who wish to tender their Old Notes and (i) whose
Old Notes are not immediately available, or (ii) who cannot deliver their Old
Notes, this Letter of Transmittal or any other documents required hereby to the
Exchange Agent prior to the Expiration Date, may tender their Old Notes
according to the guaranteed delivery procedures set forth in the Prospectus
under the Caption "The Exchange Offer - Guaranteed Delivery Procedures." See
Instruction 1 regarding the completion of the Letter of Transmittal printed
below.
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
X
- ------------------------------------------ -----------------------------
Date
X
- ------------------------------------------ -----------------------------
Signature(s) of Registered Holder(s) Date
or Authorized Signatory
Area Code and Telephone Number:
---------------------------
The above lines must be signed by the registered holder(s) of Old
Notes as their name(s) appear(s) on the Old Notes or by person(s) authorized to
become registered holder(s) by a properly completed bond power from the
registered holder(s), a copy of which must be transmitted with this Letter of
Transmittal. If Old Notes to which this Letter of Transmittal relates are held
of record by two or more joint holders, then all such holders must sign this
Letter of Transmittal. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in
a fiduciary or representative capacity, such person must (i) set forth his or
her full title below and (ii) unless waived by the Company, submit evidence
satisfactory to the Company of such person's authority so to act. See
Instruction 4 regarding the completion of this Letter of Transmittal printed
below.
4
<PAGE> 5
Name(s):
---------------------------------------------------------------
---------------------------------------------------------------
(Please Print)
Capacity:
---------------------------------------------------------------
Address:
--------------------------------------------------------------
--------------------------------------------------------------
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution:
(If required by Instruction 4)
---------------------------------------
(Authorized Signature)
---------------------------------------
(Title)
---------------------------------------
(Name of Firm)
Dated: , 1995.
---------------------------
5
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. The
tendered Old Notes, as well as a properly completed and duly executed copy of
this Letter of Transmittal or facsimile hereof and any other documents required
by this Letter of Transmittal must be received by the Exchange Agent at its
address set forth herein prior to 5:00 P.M., New York City time, on the
Expiration Date. The method of delivery of the tendered Old Notes, this Letter
of Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the Holder and, except as otherwise provided below, the
delivery will be deemed made only when actually received by the Exchange Agent.
Instead of delivery by mail, it is recommended that the Holder use an overnight
or hand delivery service. In all cases, sufficient time should be allowed to
assure timely delivery. No Letter of Transmittal or Old Notes should be sent
to the Company.
Holder who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available, or (ii) who cannot delivery their Old Notes, this
Letter of Transmittal or any other documents required hereby to the Exchange
Agent prior to 5:00 P.M., New York City time, on the Expiration Date must
tender their Old Note according to the guaranteed delivery procedures set forth
in the Prospectus. Pursuant to such procedure: (i) such gender must be made
by or through an Eligible Institution within the meaning of Rule 17 Ad-15 under
the Securities Exchange Act of 1934, as amended; (ii) prior to the Expiration
Date, the Exchange Agent must have received from the Eligible Institution a
properly completed and duly executed Notice of Guaranteed delivery (by
facsimile transmission, mail or hand delivery) setting forth the name and
address of the Holder of the Old Notes, the certificate number or numbers of
such Old Notes and the principal amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within five New York Stock
Exchange trading days after the Expiration Date, this Letter of Transmittal (or
facsimile hereof) together with the certificate(s) representing the Old Notes
and any other required documents will be deposited by the Eligible Institution
with the Exchange Agent; and (iii) such properly completed and executed Letter
of Transmittal (or facsimile hereof), as well as all other documents required
by this Letter of Transmittal and the certificate(s) representing all tendered
Old Notes in proper form for transfer, must be received by the Exchange Agent
within five New York Stock Exchange trading days after the Expiration Date, all
as provided in the Prospectus under the caption "Guaranteed Delivery
Procedures." Any Holder of Old Notes who wishes to tender his or her Old Notes
pursuant to the guaranteed delivery procedures described above must ensure that
the Exchange Agent receives the Notice of Guaranteed Delivery prior to 5:00
P.M., New York City time, on the Expiration Date for the Old Notes. Upon
request of the Exchange Agent, a Notice of Guaranteed delivery will be sent to
Holders who wish to tender their Old Notes according to the guaranteed delivery
procedures set forth above.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Old Notes and withdrawal of tendered Old
Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. The Company reserves the absolute
right to reject any and all Old Notes not properly tendered or any Old Notes
the Company's acceptance of which would, in the opinion of counsel for the
Company, be unlawful. The Company also reserves the right to waive any
irregularities or conditions of tender as to particular Old Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in this Letter of Transmittal) shall be final and
binding on all parties. Unless waived, any
6
<PAGE> 7
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Neither the Company, the
Exchange Agent nor any other person shall be under any duty to give
notification of defects or irregularities with respect to tenders of Old Notes,
nor shall any of them incur any liability for failure to give such
notification. Tenders of Old Notes will not be deemed to have been made until
such defects or irregularities have been cured or waived. Any Old Notes
received by the Exchange Agent that are not properly tendered and as to which
the defects or irregularities have not been cured or waived will be returned by
the Exchange Agent to the tendering Holders of Old Notes, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
2. TENDER BY HOLDER. Only a Holder of Old Notes may tender such
Old Notes in the Exchange Offer. Any beneficial holder of Old Notes who is not
the registered holder and who wishes to tender should arrange with the
registered holder to execute and deliver this Letter of Transmittal on his or
her behalf or must, prior to completing and executing this Letter of
Transmittal and delivering his or her Old Notes, either make appropriate
arrangements to register ownership of the Old Notes in such holder's name or
obtain a properly completed bond power from the registered holder.
3. PARTIAL TENDERS. Tenders of Old Notes will be accepted only
in integral multiples of $1,000. If less than the entire principal amount of
any Old Notes is tendered, the tendering Holder should fill in the principal
amount tendered in the fourth column of the box entitled "Description of 10
1/4% Senior Notes due 1997" above. The entire principal amount of Old Notes
delivered to the Exchange Agent will be deemed to have been tendered unless
otherwise indicated. If the entire principal amount of all Old Notes is not
tendered, then Old Notes for the principal amount of Old Notes not tendered and
a certificate or certificates representing New Note issued in exchange for any
Old Notes accepted will be sent to the Holder at his or her registered address,
unless a different address is provided in the appropriate box on this Letter of
Transmittal, promptly after the Old Notes are accepted for exchange.
4. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS; GUARANTEES OF SIGNATURES. If this Letter of Transmittal (or
facsimile hereof) is signed by the record Holder(s) of the Old Notes tendered
hereby, the signature must correspond with the name(s) as written on the face
of the Old Notes without alteration, enlargement or any change whatsoever.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder or holders of Old Notes tendered and the certificate or
certificates for New Notes issued in exchange therefor are to be issued (or any
untendered principal amount of Old Notes is to be reissued) to the registered
holder, the said holder need not and should not endorse any tendered Old Notes,
nor provide a separate bond power. In any other case, such holder must either
properly endorse the Old Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal, with the signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a
person other than the registered Holder or Holders of any Old Notes listed,
such Old Notes must be endorsed or accompanied by appropriate bond powers
signed as the name of the registered Holder or Holders appears on the Old
Notes.
7
<PAGE> 8
If this Letter of Transmittal (or facsimile hereof) or any Old Notes
or bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact or officers of corporations or others acing in a fiduciary or
representative capacity, such persons should so indicate when signing, and
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by
this Instruction 4 must be guaranteed by an Eligible Institution.
Except as otherwise provided below, all signatures on this Letter of
Transmittal (or facsimile hereof) must be guaranteed by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States (an "Eligible Institution").
Signatures on this Letter of Transmittal need not be guaranteed if (i) this
Letter of Transmittal is signed by the registered Holder(s) of the Old Notes
tendered herewith and such Holder(s) have not completed the box set forth
herein entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" or (ii) such Old Notes are tendered for the account of
an Eligible Institution.
5. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. Tendering Holders
should indicate, in the applicable box or boxes, the name and address to which
New Notes or substitute Old Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from the name and
address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated.
6. TAX IDENTIFICATION NUMBER. Federal income tax law requires
that a Holder whose offered Old Notes are accepted for exchange must provide
the Company (as payor) with his or her correct Taxpayer Identification Number
("TIN"), which, in the case of an exchanging Holder who is an individual, is
his or her social security number. If the Company is not provided with the
correct TIN or an adequate basis for exemption, such Holder may be subject to a
$50 penalty imposed by the Internal Revenue Service (the "IRS"). In addition,
delivery to such Holder of New Notes may be subject to backup withholding in an
amount equal to 31% of the gross proceeds resulting from the Exchange Offer.
If withholding results in an overpayment of taxes, a refund may be obtained.
Exempt Holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. See the enclosed form W-9 for additional instructions.
To prevent backup withholding, each exchanging Holder must provide his
or her correct TIN by completing the form W-9 enclosed herewith, certifying
that the TIN provided is correct (or that such Note Holder is awaiting a TIN)
and that (i) the Holder is exempt from backup withholding, (ii) the Holder has
not been notified by the IRS that he or she is subject to backup withholding as
a result of a failure to report all interest or dividends or (iii) the IRS has
notified the Holder that he or she is no longer subject to backup withholding.
In order to satisfy the Exchange Agent that a foreign individual qualifies as
an exempt recipient, such Holder must submit a statement signed under penalty
of perjury attesting to such exempt status. Such statements may be obtained
from the Exchange Agent. If the Old Note are in more than one name or are not
in the name of the actual owner, consult the Form W-9 for information on which
TIN to report. If you do not provide your
8
<PAGE> 9
TIN to the Company within 60 days, backup withholding will begin and continue
until you furnish your TIN to the Company.
7. TRANSFER TAXES. The Company will pay all transfer taxes, if
any, applicable to the exchange of Old Notes pursuant to the Exchange Offer.
If, however, certificates representing New Notes or Old Notes for principal
amounts not tendered or accepted for exchange are to be delivered to, or are to
be registered or issued in the name of, any person other than the registered
Holder of the Old Notes tendered hereby, or if tendered Old Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Old Notes pursuant to the Exchange Offer, then the amount of any
such transfer taxes (whether imposed on the registered Holder or on any other
person) will be payable by the tendering Holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with this Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering Holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
8. WAIVER OF CONDITIONS. The Company reserves the absolute right
to amend, waive or modify specified conditions in the Exchange Offer in the
case or any Old Notes tendered.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any tendering
Holder whose Old Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated herein for further
instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance and requests for additional copies of the Prospectus or
this Letter of Transmittal may be directed to the Exchange Agent at the address
specified in the Prospectus. Holders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Exchange Offer.
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<CAPTION>
==============================================================================
|| CERTIFICATE | OLD NOTES | OLD NOTES ||
|| SURRENDERED | TENDERED | ACCEPTED ||
||-----------------------------|-------------------------|------------------||
||<S> |<C> |<C> ||
||-----------------------------|-------------------------|------------------||
|| | | ||
==============================================================================
</TABLE>
Delivery Prepared by _____________________ Checked By _____________________
Date ___________________, 1995.
9
<PAGE> 1
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR
10 1/4% SENIOR NOTES DUE 1997
OF
CARLISLE PLASTICS, INC.
This form or one substantially equivalent hereto must be used to
accept the Exchange Offer of Carlisle Plastics, Inc. (the "Company") made
pursuant to the Prospectus dated _______, 1995 (the "Prospectus") if
certificates for the 10 1/4% Senior Noted due 1997 (the "Old Notes") of the
Company are not immediately available or if the Old Notes, the Letter of
Transmittal or any other documents required thereby cannot be delivered to the
Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date
(as defined in the Prospectus). Such form may be delivered by hand or
transmitted by facsimile transmission, overnight courier or mail to the
Exchange Agent. Capitalized terms used by not defined herein have the meaning
given to them in the Prospectus.
To: United States Trust Company of New York, The Exchange Agent
<TABLE>
<S> <C>
By Registered or Certified Mail: By Overnight Courier:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 844 Cooper Station 770 Broadway
New York, New York 10276 New York, New York 10003
Attention: Corporate Trust Operations
By Hand: By Facsimile:
United States Trust Company of New York (212) 420-6152
65 Beaver Street Attention: Customer Service
New York, New York 10005
Attention: Ground Level Confirm by telephone: (800) 548-6565
Corporate Trust Operations
</TABLE>
Delivery of this instrument to an address, or transmission of
instructions via a facsimile, other than as set forth above does not constitute
a valid delivery.
This form is not to be used to guarantee signatures. If a signature
on the Letter of Transmittal to be used to tender Old Notes is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the Letter
of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Carlisle Plastics, Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Prospectus and the Letter of Transmittal (which together
constitute the "Exchange Offer"), receipt of which is hereby acknowledged,
________________ Old Notes pursuant to the guaranteed delivery procedures set
(number of notes)
forth in Instruction 1 of the Letter of Transmittal.
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
<TABLE>
<S> <C>
Certificate No(s). for Old Notes (if available) Name(s) of Record Holder(s)
- ---------------------------------------------- --------------------------------------------------
- ---------------------------------------------- --------------------------------------------------
Please print or type
Address
-------------------------------------------
---------------------------------------------------
Area Code and Tel. No.
----------------------------
Signature(s)
--------------------------------------
---------------------------------------------------
Dated:
-------------------------------------------
</TABLE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the
United States, hereby (a) represents that the above named person(s) "own(s)"
the Old Notes tendered hereby within the meaning of Rule 10b-4 under the
Securities Exchange Act of 1934, as amended, (b) represents that such tender of
Old Notes complies with Rule
<PAGE> 3
10b-4 and (c) guarantees that delivery to the Exchange Agent of certificates
for the Old Notes tendered hereby, in proper form for transfer, with delivery
of a properly completed and duly executed Letter of Transmittal (or manually
signed facsimile thereof) with any required signature and any other required
documents, will be received by the Exchange Agent at one of its addresses set
forth above within five New York Stock Exchange trading days after timely
receipt by the Exchange Agent of this properly completed and duly executed
Notice of Guaranteed Delivery.
Name of Firm
------------------------------ -----------------------------
Authorized Signature
Address Name
------------------------------------ ------------------------
Please Print or Type
Title
- ------------------------------------------ ------------------------
Zip Code
Area Code and Tel. No. Date
--------------------- ------------------------
Dated: , 1995
------------------------------
NOTE: DO NOT SEND OLD NOTES WITH THIS FORM; OLD NOTES SHOULD BE SENT WITH
YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE
AGENT WITHIN FIVE NEW YORK STOCK EXCHANGE TRADING DAYS AFTER TIMELY
RECEIPT HEREOF.
2
