AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 23, 1994
REGISTRATION NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SEALED AIR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 22-1682767
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Park 80 East
Saddle Brook, New Jersey 07662-5291
(201) 791-7600
(Address, Including Zip Code, and Telephone Number, Including Area Code
of Registrant's Principal Executive Offices)
Robert M. Grace, Jr., Esq.
General Counsel and Secretary
Sealed Air Corporation
Park 80 East
Saddle Brook, New Jersey 07662-5291
(201) 791-7600
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code of Agent For Service)
Copies to:
CHRISTOPHER MAYER, ESQ. ROBERT USADI, ESQ.
Davis Polk & Wardwell Cahill Gordon & Reindel
450 Lexington Avenue 80 Pine Street
New York, New York 10017 New York, New York 10005
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box: /X/
-
CALCULATION OF REGISTRATION FEE
______________________________________________________________________________
PROPOSED
MAXIMUM
OFFERING
PRICE PROPOSED
PER SENIOR MAXIMUM
TITLE OF EACH CLASS OF AMOUNT SUBORDINATED AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE DEBT OFFERING REGISTRATION
REGISTERED REGISTERED(1) SECURITY(2) PRICE(1) FEE
- --------------------- ------------- ------------ ------------ ------------
Senior Subordinated
Debt Securities $200,000,000 100% $200,000,000 $68,966
- ------------------------------------------------------------------------------
(1) Or, if any Debt Securities are issued at original issue discount, such
greater principal amount as shall result in an aggregate initial
offering price of $200,000,000.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457 of the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE 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, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
SUBJECT TO COMPLETION DATED MAY 23, 1994
SEALED AIR CORPORATION
SENIOR SUBORDINATED DEBT SECURITIES
_________________________
Sealed Air Corporation (the "Company") may offer from time to time its
senior subordinated debt securities in one or more series (the "Debt
Securities") at an aggregate initial offering price not to exceed $200
million. The Notes are unsecured general obligations of the Company and
will be subordinated in right of payment to all Senior Indebtedness (as
defined herein) of the Company.
The Debt Securities will be offered to the public on terms
determined by market conditions at the time of sale. The Debt Securities
may be offered to the public as separate series in amounts, at prices and
on terms to be determined at the time of offering and to be set forth in
one or more supplements (a "Prospectus Supplement") to this Prospectus.
The specific terms of the Debt Securities in respect of which this
Prospectus and the Prospectus Supplement are being delivered, including,
where applicable, aggregate principal amount, maturity (which may be
fixed or extendible), interest rate or rates (which may be fixed or
variable), if any, and the time of payment of interest, if any,
authorized denominations, initial public offering price, purchase price,
any terms for mandatory or optional redemption (including any sinking
fund), any modification of the covenants and any other specific terms
with respect to the Debt Securities will be set forth in an accompanying
Prospectus Supplement. Debt Securities may be issued as Original Issue
Discount Securities to be sold at a substantial discount below their
principal amount and, if issued, certain terms thereof will be set forth
in the Prospectus Supplement related thereto. See "Description of Debt
Securities."
See "Investment Considerations" for a description of certain
factors that should be considered by purchasers of the Debt Securities.
_________________________
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 Debt Securities may be offered directly to purchasers or to or
through underwriters, dealers or agents. Such underwriters may include
Donaldson, Lufkin & Jenrette Securities Corporation and Morgan Stanley &
Co. Incorporated and/or other underwriters, acting alone or with other
underwriters. If an agent of the Company or a broker-dealer or
underwriter is involved in the sale of the Debt Securities in respect of
which this Prospectus is being delivered, the names of such agent,
broker-dealer or underwriter and the agent's commission or broker-dealer's
or underwriter's discount will be set forth in the Prospectus
Supplement. The proceeds to the Company will be the purchase price in
the case of sale through an agent or a broker-dealer or the public
offering price in the case of sale through an underwriter. Net proceeds
to the Company will be the purchase price less commission in the case of
an agent, the purchase price in the case of a broker-dealer or the public
offering price less discount in the case of an underwriter, less, in each
case, other issuance expenses. See "Plan of Distribution."
_________________________
The date of this Prospectus is May , 1994.
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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT, IN CONNECTION WITH THE OFFERING MADE HEREBY, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, AGENT OR
DEALER. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE
AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THOSE TO WHICH IT RELATES OR AN OFFER TO OR SOLICITATION OF ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION SET FORTH
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
Available Information . . . . . . . . . . . . . . 3
Incorporation of Documents by Reference . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . 4
Investment Considerations . . . . . . . . . . . . 7
Use of Proceeds . . . . . . . . . . . . . . . . . 10
Capitalization . . . . . . . . . . . . . . . . . 11
Selected Financial Data . . . . . . . . . . . . . 12
Description of New Credit Facility . . . . . . . 15
Description of Debt Securities . . . . . . . . . 17
Plan of Distribution . . . . . . . . . . . . . . 37
Legal Matters . . . . . . . . . . . . . . . . . . 38
Experts . . . . . . . . . . . . . . . . . . . . . 38
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., a Registration Statement on Form S-3 under
the Securities Act of 1933, as amended (the "Securities Act"), for the
registration of the Debt Securities offered hereby. This Prospectus omits
certain information contained in the Registration Statement and reference
is made to the Registration Statement and the exhibits thereto for further
information with respect to the Company and the Debt Securities.
Statements contained herein concerning the provisions of any documents are
not necessarily complete, and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration Statement.
Each such statement is qualified in its entirety by such reference. The
Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
SEC. Items of information omitted from this Prospectus but contained in
the Registration Statement and reports, proxy statements and other
information filed by the Company with the SEC may be inspected and copied
at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549-1004 and at the SEC's regional offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048
and Northwestern Atrium Center, 500 West Madison, Suite 1400, Chicago,
Illinois 60661. Certain of such materials are also available through the
SEC's Electronic Data Gathering and Retrieval System ("EDGAR"). Copies of
such materials may be obtained at prescribed rates. In addition, the
Company's Common Stock is listed on the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005 where reports, proxy statements and
other information concerning the Company can be inspected.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1993, Proxy Statement dated March 30, 1994 for the Annual Meeting of
Stockholders to be held on May 20, 1994, and Quarterly Report on Form
10-Q for the quarter ended March 31, 1994 have been filed by the Company
with the SEC (File No. 1-7834) and are incorporated herein by reference
to the extent provided for therein and by the rules and regulations of
the SEC.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Debt
Securities shall be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing such documents
to the extent provided for therein by the rules and regulations of the
SEC. Any statement contained in a document incorporated or deemed to be
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 incorporated or 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.
Upon written or oral request, the Company will furnish without charge
to each person, including any beneficial owner to whom this Prospectus is
delivered, a copy of any or all of the documents described above other than
exhibits thereto not incorporated by reference into such documents. Such
requests should be addressed to Sealed Air Corporation, Park 80 East,
Saddle Brook, New Jersey 07662-5291, telephone (201)791-7600, attention:
Director of Corporate Development.
THE COMPANY
The Company is a leading global manufacturer of a wide range of
protective and specialty packaging materials and systems that are used to
protect a wide variety of products from damage during manufacture,
shipment, storage and handling. The Company's principal classes of
products include engineered products, surface protection and other
cushioning products, and food packaging products. Certain of these
products are also produced for non-packaging applications. The Company's
operations are conducted primarily in the United States and in 17 other
countries in North America, Europe and the Far East, and its products are
distributed in these areas as well as in other parts of the world.
Engineered Products. These products, which accounted for
approximately 40% of 1993 net sales, include the Company's Instapak
(Registered Trademark) polyurethane foam packaging systems, thick
polyethylene foams for packaging and non-packaging uses, and Korrvu
(Registered Trademark) suspension packaging products.
Instapak (Registered Trademark) systems consist of proprietary blends
of polyurethane chemicals and specially designed dispensing equipment,
certain features of which are patented. The Company also manufactures a
line of Instamate (Registered Trademark) polyolefin films, which are
high-performance films designed for use with Instapak (Registered
Trademark) systems. These systems produce just-in-time polyurethane foam
cushions for a broad range of protective packaging applications.
Thick polyethylene foams, offered in varying densities and
thicknesses, are used in applications in which a clean, non-abrasive
material is required with such properties as shock absorption, vibration
dampening, thermal insulation or buoyancy. The Company is also engaged in
the development, manufacture and sale of Korrvu (Registered Trademark)
suspension packaging, which is covered by certain patents. A Korrvu
(Registered Trademark) package suspends a product in the air space of its
shipping container between two strong, flexible low-slip films.
Surface Protection and Other Cushioning Products. These products,
which accounted for approximately 47% of 1993 net sales, include AirCap
(Registered Trademark) R and PolyCap (Registered Trademark) R air cellular
cushioning materials, Cell-Aire (Registered Trademark) polyethylene foam
sheeting, various paper protective packaging materials, and a comprehensive
line of protective and durable mailers. These mailers, marketed under the
Jiffy (Trademark) and related trademarks, are used for mailing a wide
variety of items for which clean, light-weight, preconstructed protective
packages are desirable, and may provide the user with significant postage
savings and enhanced product protection relative to other types of
envelopes and shipping containers. The Company's Shurtuff (Registered
Trademark) durable plastic mailers, which were acquired in 1993, are a line
of mailers produced from coextruded polyolefin film. This class of
products also includes various automated packaging systems including the
Instasheeter (Trademark) converting system that is designed for use with
the Company's surface protection and cushioning materials, the Jiffy Packer
(Trademark) paper packaging system, and the VoidPak (Trademark) inflatable
packaging system.
Food Packaging Products. These products, which accounted for
approximately 11% of 1993 net sales, consist primarily of the Company's
Dri-Loc (Registered Trademark) absorbent pads, which are covered by certain
patents and are used in the pre-packaging of meat, fish and poultry to
absorb excess fluids. With their superior absorbency, Dri-Loc (Registered
Trademark) pads enable the supermarket retailer to save material, labor and
packaging waste by reducing the number of packaging rewraps. Also included
in this product class are conventional absorbent food pads, Pad-Loc
(Trademark) poultry processor absorbent pads, and supermarket display case
liners.
Other Products. Other products are primarily products designed to
control static electricity and certain recreation and energy conservation
products. Other products accounted for approximately 2% of 1993 net sales.
The Company employs several hundred sales and account representatives
who market its products through a large number of distributors, fabricators
and converters as well as directly to end users. In the United States and
certain other countries, the Company has separate sales and marketing
groups for its engineered products, its surface protection and other
cushioning products, and its food packaging products. These groups often
work together to develop market opportunities for the Company's products.
The Company has no material long-term contracts for the distribution
of its protective packaging products. In 1993, no customer or affiliated
group of customers accounted for as much as 5% of the Company's
consolidated net sales.
To assist its marketing efforts and to provide specialized customer
services, the Company maintains packaging laboratories in many of its
United States and foreign facilities. These laboratories are staffed by
professional packaging engineers and equipped with drop-testing and other
equipment used to develop and test cost-effective package designs to meet
the particular protective packaging requirements of each customer.
While the Company is the owner or licensee of a number of United
States and foreign patents and patent applications that relate to certain
of its products, manufacturing processes and equipment, the Company
believes that its success depends primarily on its marketing, engineering
and manufacturing skills and on its research and product technology.
The Company believes that its protective packaging materials offer
superior packaging protection, enabling customers to achieve the same
degree of product protection with smaller, lighter packages using the
Company's protective packaging materials than with many alternative
packaging methods, thereby reducing the disposal of damaged products as
well as the amount of packaging waste. Because the Company offers both
plastic-based and paper-based protective packaging materials, customers can
select the protective packaging materials that they consider to best meet
their performance and cost needs and environmental preferences. A number
of the Company's product lines incorporate recycled or reprocessed content,
and the Company maintains ongoing efforts to add or increase the amount of
recycled or reprocessed content in many of its product lines.
The Company also supports its customers' interests in eliminating
waste by offering or participating in collection programs for certain of
the Company's products or product packaging and for materials used in
certain of the Company's products, including programs aimed at recovering
and recycling polyethylene materials from customers, Instapak (Registered
Trademark) foam return programs and local newspaper collection programs to
obtain materials used to produce Jiffy (Trademark) padded mailers and
certain other products. Whenever possible, materials collected through
these collection programs are reprocessed and either reused in the
Company's operations or offered to other manufacturers for use in other
products. Certain of the Company's protective packaging products can be
reused and, as an alternative to recycling or disposal in solid waste
landfills, are suitable fuel sources for waste-to-energy conversion
facilities.
In May 1989, the Company paid a special dividend of $40 per share to
its stockholders ($20 per share after giving effect to a 2 for 1 stock
split declared in 1992). In connection with this transaction, the Company
incurred approximately $142.3 million of secured bank debt and $170 million
principal amount of 12 5/8% Senior Subordinated Notes due 1999 (the
"Outstanding Subordinated Notes"). See "Use of Proceeds." Since 1989, the
Company has repaid prior to scheduled maturity, primarily from internally
generated funds, all of such bank debt as well as an additional $34 million
of indebtedness that was assumed in connection with the Company's 1991
acquisition of Sentinel Holdings, Inc.
Net sales have grown from $345.6 million in 1988 to $451.7 million in
1993, and operating profit has grown from $42.4 million, or 12.3% of net
sales, in 1988, to $74.1 million, or 16.4% of net sales, in 1993. Earnings
before interest, taxes, depreciation and amortization ("EBITDA"), a measure
of performance commonly used by the investment community, has grown from
$58.3 million, or 16.9% of net sales, in 1988 to $96.2 million, or 21.3% of
net sales, in 1993. Net sales, operating profit and EBITDA have each
increased in every year since 1982.
Since 1989, the Company has also made several acquisitions that have
complemented its strategic emphasis on protective and specialty packaging,
introduced a number of new products that were developed as a result of the
Company's internal new product development efforts, and disposed of minor
product lines that did not meet the Company's strategic direction.
Growth Strategy. The Company's growth strategy is based on providing
worldwide leadership in protective and specialty packaging by producing and
selling differentiated, proprietary packaging materials and systems that
are designed to provide cost-effective solutions to the protective
packaging needs of a wide variety of products and customers throughout the
world. The Company seeks to emphasize materials and systems that enable
its customers to provide a high degree of product protection in packaging
their products while reducing shipping and storage costs as well as the
amount of packaging waste.
In pursuing this strategy, the Company is directing its efforts to
the following four areas:
Bullet New product development, both internally and through acquisitions and
strategic alliances.
Bullet Global expansion to meet the worldwide protective packaging needs of
its customers and to exploit opportunities presented by economic
growth and emerging markets outside the United States and the other
countries in which the Company operates.
Bullet Identifying and pursuing opportunities in specialty packaging that
offer economic characteristics similar to the Company's protective
packaging products and that offer synergies with the Company's
marketing expertise, distribution channels and technological
capabilities.
Bullet Exploiting the Company's core technologies in extrusion, chemical
formulation, packaging systems and protective packaging design and
evaluation for both packaging and non-packaging applications.
New Product Development. Internal new product development efforts
over the past several years have led to the introduction of a number of new
products, including the high-speed Instapacker (Trademark) and VersaPacker
(Trademark) foam-in-bag systems, the Instasheeter (Trademark) converting
system and the JiffyPacker (Trademark) paper packaging system. In 1993,
the Company introduced its VoidPak (Trademark) inflatable packaging system
and additional models of its packaging systems, including the JiffyPacker
(Trademark) Benchtop system and a 30-inch wide model of the VersaPacker
(Trademark) Benchtop foam-in-bag system. The Company has also incorporated
recycled content into most of its products and has reformulated its foam
products to eliminate the use of fluorocarbons. Annual expenditures for
internal research and development represent approximately 2% of net sales.
Recent acquisitions include, in 1991, the acquisitions of Sentinel
Holdings, Inc., a manufacturer of thick polyethylene foams and other
protective packaging products, and of the Korrvu (Registered Trademark)
product line; and, in 1993, the acquisitions of the Shurtuff (Registered
Trademark) durable mailer product line and of a small manufacturer of
multi-web air cellular materials that are used primarily as protective
wrappings for furniture. The Company has recently acquired a small
fabricator of packaging materials in France. Although the Company has
discussed and continues to discuss various other potential acquisitions
with third parties, no assurance can be given that any transaction will be
completed.
Global Expansion. The Company's global expansion efforts are
directed at seeking additional opportunities to expand its product offering
in countries in which the Company does business as well as establishing
operations in additional countries. In 1993, these efforts led to the
introduction of Instapak (Registered Trademark) products in Mexico through
a subsidiary that the Company acquired in 1992, the installation of air
cellular manufacturing equipment in Italy, the establishment of an
additional air cellular manufacturing facility in Spain, the commencement
of the manufacture of Korrvu (Registered Trademark) products in Germany,
and expanded sales of the Company's Dri-Loc (Registered Trademark) products
in Europe and the Far East. In early 1994, the Company also established a
subsidiary in Korea to market Instapak (Registered Trademark) and certain
other products in that country.
Specialty Packaging. Building from its experience in specialty
packaging, such as its Dri-Loc (Registered Trademark) products, the Company
intends to seek to identify and pursue opportunities in specialty packaging
that offer economic characteristics similar to the Company's protective
packaging products and that offer synergies with the Company's marketing
expertise, distribution channels and technological capabilities.
Exploiting Core Technologies. Efforts to exploit the Company's core
technologies in non-packaging applications led to the introduction in 1993
of Instapak (Registered Trademark) -Floral, a foam used as a design base
for artificial flower arrangements, and the growth in sales of thick
polyethylene foams for non-packaging applications such as flotation and
recreation products and construction uses.
The Company's executive officers have been employed by the Company or
its subsidiaries or predecessors for periods ranging from seven years up to
31 years.
New Bank Credit Arrangements and Refinancing. The Company is in the
process of negotiating a new credit agreement with a group of banks (the
"New Credit Facility") to provide for (i) a five-year $175 million
unsecured revolving credit facility (the "Revolving Credit Facility") which
will be available to the Company and certain of its subsidiaries for
general corporate purposes including acquisitions, capital expenditures,
working capital and permitted investments and (ii) a five-year $100 million
unsecured term loan (the "Term Loan Facility") which will be available to
the Company solely for the purpose of redeeming the Company's Outstanding
Subordinated Notes. These Notes are redeemable by the Company commencing
July 1, 1994 at 104.734% of their principal amount plus accrued interest to
the date of redemption.
The Company expects to redeem the Outstanding Subordinated
Notes as part of a refinancing plan designed to reduce interest expense and
improve the Company's operating and financial flexibility. Depending on
market conditions, the Company expects to redeem the Outstanding
Subordinated Notes either through the issuance of Debt Securities or
borrowings under the Term Loan Facility, in each case together with
borrowings under the Revolving Credit Facility. Depending on market
conditions, the Company would expect to refinance any borrowings under the
Term Loan Facility through the issuance of Debt Securities. In connection
with the redemption of the Outstanding Subordinated Notes, the Company
expects to record an after-tax extraordinary charge to earnings of
approximately $5.8 million. Such charge will be incurred at or prior to
the date of redemption.
The Company, originally formed in 1960, was incorporated in Delaware
in 1969. The Company's principal executive offices are located at Park 80
East, Saddle Brook, New Jersey 07662-5291, and its telephone number is
(201) 791-7600.
INVESTMENT CONSIDERATIONS
Prospective purchasers of the Debt Securities should consider
carefully the following factors associated with an investment in the Debt
Securities as well as the other information set forth in this Prospectus.
LEVERAGE
The Company has substantial indebtedness. At March 31, 1994, the
Company's long-term debt as a percentage of total capitalization was
111.5%, and the Company's ratio of earnings to fixed charges was 2.8 to 1.
The Indenture and the New Credit Facility will contain financial and
operating covenants including, among other things, limitations on the
Company's ability to incur other indebtedness, to make certain acquisitions
and investments, and to pay dividends. The New Credit Facility will
contain requirements that the Company maintain certain financial ratios and
satisfy certain financial tests. See "Description of Debt Securities" and
"Description of New Credit Facility." If the Company fails to comply with
the various covenants, the lenders will be able either to accelerate the
maturity of or to cause the Company to repurchase the applicable
indebtedness.
The degree to which the Company is leveraged and the terms governing
the Company's indebtedness, including restrictive covenants and events of
default, could have important consequences to holders of the Debt
Securities, including the following: (i) a substantial portion of the
Company's cash flow from operations must be dedicated to service its
indebtedness; (ii) the Company may be more leveraged than other providers
of similar products, which may place the Company at a competitive
disadvantage; and (iii) the Company's leverage could make it more
vulnerable to changes in general economic conditions. Although the Company
believes that funds from operations, together with borrowings under the
Revolving Credit Facility under the New Credit Facility and other available
lines of credit, will be adequate to fund the Company's operating
requirements, capital expenditure program and other cash flow needs and to
meet its debt obligations, unexpected declines in the Company's future
business, increases in interest rates, or the inability to borrow
additional funds or to issue additional equity securities to finance its
operations if and when required could impair the Company's ability to meet
its debt service obligations or otherwise, could have a materially adverse
effect on the Company's business and future prospects. No assurance can be
given that additional debt or equity funds would be available if needed or,
if available, could be obtained on terms that are favorable to the Company.
SUBORDINATION OF THE DEBT SECURITIES AND SUBSIDIARY OPERATIONS
The right of the holders of the Debt Securities to receive payment of
principal and interest on the Debt Securities will be subordinated to the
prior payment in full of all Senior Indebtedness (as defined in the
Indenture) of the Company, which will consist of, among other things,
amounts owing under the New Credit Facility. No payment of principal of or
interest on the Debt Securities may be made during the continuance of a
payment default under Senior Indebtedness. Furthermore, the holders of
certain Senior Indebtedness will be able to block payment on the Debt
Securities for up to 180 days during any 360-day period upon the occurrence
of certain non-payment events of default under such Senior Indebtedness.
In addition, in the event of the dissolution, liquidation or other winding
up of the Company, all obligations with respect to Senior Indebtedness must
first be paid in full before any payment may be made with respect to the
Debt Securities. As of March 31, 1994, Senior Indebtedness totalled $17.3
million (including approximately $7.3 million in respect of Company
guarantees of subsidiary indebtedness). Subject to certain restrictions
contained in the New Credit Facility and the Indenture, the Company is
permitted to incur additional Senior Indebtedness. See "Description of
Debt Securities-Subordination."
Substantially all of the Company's domestic operations are conducted
directly by the Company. However, for the year ended December 31, 1993
approximately 27% of the Company's revenues and 20% of its operating profit
were derived from operations of its foreign subsidiaries. As a result, it
may be necessary for the Company to obtain dividends, loans or other
transfers of funds from such subsidiaries to service its debt obligations.
Claims of holders of the Debt Securities, as creditors of the Company, will
be junior in right of payment to all liabilities (whether or not for
borrowed money and including contingent liabilities) of such subsidiaries,
including any amounts borrowed by subsidiaries under the New Credit
Facility. As of March 31, 1994, the liabilities of the Company's
subsidiaries (other than intercompany liabilities) as reflected on the
Company's consolidated balance sheet were approximately $48.1 million,
consisting of borrowings aggregating $19.5 million (of which $7.3 is
guaranteed by the Company) and other liabilities of
approximately $28.6 million. The Indenture and the New Credit Facility
place certain restrictions on the ability of the Company and its
subsidiaries to incur additional Debt (including Senior Indebtedness) on a
consolidated basis but do not otherwise restrict the amount of additional
Debt which may be incurred by subsidiaries of the Company.
FOREIGN OPERATIONS
As noted above, for the year ended December 31, 1993 approximately
27% of the Company's revenues and 20% of its operating profit were derived
from operations of its foreign subsidiaries, and at December 31, 1993
approximately 34% of the Company's identifiable assets were located outside
the United States. International operations are subject to a number of
special concerns, including currency exchange rate fluctuations, exchange
controls and other risks associated with foreign operations. The Company's
reported operating results have been, and in the future are expected to
continue to be, affected by fluctuations in currency exchange rates. See
"Management's Discussion and Analysis of Results of Operations and
Financial Condition" and Note 1 of Notes to Consolidated Financial
Statements for the year ended December 31, 1993 incorporated by reference
herein.
ENVIRONMENTAL MATTERS
The operations of the Company, like those of most other manufacturing
companies, are subject to extensive and changing federal, state, local and
foreign environmental laws and regulations pertaining to the discharge of
materials into the environment, the handling and disposition of wastes
(including solid and hazardous wastes) or otherwise relating to protection
of the environment. In addition, the Company is currently involved in
environmental proceedings and inquiries relating to compliance with
environmental laws and permits and other environmental matters. Based upon
the information currently available to the Company, the Company believes
that these laws and regulations and the costs and expenditures of these
proceedings and matters will not have a material adverse effect on the
Company. No assurance can be given, however, that additional environmental
matters related to the Company will not require additional expenditures.
ABSENCE OF PUBLIC MARKET FOR THE DEBT SECURITIES
The Debt Securities are a new issue of securities for which no market
currently exists. If the Debt Securities are traded after their initial
issuance, they may trade at a discount from their initial offering price,
depending upon prevailing interest rates, the market for similar securities
and other factors. Accordingly, no assurance can be given that a holder of
the Debt Securities will be able to sell such Debt Securities in the future
or that such sale will be at a price equal to or higher than the initial
offering price of the Debt Securities. The Company does not intend to
apply for listing of the Debt Securities on any securities exchange or to
seek their admission to trading on the National Association of Securities
Dealers Automated Quotation System. Any underwriters for any issue of Debt
Securities may, subject to applicable laws and regulations, make a market
in the Debt Securities. However, the underwriters will not be obligated to
do so and may discontinue such market making at any time without notice.
No assurance can be given that an active trading market will develop or be
maintained for the Debt Securities.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities may be used by
the Company to repay or redeem the Outstanding Subordinated Notes or
borrowings under the Term Loan Facility of the New Credit Facility to the
extent such borrowings were used to redeem the Outstanding Subordinated
Notes; to repay, redeem or repurchase other outstanding indebtedness; for
its general operations, including acquisitions, capital expenditures and
working capital requirements; or for such other purposes as may be
specified in the Prospectus Supplement. A description of any indebtedness
to be refinanced with the proceeds of the Debt Securities will be set forth
in the applicable Prospectus Supplement.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
March 31, 1994. This table should be read in conjunction with the historical
consolidated financial statements and related notes thereto and "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
incorporated by reference in this Prospectus.
March 31, 1994
------------------------------
(dollars in thousands)
Short-term debt:
Notes payable and current
installments of long-term $18,336
debt(1) . . . . . . . . . . . . . .
Long-term debt, less current
installments:
Outstanding Subordinated Notes . . . 170,000
Other existing indebtedness . . . . . 11,197
Total long-term debt . . . . . . . . 181,197
Shareholders' equity (deficit):
Common stock, $.01 par value,
Authorized 35,000,000 shares;
issued 20,021,061 shares . . . . . 200
Additional paid-in capital . . . . . 111,258
Retained earnings (accumulated
deficit) . . . . . . . . . . . . . (130,128)
Accumulated translation adjustment . 5,156
Less deferred compensation and
cost ($246) of 119,806 shares of
common stock held as treasury
stock . . . . . . . . . . . . . . . (5,147)
Total shareholders' equity
(deficit) . . . . . . . . . . . . (18,661)
Total capitalization . . . . . . $162,536
_________________
(1) Includes $7 million of borrowings under the Company's existing
revolving credit facility, which amount was repaid in April 1994.
The existing facility will be replaced by the New Credit Facility.
Any outstanding borrowings under the existing facility will be repaid
with internally generated funds or by borrowings under the New Credit
Facility.
SELECTED FINANCIAL DATA
The following table sets forth selected historical financial data
with respect to the Company for the periods indicated. This information
should be read in conjunction with the historical consolidated financial
statements and related notes thereto and "Management's Discussion and
Analysis of Results of Operations and Financial Condition" incorporated by
reference in this Prospectus.
The selected financial data for the five years ended December 31,
1993 (other than net sales by class of product and information set forth
under Other Data) were derived from the Company's consolidated financial
statements which have been audited by KPMG Peat Marwick, independent
certified public accountants. The consolidated financial statements for
the three years ended December 31, 1993 and the report thereon are
incorporated by reference in this Prospectus. The selected financial data
for the three months ended March 31, 1994 and 1993 (other than net sales by
class of product and information set forth under Other Data) have been
derived from the unaudited consolidated financial statements of the Company
which, in the opinion of management, reflect all adjustments (consisting
only of normal recurring accruals) necessary to present fairly the
financial data for such periods. The results for three months ended March
31, 1994 are not necessarily indicative of operating results for a full
year.
<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended March 31,
----------------------------------------------------------- ---------------------
1989 1990 1991(1) 1992 1993 1993 1994
(In thousands, except ratios and
per share data)
CONSOLIDATED EARNINGS STATEMENT DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales by class product:
Engineered products $145,253 $160,548 $165,926 $176,541 $180,508 $ 44,452 $ 47,636
Surface protection and
other cushioning products 172,925 188,108 199,800 206,447 209,909 50,485 54,862
Food packaging products 42,168 44,247 49,207 52,727 51,023 11,942 12,790
Other products 24,694 20,365 20,195 10,343 10,254 2,267 2,173
-------- -------- -------- -------- -------- -------- --------
Total 385,040 413,268 435,128 446,058 451,694 109,146 117,461
Cost of sales 250,483 262,694 271,006 278,427 282,147 68,039 73,003
-------- -------- -------- -------- -------- -------- --------
Gross profit 134,557 150,574 164,122 167,631 169,547 41,107 44,458
Marketing, administrative and
development expenses 76,897 83,130 94,642 95,441 95,434 23,014 24,936
-------- -------- -------- -------- -------- -------- --------
Operating profit 57,660 67,444 69,480 72,190 74,113 18,093 19,522
Other income (expense):
Interest income 2,181 1,919 1,311 1,010 1,145 106 182
Interest expense (31,812) (41,357) (35,259) (31,080) (28,828) (7,473) (6,196)
Other, net (3,883)(2) (3,532) (4,066) (3,302) (969) 92 (928)
-------- -------- -------- -------- -------- -------- --------
Other income (expense),
net 33,514 (2) (42,970) (38,014) (33,372) (28,652) (7,275) (6,942)
======== ======== ======== ======== ======== ======== ========
Earnings before income
taxes 24,146 24,474 31,466 38,818 45,461 10,818 12,580
Income taxes 16,856 13,094 15,291 18,050 19,547 4,760 5,032
-------- -------- -------- -------- -------- -------- --------
Earnings before cumulative
effect of accounting
change 7,290 11,380 16,175 20,768 25,914 6,058 7,548
Cumulative effect of accounting
change for income taxes(3) - - - - 1,459 1,459 -
-------- -------- -------- -------- -------- -------- --------
Net earnings $7,290 $11,380 $16,175 $20,768 $27,373 $7,517 $7,548
======== ======== ========= ========= ======= ======= ========
Earnings per share before
cumulative effect of
accounting change $0.44 $0.65 $0.88 $1.08 $1.32 $0.31 $0.38
Earnings per share from cumulative
effect of accounting change(3) - - - - 0.08 0.08 -
-------- -------- -------- -------- -------- -------- --------
Earnings per common share(4) $0.44 $0.65 $0.88 $1.08 $1.40 $0.39 $0.38
======== ======== ========= ========= ======= ======= ========
Cash dividends per common
share(4) $20.08 - - - - - -
======== ======== ========= ========= ======= ======= ========
CONSOLIDATED BALANCE SHEET DATA
(AT PERIOD END):
Working capital $34,119 $22,320 $18,495 $29,417 $33,828 $33,742 $36,337
Total assets 229,071 225,473 274,877 268,264 279,818 263,117 278,239
Long-term debt, less current
installments 301,558 259,082 253,746 225,278 190,058 215,794 181,197
Shareholders' equity
(deficit)(5) (160,466) (131,558) (94,626) (66,311) (29,419) (56,570) (18,661)
</TABLE>
<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended March 31,
--------------------------------------------------- -----------------
1989 1990 1991(1) 1992 1993 1993 1994
(In thousands, except ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER DATA:
EBITDA(6) $70,125 $81,293 $85,264 $90,850 $96,221 $23,718 $24,718
Capital expenditures 13,818 12,059 15,945 11,226 22,474 6,763 4,834
Depreciation and amortization 16,153 20,115 22,880 23,607 24,544 6,085 6,126
EBITDA as a % of net sales 18.2% 19.7% 19.6% 20.4% 21.3% 21.7% 21.0%
Operating profit as a percentage 15.0 16.3 16.0 16.2 16.4 16.6 16.6
of net sales
Ratio of earnings to fixed
charges(7) 1.7x 1.6x 1.8x 2.2x 2.4x 2.3x 2.8x
Ratio of EBITDA to cash interest
expense(8) 2.4 2.2 2.8 2.8 3.7 3.5 4.1
Ratio of long-term debt to EBITDA 4.3 3.2 3.0 2.5 2.0
<FN>
_______________
(1) Includes the operations of Sentinel Holdings, Inc. from the date of
its acquisition in August 1991.
(2) Includes approximately $6 million of expenses relating to the 1989
recapitalization.
(3) Reflects cumulative effect of the implementation as of January 1,
1993 of Financial Accounting Standard No. 109, "Accounting for Income
Taxes." (See notes 1 and 7 to the Consolidated Financial Statements
incorporated by reference herein.)
(4) Per common share data has been restated for periods prior to 1992 to
reflect the September 1992 two-for-one stock split in the form of a
100% stock dividend.
(5) The Company's deficit in shareholders' equity resulted from the
payment in 1989 of a special cash dividend of $40 per share ($20 per
share after effecting the two-for-one stock split referred to in note
4 above) to the Company's stockholders. See Note 2 of Notes to
Consolidated Financial Statements for the year ended December 31, 1993
incorporated by reference herein.
(6) EBITDA is defined as earnings before income taxes, interest expense
(including the noncash amortization of deferred financing costs),
depreciation, goodwill amortization and amortization of other intangible
assets. While EBITDA should not be construed as a substitute for income
from operations or a better indicator of liquidity than cash flow from
operating activities, which are determined in accordance with generally
accepted accounting principles, it is included herein to provide
additional information with respect to the ability of the Company to
meet its debt service, capital expenditure and working capital
requirements.
(7) For the purpose of calculating the ratio of earnings to fixed
charges, "earnings" represents earnings before income taxes plus fixed
charges. "Fixed charges" consist of interest on all indebtedness,
amortization of deferred financing costs and the portion of rental
expense which management believes is representative of the interest
component of rental expense.
(8) Cash interest expense represents interest expense less amortization
of deferred financing costs.
</TABLE>
DESCRIPTION OF NEW CREDIT FACILITY
On or prior to the date of this Prospectus, the Company will enter
into a new credit agreement with a group of banks and Bankers Trust
Company, as agent (the "Agent"), providing for the New Credit Facility.
The New Credit Facility will be available to the Company and certain of its
subsidiaries for general corporate purposes, including for acquisitions,
capital expenditures, working capital and permitted investments and to
redeem the Outstanding Subordinated Notes. The following preliminary
summary of certain provisions of the New Credit Facility does not purport
to be complete and is subject to, and qualified in its entirety by
reference to, the full text of the credit agreement, a copy of which will
be filed as an exhibit to the Registration Statement.
GENERAL
The New Credit Facility will provide for the Revolving Credit Facility
and Term Loan Facility. The Revolving Credit Facility provides for a five-
year $175 million unsecured revolving credit facility, except that the
available commitment thereunder will be reduced by $25 million on each of
the third and fourth anniversaries of the closing date under the New Credit
Facility. The Term Loan Facility provides for a five-year $100 million
unsecured term loan which will be available to the Company solely for the
purpose of redeeming the Outstanding Subordinated Notes. Borrowings under
the Revolving Credit Facility will be available to the Company and
subsidiaries of the Company agreeable to the Agent with direct borrowings
by subsidiaries being unconditionally guaranteed by the Company. The
proceeds from initial borrowings under the Revolving Credit Facility will
be used, together with borrowings under the Term Loan Facility or the net
proceeds from an issuance of Debt Securities, to finance the redemption of
the Outstanding Subordinated Notes. At the option of the Company, the
Revolving Credit Facility may also be used for the issuance of up to $20
million of letters of credit instead of revolving credit loans. To the
extent utilized, borrowings under the Term Loan Facility are repayable in
equal quarterly installments over a five year period.
INTEREST RATE
At the Company's option, interest on revolving credit loans will
accrue at either (i) the Applicable Margin plus the higher of (x) the rate
which is 1/2% in excess of the average domestic three month certificate of
deposit rate published weekly by the Federal Reserve System adjusted for
reserve requirements and Federal Deposit Insurance Corporation ("FDIC")
assessments and (y) the rate publicly announced from time to time by the
Agent as its prime lending rate (the "Base Rate"), (ii) the Applicable
Margin plus the New York interbank Eurodollar offering rate for the
applicable interest period as quoted to first-class banks by the Agent for
amounts comparable to the amount of such loans adjusted for reserve
requirements in respect of Eurocurrency liability (the "Eurodollar Rate"),
or (iii) the Applicable Margin plus the rate for certificates of deposit
for the applicable interest period as quoted to first class banks by the
Agent for amounts comparable to the amount of such loans adjusted for
reserve requirements and FDIC assessments (the "CD Rate"). The Applicable
Margin ranges from 0.25% to 0 for Base Rate loans, 1.25% to .625% for
Eurodollar Rate loans and 1.375% to .75% for CD Rate loans, in each case
based on either the ratio of total debt to EBITDA (as defined in the New
Credit Facility) or the Company's credit rating as determined by Moody's
and Standard & Poors, provided that all such Applicable Margins are
decreased 0.25% (but not below 0) if the Term Loan Facility is terminated.
The Company expects that the initial Applicable Margin will be % for Base
Rate loans, % for Eurodollar rate loans ( % if the Term Loan Facility is
terminated) and % for CD Rate loans ( % if the Term Loan Facility is
terminated).
COVENANTS
Under the New Credit Facility, the Company will agree to maintain (i)
a ratio of EBITDA (as defined in the New Credit Facility) to consolidated,
cash interest expense of not less than :1 until and not less than :1
thereafter and (ii) a ratio of total debt to EBITDA (as so defined) of
through and of thereafter (the "Financial Covenants"). The New Credit
Facility will also restrict the Company and its subsidiaries from making
capital expenditures (including expenditures in respect of capitalized
lease obligations) in excess of $35 million in any year, provided that to
the extent such capital expenditures in any year are less than such amount,
the difference may be carried forward to the immediately succeeding year.
Under the New Credit Facility the Company will also agree, among other
things, that it will not, and will not permit any subsidiary to, without
the prior consent of the banks holding 51% of the commitments, (i) incur,
assume or guarantee indebtedness (other than indebtedness that is
specifically permitted), (ii) engage in certain sale-leaseback
transactions, (iii) incur any liens (except liens that are specifically
permitted), (iv) pay any dividend, make any distribution or repurchase
capital stock (other than dividends, distributions or repurchases that are
specifically permitted), (v) engage in transactions with affiliates other
than on arm's length terms, (vi) make any loan, advance, guarantee or
investment (other than those specifically permitted), or (vii) effect any
merger, consolidation, acquisition or sale of assets except as specifically
permitted and except that (a) in connection with any acquisition in excess
of $25 million the Company must satisfy the Financial Covenants on a pro
forma basis for both the preceding 12-month period and the immediately
succeeding 12-month period and have at least $15 million of availability
under the New Credit Facility after giving effect to the acquisition and
(b) the Company may not make acquisitions aggregating in excess of $150
million.
DEFAULT
Under the New Credit Facility, various specified events, including
certain events described below that may be deemed to affect ownership or
control of the Company, constitute "Events of Default" upon the occurrence
of which, in certain circumstances, the banks are permitted to declare all
outstanding amounts due and payable. These Events of Default include,
without limitation: (i) default in the payment of principal when due and
in the payment of interest and any other payment required under the New
Credit Facility for business days after such payments are due; (ii) any
representation or warranty in the New Credit Facility proving to have been
incorrect in any material respect when made; (iii) default in the
observance or performance of covenants contained in the New Credit
Facility, in the case of certain covenants beyond a grace period of 30
days; (iv)(a) default beyond any applicable grace period in payment of any
indebtedness of the Company or any of its subsidiaries, (b) nonpayment
defaults beyond any applicable grace period under any indebtedness of the
Company or any of its subsidiaries which causes, or permits the holder
thereof to cause, such indebtedness to become due prior to its stated
maturity and (c) any indebtedness (in an aggregate amount of all such
indebtedness in excess of $ million) of the Company or any of its
subsidiaries shall be declared due and payable prior to the stated maturity
thereof, (v) the Company or any of its subsidiaries becoming subject to
certain events of bankruptcy, insolvency, liquidation, dissolution or
reorganization; (vi) the occurrence of certain events with respect to
certain employee benefit plans of the Company and its subsidiaries; (vii)
the existence of unsatisfied judgments in excess of $ million for more than
days from the entry thereof; (viii) at any time or during any calendar
year, 50% or more of the members of the Board of the Company shall have
resigned or been removed or replaced; and (ix) more than 50% of the Common
Stock of the Company shall have been acquired, directly or indirectly, by
any person or group.
FEES
The New Credit Facility will provide that the Company shall pay to the
Agent for the benefit of the banks, the following fees: (i) a commitment
fee at a rate equal to 3/8% per annum on the daily average unused
commitments under the New Credit Facility (or 1/4% if the Applicable Margin
on Eurodollar Rate loans is 0.50% or less) and (ii) a fee in respect of
each letter of credit from the date of issuance thereof to its termination
date at a rate equal to the Applicable Margin for Eurodollar Rate loans
less 1/4% on the daily average stated amount of such letter of credit plus
an additional 1/4% on such daily average stated amount to be paid as a
"fronting" fee to the lender issuing the applicable letter of credit. In
addition, the Company will pay certain facility, syndication and other fees
of up to approximately $1.2 million. The Company will also agree to pay
the expenses of the Agent (including the reasonable fees and expenses of
its special and local counsel, consultants and financial advisors) and to
provide the banks with indemnification with respect to certain matters.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an indenture (the
"Indenture"), to be dated as of , 1994, by and between the Company and
First National Bank of Boston, as Trustee (the "Trustee"). The terms of
the Debt Securities will include those stated in the Indenture and those
made a part of the Indenture by reference to the Trust Indenture Act of
1939, as amended, as in effect on the date of the Indenture (the "TIA").
The Debt Securities will be subject to all such terms, and holders of the
Debt Securities are referred to the Indenture and the TIA for a statement
of such terms. The following summaries of certain provisions of the
Indenture do not purport to be complete and are qualified in their entirety
by reference to all of the provisions of the Indenture, a copy of which has
been filed as an exhibit to the Registration Statement of which this
Prospectus constitutes a part. Wherever particular sections or defined
terms of the Indenture are referred to in this summary, it is intended that
such sections or defined terms shall be incorporated herein by reference.
GENERAL
The Indenture will not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and will provide that Debt
Securities may be issued in separate series thereunder up to the aggregate
principal amount which may be authorized from time to time by the Company.
The terms of each series of Debt Securities will be established in or
pursuant to a resolution of the Board of Directors of the Company and set
forth in an officers' certificate, or established in one or more
supplemental indentures. The particular terms of each series of Debt
Securities will be described in a Prospectus Supplement or Prospectus
Supplements relating to such series.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debt Securities of each series: (1)
the title of the Debt Securities; (2) any limit on the aggregate principal
amount of the Debt Securities; (3) the date or dates on which the
principal of the Debt Securities is payable; (4) the rate or rates (which
may be fixed or variable) per annum at which the Debt Securities will bear
interest, if any; (5) the date or dates from which such interest, if any,
on the Debt Securities will accrue, the date or dates on which such
interest, if any, will be payable, the date on which payment of such
interest, if any, will commence and the regular record dates for such
interest payment dates, if any; (6) the place or places, if other than as
set forth in the Indenture, where the principal, premium, if any, and
interest, if any, on the Debt Securities will be payable; (7) the date, if
any, after which and the price or prices at which the Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed by
the Company; (8) the dates, if any, on which and the price or prices at
which the Debt Securities will, pursuant to any mandatory sinking fund
provisions, or may, pursuant to any optional sinking fund provisions, be
redeemed by the Company, and the other detailed provisions of such sinking
fund; (9) the denominations in which any Debt Securities will be issuable,
if other than denominations of $1,000 and any integral multiple thereof;
(10) if other than the principal amount thereof, the amount of Debt
Securities which shall be payable upon declaration of acceleration of the
maturity thereof; (11) any deletions from, modifications of or additions
to the defaults set forth in the Indenture or the covenants of the Company
with respect to any series of the Debt Securities, whether or not such
defaults or covenants are consistent with the defaults or covenants set
forth therein; and (12) any other terms relating to the Debt Securities not
inconsistent with the Indenture.
Principal, premium, if any, and interest, if any, will be payable on
the dates and in the manner provided in the Debt Securities and the
Indenture. Debt Securities will be transferable at the principal corporate
trust office of the Trustee in The City of New York or at such other places
in The City of New York as the Company may designate.
Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Debt Securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or any integral multiple
thereof. No service charge will be made for any registration or transfer
or exchange of the Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
If so provided in the Prospectus Supplement, Debt Securities may be
issued as Original Issue Discount Securities (bearing either no interest or
bearing interest at a rate which at the time of issuance is below the
prevailing market rate) to be sold at a substantial discount below their
principal amount. In such cases, special Federal income tax and other
considerations applicable to such Debt Securities will be described in the
Prospectus Supplement.
SUBORDINATION
The indebtedness evidenced by the Debt Securities (including
principal, premium, if any, and interest) will be subordinated in right of
payment to the prior payment in full of all present and future Senior
Indebtedness. "Senior Indebtedness" means all Debt of the Company,
including principal, premium, if any, and interest on or in connection with
Debt of the Company (other than the Debt Securities), whether presently
outstanding or hereafter created, incurred or assumed, other than Debt
which by its terms or the terms of the instrument creating or evidencing it
is subordinate in right of payment to or pari passu with the Debt
Securities, provided that Senior Indebtedness shall not include (A) any
Debt, liability or obligation of the Company to (i) any of its
subsidiaries, (ii) trade creditors, or (iii) any person arising out of any
lawsuit against the Company or any of its subsidiaries or any settlement
thereof, (B) any liability for taxes, (C) any redemption or other payments
on preferred stock, (D) any Debt incurred in violation of the provisions of
the Indenture, (E) any Debt of the Company which when incurred and without
regard to any election under Section 1111(b) of the Bankruptcy Code was
without recourse to the Company, or (F) the Outstanding Subordinated Notes
which Notes shall rank pari passu with the Debt Securities.
The Indenture provides that, in the event of (a) any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith
relative to the Company or to its assets, (b) any liquidation, dissolution
or other winding up of the Company whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment
for the benefit of creditors or any other marshalling of assets and
liabilities of the Company, holders of Senior Indebtedness must be paid in
full (including interest accruing subsequent to a bankruptcy or insolvency
whether or not such interest is an allowed claim enforceable against the
debtor in bankruptcy) before any payment or distribution is made with
respect to the Debt Securities. By reason of such subordination, in the
event of liquidation or insolvency, creditors of the Company who are
holders of Senior Indebtedness may recover more, ratably, than the holders
of the Debt Securities. In addition, no payment shall be made with respect
to the Debt Securities of any series (x) in the event and during the
continuation of any default in the payment of Senior Indebtedness or (y) in
the event any default (other than those referred to in clause (x)) shall
have occurred and be continuing that would permit acceleration of the
maturity of Designated Senior Debt (as defined below) and the holder of any
such Designated Senior Debt gives written notice of such default to the
Company and the Trustee. With respect to clause (y) above, if such
Designated Senior Debt is not declared due and payable within 180 days
after written notice of the default is given, promptly after the end of the
180-day period the Company will pay all sums due in respect of the Debt
Securities and not paid during the 180-day period. During any 360-day
consecutive period, only one such period during which payment with respect
to the Debt Securities may not be made may commence and the duration of
such period may not exceed 180 days. Nothing contained in the Indenture
shall prevent the holders of Debt Securities from receiving securities of
the Company or of any other corporation provided for by a plan of
reorganization or readjustment which are subordinated, to at least the same
extent as the Debt Securities, to Senior Indebtedness. "Designated Senior
Debt" means (i) Debt of the Company under or in respect of the New Credit
Facility and (ii) after such time as the New Credit Facility shall have
terminated, any other Debt constituting Senior Indebtedness of the Company
which at the time of determination has an aggregate principal amount
outstanding of at least $50,000,000 and is specifically designated in the
instrument creating or evidencing such Senior Indebtedness as "Designated
Senior Debt" by the Company. Nothing in the Indenture or in the Debt
Securities affects the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium, if any, and interest on the
Debt Securities.
Claims of holders of the Debt Securities, as creditors of the Company,
will also be junior in right of payment to all liabilities (whether or not
for borrowed money and including contingent liabilities) of the Company's
subsidiaries with respect to the assets of these subsidiaries. As of March
31, 1994, the liabilities of the Company's subsidiaries (other than
intercompany liabilities) as reflected on the Company's consolidated
balance sheet would have been approximately $48.1 million, consisting of
borrowings aggregating $19.5 million (including amounts guaranteed by the
Company) and other liabilities of approximately $28.6 million.
CHANGE OF CONTROL
Unless otherwise indicated in a Prospectus Supplement related to a
specific series of Debt Securities, the following provisions will be
applicable to each series of Debt Securities issued under the Indenture.
Upon the occurrence of a Change of Control (the "Change of Control
Date"), each holder of a Debt Security shall have the right to require the
repurchase by the Company of all or any part (equal to $1,000 or multiples
thereof) of such holder's Debt Securities pursuant to the offer described
in the next paragraph (the "Change of Control Offer") at a purchase price
equal to 101% thereof of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase (the "Purchase Price").
Prior to the mailing of the notice to holders provided for below but in any
event within 30 days following any Change of Control, the Company covenants
to (i) repay in full all Debt under the New Credit Facility or, if the
lenders under the New Credit Facility are then permitted to accept
prepayments on a non-pro rata basis, to offer to repay in full all such
Debt and to repay the Debt of each lender who has accepted such offer or
(ii) obtain the requisite consent under the New Credit Facility to permit
the repurchase of the Debt Securities as provided for in the immediately
following paragraph. The Company shall first comply with the covenant in
the preceding sentence before it shall be required to repurchase Debt
Securities pursuant to this covenant.
If so provided in a Prospectus Supplement, the obligation of the
Company to repurchase the Debt Securities offered pursuant to that
Prospectus Supplement as a result of a Change of Control may be made
subject to the prior repurchase of all Debt Securities of any previously
issued series of Debt Securities required to be repurchased as a result of
such Change of Control.
Within 30 days following any Change of Control, the Company shall mail
a notice to each holder stating: (1) that the Change of Control Offer is
being made pursuant to this covenant and that all Debt Securities tendered
will be accepted for payment; (2) the Purchase Price and the purchase date
(which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed) (the "Change of Control Payment Date"); (3)
that any Debt Security not tendered will continue to accrue interest; (4)
that unless the Company defaults in the payment due on the Change of
Control Payment Date any Debt Security accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date; (5) that holders electing to have a Debt Security
purchased pursuant to a Change of Control Offer will be required to
surrender such Debt Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Debt Security completed, to the
paying agent at the address specified in the notice prior to the close of
business on the Change of Control Payment Date; (6) that holders will be
entitled to withdraw their election if the paying agent receives, not later
than the close of business on the third business day (or such shorter
period as may be required by applicable law) preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the holder, the principal amount of Debt
Securities the holder delivered for purchase, and a statement that such
holder is withdrawing his election to have such Debt Securities purchased;
and (7) that holders whose Debt Securities are purchased only in part will
be issued new Debt Securities of the same series in a principal amount
equal to the unpurchased portion of the Debt Securities surrendered. In
the event a Change of Control occurs and the holders of Debt Securities
exercise the right to require the Company to repurchase Debt Securities,
and assuming that such a repurchase constitutes a "tender offer" for
purposes of Rule 14e-1 under the Exchange Act at the time it is required,
the Company will comply with the requirements of Rule 14e-1 as then in
effect and any other applicable securities laws or regulations with respect
to such repurchase.
On the Change of Control Payment Date, the Company shall (i) accept
for payment Debt Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Trustee money sufficient to
pay the Purchase Price of all Debt Securities or portions thereof so
tendered, and (iii) deliver or cause to be delivered to the Trustee Debt
Securities so accepted together with an officers' certificate stating the
Debt Securities or portions thereof tendered to the Company. The Trustee
shall promptly mail to the holder of Debt Securities so accepted payment in
an amount equal to the Purchase Price, and the Trustee shall promptly
authenticate and mail to such holders a new Debt Security of the same
series in a principal amount equal to any unpurchased portion of the Debt
Security surrendered. The Company will publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change
of Control Payment Date.
"Change of Control" shall mean (i) a sale of all or substantially all
of the assets of the Company to any person (other than any wholly-owned
subsidiary of the Company) or related group (as that term is used in
Section 13(d)(3) of the Exchange Act) of persons (other than any wholly-
owned subsidiary of the Company) as an entirety or substantially as an
entirety in one transaction or series of related transactions, (ii) the
merger or consolidation of the Company with or into another corporation or
the merger of another corporation into the Company with the effect that
immediately after such transaction the shareholders of the Company
immediately prior to such transaction hold less than 50% of the total
voting power entitled to vote generally in the election of directors,
managers or trustees of the surviving corporation of such merger or
consolidation, (iii) the liquidation or dissolution of the Company, (iv)
any person or group (as so defined) acquiring more than 50% of the total
voting power entitled to vote generally in the election of the directors,
managers or trustees of the Company, or (v) the persons constituting the
Board of Directors on the Initial Issue Date or persons nominated for
election or elected to the Board of Directors by a majority vote of such
directors (the "Continuing Directors") or by a majority vote of the
Continuing Directors do not constitute a majority of the members of the
Board of Directors of the Company.
The obligation of the Company to repurchase Debt Securities as a
result of the occurrence of a Change of Control could create an event of
default under Senior Indebtedness of the Company, as a result of which any
repurchase could, absent a waiver, be blocked by the subordination
provisions of the Debt Securities. See "Subordination." Failure by the
Company to repurchase the Debt Securities when required will result in an
Event of Default with respect to the Debt Securities whether or not such
repurchase is permitted by the subordination provisions. The Company's
ability to pay cash to the holders of Debt Securities upon repurchase may
be limited by the Company's financial condition at the time of the Change
of Control or by financial covenants contained in the Company's Senior
Indebtedness, including the New Credit Facility.
The Change of Control provisions described above may deter certain
mergers, tender offers and other takeover attempts involving the Company.
The Company does not have any current intention to enter into a transaction
which would constitute a Change of Control.
CERTAIN DEFINITIONS
The following definitions apply to the Debt Securities unless the
Prospectus Supplement otherwise provides.
"Acquisition Debt" means Debt of any person existing at the time such
person became a subsidiary of the Company (or such person is merged with
the Company or one of its subsidiaries) or assumed by the Company or any of
its subsidiaries in connection with the acquisition of assets from such
person (other than in the ordinary course of business), including Debt
Incurred in connection with, or in contemplation of, such person becoming a
subsidiary of the Company or such merger or acquisition (but excluding Debt
of such person which is extinguished, retired or repaid in connection with
such person becoming a subsidiary of the Company or such merger or
acquisition).
"Asset Acquisition" means (i) an investment by the Company or any of
its subsidiaries in any other person pursuant to which such person shall
become a subsidiary of the Company or any of its subsidiaries or shall be
merged with the Company or any of its subsidiaries or (ii) the acquisition
by the Company or any of its subsidiaries of the assets of any person which
constitute substantially all of an operating unit or business, or
identifiable product line for which financial information for the Reference
Period is available, of such person.
"Asset Disposition" means, with respect to any person, any sale,
transfer, conveyance, lease or other disposition (including, without
limitation, by way of merger, consolidation or sale-leaseback) by such
person or any of its subsidiaries to any person (other than to such person
or a Wholly-owned Subsidiary of such person and other than in the ordinary
course of business) of (i) any assets of such person or any of its
subsidiaries or (ii) any shares of capital stock of such person's
subsidiaries. For purposes of this definition, any disposition in
connection with directors' qualifying shares shall not constitute an Asset
Disposition. For purposes of this definition, the term "Asset Disposition"
shall not include any sale, transfer, conveyance, lease or other
disposition of assets and properties of the Company that is governed by the
covenant described under "Limitation on Merger, Sale or Consolidation."
"Asset Sale" means the sale or other disposition by the Company or any
of its subsidiaries (other than to Wholly-owned Subsidiaries) of (i) all or
substantially all of the capital stock of any of the Company's subsidiaries
or (ii) substantially all of the assets of the Company or any of its
subsidiaries which constitute substantially all of an operating unit or
business, or identifiable product line for which financial information for
the Reference Period is available.
"Capitalized Lease" means, as applied to any person, any lease of any
property (whether real, personal or mixed) the discounted present value of
the rental obligations of such person as lessee under which, in conformity
with generally accepted accounting principles, is required to be
capitalized on the balance sheet of that person. "Capitalized Lease
Obligation" means, as applied to any person, the rental obligation, as
aforesaid, under any Capitalized Lease.
"Consolidated Cash Flow" of any person for any period shall mean (a)
the Consolidated Net Income of such person for such period, plus (b) the
sum of (i) income taxes, (ii) Consolidated Fixed Charges, (iii)
depreciation expense, (iv) amortization expense, and (v) all other non-cash
items deducted from net revenues in determining Consolidated Net Income for
such period, in each case determined on a consolidated basis for such
person and its consolidated subsidiaries in accordance with generally
accepted accounting principles.
"Consolidated Fixed Charges" of any person for any period shall mean
the aggregate of (without duplication) (i) Consolidated Interest Expense,
(ii) the interest component of Capitalized Leases and one-third of rentals
in respect of all other leases with original lease terms of more than one
year, paid or accrued by such person or any of its subsidiaries during such
period, determined on a consolidated basis for such person and its
consolidated subsidiaries in accordance with generally accepted accounting
principles, and (iii) the product of (x) the sum of (A) cash dividends paid
on any preferred stock of such person plus (B) cash and non-cash dividends
paid on any Subsidiary Preferred Stock of such person which is not
eliminated in consolidation times (y) a fraction, the numerator of which is
one and the denominator of which is one minus the then current effective
federal, state, local and foreign tax rate of such person expressed as a
decimal.
"Consolidated Interest Expense" of any person for any period shall
mean the aggregate interest expense in respect of Debt (including
amortization of original issue discount and non-cash interest payments or
accruals) of such person and its consolidated subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting
principles.
"Consolidated Net Income" of any person for any period shall mean the
Net Income of such person and its consolidated subsidiaries for such
period, determined on a consolidated basis in accordance with generally
accepted accounting principles; provided that there shall be excluded (i)
the Net Income of any person other than a consolidated subsidiary in which
such person or any of its consolidated subsidiaries has a joint interest
with a third party except to the extent of the amount of dividends or
distributions actually paid to such person and its consolidated
subsidiaries during such period and (ii) except to the extent includable
pursuant to the foregoing clause (i), the Net Income of any person accrued
prior to the date it became a subsidiary of such person or any of its
subsidiaries or is merged or consolidated with such person or any of its
subsidiaries or that person's assets are acquired by such person or any of
its subsidiaries, provided that this clause (ii) shall not be effective for
any calculation of Consolidated Cash Flow to be made in accordance with
clause (2) of the definition of Pro Forma Coverage Ratio, and (iii) the Net
Income (if positive) of any subsidiary of such person to the extent that
the declaration or payment of dividends or similar distributions by that
subsidiary to such person of such Net Income is not at the time of
determination permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that subsidiary.
"Currency Agreement" means with respect to any person any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect the Company or any of its subsidiaries
against fluctuations in currency values.
"Debt" of any person shall mean at any date, without duplication, (1)
all obligations of such person for borrowed money (including net overdrafts
in any bank), (2) all obligations of such person evidenced by bonds,
debentures, notes or other similar instruments, (3) all obligations of such
person to pay the deferred purchase price of property or services, except
accounts payable arising in the ordinary course of business, (4) all
Capitalized Lease Obligations of such person, (5) all Debt of others
secured by a Lien on any asset of such person, whether or not such Debt is
assumed by such person, provided that, for purposes of determining the
amount of Debt of the type described in this clause, if recourse with
respect to such Debt is limited to such asset, the amount of such Debt
shall be limited to the fair market value thereof, (6) all Debt of others
directly or indirectly guaranteed by such person, (7) all obligations of
such person to reimburse the issuer of any letter of credit, and (8) to the
extent not otherwise included, obligations under Currency Agreements and
Interest Rate Agreements.
"Dollar Equivalent" means, with respect to any monetary amount in a
currency other than U.S. dollars, at any time for the determination
thereof, the amount of U.S. dollars obtained by converting such foreign
currency involved in such computation into U.S. dollars at the spot rate
for the purchase of U.S. dollars with the applicable foreign currency as
quoted by Bankers Trust Company at approximately 11:00 a.m. (New York
time) on the date two business days prior to such determination.
"GAAP" or "generally accepted accounting principles" means generally
accepted accounting principles in the United States as of the date or time
of any computation including, without limitation, those set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession; provided, that all ratios and computations based on
GAAP contained in the Indenture shall be computed in accordance with GAAP
except that calculations made for the purpose of determining compliance
with the terms of the covenant described under "Covenants - Limitation on
Restricted Payments" below shall be made, except as otherwise provided,
without giving effect to adjustments in component amounts required or
permitted by Accounting Principles Board Opinions Nos. 16 and 17 as a
result of any Asset Acquisition made subsequent to the date of the
Indenture.
"Incurrence" means the incurrence, creation, assumption or in any
other manner becoming liable with respect to, or the extension of the
maturity of or becoming responsible for the payment of, any Debt; provided
that neither the accrual of interest, whether such interest is payable in
cash or in kind, nor the accretion of original issue discount shall be
considered an incurrence of Debt. "Incur" shall have a comparable meaning.
"Independent Financial Advisor" means a nationally recognized
investment banking firm (i) which does not (and whose directors, officers,
employees and affiliates do not) have a direct or indirect material
financial interest in the Company or any of its subsidiaries and (ii)
which, in the sole judgment of the Board of Directors of the Company, is
otherwise independent and qualified to perform the task for which such firm
is being engaged.
"Initial Issue Date" means the date on which the initial series of
Debt Securities is issued under the Indenture.
"Interest Rate Agreement" means with respect to any person any
interest rate protection agreement, interest rate future, interest rate
option, interest rate swap, interest rate cap or other interest rate hedge
arrangement, to or under which the Company or any of its subsidiaries is a
party or a beneficiary on the date of the Indenture or becomes a party or
beneficiary thereafter.
"Investment" means any capital contributions, advances or loans to
(including any guarantees of loans to), or investments in or purchases of
capital stock of, any Restricted Subsidiary of the Company.
"Joint Venture" means a joint venture or other similar arrangement,
whether in corporate, partnership or other legal form, provided that any
such arrangement which as to any person is treated as a subsidiary of such
person shall not be considered to be a Joint Venture to which such person
is a party.
"Lien" means, with respect to any property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such property. For purposes of the Indenture, the Company shall be deemed
to own subject to a Lien any property which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, Capitalized Lease or other title retention agreement relating to
such property.
"Measurement Date", when used with respect to any calculation, means
the date of the transaction giving rise to the need to make such
calculation.
"Net Cash Proceeds" 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, excluding any other consideration received in
the form of assumption by the acquiring person of Debt or other obligations
relating to the property disposed of in such Asset Disposition or received
in any other non-cash form) therefrom or an equivalent amount of cash, 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 paid or required to be accrued as a liability under
generally accepted accounting principles (i) as a consequence of such Asset
Disposition, (ii) as a result of the repayment of any Debt required or
permitted to be repaid pursuant to the covenant described under "Covenants
- - Limitation on Disposition of Assets", or (iii) in connection with any
actual or anticipated repatriation to the United States of any proceeds of
such Asset Disposition for the purpose of repaying Senior Indebtedness of
the Company, investing in capital assets, or a Qualifying Business, of the
Company or making an Excess Proceeds Offer in each case in accordance with
the covenant described under "Covenants - Limitation on Disposition of
Assets", and in each case net of a reasonable reserve (consistent with GAAP
or its equivalent in foreign jurisdictions) for the after-tax cost of any
indemnification payments (fixed and contingent) attributable to seller's
indemnities to the purchaser undertaken by the Company or any of its
subsidiaries in connection with such Asset Disposition, and net of all
payments made on any Debt which is secured by such property, in accordance
with the terms of any Lien upon or with respect to such property or which
must by its terms 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 Income" of any person for any period means the net income (loss)
of such person for such period, determined in accordance with generally
accepted accounting principles (except that (i) any amount representing
amortization of goodwill or other intangible assets arising from
acquisitions subsequent to the date of the Indenture and extraordinary or
nonrecurring gains and losses shall be excluded therefrom, together with
the net tax effect on such person solely as a result of such exclusion and
(ii) for purposes of determining the Net Income of the Company, there shall
be excluded the after-tax effect of the extraordinary charge to earnings
resulting from the redemption of the Outstanding Subordinated Notes).
"Net Investments in Restricted Subsidiaries" means, with respect to
any Investment made by the Company, directly or indirectly, in a Restricted
Subsidiary as to which clause (iv) of the definition of Restricted Payments
would be applicable, the difference between (i) the aggregate amount of all
such Investments made by the Company and its Wholly-owned Subsidiaries in a
Restricted Subsidiary on or after the Initial Issue Date (in the case of an
Investment made other than in cash, the amount shall be determined in good
faith by the Board of Directors, whose determination shall be conclusive)
and (ii) the sum of (A) the amount of such aggregate Investments returned
in cash or cash equivalents whether through interest payments, principal
payments, dividends or other distributions (to the extent such amounts are
not otherwise available for making Restricted Payments pursuant to clause
(b)(ii) under "Covenants - Limitation on Restricted Payments") and (B) the
Net Cash Proceeds received by the Company or its Wholly-owned Subsidiaries
from the disposition (other than to a subsidiary of the Company) of all or
any portion of its Investments in such Restricted Subsidiary; provided,
however, that if such Restricted Subsidiary subsequently becomes a Wholly-
owned Subsidiary of the Company, the Net Investments in Restricted
Subsidiaries for such Restricted Subsidiary shall be zero. For purposes of
the calculations to be made pursuant to clause (vi) of the definition of
Permitted Payments and paragraph (b) under "Covenants - Limitation on
Restricted Payments", to the extent (i) above is greater than (ii) above,
such difference shall be positive and to the extent (ii) above is greater
than (i) above, such difference shall be negative.
"Net Restricted Purchase" means, with respect to any Restricted
Purchase by the Company the difference between (i) the sum of the original
amount of such Restricted Purchase and all subsequent amounts paid or
contributed in respect of such Restricted Purchase by the Company or its
Wholly-owned Subsidiaries (in the case of a Restricted Purchase or
subsequent contribution made other than in cash, the amount shall be
determined in good faith by the Board of Directors, whose determination
shall be conclusive), and (ii) the Net Cash Proceeds received by the
Company or its Wholly-owned Subsidiaries from the disposition (other than
to a subsidiary of the Company) of all or any portion of such Restricted
Purchase; provided, however, that if the entity that is the issuer or
obligor on the security underlying such Restricted Purchase subsequently
becomes a Wholly-owned Subsidiary of the Company, the Net Restricted
Purchase for that Restricted Purchase shall be zero. For purposes of the
calculations to be made pursuant to clause (vi) the definition of Permitted
Payments and paragraph (b) under "Covenants - Limitation on Restricted
Payments", to the extent (i) above is greater than (ii) above, such
difference shall be positive and to the extent (ii) above is greater than
(i) above, such difference shall be negative.
"Net Worth" of any person as of any date means the aggregate of
capital attributable to common stock and preferred stock of such person
having no sinking fund or mandatory redemption provisions payable prior to
the maturity date of all then outstanding series of Debt Securities,
surplus and retained earnings of such person and its consolidated
subsidiaries as would be shown on a consolidated balance sheet of such
person and its consolidated subsidiaries prepared as of such date in
accordance with generally accepted accounting principles.
"Permitted Payments" means with respect to the Company and its
subsidiaries (i) any dividend or other distribution on shares of capital
stock payable solely in shares of capital stock (other than Redeemable
Stock) or in options, warrants or other rights to purchase capital stock
(other than Redeemable Stock); (ii) any dividend or other distribution
payable to the Company by any of its subsidiaries or by a subsidiary to
another subsidiary (and in the case of a dividend or distribution by a
subsidiary of the Company in which the Company owns, directly or
indirectly, less than 100% of the capital stock of such subsidiary, to any
other holder of the capital stock of such subsidiary on a pro rata basis);
(iii) the purchase, redemption, retirement or other acquisition by a
Wholly-owned Subsidiary of its capital stock; (iv) the redemption,
defeasance, repurchase or other acquisition or retirement for value prior
to scheduled maturity of any Debt which by its terms ranks pari passu with,
or subordinate in right of payment to, the Debt Securities (including any
such redemption, defeasance, repurchase, acquisition or retirement of any
other series of Debt Securities) with the proceeds from the issuance of (x)
Debt (including the issuance of a new series of Debt Securities under the
Indenture) which is also pari passu with, or subordinated (on terms equally
favorable to holders of the Debt Securities if such Debt is not a series of
Debt Securities issued under the Indenture) in right of payment to, the
Debt Securities and which new Debt has no mandatory prepayment (including
at the option of the holder thereof, if such option did not exist in the
Debt being so refinanced) prior to, and has a scheduled maturity (including
sinking fund payments) later than, the earlier of (A) the final maturity of
all then outstanding series of Debt Securities and (B) the mandatory
prepayment dates and scheduled maturity, as the case may be, of the Debt
being redeemed, defeased, repurchased or otherwise acquired, provided that
such Debt is called for redemption, defeased, repurchased or otherwise
acquired within 45 days after the date on which the additional Debt is
incurred or (y) capital stock (other than Redeemable Stock); (v) the
repurchase or other acquisition or retirement for value of any shares of
the Company's capital stock, or any option, warrant or other right to
purchase shares of the Company's capital stock, with, or out of the
proceeds of the sale of, additional shares of the Company's capital stock
other than Redeemable Stock (unless the redemption provisions of such
Redeemable Stock prohibit the redemption thereof prior to the date on which
the capital stock to be acquired or retired was by its terms required to be
redeemed); provided that such proceeds are applied to the repurchase,
retirement or other acquisition within 45 days after the date on which the
additional shares of the Company's capital stock are issued; (vi) with
respect to any Restricted Purchase or Investment in a Restricted Subsidiary
as to which clause (iv) of the definition of Restricted Payments would be
applicable the sum of (A) the aggregate amount of all Net Restricted
Purchases and all Net Investments in Restricted Subsidiaries, made on and
after the Initial Issue Date pursuant to this clause (vi) by the Company
and its subsidiaries not in excess of $50 million (provided, however that
the aggregate amount of all such Net Restricted Purchases shall not exceed
$20 million), plus (B) the sum of (x) the amount of all Investments
existing on the Initial Issue Date in Restricted Subsidiaries of the
Company existing on such date returned in cash or cash equivalents whether
through interest payments, principal payments, dividends or other
distributions (to the extent such amounts are not otherwise available for
making Restricted Payments pursuant to clause (b)(ii) under "Covenants -
Limitation on Restricted Payments") and (y) the Net Cash Proceeds received
by the Company or its Wholly-owned Subsidiaries from the disposition (other
than to a subsidiary of the Company) of all or any portion of such
Investments in such Restricted Subsidiaries; (vii) Debt of the Company
which is pari passu with or subordinated in right of payment to the Debt
Securities purchased in anticipation of satisfying sinking fund, principal
installments or final maturity payments, in each case within one year of
the date of such purchase; (viii) the redemption (or defeasance prior to
redemption) of the Outstanding Subordinated Notes; (ix) the repurchase of
any Debt which is pari passu with or subordinated in right of payment to
any series of Debt Securities (including any such repurchase of any other
series of Debt Securities) ("Other Debt") pursuant to a "change of
control" or "asset disposition" covenant set forth in the related indenture
or other agreement pursuant to which such Debt is outstanding (or pursuant
to the provisions described under "Change of Control" or
"Covenants - Limitation on Disposition of Assets" if the Other Debt to be
redeemed is Debt Securities issued under the Indenture), provided that such
repurchase shall only be permitted if all of the terms and conditions in
such provisions have been fully complied with and such repurchases are made
in accordance with the Indenture and such indenture or agreement, and
provided, further, that the Company has repurchased all Debt Securities of
any series required to be repurchased by the Company pursuant to the terms
and conditions described under "Change of Control" and
"Covenants - Limitation on Disposition of Assets" prior to the repurchase
of any Other Debt pursuant to the "change of control" or "asset
disposition" covenant in such indenture or other agreement, if such Other
Debt is not a series of Debt Securities issued under the Indenture, or the
provisions described under "Change of Control" or "Covenants - Limitation
on Disposition of Assets", if such Other Debt is a series of Debt
Securities issued under the Indenture; (x) the acquisition and holding of
receivables owing to the Company or any of its subsidiaries or acquired in
the ordinary course of business and payable or dischargeable in accordance
with customary trade terms, provided that nothing in this clause (x) shall
prevent the Company or any subsidiary from offering such concessionary
trade terms as management deems appropriate; (xi) any securities received
in satisfaction or partial satisfaction thereof from financially troubled
debtors with whom the Company or any of its subsidiaries has dealings in
the ordinary course of business, and (xii) the acquisition of any Debt or
securities received for assets sold or otherwise disposed of in accordance
with the provisions described under "Covenants - Limitation on Disposition
of Assets".
"Pro Forma Coverage Ratio" means the ratio, on a pro forma basis, of
(i) the aggregate amount of Consolidated Cash Flow of any person for the
Reference Period immediately prior to the Measurement Date to (ii) the
aggregate Consolidated Fixed Charges of such person during such Reference
Period; provided that for purposes of such computation, in calculating
Consolidated Cash Flow and Consolidated Fixed Charges, (1) the Incurrence
of the Debt or the Subsidiary Preferred Stock giving rise to the need to
calculate the Pro Forma Coverage Ratio and the application of the proceeds
therefrom shall be assumed to have occurred on the first day of the
Reference Period, (2) Asset Sales and Asset Acquisitions which occur
during the Reference Period or subsequent to the Reference Period and prior
to the Measurement Date (but including any Asset Acquisition to be made
with the Debt Incurred pursuant to (1) above) shall be assumed to have
occurred on the first day of the Reference Period, (3) the Incurrence of
any Debt or Subsidiary Preferred Stock during the Reference Period or
subsequent to the Reference Period and prior to the Measurement Date and
the application of the proceeds therefrom shall be assumed to have occurred
on the first day of such Reference Period, (4) Consolidated Fixed Charges
attributable to any Debt or Subsidiary Preferred Stock (whether existing or
being Incurred) computed on a pro forma basis and bearing a floating
interest rate shall be computed as if the rate in effect on the Measurement
Date had been the applicable rate for the entire period unless such person
or any of its subsidiaries is a party to an Interest Rate Agreement or
Currency Agreement which has the effect of fixing the interest rate on the
date of computation, in which case such rate (whether higher or lower)
shall be used, and (5) there shall be excluded from Consolidated Fixed
Charges any Consolidated Fixed Charges related to any Debt or Subsidiary
Preferred Stock which was outstanding during or subsequent to the Reference
Period but is not outstanding on the Measurement Date. For the purposes of
making the computation referred to above, Asset Sales and Asset
Acquisitions which have been made by any person which has become a
subsidiary of the Company or been merged with or into the Company or any
subsidiary of the Company during the Reference Period or subsequent to the
Reference Period and prior to the Measurement Date shall be calculated on a
pro forma basis (including all of the calculations referred to in numbers
(1) through (5) above) assuming such Asset Sales or Asset Acquisitions
occurred on the first day of the Reference Period.
"Purchase Money Obligations" means Debt of the Company or its
subsidiaries secured by Liens (i) on property or assets acquired after the
date hereof and used in the ordinary course of business by the Company and
its subsidiaries and (ii) securing the payment of all or any part of the
purchase price of such property or assets and limited to the property or
assets so acquired and improvements thereof.
"Qualifying Business" shall mean a business at least a majority of the
revenues of which result from the manufacture and/or sale of industrial or
commercial products.
"Redeemable Stock" means with respect to the Company and its
subsidiaries any series or class of capital stock which is (i) redeemable
at the option of the holder or is subject to mandatory redemption prior to
the final maturity of all then outstanding series of Debt Securities or
(ii) convertible into or exchangeable for capital stock referred to in
clause (i) or Debt having a scheduled maturity prior to the final maturity
of all then outstanding series of Debt Securities; provided that any
capital stock which would not constitute Redeemable Stock but for
provisions thereof giving holders thereof the right to require the Company
to repurchase or redeem such capital stock upon the occurrence of a "change
in control" or "asset disposition" occurring prior to the final maturity of
all then outstanding series of Debt Securities shall not constitute
Redeemable Stock if the "change in control" or "asset disposition"
provisions applicable to such capital stock are no more favorable to the
holders of such capital stock than the provisions described under "Change
of Control" or "Covenants - Limitation on Disposition of Assets" and such
capital stock specifically provides that the Company will not repurchase or
redeem any such stock pursuant to such provisions prior to the Company's
repurchase of such Debt Securities as are required to be repurchased
pursuant to the provisions described under "Change of Control" or
"Covenants - Limitation on Disposition of Assets."
"Reference Period" means the four fiscal quarters ending with the most
recent fiscal quarter for which financial information was required to be
sent to holders of the Debt Securities pursuant to the terms of the
Indenture and which ended immediately preceding the Measurement Date.
"Restricted Payments" shall mean with respect to any person (i) any
dividend or other distribution on any shares of such person's capital
stock; (ii) any payment on account of the purchase, redemption, retirement
or other acquisition of (a) any shares of such person's capital stock or
(b) any option, warrant or other right to acquire shares of such person's
capital stock; (iii) any defeasance, redemption, repurchase or other
acquisition or retirement for value prior to scheduled maturity of any Debt
ranked pari passu with or subordinated in right of payment to the Debt
Securities (including any such defeasance, redemption, repurchase,
acquisition or retirement of any other series of Debt Securities) and
having a final maturity date subsequent to the maturity of all then
outstanding series of Debt Securities; or (iv) any Investment outside of
the ordinary course of business in any Restricted Subsidiary; or (v) any
Restricted Purchase by the Company or any of its subsidiaries.
Notwithstanding the foregoing, "Restricted Payment" shall not include any
"Permitted Payment".
"Restricted Purchase" shall mean (i) any purchase by the Company or
any of its subsidiaries of non-convertible debt securities or non-
convertible preferred stock of any entity (other than (a) securities issued
by a Wholly-owned Subsidiary or a Restricted Subsidiary or (b) securities
transferred by a Wholly-owned Subsidiary or a Restricted Subsidiary
described in clause (ii) of the definition thereof) in any such case having
a remaining term in excess of one year from the date of purchase which at
the time of purchase is not rated investment grade by either Moody's
Investors Service or Standard & Poors Corp. and (ii) any purchase by the
Company or any of its subsidiaries of common stock, or securities
convertible into common stock, of any entity (other than (a) a Wholly-owned
Subsidiary or a Restricted Subsidiary or (b) securities transferred by a
Wholly-owned Subsidiary or a Restricted Subsidiary described in clause (ii)
of the definition thereof) if after giving effect to such purchase the
Company and its subsidiaries directly or indirectly own less than a
majority of the outstanding common stock of such entity, provided that a
Restricted Purchase shall not include the purchase of any security issued
by the Company.
"Restricted Subsidiary" means (i) any Joint Venture in which the
Company or any of its subsidiaries holds a 50% or less interest or (ii) any
subsidiary of the Company which is not a Wholly-owned Subsidiary.
"Revolving Credit Facility" means the Revolving Credit Facility under
Credit Agreement dated as of among the Company, the lenders listed therein
and Bankers Trust Company, as Agent, as such Agreement may be amended,
restated, supplemented or otherwise modified from time to time, and
includes any agreements, documents or instruments extending the maturity
of, refinancing, replacing or restructuring (including, but not limited to,
the inclusion of additional borrowers thereunder that are subsidiaries of
the Company and whose obligations are guaranteed by the Company thereunder)
all or any portion of, the Debt under the Revolving Credit Facility under
such Agreement or any successor agreements (which extensions, refinancings,
replacements or restructurings may not provide for borrowings in excess of
$175 million plus the direct costs and expenses incurred in connection
therewith).
"Subsidiary Preferred Stock" with respect to any person means any
series of preferred stock issued by a subsidiary of such person.
"Wholly-owned Subsidiary" means with respect to the Company, Sealed
Air S.A. and any other subsidiary of the Company of which all of the
outstanding voting stock (other than directors' qualifying shares) is
owned, directly or indirectly, by the Company.
COVENANTS
The following covenants apply to the Debt Securities unless the
Prospectus Supplement otherwise provides.
Limitation on Debt
The Indenture provides that the Company will not, and will not permit
any of its subsidiaries to, Incur any Debt, including Acquisition Debt, or
Subsidiary Preferred Stock, if the Pro Forma Coverage Ratio of the Company
is less than 2.25 to 1 through December 31, 1996 and 2.5 to 1 thereafter.
Notwithstanding the foregoing, the Indenture provides that the Company
and its subsidiaries may Incur each and all of the following:
(a) Debt of the Company evidenced by the Debt Securities; provided that
Debt Securities of any series to be issued subsequent to the Initial Issue
Date may be issued under the Indenture only if such subsequent series of
Debt Securities may be incurred pursuant to the Pro Forma Coverage Ratio or
pursuant to clauses (h) or (i) below (except that if incurred pursuant to
the Pro Forma Coverage Ratio or pursuant to clause (h) below, such
subsequent series shall for all purposes be considered Debt Securities
permitted under this clause (a)).
(b) Debt of the Company evidenced by the Outstanding Subordinated Notes
(or, borrowings under the Term Loan Facility under the New Credit Facility,
if such borrowings were used to finance the redemption of such Notes);
(c) other Debt of the Company and its subsidiaries or Subsidiary
Preferred Stock outstanding on the Initial Issue Date;
(d) all obligations of the Company and its subsidiaries now or
hereafter existing under the Revolving Credit Facility, whether for
principal, interest, or reimbursement of amounts drawn under letters of
credit issued pursuant thereto, guarantees in respect thereof, fees,
expenses, premium, indemnities or otherwise;
(e) obligations under Interest Rate Agreements and Currency Agreements;
(f) Debt of the Company to any of its Wholly-owned Subsidiaries, or
Debt or Subsidiary Preferred Stock of a subsidiary to the Company or to a
Wholly-owned Subsidiary of the Company; provided that if the Company is the
obligor of such Debt, such Debt is expressly subordinate to the Debt
Securities on terms at least as favorable to the holders of the Debt
Securities as the subordination provisions set forth in the Debt Securities
are to holders of Senior Indebtedness;
(g) Capitalized Lease Obligations and Purchase Money Obligations of the
Company and its subsidiaries, in each case with respect to hereafter
acquired property or equipment or Capitalized Lease Obligations resulting
from sale/leaseback transactions, and not to exceed for all such
Capitalized Lease Obligations and Purchase Money Obligations in the
aggregate $25 million incurred in any one year or $70 million outstanding
at any one time;
(h) Debt issued in exchange for, or the proceeds of which are used to
refinance, replace or refund outstanding Debt of the Company (other than
Debt referred to in clause (b) above) or any of its subsidiaries or
Subsidiary Preferred Stock in an amount (or, if such new Debt is issued at
a price less than the principal amount thereof, with an original issue
price) not to exceed the amount so exchanged or refinanced (plus accrued
interest and fees and expenses related thereto), provided that the new Debt
exchanged for, or the proceeds of which are used to refinance, any series
of Debt Securities or other Debt of the Company which is pari passu or
subordinated to the Debt Securities shall only be permitted (1) if, in case
Debt Securities of a series are refinanced or exchanged in part, such new
Debt (if other than Debt Securities issued pursuant to the Indenture) is
expressly made pari passu or subordinate in right of payment to the
remaining Debt Securities, (2) if the Debt to be exchanged or refinanced is
subordinate to the Debt Securities, such new Debt is subordinate to the
Debt Securities at least to the extent and in the manner that the Debt to
be exchanged or refinanced is subordinate to the Debt Securities, and (3)
if, in case the Debt Securities of a series are exchanged or refinanced in
part or the Debt to be exchanged or refinanced is subordinated to the Debt
Securities, no payments of principal of such new Debt (including if such
new Debt is a series of Debt Securities issued under the Indenture) by way
of sinking fund, mandatory redemption or otherwise (including defeasance)
may be made by the Company (including, without limitation, at the option of
the holder thereof other than an option given to a holder pursuant to the
provisions described under "Change of Control" or "Limitation on
Disposition of Assets," if such new Debt is a series of Debt Securities
issued under the Indenture, or a "change of control" or "asset disposition"
covenant which is no more favorable to the holders of such Debt than the
provisions described under "Change of Control" and "Limitation on
Disposition of Assets", if such new Debt is not a series of Debt Securities
issued under the Indenture, and such new Debt provides that the Company
will not repurchase such Debt pursuant to such provisions prior to the
Company's repurchase of the Debt Securities of any series required to be
repurchased by the Company pursuant to the provisions described under
"Change of Control" and "Limitation on Disposition of Assets") at any time
prior to the final scheduled maturity date of all then outstanding series
of Debt Securities;
(i) Debt of the Company or a subsidiary of the Company, whether secured
or unsecured, and Subsidiary Preferred Stock in each case not otherwise
permitted hereby; provided that the sum of the aggregate principal amount
of such Debt (or, if such Debt is issued at a price less than the principal
amount thereof, the original issue price) and the aggregate liquidation
value of such Subsidiary Preferred Stock does not exceed $60,000,000 at any
one time outstanding;
(j) Debt in an aggregate amount not to exceed $10,000,000 at any one
time outstanding in respect of performance bonds and surety bonds provided
in the ordinary course of business, and refinancings thereof;
(k) Except in the case of daylight overdrafts, Debt arising from the
honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds in the
ordinary course of business; provided that such Debt is extinguished within
two business days of its Incurrence;
(l) Debt in an aggregate amount not to exceed $5,000,000 at any time
outstanding under guarantees Incurred in the ordinary course of business of
obligations of suppliers, licensees or customers;
(m) obligations under standby letters of credit issued for the purpose
of supporting (a) workers' compensation liabilities of the Company or any
of its subsidiaries as required by law, (b) obligations with respect to
leases of the Company or any of its subsidiaries or (c) performance,
payment, deposit or surety obligations of the Company or any of its
subsidiaries, not exceeding an aggregate amount of $5,000,000 at any one
time outstanding in addition to any amounts required by law; provided that
in each case such standby letters of credit are obtained in the ordinary
course of business;
(n) Debt of subsidiaries of the Company which represents the assumption
by such subsidiaries of Debt of another subsidiary of the Company in
connection with the merger of such other subsidiary with and into the
assuming subsidiary or the purchase of all or substantially all the assets
of such other subsidiary; and
(o) guarantees resulting from endorsement of negotiable instruments for
collection in the ordinary course of business.
For purposes of determining any particular amount of Debt under this
covenant, guarantees of (or obligations with respect to letters of credit
supporting) Debt otherwise included in the determination of such amount
shall not also be included. For the purpose of determining compliance with
this covenant, (A) in the event that an item of Debt meets the criteria of
more than one of the types of Debt described in the above clauses, the
Company, in its sole discretion, shall classify such item of Debt and only
be required to include the amount and type of such Debt in one of such
clauses; (B) the amount of Debt issued at a price which is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with generally accepted accounting
principles; and (C) the amount of any Debt denominated in a currency other
than U.S. dollars will be the Dollar Equivalent of such currency at the
date of its issuance, provided that the Company or any of its subsidiaries
may always incur Debt denominated in a foreign currency for the purpose of
extending, renewing or replacing any Debt incurred pursuant to this
covenant and denominated in such foreign currency, in a principal amount
equal to the then outstanding foreign currency amount. Notwithstanding
anything herein to the contrary, the maximum amount of Debt which the
Company or any of its subsidiaries may Incur pursuant to this covenant
shall not be deemed to be exceeded solely as a result of fluctuations in
exchange rates of currencies.
Limitation on Restricted Payments
The Indenture provides that on and after the Initial Issue Date the
Company will not, and will not permit any subsidiary to, directly or
indirectly, make any Restricted Payment, if after giving effect thereto:
(a) an Event of Default, or an event that through the passage of time
or the giving of notice, or both, would become an Event of Default, shall
have occurred and be continuing; or
(b) the aggregate amount of all Restricted Payments described in
clauses (i), (ii) and (iii) of the definition thereof and the Net
Investments in Restricted Subsidiaries and the Net Restricted Purchases (in
each case in excess of those permitted pursuant to clause (vi) of the
definition of Permitted Payments) made by the Company and its subsidiaries
(the amount expended or distributed for such purposes, if other than in
cash, to be valued at its fair market value as of the date of determination
(declaration in the case of a dividend) as determined in good faith by the
Board of Directors, whose determination shall be conclusive and evidenced
by a resolution of the Board of Directors delivered to the Trustee) from
and after the Initial Issue Date shall exceed the sum (without duplication)
of:
(i) $50,000,000;
(ii) the aggregate of 50% of Consolidated Net Income of the Company
accrued for the period (taken as one accounting period) commencing with the
first day of the Company's fiscal quarter in which the Initial Issue Date
occurs to and including the fiscal quarter ended immediately prior to the
date of such calculation; provided that if Consolidated Net Income for such
period is less than zero, then minus 100% of the amount of such loss; and
(iii) the aggregate net proceeds, including the fair market value of
property other than cash (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a
resolution of the Board of Directors filed with the Trustee), received by
the Company from the issuance or sale (other than to a subsidiary of the
Company unless the subsidiary is using such stock as consideration for an
acquisition of assets or shares of capital stock from a third party) of its
capital stock from and after the first day of the Company's fiscal quarter
in which the Initial Issue Date occurs (excluding Redeemable Stock, but
including capital stock other than Redeemable Stock issued upon conversion
of, or exchange for, Redeemable Stock or securities other than its capital
stock), and warrants, options and rights to purchase its capital stock
(other than Redeemable Stock);
provided that the foregoing clauses (a) and (b) shall not prevent Permitted
Payments and the foregoing clause (b) shall not prevent (y) the payment of
any dividend or other distribution within 60 days after the date of its
declaration if such dividend or other distribution could have been made on
the date of its declaration without violation of the provisions of this
covenant, or (z) the purchase or redemption of capital stock of the Company
or options in respect thereof issued in connection with the Company's
employee benefit plans in an aggregate amount of up to $1,000,000, provided
that in determining the aggregate amount of purchases or redemptions
permitted pursuant to this clause (z) such amount shall be increased by the
amount of cash received upon sale of any capital stock that is sold to
employees of the Company or any of its subsidiaries pursuant to such
employee benefits plans (the "Additional Repurchase Amount"). For purposes
of this covenant, the amount of Restricted Payments made pursuant to
clauses (y) and (z) above shall be included in any computation of the
amount of Restricted Payments made pursuant to this covenant (for purposes
of this sentence, the amount of Restricted Payments made with respect to
this clause (z) above shall be equal to the excess of the amounts actually
purchased or redeemed over the Additional Repurchase Amount). For purposes
of clause (b)(iii), the aggregate net proceeds received by the Company (x)
from the issuance of its capital stock upon the conversion of, or exchange
for, securities evidencing Debt of the Company, shall be calculated on the
assumption that the gross proceeds from such issuance are equal to the
aggregate principal amount (or, if discount Debt, the accreted principal
amount) of the Debt evidenced by such securities converted or exchanged and
(y) upon the conversion or exchange of other securities of the Company
shall be equal to the aggregate net proceeds of the original sale of the
securities so converted or exchanged if such proceeds of such original sale
were not previously included in any calculation for the purposes of clause
(b)(iii) plus any additional sums payable upon conversion or exchange.
Limitation on Disposition of Assets
The Indenture provides that from and after the Initial Issue Date the
Company will not make, and will not permit any of its subsidiaries to make,
any Asset Disposition (other than (a) to Restricted Subsidiaries of the
Company or any of its subsidiaries to the extent such Asset Disposition is
either a Permitted Payment or a Restricted Payment permitted to be made
under "Limitation on Restricted Payments" above or (b) other Asset
Dispositions the fair market value (as determined in good faith by the
Board of Directors as of the time of such Asset Disposition, which
determination shall be conclusive) of which aggregates (A) in any one
transaction or series of related transactions not more than $10 million and
(B) not more than $25 million in any twelve month period commencing on and
after the Initial Issue Date which Asset Dispositions shall take place at
not less than such fair market value) unless (i) the Company (or the
subsidiary, as the case may be) receives consideration at the time of such
Asset Disposition at least equal to the fair market value of the shares or
assets sold or otherwise disposed of (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 $5,000,000, whose determination
shall be conclusive and evidenced by a resolution of the Board of Directors
delivered to the Trustee), except that an Asset Disposition may be at less
than fair market value if either (1) the Asset Disposition is the result of
an expropriation or (2) the amount to be paid to the Company or its
subsidiary, as the case may be, is determined or mandated by applicable
law; (ii) not less than 75% of the consideration received by the Company
(or such subsidiary, as the case may be) is in the form of cash, provided
that any note or other obligation received by the Company (or such
subsidiary, as the case may be) that is immediately converted into cash
shall be deemed to be cash for purposes of this clause (ii); and (iii) Net
Cash Proceeds from the Asset Disposition in the amount by which such Asset
Disposition exceeds the amounts set forth in clause (b) above ("Excess Cash
Proceeds"), are, within nine months of the date of such Asset Disposition,
at the Company's election either (x) applied to the payment of the
principal of and interest on any Senior Indebtedness of the Company or, in
the case of an Asset Disposition by a subsidiary, any Senior Indebtedness
of the Company or any Debt of such subsidiary or any other Wholly-owned
Subsidiary (other than Debt owed to the Company or another subsidiary) and
in connection with any such payment, any related loan commitment, standby
facility or the like shall be permanently reduced in an amount equal to the
principal amount so repaid, (y) in the case of an Asset Disposition by the
Company, reinvested in capital assets, or a Qualifying Business, of the
Company, or (z) in the case of an Asset Disposition by a subsidiary,
reinvested in capital assets, or a Qualifying Business, of the Company, the
subsidiary which disposed of such assets or in any other Wholly-owned
Subsidiary of the Company, provided that in the case of clauses (y) or (z)
above, such reinvestment shall have been made within the nine-month period
referred to above, or, within such period, the Company or the applicable
subsidiary, as the case may be, shall have entered into a definitive
agreement to make such reinvestment within 12 months from the end of such
nine-month period. Notwithstanding the foregoing, to the extent that any
or all of the Net Cash Proceeds of any Asset Disposition are prohibited or
delayed by applicable local law from being repatriated to the United
States, the portion of such Net Cash Proceeds so affected will not be
required to be applied in accordance with this covenant (other than (i) to
repay Debt of the subsidiary making such Asset Disposition or Debt of a
Wholly-owned Subsidiary of the Company, in each case to the extent such
Debt may be repaid or (ii) reinvested in capital assets, or a Qualifying
Business, of the subsidiary making such Asset Disposition or capital
assets, or a Qualifying Business, of a Wholly-owned Subsidiary) at the time
provided above but may be retained by the applicable subsidiary so long,
but only so long as the applicable local law will not permit repatriation
to the United States (the Company hereby agreeing to cause the applicable
subsidiary to promptly take all actions required by the applicable local
law to permit such repatriation) and once such repatriation of any of such
affected Net Cash Proceeds is permitted under the applicable local law,
such repatriation will be immediately effected and such repatriated Net
Cash Proceeds will be applied, within nine months of such repatriation in
the manner set forth in this covenant.
To the extent Excess Cash Proceeds are not actually applied in
accordance with clauses (x), (y) or (z) above, or after being so applied
there remains Excess Cash Proceeds, the Indenture provides that, subject to
the last sentence of the preceding paragraph, the Company will make an
offer (an "Excess Proceeds Offer") to purchase Debt Securities either in
whole or in part in accordance with the procedures (including prorationing
in the event of over subscription) set forth in the Indenture on a date
(the "Proceeds Purchase Date") not less than 30 nor more than 60 days
following the date of such Excess Proceeds Offer at a purchase price of
100% of the principal amount of the Debt Securities plus accrued interest
to the Proceeds Purchase Date, such Proceeds Purchase Date to be not later
than the expiration of the nine month period referred to in the preceding
paragraph. Notwithstanding the foregoing, the Company will not be required
to make an Excess Proceeds Offer for Debt Securities pursuant to this
covenant if the Excess Cash Proceeds required to be applied thereto as
provided in the first sentence of this paragraph are less than $5,000,000,
which lesser amounts not applied to an Excess Proceeds Offer shall be
carried forward and cumulated for purposes of determining whether an Excess
Proceeds Offer is required with respect to any Excess Cash Proceeds
thereafter received.
If so provided in a Prospectus Supplement, the obligation of the
Company to repurchase Debt Securities offered pursuant to that Prospectus
Supplement as a result of an Excess Proceeds Offer may be made subject to
the prior repurchase of all Debt Securities of any previously issued series
of Debt Securities required to be repurchased as a result of such Excess
Proceeds Offer.
Notice of an Excess Proceeds Offer shall be mailed by the Trustee to
all holders of Debt Securities not less than 30 nor more than 60 days prior
to the Proceeds Purchase Date to such holders at their last registered
address. The Excess Proceeds Offer shall remain open from the time of
mailing until 5 days (or such shorter period as may be required under
applicable law) before the Proceeds Purchase Date. The notice, which shall
govern the terms of the Excess Proceeds Offer, shall state: (1) that the
Excess Proceeds Offer is being made pursuant to this covenant; (2) the
amount of the Excess Proceeds Offer (the "Offer Amount"), the purchase
price and the Proceeds Purchase Date; (3) that any Debt Security not
tendered or accepted for payment will continue to accrue interest; (4)
that any Debt Security or portion thereof accepted for payment pursuant to
the Excess Proceeds Offer shall cease to accrue interest after the Proceeds
Purchase Date; (5) that each holder of a Debt Security electing to have
such Debt Security purchased pursuant to an Excess Proceeds Offer will be
required to surrender such Debt Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Debt Security completed, to
the Trustee at the address specified in the notice prior to the close of
business on the fifth day (or such shorter period as may be required under
applicable law) prior to the Proceeds Purchase Date; (6) that holders will
be entitled to withdraw their election if the Trustee receives, not later
than the close of business on the third day (or such shorter period as may
be required by applicable law) next preceding the Proceeds Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of
the holder, the principal amount of Debt Securities the holder delivered
for purchase and a statement that such holder is withdrawing his election
to have such Debt Securities purchased; and (7) that holders whose Debt
Securities are purchased only in part will be issued new Debt Securities of
the same series in a principal amount equal to the unpurchased portion of
the Debt Securities surrendered. If upon expiration of the period for
which the Excess Proceeds Offer remains open, the aggregate principal
amount of Debt Securities surrendered by holders exceeds the Offer Amount,
the Trustee shall select the Debt Securities to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Trustee so
that only Debt Securities in denominations of $1,000 or multiples thereof
shall be purchased).
On the Proceeds Purchase Date, the Company shall (i) accept for
payment on a pro rata basis (if necessary) such Debt Securities or portions
thereof tendered pursuant to the Excess Proceeds Offer, (ii) deposit with
the Trustee money sufficient to pay the purchase price of all such Debt
Securities or portions thereof so accepted, and (iii) deliver or cause to
be delivered to the Trustee all such Debt Securities so accepted together
with an officers' certificate stating the Debt Securities or portions
thereof accepted for payment by the Company. The Trustee shall promptly
mail or deliver to the holders of such Debt Securities so accepted payment
in an amount equal to the purchase price of the Debt Securities or portion
thereof accepted for payment, and the Trustee shall promptly authenticate
and mail or deliver to such holders a new Debt Security of the same series
in principal amount equal to any unpurchased portion of the respective Debt
Security surrendered. Any Debt Securities not so accepted shall be
promptly mailed or delivered by the Company to the holder thereof. If the
aggregate purchase price of Debt Securities tendered and accepted pursuant
to an Excess Proceeds Offer is less than the Offer Amount, the Company may
use the remaining Excess Cash Proceeds for general corporate purposes and
such remaining Excess Cash Proceeds will not be available for any future
Excess Proceeds Offer.
In the event an Excess Proceeds Offer occurs and assuming that such
offer constitutes a "tender offer" for purposes of Rule 14e-1 under the
Exchange Act at the time it is made, the Company will comply with the
requirements of Rule 14e-1 as then in effect any other applicable
securities laws or regulations with respect to such offer.
Limitations on Liens
The Indenture provides that the Company will not directly or
indirectly create, incur, assume or permit to exist any Debt of the Company
(i) which is, by the terms of the instrument creating or evidencing such
Debt or pursuant to which it is outstanding, pari passu or subordinate in
right of payment to the Debt Securities and (ii) which is secured, directly
or indirectly, with a Lien on the property, assets or any income or profits
thereon of the Company or any subsidiary unless contemporaneously therewith
or prior thereto the Debt Securities are equally and ratably secured for so
long as such other Debt is so secured, except for (a) any such Debt secured
by Liens on the assets of any entity existing at the time such assets are
acquired by the Company or any of its subsidiaries, whether by merger,
consolidation, purchase of assets or otherwise; provided that such Liens
(x) are not created, incurred or assumed in connection with, or in
contemplation of, such assets being acquired by the Company or any of its
subsidiaries and (y) do not extend to any other property or assets of the
Company or any of its subsidiaries or (b) any other Debt required to be
equally and ratably secured as a result of the Incurrence of such Debt.
Limitation on Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit
any of its subsidiaries to, directly or indirectly enter into any
transaction (including, without limitation, the sale, purchase or lease of
any assets or properties or the rendering of any services) involving
aggregate consideration in excess of $5 million with any affiliate of the
Company (other than a Wholly-owned Subsidiary of the Company) except for
transactions (including any loans or advances by or to, or guarantee on
behalf of, any such affiliate) made in good faith the terms of which are
fair and reasonable to the Company or such subsidiary, as the case may be,
and are at least as favorable as the terms which could be obtained by the
Company or such subsidiary, as the case may be, in a comparable transaction
made on an arm's length basis with persons who are not such an affiliate;
provided that any such transaction shall be conclusively deemed to be on
terms which are fair and reasonable to the Company or any of its
subsidiaries and on terms which are at least as favorable as the terms
which could be obtained on an arm's length basis with persons who are not
such an affiliate if either (x) such transaction is approved by a majority
of the Company's directors who do not have material interest in the
transaction or (y) the Company shall obtain a written opinion of an
Independent Financial Advisor stating that the terms of such transaction
are fair to the Company or its subsidiary, as the case may be, from a
financial point of view. This covenant shall not apply to (a) transactions
in the ordinary course of business, (b) transactions between the Company or
any of its subsidiaries and any employee of the Company or any of its
subsidiaries that are approved by the Board of Directors (in the case of an
employee who is an officer or director, by a majority of the independent
members of the Board of Directors), (c) the payment of reasonable and
customary regular fees to directors of the Company, (d) any transaction
between the Company or among any of its Wholly-owned Subsidiaries or
between or among any of its Wholly-owned Subsidiaries, or (e) any Permitted
Payment and any Restricted Payment not otherwise prohibited by the covenant
described under "Limitation on Restricted Payments" above.
No Senior Subordinated Indebtedness
The Company will not create, incur, assume or suffer to exist any
indebtedness that is subordinate in right of payment to any Debt of the
Company unless such Debt by its terms or the terms of the instrument
creating or evidencing it is subordinate in right of payment to or pari
passu with the Debt Securities.
LIMITATION ON MERGER, SALE OR CONSOLIDATION
The Indenture provides that the Company will not consolidate or merge
with another person or sell, lease or convey all or substantially all of
its assets (as an entirety or substantially as an entirety in one
transaction or series of related transactions) to another person (except a
Wholly-owned Subsidiary of the Company with a positive Net Worth) unless
(i) (a) the Company is the continuing corporation in the case of a merger
or (b) the resulting, surviving or transferee entity (the "Surviving
Entity") is a corporation or partnership organized under the laws of the
United States, any state thereof or the District of Columbia and expressly
assumes by supplemental indenture all of the obligations of the Company
under the Indenture and the Debt Securities; (ii) no Event of Default (or
event or condition which after notice or lapse of time or both would become
an Event of Default) shall have occurred and be continuing immediately
after giving effect to such transaction; (iii) immediately after giving
effect to such transaction, the Net Worth of the Company or Surviving
Entity, as the case may be, on a pro forma basis shall be no less than the
Net Worth of the Company immediately prior to such transaction; and (iv)
immediately after giving effect to such transaction, the Company or the
Surviving Entity, as the case may be, would have a Pro Forma Coverage Ratio
of not less than 2.0 to 1 prior to January 1, 1997 or 2.25 to 1 thereafter.
Notwithstanding the foregoing, clauses (iii) and (iv) of this covenant
shall not prohibit a transaction, the principal purpose of which is (as
determined in good faith by the Board of Directors of the Company whose
determination shall be conclusive and evidenced by the resolution of the
Board of Directors delivered to the Trustee) to change the state of
incorporation of the Company, and such transaction does not have as one of
its purposes the evasion of the limitations imposed by this covenant.
The Pro Forma Coverage Ratio for purposes of this covenant shall be
determined on the basis of the Consolidated Cash Flow and Consolidated
Fixed Charges of the Company or the Surviving Entity, as the case may be,
after giving effect to the transaction.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Debt Securities of each
series affected thereby, to amend or supplement the Indenture or any
supplemental indenture or modify the rights of the holders of the Debt
Securities, provided that no such modification may, without the consent of
each holder of the Debt Securities affected thereby, (i) reduce the amount
of Debt Securities whose holders must consent to any amendment, supplement
or waiver, (ii) reduce the rate of or extend the time for payment of
interest on any Debt Security, (iii) reduce the principal of or extend the
final maturity of any Debt Security, (iv) reduce any amount payable on
redemption or required repurchase of any Debt Security, or (v) impair or
affect the right of any holder of Debt Securities to institute suit for the
payment of any Debt Security. Notwithstanding the foregoing, no such
supplemental indenture shall modify any provision of the Indenture so as to
affect adversely the rights of any holder of Senior Indebtedness at the
time outstanding to the benefits of subordination under the Indenture
without the consent of such holder.
The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of a series may, on behalf of all holders of
Debt Securities of such series, waive compliance by the Company with
certain restrictive provisions of the Indenture, including the provisions
described under "Covenants" and "Limitation on Merger, Sale or
Consolidation" above. The holders of a majority in aggregate principal
amount of the outstanding Debt Securities of a series may, on behalf of all
holders of Debt Securities of such series, waive any past default under the
Indenture with respect to the Debt Securities of such series, except a
default in the payment of principal, premium, if any, or interest or in
respect of a provision which under the Indenture cannot be modified or
amended without consent of the holder of each Debt Security affected
thereby.
EVENTS OF DEFAULT AND REMEDIES
The Indenture defines an Event of Default with respect to the Debt
Securities of any series as being: (i) failure to pay any installments of
interest on any Debt Securities of that series as and when the same become
due and payable and the continuance of any such failure for 30 days, (ii)
failure to pay all or any part of the principal of the Debt Securities of
that series when and as the same shall become due and payable at maturity,
redemption, by declaration or otherwise, (iii) failure by the Company to
observe or perform any covenant or agreement contained in the Debt
Securities of that series or the Indenture (other than a covenant or
agreement included in the Indenture solely for the benefit of a series of
Debt Securities other than such series) and the continuance of such failure
for a period of 60 days after written notice is given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Debt Securities of all series
affected thereby, (iv) certain events of bankruptcy, insolvency or
reorganization in respect of the Company or any of its Material
Subsidiaries (as defined below), (v) any acceleration of the maturity of
indebtedness of the Company (including acceleration with respect to a
series of Debt Securities other than such series) or any of its Material
Subsidiaries, or a failure to pay any such indebtedness (including with
respect to a series of Debt Securities other than such series) at its
stated final maturity, aggregating at least $25,000,000 and such
acceleration or failure to pay not being cured or waived within 10 days,
(vi) final judgments not covered by insurance aggregating in excess of
$20,000,000 rendered against the Company or any of its Material
Subsidiaries and not stayed or discharged within 60 days and (vii) any
other Event of Default established for the Debt Securities of such series
set forth in the Prospectus Supplement. The Indenture provides that if a
default (the term "default" for purposes of this provision being defined as
any event or condition which is, or with notice or lapse of time or both
would be, an Event of Default) occurs and is continuing with respect to
Debt Securities of such series and if it is known to the Trustee, the
Trustee must, within 90 days after the occurrence of such default, give to
the holders of the Debt Securities of such series notice of such default,
provided that, except in the case of default in payment of principal of, or
premium, if any, or interest on the Debt Securities of such series, the
Trustee will be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interest of the
holders of the Debt Securities of such series. "Material Subsidiary" means
as of any date any subsidiary of the Company (a) the value of whose assets,
as such assets would appear on a consolidated balance sheet of such
subsidiary and its consolidated subsidiaries prepared as of the end of the
fiscal quarter next preceding such determination in accordance with
generally accepted accounting principles, is at least 10% of the value of
the assets of the Company and its consolidated subsidiaries, determined as
aforesaid, or (b) which has revenues, as such revenues would appear on a
consolidated income statement of such subsidiary and its consolidated
subsidiaries prepared for the four fiscal quarters next preceding such
determination in accordance with generally accepted accounting principles,
constituting at least 10% of the revenues of the Company and its
consolidated subsidiaries for such last four fiscal quarters or (c) which
has Consolidated Cash Flow, as such Consolidated Cash Flow would be
determined from the consolidated financial statements of such subsidiary
and its consolidated subsidiaries prepared for the four fiscal quarters
next preceding such determination in accordance with generally accepted
principles, constituting at least 10% of the Consolidated Cash Flow of the
Company and its consolidated subsidiaries, determined as aforesaid, for
such last four fiscal quarters.
The imposition of a payment blockage period in accordance with the
subordination provisions shall not prevent the occurrence of an Event of
Default.
If an Event of Default occurs and is continuing (other than an Event
of Default specified in clause (iv) relating to the Company) with respect
to any series of Debt Securities, unless the principal of all of the Debt
Securities of such series shall have already become due and payable, the
Trustee or the holders of (x) 25% in aggregate principal amount of the Debt
Securities of such series then outstanding in the case of Events of Default
referred to in clauses (i) and (ii) above or (y) 40% in aggregate principal
amount of the Debt Securities of such series then outstanding in the case
of Events of Default referred to in clauses (iii), (v), (vi), (vii) and,
with respect to any Material Subsidiary, (iv) above, by notice in writing
to the Company (and to the Trustee if given by holders of the Debt
Securities of such series) (an "Acceleration Notice"), may declare the
principal of all Debt Securities of such series (or, if the Debt Securities
of such series are Original Issue Discount Securities, such portion of the
principal as may be specified in the terms of such series) and accrued
interest thereon to be due and payable (i) immediately if no Debt under the
New Credit Facility is outstanding or (ii) if Debt under the New Credit
Facility is outstanding, upon the earlier of (a) five days after such
Acceleration Notice is received by the Company or (b) the acceleration of
the Debt under the New Credit Facility; provided, that such acceleration
shall be automatically rescinded and annulled without any further action
required on the part of the holders in the event that any default specified
in the Acceleration Notice under the Debt Securities of such series shall
have been cured, waived or otherwise remedied prior to the expiration of
such period. If an Event of Default specified in clause (iv) above
relating to the Company occurs, all principal (or, if Debt Securities of
any series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) and
accrued interest shall be immediately due and payable on all outstanding
Debt Securities without any declaration or other act on the part of the
Trustee or the holders of the Debt Securities.
Prior to the declaration of acceleration of the maturity of the Debt
Securities of a series, the holders of a majority in aggregate principal
amount of the Debt Securities of such series at the time outstanding may
waive on behalf of all the holders of the Debt Securities of such series
any default, except a default in the payment of principal of, premium, if
any, or interest on any Debt Security of such series not yet cured, or a
default with respect to any covenant or a provision which cannot be
modified or amended without the consent of the holder of each outstanding
Debt Security of such series affected.
The Company will furnish to the Trustee annually a certificate from
the principal executive, financial or accounting officer of the Company as
to his knowledge of the Company's compliance with all conditions and
covenants under the Indenture (such compliance to be determined without
regard to any period of grace or requirement of notice provided under the
Indenture.
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
The Indenture provides that it will cease to be of further effect with
respect to the Debt Securities of any series (except for certain
obligations to register the transfer, substitution or exchange of Debt
Securities, to replace stolen, lost or mutilated Debt Securities, and to
maintain paying agencies, and except for the right of the holders of the
Debt Securities to receive payments of principal and interest, and the
rights, obligations and immunities of the Trustee) when (1) either (A) all
outstanding Debt Securities of such series (except lost, stolen or
destroyed Debt Securities for whose payment money has been deposited in
trust) have been delivered to the Trustee for cancellation, or (B) all such
Debt Securities of such series not theretofore delivered to the Trustee for
cancellation (i) have become due and payable, or (ii) will become due and
payable at their stated maturity within one year, or (iii) are to be called
for redemption within one year, and the Company has deposited or caused to
be deposited with the Trustee as trust funds in trust for the holders of
the Debt Securities of such series, an amount sufficient to pay and
discharge the entire indebtedness on such Debt Securities not therefore
delivered to the Trustee for cancellation, for principal (and premium, if
any) and interest to the stated maturity or redemption date, as the case
may be; (2) the Company has paid all other sums payable by it under such
Indenture; (3) there is no Event of Default in the payment of principal or
interest on such Debt Securities; and (4) certain other conditions are met.
The Indenture further provides that notwithstanding the immediately
preceding paragraph, the Company will be discharged (a "discharge") from
any and all obligations in respect of the Debt Securities of any series
(except for the obligations described above), or that with respect to the
Debt Securities of any series the Company may terminate its obligations
under certain covenants in the Indenture, including those described under
"Change of Control," "Covenants" and "Limitation on Merger, Sale or
Consolidation" (as to clauses (iii) and (iv) of the first paragraph
thereunder), and the operation of the defaults described in clauses (v),
(vi) and (vii) of the first paragraph under "Events of Default" (a
"covenant defeasance"), upon the deposit with the Trustee, in trust, of
money and/or U.S. Government Obligations (as defined in the Indenture)
which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to
pay the principal of (and premium, if any) and each installment of interest
on the Debt Securities of such series on the stated maturity of such
payments or on a selected date of redemption in accordance with the terms
of the Indenture and the Debt Securities of such series. Such a trust may
only be established if, among other things, the Company has received an
opinion of counsel (who may be an employee of or counsel for the Company)
reasonably satisfactory to the Trustee to the effect that holders of the
Debt Securities of such series will not recognize income, gain or loss for
United States federal income tax purposes as a result of such deposit,
discharge or covenant 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, discharge or covenant defeasance had
not occurred and, in the case of a discharge, such opinion is accompanied
by a private letter ruling to such effect received from the Internal
Revenue Service or a revenue ruling pertaining to a comparable form of
transaction to such effect published by the Service.
The New Credit Facility contains a covenant prohibiting defeasance of
the Debt Securities and prohibiting amendment or modification of any of the
terms or provisions of the Debt Securities or any agreement relating to the
Debt Securities.
BOOK-ENTRY SYSTEM
If so specified in a Prospectus Supplement, upon issuance, the Debt
Securities of any series may be represented by one or more global
securities (each a "Global Security"). Any such Global Security will be
deposited with, or on behalf of, The Depository Trust Company (the
"Depository") and registered in the name of a nominee of the Depository.
Except under circumstances described below, the Global Securities will not
be exchangeable for Debt Securities of such series in definitive form.
Upon the issuance of Debt Securities to be represented by a Global
Security, the Depository will credit on its book-entry registration and
transfer system the accounts of persons designated by the underwriters or
agents of such Debt Securities or by the Company if such Debt Securities
are sold directly by the Company with the respective principal amounts of
the Debt Securities represented by the Global Security. Ownership of
beneficial interests in the Global Security will be limited to persons that
have accounts with the Depository or its nominee ("participants") or
persons that may hold interests through participants. Ownership of
beneficial interests in the Global Security will be shown on, and the
transfer of that ownership will be effected only through, records
maintained by the Depository or its nominee (with respect to interests of
participants) and on the records of participants (with respect to interests
of persons other than participants). The laws of some states require that
certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to
transfer beneficial interests in the Global Security.
So long as the Depository or its nominee is the registered owner of
the Global Security, the Depository or such nominee, as the case may be,
will be considered the sole owner or holder of the Debt Securities
represented by the Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in the Global
Security will not be entitled to have Debt Securities of the series
represented by the Global Security registered in their names, will not
receive or be entitled to receive physical delivery of Debt Securities of
the series in definitive form and will not be considered the owners or
holders thereof under the Indenture. Beneficial owners of Debt Securities
of the series represented by the Global Security will only be able to
exercise the rights of holders indirectly through the Depository and its
participating organizations. Except as set forth below, the Global
Security may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or any
nominee to a successor of the Depository or a nominee of such successor.
Principal and interest payments on Debt Securities registered in the
name of the Depository or its nominee will be made to the Depository or its
nominee, as the case may be, as the registered owner of the Global
Security. None of the Company, the Trustee, any paying agent or the
registrar for the Debt Securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial interests in the Global Security or for maintaining, supervising
or reviewing any records relating to such beneficial interests.
The Depository has advised the Company as follows: The Depository is
a limited-purpose trust company organized under the laws of the State of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depository was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. The Depository's
participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations, some of
whom (and/or their representatives) own the Depository. Access to the
Depository's book-entry system is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodian relationship with a participant, either directly or indirectly.
The Company expects that the Depository for the Debt Securities of a
series or its nominee, upon receipt of any payment of principal or
interest, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
principal amount of the Global Security as shown on the records of the
Depository or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in the Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the
accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such participants.
If the Depository for Debt Securities of a series is at any time
unwilling or unable to continue as depositary or ceases to be a clearing
agency registered under the Exchange Act or there shall have occurred and
be continuing an Event of Default or an event which, with notice or lapse
of time, would become an Event of Default under the Indenture, and a
successor Depository is not appointed by the Company within 90 days, the
Company will issue Debt Securities of such series in definitive form in
exchange for the entire Global Security or Securities representing the Debt
Securities of such series. In addition, the Company may at any time and in
its sole discretion determine not to have the Debt Securities of a series
represented by the Global Security and, in such event, will issue Debt
Securities of such series in definitive form in exchange for the entire
Global Security or Securities representing the Debt Securities of such
series. In any such instances, an owner of a beneficial interest in the
Global Security will be entitled to physical delivery in definitive form of
Debt Securities of the series represented by the Global Security equal in
principal amount to such beneficial interest and to have such Debt
Securities registered in its name. Debt Securities of such series so
issued in definitive form will be issued as registered Debt Securities in
denominations of $1,000 and integral multiples thereof.
REPORTS
So long as Debt Securities are outstanding, the Company will furnish
to the holders of the Debt Securities quarterly and annual financial
reports that the Company is required to file with the Commission under the
Exchange Act (or similar reports in the event that the Company is not at
the time required to file such reports with the Commission).
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities offered hereby directly to
purchasers or to or through underwriters, dealers or agents.
Debt Securities may be offered and sold through agents designated by
the Company from time to time. Any such agent involved in the offer or
sale of the Debt Securities will be named, and any commissions payable by
the Company to such agents will be set forth, in the Prospectus Supplement.
Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best efforts basis for the period of its appointment.
Any such agent may be deemed to be an underwriter (as that term is defined
in the Securities Act) of the Debt Securities so offered and sold. Agents
may be entitled under agreements which may be entered into with the Company
to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for the Company in the ordinary
course of business.
If an underwriter or underwriters are utilized in the sale of Debt
Securities, the Company will execute an underwriting agreement with such
underwriter or underwriters at the time an agreement for such sale is
reached, and the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including compensation of the underwriters and dealers, if
any, will be set forth in the Prospectus Supplement, which will be used by
the underwriters to make resales of Debt Securities. The underwriters may
be entitled, under the relevant underwriting agreement, to indemnification
by the Company against certain liabilities, including liabilities under the
Securities Act. Donaldson, Lufkin & Jenrette Securities Corporation and
Morgan Stanley & Co. Incorporated and/or other underwriters named in the
Prospectus Supplement may act as managing underwriters with respect to an
offering of Debt Securities effected through underwriters. Only
underwriters named in the Prospectus Supplement are deemed to be
underwriters in connection with the Debt Securities and if Donaldson,
Lufkin & Jenrette Securities Corporation and Morgan Stanley & Co.
Incorporated are not named in the Prospectus Supplement, they will not be
parties to the underwriting agreement relating to such Debt Securities,
will not be purchasing any such Debt Securities from the Company in
connection with such offering and will have no direct or indirect
participation in the underwriting of such Debt Securities, although they
may participate in the distribution of such Debt Securities under
circumstances where they may be entitled to a dealer's commission.
If a dealer is utilized in the sale of Debt Securities, the Company
will sell such Debt Securities to the dealer, as principal. The dealer may
then resell such Debt Securities to the public at varying prices to be
determined by such dealer at the time of resale. Dealers may be entitled,
under agreements which may be entered into with the Company, to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act. The name of the dealer and the terms
of the transaction will be set forth in the Prospectus Supplement relating
thereto.
Offers to purchase Debt Securities may be solicited directly by the
Company and sales thereof may be made by the Company directly to
institutional investors or others. The terms of any such sales, including
the terms of any bidding or auction process, if utilized, are described in
the Prospectus Supplement relating thereto.
The place and time of delivery of Debt Securities are set forth in the
accompanying Prospectus Supplement.
The Prospectus Supplement will identify any firms which plan to make a
market in the Debt Securities offered thereby as permitted by applicable
laws and regulations. Such firms will not be obligated to make such a
market and may discontinue any market making at any time without notice.
No assurance can be given as to the liquidity of, or the trading markets
for, the Debt Securities.
LEGAL MATTERS
The validity of the issuance of the Debt Securities will be passed
upon for the Company by Robert M. Grace, Jr., General Counsel and
Secretary of the Company. Certain legal matters in connection with the
offering of the Debt Securities will be passed upon for the Company by
Davis Polk & Wardwell, New York, New York and for the underwriters and
certain other purchasers by Cahill Gordon & Reindel (a partnership
including a professional corporation), New York, New York. As of April 30,
1994, Mr. Grace was the beneficial owner of approximately 45,904 shares of
the Company's Common Stock, certain of which are subject to a right of
forfeiture in favor of the Company.
EXPERTS
The consolidated financial statements and financial statement
schedules of the Company as of December 31, 1993 and 1992 and for each of
the years in the three-year period ended December 31, 1993 incorporated by
reference in this Prospectus and in the Registration Statement have been
incorporated by reference herein and in the Registration Statement in
reliance upon the reports of KPMG Peat Marwick, independent certified
public accountants, and upon the authority of such firm as experts in
accounting and auditing. The report of KPMG Peat Marwick covering the
December 31, 1993 consolidated financial statements refers to a change in
the Company's method of accounting for income taxes.
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The fees and expenses to be paid by the Registrant in connection
with the distribution of the securities being registered hereby are set
forth below. All amounts are estimates except the SEC and NASD fees:
Registration Fee $ 68,966
NASD Fees 20,500
Accounting Fees and
Expenses *
Blue Sky Fees and Expenses *
Legal Fees and Expenses *
Printing and Engraving Fees *
Rating Agency Fees *
Trustee Fees *
Miscellaneous *
--------
Total $ *
- ---------- ========
* To be filed by amendment
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware (the "General Corporation Law") provides that: (1) under certain
circumstances a corporation may indemnify a director or officer made party
to, or threatened to be made party to, any civil, criminal, administrative
or investigative action, suit or proceeding (other than an action by or in
the right of the corporation) because such person is or was a director,
officer, employee or agent of the corporation, or because such person is or
was so serving another enterprise at the request of the corporation,
against expenses, judgments, fines and amounts paid in settlement
reasonably incurred by such person in connection with such action, suit or
proceeding, if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to criminal cases, had no reasonable cause
to believe such person's conduct was unlawful; (2) under certain
circumstances a corporation may indemnify a director or officer made party
to, or threatened to be made party to, any action or suit by or in the
right of the corporation for judgment in favor of the corporation because
such person is or was a director, officer, employee or agent of the
corporation, or because such person is or was so serving another enterprise
at the request of the corporation, against expenses reasonably incurred by
such person in connection with the defense or settlement of such action or
suit if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation; and (3) a director or officer shall be indemnified by the
corporation against expenses reasonably incurred by such person in
connection with and to the extent that such person has been successful on
the merits or otherwise in defense of any action, suit or proceeding
referred to in the preceding clauses, or in defense of any claim, issue or
matter therein.
Under Article THIRTEENTH of the Registrant's Certificate of
Incorporation and Article VIII of the Registrant's By-Laws, indemnification
of directors and officers is provided for to the fullest extent permitted
under the General Corporation Law. Article EIGHTEENTH of the Registrant's
Certificate of Incorporation eliminates the liability of directors for
monetary damages for breach of fiduciary duty as Directors, except to the
extent such exemption from liability is not permitted under the General
Corporation Law. The General Corporation Law, the Registrant's Certificate
of Incorporation and the By-Laws of the Registrant permit the purchase by
the Registrant of insurance for indemnification of directors and officers.
The Registrant currently maintains directors and officers liability
insurance.
Reference is made to Articles THIRTEENTH and EIGHTEENTH of the
Certificate of Incorporation of the Registrant and Article VIII of the By-
Laws of the Registrant. The proposed form of Underwriting Agreement, filed
as Exhibit (1) to the Registration Statement, provides for indemnification
of directors and officers of the Company by the Underwriters against
certain liabilities.
Item 16. Exhibits.
Exhibit Number Description
(1) Form of Underwriting Agreement.
(4.1) Form of Indenture between First National Bank of Boston, as
trustee and Sealed Air Corporation.
(5)* Opinion of Robert M. Grace, Jr., General Counsel and
Secretary, Sealed Air Corporation, as to the legality of
the Debt Securities.
(10)* Credit Agreement between Sealed Air Corporation, as
borrower, the banks listed on the signature pages
thereof and Bankers Trust Company, as Agent
(12) Computation of ratio of earnings to fixed charges
(23.1) Consent of KPMG Peat Marwick.
(23.2)* Consent of Robert M. Grace, Jr., General Counsel and
Secretary, Sealed Air Corporation (contained in opinion
filed as Exhibit (5)(A)).
(24) Powers of Attorney (contained in signature pages of this
Registration Statement).
(25) Statement of Eligibility of Trustee on Form T-1.
______________
* To be filed by amendment
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities registered hereby, a post-effective amendment
to this 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 this 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 this
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) 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.
(4) 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 this Registration Statement
shall be deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrants pursuant to Rule
424(b)(1) or (4) or Rule 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared
effective.
(6) For the purpose of determining any liability under the
Securities Act of 1933, each 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.
(7) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange 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 Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant 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
Registrant will, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Town of Saddle Brook and the State of New
Jersey, on the 20th day of May, 1994.
SEALED AIR CORPORATION
By: /s/ T.J. DERMOT DUNPHY
------------------------
T.J. Dermot Dunphy
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated. Each person whose individual
signature appears below hereby authorizes T.J. Dermot Dunphy, William V.
Hickey and Robert M. Grace, Jr., and each of them, as attorneys-in-fact,
with full power of substitution, to execute, in the name and on behalf of
each such person and in each capacity stated below, and to file any
amendment to this Registration Statement, including any and all
post-effective amendments.
Signature Title Date
--------- ----- ----
/s/ T.J. DERMOT DUNPHY President and Director May 20, 1994
______________________ (Principal Executive Officer)
T.J. Dermot Dunphy
/s/ WILLIAM V. HICKEY Senior Vice President- May 20, 1994
______________________ Finance (Principal Financial
William V. Hickey and Accounting Officer)
/s/ JOHN K. CASTLE Director May 20, 1994
______________________
John K. Castle
/s/ LAWRENCE R. CODEY Director May 20, 1994
______________________
Lawrence R. Codey
______________________ Director
Charles F. Farrell, Jr.
/s/ DAVID FREEMAN Director May 20, 1994
______________________
David Freeman
/s/ SHIRLEY A. JACKSON Director May 20, 1994
______________________
Shirley A. Jackson
______________________ Director
Alan Miller
/s/ R.L. SAN SOUCIE Director May 20, 1994
______________________
R.L. San Soucie
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
(1) Form of Underwriting Agreement.
(4.1) Form of Indenture between First National Bank of Boston, as
trustee, and Sealed Air Corporation.
(5)* Opinion of Robert M. Grace, Jr., General Counsel and
Secretary, Sealed Air Corporation, as to the legality of the
Debt Securities.
(10)* Credit Agreement between Sealed Air Corporation, as borrower,
the banks listed on the signature pages thereof and Bankers
Trust Company, as Agent
(12) Computation of ratio of earnings to fixed charges
(23.1) Consent of KPMG Peat Marwick.
(23.2)* Consent of Robert M. Grace, Jr., General Counsel and
Secretary, Sealed Air Corporation (contained in opinion
filed as Exhibit (5)(A)).
(24) Powers of Attorney (contained in signature pages of this
Registration Statement).
(25) Statement of Eligibility of Trustee on Form T-1.
______________
* To be filed by amendment
EXHIBIT 1
SEALED AIR CORPORATION
Debt Securities
STANDARD UNDERWRITING AGREEMENT PROVISIONS
Sealed Air Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell from time to time certain debt securities
registered under the Registration Statement (as defined below) (the
"Notes"). The Notes are to be issued pursuant to the provisions of an
Indenture to be dated as of , 1994 between the Company and The First
National Bank of Boston, as Trustee (such Indenture as amended or
supplemented, the "Indenture") in one or more series, which series may vary
as to interest rates, maturities, redemption provisions, selling prices and
other terms, with all such terms for any particular series of the Notes
being determined at the time of sale. Particular series of the Notes will
be sold pursuant to a Pricing Agreement referred to in Section 2, for
resale in accordance with terms of offering determined at the time of sale.
The firm or firms which agree to purchase the Notes are
hereinafter referred to as the "Underwriters" of such Notes. References to
an Underwriter acting as "qualified independent underwriter" shall apply
only to the extent a qualified independent underwriter is required under
the terms of Schedule E to the By-laws of the National Association of
Securities Dealers, Inc. (the "NASD").
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission
thereunder (collectively called, the "Act"), a registration statement on
Form S-3 including a prospectus relating to the Notes (Registration No.
_____) which may be amended. Such registration statement as amended at the
date of any Pricing Amendment is referred to in this Agreement as the
"Registration Statement," and the prospectus in the form first used to
confirm sales of Notes, as supplemented to reflect the terms of any series
of Notes and the plan of distribution thereof, is referred to as the
"Prospectus"; and each preliminary prospectus included in the Registration
Statement prior to the time it became or becomes effective is herein
referred to as a "Preliminary Prospectus" and such documents include, in
each case, the documents incorporated by reference therein.
2. Agreements to Sell and Purchase. The obligation of the
Underwriters to purchase the Notes will be evidenced by an exchange of
written communications ("Pricing Agreement") at the time the Company
determines to sell the Notes. The Pricing Agreement will incorporate by
reference the provisions of this Agreement, except as otherwise provided
therein, and will specify (1) the firm or firms which will be Underwriters,
(2) the principal amount of Notes to be purchased by each Underwriter and
the purchase price to be paid by the Underwriters, (3) the terms of the
Notes not already specified in the Indenture, (4) the time and date on
which delivery of the Notes will be made for the accounts of the several
Underwriters against payment by the several Underwriters of the purchase
price in New York Clearing House funds or, if the Pricing Agreement so
indicates, in immediately available funds (net of the cost of such funds)
(such time and date, or such other time and date not later than five full
business days thereafter as the Underwriters and the Company agree to as to
time and date for payment and delivery, being herein and in the Pricing
Agreement referred to as the "Closing Date") and (5) the place of delivery
and payment.
The obligations of the Underwriters to purchase the Notes will
be several and not joint. The Securities delivered to the Underwriters on
the Closing Date will be in definitive fully registered form.
If necessary, the Company will be advised by the Underwriters
that the yield on the Notes to the public is not lower than that
recommended by a "qualified independent underwriter" within the meaning of
Schedule E to the By-Laws of the National Association of Securities
Dealers, Inc. (the "NASD"). The qualified independent underwriter will
agree without additional fee to the Company to act as "qualified
independent underwriter" and to deliver its recommendations to the Company
and the other Underwriter at or before the pricing of the Notes in
substantially the form attached hereto as Exhibit A.
3. Terms of Public Offering. The Company is advised by the
Underwriters that the Underwriters propose (i) to make a public offering of
their respective portions of the Notes as soon after the effective date of
the Registration Statement as in the Underwriters' judgment is advisable
and (ii) initially to offer the Notes upon the terms set forth in the
Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Notes shall be made at such place in New York, New York as
they shall designate, at 10:00 A.M., New York City time, on the fifth
business day (the "Closing Date") following the date of the initial public
offering. The Closing Date and the location of the delivery of and payment
for the Notes may be varied by agreement between the Underwriters and the
Company.
Unless otherwise specified in the Pricing Amendment the Notes
in definitive form shall be registered in the name of Cede & Co., as
nominee for the Depository Trust Company, and shall be made available to
the Underwriters for inspection not later than 9:30 A.M. on the business
day next preceding the Closing Date. The Notes shall be delivered to the
Underwriters on the Closing Date with any transfer taxes thereon duly paid
by the Company for the respective accounts of the Underwriters against
payment of the purchase price therefor to such account as the Company may
direct.
5. Agreements of the Company. The Company agrees with each
Underwriter:
(a) If necessary, to file (i) an amendment to the
Registration Statement relating to the Notes, or (ii) a post-
effective amendment to the Registration Statement, pursuant to Rule
430A under the Act as soon as practicable after the execution and
delivery of this Agreement and to use its best efforts to cause the
Registration Statement or such post-effective amendment to become
effective at the earliest possible time. The Company will comply
in a timely manner, if necessary, with the applicable provisions of
the Act and Rule 424(b) and Rule 430A thereunder.
(b) To advise the Underwriters and, if requested by the
Underwriters, to confirm such advice in writing, (i) when the
Registration Statement has become effective and when any post-
effective amendment to it becomes effective, (ii) of any request by
the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional
information relating thereto, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the
Notes for offering or sale in any jurisdiction, or the initiation
of any proceeding for such purposes, and (iv) of the happening of
any event during the period referred to in paragraph (e) below
which makes any statement of a material fact made in the
Registration Statement or the Prospectus untrue or which requires
the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein
not misleading. If at any time the Commission shall issue, or
institute proceedings to issue, any stop order suspending the
effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue, or
institute proceedings to issue, an order suspending the
qualification or exemption from qualification of any of the Notes
under state securities or Blue Sky laws, the Company will make
every reasonable effort to obtain the withdrawal or lifting of such
order, or the termination of such proceeding, at the earliest
possible time.
(c) To furnish to the Underwriters, without charge, two
signed copies of the Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits and
documents incorporated by reference therein, and to furnish to the
Underwriters such number of conformed copies of the Registration
Statement as so filed and of each amendment to it, in each case
without exhibits but including documents incorporated by reference
therein, as the Underwriters may reasonably request.
(d) Not to file any amendment or supplement to the
Registration Statement, whether before or after the time when it
becomes effective, or to make any amendment or supplement to the
Prospectus of which the Underwriters shall not previously have been
advised or to which the Underwriters shall reasonably object in
writing unless in the judgment of the Company and its special
counsel, such amendment is necessary to comply with law; and to
prepare and file with the Commission, promptly upon the
Underwriters' reasonable request, any amendment to the Registration
Statement or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Notes by the
Underwriters, and to use its best efforts to cause the same to
become promptly effective.
(e) Promptly after the Registration Statement becomes
effective, and from time to time thereafter for such period as in
the opinion of counsel to the Underwriters a prospectus is required
by law to be delivered in connection with sales by an Underwriter
or a dealer, to furnish as many copies of the Prospectus (and of
any amendment or supplement to it) as the Underwriters may
reasonably request.
(f) If during the period specified in paragraph (e)
above any event shall occur as a result of which, in the judgment
of the Company or in the opinion of counsel to the Underwriters, it
becomes necessary to amend or supplement the Prospectus in order to
make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if
it is necessary to amend or supplement the Prospectus to comply
with any law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with law, and to
furnish to each Underwriter and for such dealer as they shall
specify such number of copies thereof as they may reasonably
request.
(g) Prior to any public offering of the Notes, to
cooperate with the Underwriters and their counsel in connection
with the registration or qualification of the Notes for offer and
sale by the Underwriters under the securities or Blue Sky laws of
such jurisdictions as they may reasonably request, to continue such
qualification in effect so long as reasonably required for
distribution of the Notes and to file such consents to service of
process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the
Company shall not be required to register or qualify as a foreign
corporation or to take any action which would subject it to the
service of process in suits, other than as to matters and
transactions relating to the offer and sale of the Notes, in any
jurisdiction where it is not now so subject.
(h) To make generally available to its security holders
as soon as reasonably practicable an earnings statement covering a
period of at least twelve months after the effective date of the
Registration Statement (but in no event commencing later than 90
days after such date) which shall satisfy the provisions of Section
11(a) of the Act and Rule 158 of the Commission thereunder, and to
advise the Underwriters in writing when such statement has been so
made available.
(i) During the five-year period beginning after the date
of this Agreement promptly to furnish to the Underwriters copies of
all reports and information furnished to the Trustee pursuant to
Sections [ ] and [ ] of the Indenture.
(j) The Company will use the proceeds from the sale of
the Notes in the manner specified in the Prospectus under the
caption "Use of Proceeds."
(k) To pay all costs, expenses, fees and taxes incident
to (i) the preparation by the Company, printing, filing and
distribution under the Act of the Registration Statement (including
financial statements, exhibits and documents incorporated by
reference therein), each Preliminary Prospectus and all amendments
and supplements to any of them prior to or during the period
specified in paragraph (e) above [(but not exceeding nine months
after the effective date of the Registration Statement)], (ii) the
printing and delivery of the Prospectus and all amendments or
supplements to it during the period specified in paragraph (e)
above [(but not exceeding nine months after the effective date of
the Registration Statement)], (iii) the preparation, printing
(including word processing and duplication costs) and delivery of
this Agreement, the Indenture, Preliminary and Supplemental Blue
Sky Memoranda and all other agreements, memoranda, correspondence
and other documents printed and delivered in connection with the
offering of the Notes, (iv) the registration or qualification of
the Notes for offer and sale under the securities or Blue Sky laws
of such jurisdictions as the Underwriters may reasonably request
(including the reasonable fees and disbursements of their counsel
relating to such registration or qualification), (v) fees and
expenses of rating agencies, (vi) filings and clearance with the
NASD in connection with the offering (including the reasonable fees
and disbursements of counsel to the Underwriters [relating to such
clearance and fees incurred on behalf of or disbursements by an
Underwriter in its capacity as "qualified independent underwriter",
if any]) and (vii) the performance by the Company of its other
obligations under this Agreement.
(l) To take all actions reasonably necessary on or prior
to the Closing Date to call for optional prepayment of either (i)
the Outstanding Subordinated Notes (as defined in the Prospectus)
or (ii) a portion of the Term Loan (as defined in the Prospectus)
equal to the net cash proceeds received by the Company from the
sale of the Notes.
(m) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement
by the Company prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Notes.
6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement and any amendments
thereto will comply in all material respects with the provisions of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and will not contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; the Prospectus and any supplements thereto will not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; except that the representations and
warranties contained in this paragraph (a) shall not apply (i) to
statements or omissions in the Registration Statement or Prospectus
(or any supplement or amendment to them) based upon information
relating to the Underwriters furnished to the Company in writing by
or on behalf of them expressly for use therein and (ii) to that
part of the Registration Statement which constitutes the Statement
of Eligibility and Qualification (Form T-1) of the Trustee under
the Trust Indenture Act. The Company acknowledges for all purposes
under this Agreement that the statements set forth in the Pricing
Amendment under the sections equivalent to the bottom paragraph of
the cover page, the over allotment paragraph and the caption
"Underwriting" in each case in a traditional prospectus constitute
the only written information furnished to the Company by the
Underwriters expressly for use in the Registration Statement or the
Prospectus (or any amendment or supplement to them).
(b) The documents incorporated by reference in the
Registration Statement and the Prospectus, when they were filed
(or, if an amendment with respect to any such document was filed,
when such amendment was filed) with the Commission, complied in all
material respects with the requirements of the Exchange Act; and
none of such documents, when they were filed (or, if an amendment
with respect to any such documents was filed, when such amendment
was filed), contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) The Company and each of its subsidiaries is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization
(except as to good standing for any subsidiary of the Company
organized under the laws of a jurisdiction in which the concept of
good standing is not applicable), has the corporate power and
authority and holds all material licenses required to carry on its
business as it is currently being conducted and to own its
properties, and is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property
requires such qualification except where the failure to be so
qualified and in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole. All
of the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued and are
fully paid and non-assessable and (except for directors' qualifying
shares) are owned directly or indirectly by the Company free of all
liens, encumbrances, security interests and claims whatsoever
except that the Company indirectly owns approximately 66% of the
shares of Douff S.A. and _________________.
(d) The Indenture has been duly authorized by the
Company and, when executed and delivered by the Company, will be a
valid and binding agreement of the Company and has been duly
qualified under the Trust Indenture Act.
(e) This Agreement has been duly authorized, executed
and delivered by the Company and (assuming due authorization,
execution and delivery by the Underwriters) is a valid and binding
agreement of the Company, except as rights to indemnity and
contribution hereunder may be limited by applicable Federal or
State securities law.
(f) The Notes have been duly authorized and, when
executed and authenticated in accordance with the
provisions of the Indenture and delivered against payment therefor
as provided in this Agreement, will be valid and binding
obligations of the Company, will be entitled to the benefits of the
Indenture and will conform in all material respects to the
descriptions thereof in the Registration Statement and the
Prospectus.
(g) Neither the Company nor any of its subsidiaries is
in violation of its respective charter or by-laws (or equivalent
organizational documents) or in default in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any
indenture or other instrument or agreement material to the conduct
of the business of the Company and the subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party
or by which it or any of them or the property of it or any of them
is bound, except for violations and defaults which individually and
in the aggregate are not material to the Company and its
subsidiaries taken as a whole. The execution, delivery and
performance of this Agreement, compliance by the Company with all
provisions hereof, and the consummation of the transactions
contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body,
administrative agency or other governmental body [or third party]
(except such as may be required under the Act, the TEA, and the
securities or Blue Sky laws of the various states or by the NASD)
conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws (or
equivalent organizational documents) of the Company or any of its
subsidiaries, or [(except in the case of instruments governing or
evidencing the Outstanding Notes)] any agreement, indenture or
other instrument material to the Company and its subsidiaries,
taken as a whole, to which it or any subsidiary is a party or by
which it or any of them or the property of it or any of them is
bound, or (assuming compliance with all applicable state securities
and Blue Sky laws) violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable
to the Company or such subsidiary or to any of their respective
property.
(h) Except as otherwise set forth in the Prospectus,
there is no legal or governmental proceeding pending to which the
Company or any of its subsidiaries is a party or to which any of
their respective property is subject which, if adversely
determined, is reasonably expected to result in any material
adverse change in the condition, financial or otherwise, or the
earnings, affairs or business prospects, whether or not arising in
the ordinary course of business, of the Company and its
subsidiaries, taken as a whole, and, to the best of the Company's
knowledge, no such litigation or proceeding is threatened or
contemplated. No contract or document of a character required to
be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement is not so
described or filed as required.
(i) The Company and each of its subsidiaries is in
possession of and operating in compliance with all material
licenses, permits, franchises, certificates and approvals necessary
to conduct its business as it is described in the Prospectus and to
own or lease its properties as described in the Prospectus, all of
which (except for those which individually and in the aggregate are
not material to the Company and its subsidiaries taken as a whole)
are valid and in full force and effect; and the Company and each of
its subsidiaries is operating in compliance with all laws,
regulations, administrative orders or rulings or court decrees
applicable to it or to any of its property the violation of which
could have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(j) The financial statements, together with the related
schedules and notes, forming a part of the Registration Statement
and the Prospectus comply in all material respects with the
requirements of the Act and have been prepared, and fairly present
[in all material respects] the financial condition, the results of
operations and changes in the consolidated cash flow of the Company
and its consolidated subsidiaries at the respective dates and for
the respective periods indicated, in accordance with generally
accepted accounting principles consistently applied throughout such
periods except as otherwise provided therein.
(k) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus,
and except as set forth or contemplated in the Prospectus, neither
the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, direct or contingent, nor entered into
any material transactions not in the ordinary course of business,
and there has not been any material adverse change in the condition
(financial or otherwise), business, prospects or results of
operations of the Company and its subsidiaries considered as a
whole, or any material change in the capital stock or long-term
debt of the Company and its subsidiaries considered as a whole.
(l) Neither the Company nor any Subsidiary has violated
any foreign, Federal, state or local law or regulation relating to
the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), nor any Federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable Federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act of 1974,
as amended or the rules and regulations promulgated thereunder,
which in each case could have a material adverse effect on the
Company and its subsidiaries taken as a whole. In the ordinary
course of its business, the Company conducts a periodic review of
the effect of Environmental Laws on the business, operations and
properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such
review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(m) The Company and its subsidiaries have complied with
all the provisions of Section 517.075, Florida Statutes (Chapter
92-198, Laws of Florida), relating to the disclosure of business
with Cuba.
(n) No holder of any security of the Company has any
right to request or require registration of such security under the
Act [which has not effectively been satisfied or waived].
(o) The Company and its subsidiaries, taken as a whole,
maintain reasonably adequate insurance coverage or have established
reasonably adequate reserves for non-insured risks.
(p) The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
7. Indemnification. (a) The Company agrees to indemnify and
hold harmless each of the Underwriters and each person, if any, who
controls each of the Underwriters within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities or judgments (including without
limiting the foregoing the reasonable legal and other expenses incurred
in connection with any action, suit or proceeding or any claim asserted)
caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (if used
within the period set forth in Section 5(e) hereof and as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) or any Preliminary Prospectus, or caused by any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities
or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission (i) based upon information relating
to either Underwriter furnished in writing to the Company by such
Underwriter expressly for use therein or (ii) made in any Preliminary
Prospectus if a copy of the Prospectus (as amended or supplemented, if
the Company shall have furnished any amendments or supplements thereto)
was not sent or given by or on behalf of the Underwriter to the person
asserting any such loss, claim, damage or liability or obtaining such
judgment at or prior to the written confirmation of the sale of Notes as
required by the Act and such untrue statement or omission had been
corrected in the Prospectus (as so amended or supplemented). The
Company also agrees to indemnify and hold harmless Morgan Stanley and
each person, if any, who controls Morgan Stanley within the meaning of
either Section 15 of the Act, or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages, liabilities and
judgments incurred as a result of Morgan Stanley's participation as a
"qualified independent underwriter" within the meaning of Section 1 of
Article III of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. in connection with the offering of the Notes,
except for any losses, claims, damages, liabilities and judgments
resulting from Morgan Stanley's, or such controlling person's, willful
misconduct. This indemnity agreement will be in addition to any
liability which the Company may otherwise have to the persons referred
to above in this Section 7(a).
(b) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be brought
against any Underwriter or any person controlling such Underwriter,
based upon any Preliminary Prospectus, the Registration Statement or the
Prospectus or any amendment or supplement thereto and with respect to
which indemnity may be sought against the Company, such Underwriter
shall promptly notify the Company in writing and the Company shall
assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all
fees and expenses. Any Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or at the expense of
any such controlling person unless (i) the employment of such counsel
has been specifically authorized in writing by the Company, (ii) the
Company has failed to assume the defense and employ such counsel, or
(iii) the named parties to any such action (including any impleaded
parties) include both such Underwriter or such controlling person and
the Company and such Underwriter or such controlling person shall have
been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the
right to assume the defense of such action on behalf of such Underwriter
or such controlling person, it being understood, however, that the
Company shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such Underwriters
and controlling persons, which firm shall be designated in writing by
the managing Underwriter and that all such fees and expenses shall be
reimbursed as they are incurred). The Company shall not be liable for
any settlement of any such action effected without the written consent
of the Company, but if settled with the written consent of the Company,
the Company agrees to indemnify and hold harmless each Underwriter and
any such controlling person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding anything
contained herein to the contrary, if indemnity may be sought pursuant to
Section 7(a) hereof in respect of such action or proceeding, then in
addition to such separate firm for the indemnified parties the
indemnifying party shall be liable for the reasonable fees and expenses
of not more than one separate firm (in addition to any local counsel)
for an Underwriter in its capacity as a "qualified independent
underwriter" and all persons, if any, who control such Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the
Exchange Act. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
signed the Registration Statement, and any person controlling the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the same extent as the indemnity from the Company to
each Underwriter, but only with reference to information relating to
such Underwriter furnished in writing by or on behalf of such
Underwriter expressly for use in the Registration Statement, the
Prospectus or any Preliminary Prospectus. In case any action shall be
brought against the Company, any of its directors, any such officer, or
any such controlling person based on the Registration Statement, the
Prospectus or any Preliminary Prospectus and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall
have the rights and duties given to the Company (except that if the
Company shall have assumed the defense thereof such Underwriter shall
not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Company,
its directors, any such officers, and any such controlling person shall
have the rights and duties given to the Underwriters by Section 7(b)
hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on
the other from the offering of the Notes or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be
in the same proportions as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters
on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7(d),
no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Notes underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligation in this Section 7(d) to
contribute are several in proportion to the respective principal amount
of Notes purchased by each of the Underwriters hereunder and not joint.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Notes under this
Agreement are subject to the satisfaction of each of the following
conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of
the Closing Date.
(b) The Registration Statement shall have become effective
(or if a post-effective amendment is required to be filed pursuant
to Rule 430A under the Act, such post-effective amendment shall
become effective) not later than 5:00 P.M., New York City time, on
the date of this Agreement or at such later date and time as the
Underwriters may approve in writing, and at the Closing Date no
stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or
contemplated by the Commission.
(c) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have been
any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible
change that does not indicate an improvement in the rating accorded
any of the Company's securities by any "nationally recognized
statistical rating organization", as such term is defined for
purposes of Rule 436(g)(2) under the Act.
(d) (i) Since the date of the latest balance sheet included
in the Registration Statement and Prospectus there shall not have
been any material adverse change in the condition, financial or
otherwise, or in the earnings, affairs or business prospects,
whether or not arising in the ordinary course of business, of the
Company and its subsidiaries, taken as a whole, (ii) since the date
of the latest balance sheet included in the Registration
Statement and the Prospectus there shall not have been any change
in the capital stock or material increase in the long-term debt of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Registration Statement and Prospectus, except for (y)
the grant of awards under the Company's Contingent Stock Plan, as
amended, and the Company's exercise of its repurchase option with
respect to stock outstanding under such plan, and (z) the issuance
of common stock in connection with the acquisitions described in
the second paragraph of "The Company - New Product Development" of
the Prospectus, (iii) the Company and its subsidiaries shall have
no liability or obligation, direct or contingent, which is material
to the Company and its subsidiaries, taken as a whole, other than
those reflected in the Registration Statement and Prospectus or
incurred in the ordinary course of business, and (iv) on the
Closing Date the Underwriters shall have received a certificate
dated the Closing Date, signed by the President and by the Chief
Financial Officer, in their capacities as executive officers of the
Company, confirming the matters set forth in paragraphs (a), (b),
(c) and (d) of this Section 8.
(e) The Underwriters shall have received on the Closing Date
an opinion (satisfactory to the Underwriters and their counsel),
dated the Closing Date, of Davis Polk & Wardwell, special counsel
for the Company, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Indenture has been duly authorized, executed and
delivered by the Company and (assuming the due authorization,
execution and delivery thereof by the Trustee) is a valid and
binding agreement of the Company enforceable in accordance
with its terms except as enforcement may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally, and except that the
availability of any equitable remedies for the enforcement of
any of the provisions thereof may be subject to the discretion
of the court before which any proceeding therefor may be
brought, and has been duly qualified under the Trust Indenture
Act of 1939;
(iii) the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters,
will be valid and binding obligations of the Company
enforceable in accordance with their terms except as
enforcement may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
or similar laws relating to or limiting creditors' rights
generally, and except that the availability of any equitable
remedies for the enforcement of any of the provisions thereof
may be subject to the discretion of the court before which any
proceeding therefor may be brought, and the Notes will be
entitled to the benefits of the Indenture;
(iv) the Registration Statement has become effective under
the Act, and to such counsel's knowledge after due inquiry, no
stop order suspending its effectiveness has been issued and no
proceedings for that purpose are pending before or
contemplated by the Commission;
(v) the statements under the captions "Description of
Notes," and "Underwriting" in the Prospectus and Item 15 of
Part II of the Registration Statement, insofar as such
statements constitute a summary of the legal matters or
documents referred to therein, fairly present the information
called for with respect to such legal matters and documents;
(vi) the execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby will not conflict with or constitute a
breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company;
(vii) (A) the Registration Statement and the Prospectus and
any supplement or amendment thereto comply as to form in all
material respects with the Act and (B) no facts have come to
the attention of such counsel that lead them to believe that
either the Registration Statement or any amendment thereto at
the time such Registration Statement or amendment became
effective or the Prospectus as of its date or any supplement
thereto as of its date contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading (it being understood that such counsel need
express no comment with respect to the financial statements
and schedules and other financial and statistical data
included or incorporated by reference in the Registration
Statement or Prospectus or the Statements of Eligibility and
Qualification on Forms T-1 of the Trustee).
In rendering the opinions in paragraph (vii) above, such
counsel may state that their opinion and belief is based on
their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements
thereto (in each case other than the documents incorporated by
reference therein) and review and discussion of the contents
thereof (including the documents incorporated by reference)
but is without independent check or verification, except as
specified.
(f) The Underwriters shall have received on the Closing Date
an opinion (satisfactory to the Underwriters and their counsel),
dated the Closing Date, of Robert M. Grace, Jr., General Counsel
and Secretary for the Company, to the effect that:
(i) the Company is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation, and has the corporate power and
authority to carry on its business as it is currently being
conducted;
(ii) the Company is duly qualified to transact business and
is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified
would not have a material adverse effect on the business,
financial condition or results of operations of the Company
and its subsidiaries, taken as a whole;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company and (assuming the due authorization,
execution and delivery thereof by the Trustee) is a valid and
binding agreement of the Company enforceable in accordance
with its terms except as enforcement may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally, and except that the
availability of any equitable remedies for the enforcement of
any of the provisions thereof may be subject to the discretion
of the court before which any proceeding therefor may be
brought and has been duly qualified under the Trust Indenture
Act of 1939;
(v) the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters,
will be valid and binding obligations of the Company
enforceable in accordance with their terms except as
enforcement may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
or similar laws relating to or limiting creditors' rights
generally, and except that the availability of any equitable
remedies for the enforcement of any of the provisions thereof
may be subject to the discretion of the court before which any
proceeding therefor may be brought, and the Notes will be
entitled to the benefits of the Indenture;
(vi) the Registration Statement has become effective under
the Act, and to such counsel's knowledge after due inquiry, no
stop order suspending its effectiveness has been issued and no
proceedings for that purpose are pending before or
contemplated by the Commission;
(vii) the statements under the captions "Description of
Notes," and "Underwriting" in the Prospectus and Item 15 of
Part II of the Registration Statement, insofar as such
statements constitute a summary of the legal matters or
documents referred to therein, fairly present the information
called for with respect to such legal matters and documents;
(viii) except as set forth in the Prospectus, such counsel
does not know of any legal or governmental proceeding pending
or threatened to which the Company or any of its subsidiaries
is a party or of which any of the properties of the Company or
any of its subsidiaries is the subject which is required to be
described in the Registration Statement or Prospectus and is
not so described, or of any contract or other document which
is required to be described in the Registration Statement or
Prospectus or is required to be filed as an exhibit to the
Registration Statement which is not described or filed as
required;
(ix) to such counsels knowledge the Company is not in
violation of its charter or by-laws and is not in default in
the performance of any material obligation, agreement or
condition contained in any bond, debenture, note or any other
evidence of indebtedness or in any indenture or other
instrument or agreement material to the conduct of the
business of the Company and its subsidiaries, taken as a
whole, to which the Company is a party or by which property of
it is bound except for violations or defaults which
individually and in the aggregate are not material to the
Company and its subsidiaries taken as a whole;
(x) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby will not conflict with
or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or,
to the knowledge of such counsel after due inquiry [(except in
the case of instruments governing or evidencing the
Outstanding Notes)], any agreement, indenture or other
instrument material to the Company and its subsidiaries, taken
as a whole, to which the Company is a party or by which it or
its property is bound, or (assuming compliance with all
applicable state securities and Blue Sky laws) violate or
conflict with any laws, administrative regulations or rulings
or court decrees applicable to the Company or to any of its
property except, in each case, for conflicts, violations or
defaults which individually and in the aggregate are not
material to the Company and its subsidiaries taken as a whole;
(xi) except for the order of the Commission making the
Registration Statement effective and permits and similar
authorizations required under the securities or Blue Sky laws
of certain jurisdictions, no consent, approval, authorization
or other order of any regulatory body, administrative agency
or other governmental body is legally required for the valid
issuance and sale of the Notes to the Underwriters as
contemplated by this Agreement;
[(xii) nothing has come to such counsel's knowledge that the
Company (A) is not in compliance with any and all applicable
Environmental Laws, (B) has not received all permits, licenses
or other approvals required of it under applicable
Environmental Laws to conduct its business and (C) is not in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse
effect on the Company;
(xiii) (A) the Registration Statement and the Prospectus and
any supplement or an amendment thereto comply as to form in
all material respects with the Act, (B) the documents
incorporated by reference in the Registration Statement and
the Prospectus when filed with the Commission complied as to
form in all material respects with the Exchange Act and (C) no
facts have come to the attention of such counsel that lead him
to believe that either the Registration Statement or any
amendment thereto at the time such Registration Statement or
amendment became effective or the Prospectus as of its date or
any supplement thereto as of its date contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading (it being understood that
such counsel need express no comment with respect to the
financial statements and schedules and other financial and
statistical data included or incorporated by reference in the
Registration Statement or Prospectus or the Statements of
Eligibility and Qualification on Forms T-1 of the Trustee).
In rendering the opinion in paragraph (xiii) above, such
counsel may state that his opinion and belief is based on his
participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto (in
each case other than the documents incorporated by reference
therein) and review and discussion of the contents thereof
(including the documents incorporated by reference) but is
without independent check or verification, except as
specified.
(g) The Underwriters shall have received on the Closing
Date an opinion, dated the Closing Date, of Cahill Gordon &
Reindel, counsel for the Underwriters, as to the matters
referred to in clauses (i), (ii), (iii), (iv), (v) (as to the
"Description of Notes" and "Underwriting" only) and (vii)
(subpart (A) only) of the foregoing paragraph (e). In
addition, such counsel shall state that such counsel have
participated in conferences with officers and other
representatives of the Company, counsel for the Company,
representatives of the independent public accountants for the
Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus and
related matters were discussed and, although such counsel are
not passing upon and do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement and Prospectus (other than as
set forth with respect to the statements under the caption
"Description of Notes" and "Underwriting"), on the basis of
the foregoing (relying as to materiality to a large extent
upon the opinions of officers and other representatives of the
Company), no facts have come to the attention of such counsel
that lead them to believe that either the Registration
Statement or any amendment thereto at the time such
Registration Statement or amendment became effective or the
Prospectus as of its date or any supplement thereto as of its
date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading (it
being understood that such counsel need express no comment
with respect to the financial statements and schedules and
other financial and statistical data included or incorporated
by reference in the Registration Statement or Prospectus or
the Statement of Eligibility and Qualification on Form T-1 of
the Trustee).
(h) The Underwriters shall have received a letter on and
as of the Closing Date, in form and substance satisfactory to
the Underwriters, from KPMG Peat Marwick, independent
certified public accountants, with respect to the financial
statements and certain financial information contained in the
Registration Statement and the Prospectus and substantially in
the form and substance of such letter delivered to the
Underwriters by them on the date of this Agreement.
(i) During the period beginning on the date hereof and
continuing to and including the Closing Date, the Company
shall not offer, sell, contract to sell or otherwise dispose
of any debt securities of the Company or warrants to purchase
debt securities of the Company substantially similar to the
Notes (other than (i) the Notes and (ii) commercial paper
issued in the ordinary course of business), without the prior
written consent of the underwriters.
(j) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with
by the Company at or prior to the Closing Date.
9. Effective Date of Agreement and Termination. This
Agreement shall become effective upon the later of (i) execution and
delivery hereof and (ii) when notification of the effectiveness of the
Registration Statement has been released by the Commission.
This Agreement may be terminated at any time prior to the
Closing Date by the Underwriters by written notice to the Company if any
of the following has occurred: (i) since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, any material adverse change or development involving a
prospective material adverse change in the condition, financial or
otherwise, of the Company and its subsidiaries, taken as a whole, or the
earnings, affairs or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, which would, in the Underwriters' sole judgment,
make it impracticable to market the Notes on the terms and in the manner
contemplated in the Prospectus, (ii) any material outbreak or material
escalation of hostilities or other national or international calamity or
crisis or material change in economic conditions, if the effect of such
outbreak, escalation, calamity, crisis or change in the financial
markets of the United States, in the Underwriters' sole judgement, is
material and adverse and would, in the Underwriters sole judgment, make
it impracticable to market the Notes on the terms and in the manner
contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the New York Stock Exchange, the
American Stock Exchange or the NASDAQ National Market System or
limitation on prices for securities on any such exchange or the NASDAQ
National Market System, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which in the Underwriters'
sole judgement materially and adversely affects, or will materially and
adversely affect, the business or operations of the Company and its
subsidiaries, taken as whole, (v) declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any
action by any federal, state or local government or agency in respect of
its monetary or fiscal affairs which in the Underwriters' sole judgement
has a material adverse effect on the financial markets in the United
States.
10. Default by Underwriter. If on the Closing Date either
Underwriter shall fail to purchase and pay for the portion of the Notes
which such Underwriter has agreed to purchase and pay for on such date
(otherwise than by reason of any default on the part of the Company) the
Company or the non-defaulting Underwriter will have the right, by
written notice given within 24 hours thereafter to the parties to this
Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriter or of the Company except to the extent
provided in Section 5 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 10, the
Closing Date may be postponed for such period, not exceeding seven days,
as the Underwriters may determine in order that the required changes in
the Registration Statement or in the Prospectus or in any other
documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter
under this Agreement.
11. Miscellaneous. Notices given pursuant to any provision
of this Agreement shall be addressed, if to the Company, at Park 80
Plaza East, Saddle Brook, N.J. 07662-5291, Attention: General Counsel
and Secretary.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, its
officers and directors and of the Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and
effect, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter or by or on
behalf of the Company, its officers or directors or any controlling
person of the Company, (ii) acceptance of the Notes and payment for them
hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement,
the Company agrees to reimburse the Underwriters for all reasonable out-
of-pocket expenses (including the fees and expenses of counsel) incurred
by the Underwriters.
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company,
the Underwriters, any controlling persons referred to herein, and their
respective successors and assigns, all as and to the extent provided in
this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns"
shall not include a purchaser of any of the Notes from the Underwriters
merely because of such purchase.
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW THEREOF.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
Schedule 1
Underwriter Principal Amount of Notes
$ _________________
Total . . . . . . . . . . . . . . $
Exhibit A
[Address of qualified
independent underwriter]
, 1994
National Association of
Securities Dealers, Inc.
1735 K Street, N.W.
Washington, D.C. 20006
Re: NASD File No.
Sealed Air Corporation
Dear Sirs:
We refer to the proposed public offering of $___________
aggregate principal amount of % Senor Subordinated Notes due 2004 (the
"Notes") of Sealed Air Corporation (the "Company"), for which [the
Underwriter] are acting as underwriters.
In accordance with the terms of Section 1, Article 111 of the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc. (the "NASD"), the Company has retained us as a "qualified
independent underwriter" to recommend, pursuant to section 3(c)(1) of
Schedule E of the NASD By-Laws, minimum yields at which the Notes should
be offered to the public.
In arriving at our recommendation, we have reviewed certain
publicly available business and financial information relating to the
Company including the Registration Statement on form S-3 (No. ) relating
to the Notes. We have also reviewed certain other information,
including financial forecasts, provided to us by the Company, and met
with the Company's management to discuss the business and prospects of
the Company.
We have also considered the general condition of the
securities markets (especially the market for high yield securities) at
the time of the offering and certain ratios, market prices and yields of
securities and certain financial and operating information of companies
engaged in activities similar to those of the Company. We also
considered such other information, financial studies, analyses and
investigations and financial, economic and market criteria (including
factors relating to the market for high yield securities) which we deemed
relevant.
For purposes of delivering this letter to you, we have assumed
that the information contained in the Registration Statement and the
information referred to in the preceding paragraph is true and complete
in all material respects. With respect to the financial forecasts, we
have assumed that they have been reasonably prepared on bases reflecting
the best currently available estimates and judgments of the Company's
management as to the future financial performance of the Company. In
addition, we have not made an independent valuation or appraisal of the
assets of the Company.
Based upon the foregoing and assuming that the public offering
of the Notes is made on the date hereof, we recommend that the yield on
the Senor Notes is not lower than %, which minimum yield should in no
way be considered or relied upon as an indication of the value of the
Notes.
Very truly yours,
By:
Name:
Title:
EXHIBIT 4.1
- ------------------------------------------------------------------------------
SEALED AIR CORPORATION
and
FIRST NATIONAL BANK OF BOSTON,
as Trustee,
_______________________________
INDENTURE
Dated as of ( ), 1994
_______________________________
Senior Subordinated Notes
- ------------------------------------------------------------------------------
CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
- ----------- -----------------
Section 310(a)(1) . . . . . . . . . . . . . 7.07; 8.02
(b) . . . . . . . . . . . . . . . . 7.07; 7.10; 8.02
(c) . . . . . . . . . . . . . . . . N.A.
Section 311(a) . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . N.A.
Section 312(a) . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . 10.10
(c) . . . . . . . . . . . . . . . . 10.10
Section 313(a) . . . . . . . . . . . . . . 7.05
(b) . . . . . . . . . . . . . . . . N.A.
(c) . . . . . . . . . . . . . . . . 10.02
(d) . . . . . . . . . . . . . . . . 7.05
Section 314(a) . . . . . . . . . . . . . . 4.03; 4.04
(b) . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . 10.01
(c)(2) . . . . . . . . . . . . . . 10.02
(c)(3) . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . 10.04
(f) . . . . . . . . . . . . . . . . N.A.
Section 315(a) . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . 7.04
(c) . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . 6.11
Section 316(a) (last sentence) . . . . . . 2.11
(a)(1)(A) . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . 9.04
Section 317(a)(1) . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . 2.04
Section 318(a) . . . . . . . . . . . . . . 10.01
(c) . . . . . . . . . . . . . . . . 10.01
____________________
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of this Indenture.
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
DEFINITIONS AND
INCORPORATION BY REFERENCE
1.01 Definitions . . . . . . . . . . . . . . . . . . . 1
1.02 Incorporation by Reference of Trust Indenture Act 21
1.03 Rules of Construction . . . . . . . . . . . . . . 21
ARTICLE II
THE SECURITIES
2.01 Designation; Issuable in Series . . . . . . . . . 22
2.02 Execution and Authentication . . . . . . . . . . . 24
2.03 Bond Agents . . . . . . . . . . . . . . . . . . . 24
2.04 Paying Agent To Hold Money in Trust . . . . . . . 25
2.05 Securityholder Lists . . . . . . . . . . . . . . . 25
2.06 Transfer and Exchange . . . . . . . . . . . . . . 25
2.08 Replacement Securities . . . . . . . . . . . . . . 26
2.08 Outstanding Securities . . . . . . . . . . . . . . 26
2.09 Discounted Securities . . . . . . . . . . . . . . 26
2.10 Treasury Securities . . . . . . . . . . . . . . . 27
2.11 Global Securities . . . . . . . . . . . . . . . . 27
2.12 Temporary Securities . . . . . . . . . . . . . . . 27
2.13 Cancellation . . . . . . . . . . . . . . . . . . . 28
2.14 Defaulted Interest . . . . . . . . . . . . . . . . 28
ARTICLE III
REDEMPTION
3.01 Notices to Trustee . . . . . . . . . . . . . . . . 28
3.02 Selection of Securities To Be Redeemed . . . . . . 29
3.03 Notice of Redemption . . . . . . . . . . . . . . . 29
3.04 Effect of Notice of Redemption . . . . . . . . . . 30
3.05 Payment of Redemption Price . . . . . . . . . . . 30
3.06 Securities Redeemed in Part . . . . . . . . . . . 30
ARTICLE IV
COVENANTS
4.01 Payment of Securities . . . . . . . . . . . . . . 31
4.02 Maintenance of Office or Agency . . . . . . . . . 31
4.03 Compliance Certificates . . . . . . . . . . . . . 32
4.04 Reports . . . . . . . . . . . . . . . . . . . . . 32
4.05 Limitation on Restricted Payments . . . . . . . . 33
4.06 Limitation on Debt . . . . . . . . . . . . . . . . 35
4.07 Change of Control . . . . . . . . . . . . . . . . 39
4.08 Limitation on Transactions with Affiliates . . . . 41
4.09 Limitation on Asset Dispositions . . . . . . . . . 42
4.10 Limitation on Liens . . . . . . . . . . . . . . . 45
4.11 Limitation on Senior Subordinated Indebtedness . . 46
ARTICLE V
SUCCESSOR CORPORATION
5.01 When Company May Merge, etc. . . . . . . . . . . . 46
5.02 Opinion of Counsel to Trustee; Officers' Certificate 47
5.03 Successor Corporation Substituted . . . . . . . . 47
ARTICLE VI
DEFAULT AND REMEDIES
6.01 Events of Default . . . . . . . . . . . . . . . . 48
6.02 Acceleration . . . . . . . . . . . . . . . . . . . 50
6.03 Other Remedies . . . . . . . . . . . . . . . . . . 51
6.04 Waiver of Past Default . . . . . . . . . . . . . . 51
6.05 Control by Majority . . . . . . . . . . . . . . . 52
6.06 Limitation on Suits . . . . . . . . . . . . . . . 52
6.07 Rights of Holders To Receive Payment . . . . . . . 53
6.08 Collection Suit by Trustee . . . . . . . . . . . . 53
6.09 Trustee May File Proofs of Claim . . . . . . . . . 53
6.10 Priorities . . . . . . . . . . . . . . . . . . . . 54
6.11 Undertaking for Costs . . . . . . . . . . . . . . 54
6.12 Rights and Remedies Cumulative . . . . . . . . . . 55
6.13 Delay or Omission Not Waiver . . . . . . . . . . . 55
6.14 Restoration of Rights and Remedies . . . . . . . . 55
ARTICLE VII
TRUSTEE
7.01 Rights and Duties of Trustee . . . . . . . . . . . 55
7.02 Individual Rights of Trustee . . . . . . . . . . . 58
7.03 Trustee's Disclaimer . . . . . . . . . . . . . . . 58
7.04 Notice of Defaults . . . . . . . . . . . . . . . . 58
7.05 Reports by Trustee to Holders . . . . . . . . . . 58
7.06 Compensation and Indemnity . . . . . . . . . . . . 59
7.07 Replacement of Trustee . . . . . . . . . . . . . . 59
7.08 Successor Trustee by Merger, etc. . . . . . . . . 60
7.09 Trustee's Capital and Surplus . . . . . . . . . . 61
7.10 No Conflicting Interest . . . . . . . . . . . . . 61
7.11 Preferential Collection of Claims Against Company 61
ARTICLE VIII
DISCHARGE OF INDENTURE
8.01 Termination of the Company's Obligations . . . . . 61
8.02 Legal Defeasance and Covenant Defeasance . . . . . 63
8.03 Application of Trust Money . . . . . . . . . . . . 68
8.04 Repayment to Company . . . . . . . . . . . . . . . 68
8.05 Reinstatement . . . . . . . . . . . . . . . . . . 69
ARTICLE IX
AMENDMENTS
9.01 Without Consent of Holders . . . . . . . . . . . . 69
9.02 With Consent of Holders . . . . . . . . . . . . . 70
9.03 Compliance with Trust Indenture Act . . . . . . . 71
9.04 Effect of Consents . . . . . . . . . . . . . . . . 71
9.05 Notation on or Exchange of Securities . . . . . . 71
9.06 Trustee Protected . . . . . . . . . . . . . . . . 72
9.07 Waiver of Covenants . . . . . . . . . . . . . . . 72
ARTICLE X
MISCELLANEOUS
10.01 Trust Indenture Act . . . . . . . . . . . . . . . 72
10.02 Notices . . . . . . . . . . . . . . . . . . . . . 72
10.03 Certificate and Opinion as to Conditions Precedent 74
10.04 Statements Required in Certificate or Opinion . . 74
10.05 Rules by Company and Agents . . . . . . . . . . . 75
10.06 Legal Holidays . . . . . . . . . . . . . . . . . . 75
10.07 No Recourse Against Others . . . . . . . . . . . . 75
10.08 Duplicate Originals . . . . . . . . . . . . . . . 75
10.09 Governing Law . . . . . . . . . . . . . . . . . . 75
10.10 Communications by Holders with Other Holders . . . 75
ARTICLE XI
SUBORDINATION OF SECURITIES
11.01 Securities Subordinated to Senior Indebtedness . . 76
11.02 No Payment on Securities in Certain Circumstances 76
11.03 Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation
or Reorganization . . . . . . . . . . . . . . . . 77
11.04 Holders of Securities To Be Subrogated to Rights
of Holders of Senior Indebtedness . . . . . . . . 79
11.05 Obligations of the Company Unconditional . . . . . 79
11.06 Trustee and Paying Agent Entitled To Assume Payments
Not Prohibited in Absence of Notice . . . . . . . . 80
11.07 Application by Trustee of Moneys Deposited with It 80
11.08 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 81
11.09 Securityholders Authorize Trustee To Effectuate
Subordination of Securities . . . . . . . . . . . 81
11.10 Right of Trustee and Paying Agent To Hold Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 82
11.11 This Article Not To Prevent Events of Default . . 82
11.12 No Fiduciary Duty Created to Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . 82
11.13 Trustee's Compensation Not Prejudiced . . . . . . 83
11.14 Representative of Senior Indebtedness . . . . . . 83
SIGNATURES . . . . . . . . . . . . . . . . . . . . 84
Exhibit A: A Form of Registered Security
INDENTURE dated as of ( ), 1994, between SEALED AIR CORPORATION,
a Delaware corporation (the "Company"), and FIRST NATIONAL BANK OF BOSTON,
as Trustee (the "Trustee").
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of the Senior Subordinated Notes
of the Company (the "Securities"), in one or more series, to be issued as
provided for in this Indenture. All things necessary to make the
Securities and each series thereof, when duly issued and executed by the
Company and authenticated and delivered hereunder, the valid obligations of
the Company, and to make this Indenture a valid, binding agreement of the
Company, in accordance with their respective terms, have been done.
The parties hereto agree as follows for the benefit of each other
and for the equal and ratable benefit of the Holders:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.02.
"Acquisition Debt" means Debt of any Person existing at the time
such Person became a Subsidiary of the Company (or such Person is merged
with the Company or one of its Subsidiaries) or assumed by the Company or
any of its Subsidiaries in connection with the acquisition of assets from
such Person (other than in the ordinary course of business), including Debt
Incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary of the Company or such merger or acquisition (but excluding Debt
of such Person which is extinguished, retired or repaid in connection with
such Person becoming a Subsidiary of the Company or such merger or
acquisition).
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control"
when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Asset Acquisition" means (i) an investment by the Company or any
of its Subsidiaries in any other Person pursuant to which such Person shall
become a Subsidiary of the Company or any of its Subsidiaries or shall be
merged with the Company or any of its Subsidiaries or (ii) the acquisition
by the Company or any of its Subsidiaries of the assets of any Person which
constitute substantially all of an operating unit or business, or
identifiable product line for which financial information for the Reference
Period is available, of such Person.
"Asset Disposition" means, with respect to any Person, any sale,
transfer, conveyance, lease or other disposition (including, without
limitation, by way of merger, consolidation or sale-leaseback) by such
Person or any of its Subsidiaries to any Person (other than to such Person
or a Wholly-Owned Subsidiary of such Person and other than in the ordinary
course of business) of (i) any assets of such Person or any of its
Subsidiaries or (ii) any shares of Capital Stock of such Persons's
Subsidiaries. For purposes of this definition, any disposition in
connection with directors' qualifying shares shall not constitute an Asset
Disposition. For purposes of this definition, the term "Asset Disposition"
shall not include any sale, transfer, conveyance, lease or
other disposition of assets and properties of the Company that is governed
by the covenant described under Article V hereof.
"Asset Sale" means the sale or other disposition by the Company
or any of its Subsidiaries (other than to Wholly-Owned Subsidiaries) of (i)
all or substantially all of the Capital Stock of any of the Company's
Subsidiaries or (ii) substantially all of the assets of the Company or any
of its Subsidiaries which constitute substantially all of an operating unit
or business, or identifiable product line for which financial information
for the Reference Period is available.
"Bankruptcy Law" means Title 11 of the U.S. Code or any similar
Federal or state law for the relief, reorganization, adjustment or
recomposition of debtors.
"Board of Directors" means with respect to any Person, the Board
of Directors of such Person or any committee of such Board of Directors
authorized to act for it hereunder.
"Bond Resolution" means a resolution adopted by the Board of
Directors authorizing a series of Securities.
"Business Day" means any day except a Saturday, a Sunday or any
day on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights in, or other equivalents (however
designated and whether voting or non-voting) of, such Person's capital
stock, including each class of Common or Preferred Stock of such Person,
whether outstanding on the Issue Date or issued after the Issue Date.
"Capitalized Lease" means, as applied to any Person, any lease of
any Property the discounted present value of the rental obligations of such
Person as lessee under which, in conformity with generally accepted
accounting principles, is required to be capitalized on the balance sheet
of that Person. "Capitalized Lease Obligation" means, as applied to any
Person, the rental obligation, as aforesaid, under any Capitalized Lease.
"Change of Control" means (i) a sale of all or substantially all
of the assets of the Company to any Person (other than a Wholly-Owned
Subsidiary of the Company) or related group (as that term is used in
Section 13(d)(3) of the Exchange Act) of Persons (other than any Wholly-
Owned Subsidiary of the Company) as an entirety or substantially as an
entirety in one transaction or series of related transactions, (ii) the
merger or consolidation of the Company with or into another corporation or
the merger of another corporation into the Company with the effect that
immediately after such transaction the shareholders of the Company
immediately prior to such transaction hold less than 50% of the total
voting power entitled to vote generally in the election of directors,
managers or trustees of the surviving corporation of such merger or
consolidation, (iii) the liquidation or dissolution of the Company, (iv)
any Person or group (as so defined) of Persons (other than a Wholly-Owned
Subsidiary of the Company) acquiring more than 50% of the total voting
power entitled to vote generally in the election of the directors, managers
or trustees of the Company, or (v) the Persons constituting the Board of
Directors of the Company on the date hereof or Persons nominated for
election or elected to the Board of Directors of the Company by a majority
vote of such directors (the "Continuing Directors") or a majority of the
Continuing Directors do not constitute a majority of the members of the
Board of Directors of the Company.
"Change of Control Date" has the meaning provided in Section 4.07.
"Change of Control Offer" has the meaning provided in Section 4.07.
"Change of Control Payment Date" has the meaning provided in
Section 4.07.
"Common Stock" of any Person means any and all shares, interests
or other participations in, and other equivalents (however designated and
whether voting or non-voting) of such Person's common stock, whether
outstanding on the Issue Date or issued after the Issue Date, and includes,
without limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture
and, thereafter, means the successor.
"Consolidated Cash Flow" of any Person for any period means (a)
the Consolidated Net Income of such Person for such period, plus (b) the
sum of (i) income taxes, (ii) Consolidated Fixed Charges, (iii)
depreciation expense, (iv) amortization expense, and (v) all other non-cash
items deducted from net revenues in determining Consolidated Net Income for
such period, in each case determined on a consolidated basis for such
Person and its Consolidated Subsidiaries in accordance with generally
accepted accounting principles.
"Consolidated Fixed Charges" of any Person for any period means
the aggregate of (without duplication) (i) Consolidated Interest Expense,
(ii) the interest component of Capitalized Leases and one-third of rentals
in respect of all other leases with original lease terms of more than one
year, paid or accrued by such Person or any of its Subsidiaries during such
period, determined on a consolidated basis for such Person and its
Consolidated Subsidiaries in accordance with GAAP, and (iii) the product of
(x) the sum of (A) cash dividends paid on any Preferred Stock of such
Person plus (B) cash and non-cash dividends paid on any Subsidiary
Preferred Stock of such Person which is not eliminated in consolidation
times (y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective
federal, state, local and foreign tax rate of such Person
expressed as a decimal.
"Consolidated Interest Expense" of any Person for any period means the
aggregate interest expense in respect of Debt (including amortization of
original issue discount and non-cash interest payments or accruals) of such
Person and its Consolidated Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" of any Person for any period means the Net
Income of such Person and its Consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided that
there shall be excluded (i) the Net Income of any Person other than a
Consolidated Subsidiary in which such Person or any of its Consolidated
Subsidiaries has a joint interest with a third party except to the extent
of the amount of dividends or distributions actually paid to such Person
and its Consolidated Subsidiaries during such period, (ii) except to the
extent includable pursuant to the foregoing clause (i), the Net Income of
any Person accrued prior to the date it became a Subsidiary of such Person
or any of its Subsidiaries or is merged or consolidated with such Person or
any of its Subsidiaries or that Person's assets are acquired by such Person
or any of its Subsidiaries, provided that this clause (ii) shall not be
effective for any calculation of Consolidated Cash Flow to be made in
accordance with clause (2) of the definition of Pro Forma Coverage Ratio,
and (iii) the Net Income (if positive) of any Subsidiary of such Person to
the extent that the declaration or payment of dividends or similar
distributions to such Person of such Net Income are not at the time of
determination permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
"Consolidated Subsidiary" of any Person means a Subsidiary which
for financial reporting purposes is or, in accordance with GAAP, should be,
accounted for by such Person as a consolidated subsidiary.
"Corporate Trust Office" means the office of the Trustee at which
the corporate trust business of the Trustee shall, at any particular time,
be principally administered, which office is, at the date as of which this
Indenture is dated, located at 100 Federal Street, Boston, Massachusetts
02110, Attention: Corporate Trust Division.
"Currency Agreement" means with respect to any Person any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person or any of its Subsidiaries
against fluctuations in currency values.
"Custodian" has the meaning provided in Section 6.01(b).
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money (including net overdrafts
in any bank), (ii) all obligations of such Person evidenced by bonds,
debentures, notes, or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of Property or services,
except accounts payable arising in the ordinary course of business, (iv)
all Capitalized Lease Obligations of such Person, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not such Debt is
assumed by such Person, provided that, for purposes of determining the
amount of Debt of the type described in this clause, if recourse with
respect to such Debt is limited to such asset, the amount of such Debt
shall be limited to the fair market value thereof, (vi) all Debt of others
directly or indirectly guaranteed by such Person, (vii) all obligations of
such Person to reimburse the issuer of any letter of credit, and (viii) to
the extent not otherwise included, obligations of such Person under
Currency Agreements and Interest Rate Agreements.
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Senior Debt" means (i) Debt of the Company under or
in respect of the New Credit Facility and (ii) after such time as the New
Credit Facility shall have terminated, any other Debt constituting Senior
Indebtedness which at the time of determination has an aggregate amount
outstanding of at least $50,000,000 and is specifically designated in the
instrument creating or evidencing such Senior Indebtedness as "Designated
Senior Debt" by the Company.
"Dollar Equivalent" means, with respect to any monetary amount in
a currency other than U.S. dollars, at any time for the determination
thereof, the amount of U.S. dollars obtained by converting such foreign
currency involved in such computation into U.S. dollars at the spot rate
for the purchase of U.S. dollars with the applicable foreign currency as
quoted by Bankers Trust Company at approximately 11:00 a.m. (New York
time) on the date two business days prior to such determination.
"Event of Default" means any event or condition specified as such
in Section 6.01(a) which shall have continued for the period of time, if
any, therein designated.
"Excess Cash Proceeds" has the meaning provided in Section 4.09.
"Excess Proceeds Offer" has the meaning set forth in Section 4.09.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" or "generally accepted accounting principles" means
generally accepted accounting principles in the United
States as of the date or time of any computation including, without
limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession; provided,
that all ratios and computations based on GAAP contained herein shall be
computed in accordance with GAAP except that calculations made for the
purpose of determining compliance with Section 4.05 herein shall be made,
except as otherwise provided, without giving effect to adjustments in
component amounts required or permitted by Accounting Principles Board
Opinions Nos. 16 and 17 as a result of any Asset Acquisition made
subsequent to the date hereof.
"guarantee" by a Person means, without duplication, any
obligation, contingent or otherwise, of any Person directly or indirectly
guaranteeing any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or
other obligation of such other Person (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Debt or other obligation
of the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part), provided that the term "guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb has a corresponding meaning.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incurrence" means the incurrence, creation, assumption or in any
other manner becoming liable with respect to, or the extension of the
maturity of or becoming responsible for the payment of, any Debt; provided
that neither the accrual of interest, whether such interest is payable in
cash or in kind, nor the accretion of original issue discount shall be
considered an Incurrence of Debt. "Incur" shall have a comparable meaning.
"Indenture" means this Indenture as amended or supplemented from
time to time pursuant to the terms hereof.
"Initial Issue Date" means the date on which the initial series
of Securities is issued under this Indenture.
"Interest Payment Date," when used with respect to any Security,
means the stated maturity of an installment of interest specified in such
Security.
"Interest Rate," when used with respect to any series, means the
rate per annum specified in the Securities of such series as the rate of
interest accruing on the principal amount of the Securities of such series.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future, interest rate
option, interest rate swap, interest rate cap or other interest rate hedge
arrangement to or under which such Person or any of its Subsidiaries is a
party or a beneficiary on the date hereof or becomes a party or beneficiary
hereafter.
"Investment" means any capital contributions, advances or loans
to (including any guarantees of loans to), or investments in or purchases
of Capital Stock of, any Restricted Subsidiary of the Company.
"Issue Date" means the date on which a series is initially issued
under this Indenture.
"Joint Venture" means a joint venture or other similar
arrangement, whether in corporate, partnership or other legal form,
provided that any such arrangement which as to any Person is treated as a
Subsidiary of such Person shall not be considered to be a Joint Venture to
which such Person is a party.
"Legal Holiday" means any day other than a Business Day.
"Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For the purposes hereof, the Company shall be deemed to own
subject to a Lien any Property which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
Capitalized Lease or other title retention agreement relating to such
Property.
"Material Subsidiary" means as of any date any Subsidiary of the
Company (a) the value of whose assets, as such assets would appear on a
consolidated balance sheet of such Subsidiary and its Consolidated
Subsidiaries prepared as of the end of the fiscal quarter next preceding
such determination in accordance with GAAP, is at least 10% of the value of
assets of the Company and its Consolidated Subsidiaries, determined as
aforesaid or (b) which has revenues, as such revenues would appear on a
consolidated income statement of such Subsidiary and its Consolidated
Subsidiaries prepared for the four fiscal quarters next preceding such
determination in accordance with GAAP, constituting at least 10% of the
revenues of the Company and its Consolidated Subsidiaries for such last
four fiscal quarters or (c) which has Consolidated Cash Flow, as such
Consolidated Cash Flow would be determined from the consolidated financial
statements of such Subsidiary and its Consolidated Subsidiaries prepared
for the four fiscal quarters next preceding such determination in
accordance with GAAP, constituting at least 10% of the Consolidated Cash
Flow of the Company and its Consolidated Subsidiaries, determined as
aforesaid, for such last four fiscal quarters.
"Maturity Date," when used with respect to any series of
Securities, means the date specified in the Securities of such series as
the fixed date on which the final installment of principal of Securities of
such series is due and payable (in the absence of any acceleration thereof
pursuant to Section 6.02 or any Change of Control Offer or Excess Proceeds
Offer).
"Measurement Date," when used with respect to any calculation,
means the date of the transaction giving rise to the need to make such
calculation.
"Net Cash Proceeds" 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, excluding any other consideration received in
the form of assumption by the acquiring Person of Debt or other obligations
relating to the Property disposed of in such Asset Disposition or received
in any other noncash form) therefrom, or an equivalent amount of cash, 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 paid or required to be accrued as a liability under
GAAP (i) as a consequence of such Asset Disposition, (ii) as a result of
the repayment of any Debt required or permitted to be repaid pursuant to
Section 4.09 hereof in any jurisdiction other than the jurisdiction where
the Property disposed of was located or (iii) in connection with any actual
or anticipated repatriation to the United States of any proceeds of such
Asset Disposition for the purpose of repaying Senior Indebtedness of the
Company, investing in capital assets, or a Qualifying Business, of the
Company or making an Excess Proceeds Offer in each case in accordance with
Section 4.09 herein, and in each case net of a reasonable reserve
(consistent with GAAP or its equivalent in foreign jurisdictions) for the
after-tax cost of any indemnification payments (fixed and contingent)
attributable to seller's indemnities to the purchaser undertaken by the
Company or any of its Subsidiaries in connection with such Asset
Disposition, and net of all payments made on any Debt which is secured by
such Property, in accordance with the terms of any Lien upon or with
respect to such Property or which must by its terms 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 Income" of any Person for any period means the net income
(loss) of such Person for such period, determined in accordance with
generally accepted accounting principles (except that (i) any amount
representing the amortization of goodwill or other intangible assets
arising from acquisitions subsequent to the date hereof and extraordinary
or nonrecurring gains and losses shall be excluded therefrom, together with
the net tax effect on such Person solely as a result of such exclusion, and
(ii) for purposes of determining the Net Income of the Company, there
should be excluded the after-tax effect of the extraordinary charge to
earnings resulting from the redemption of the Outstanding Subordinated
Notes).
"Net Investments in Restricted Subsidiaries" means, with respect
to any Investment made by the Company, directly or indirectly, in a
Restricted Subsidiary as to which clause (iv) of the definition of
Restricted Payments would be applicable, the difference between (i) the
aggregate amount of all Investments made by the Company and its Wholly-
Owned Subsidiaries in a Restricted Subsidiary on or after the Initial Issue
Date (in the case of an investment made other than in cash, the amount
shall be determined in good faith by the Board of Directors, whose
determination shall be conclusive) and (ii) the sum of (A) the amount of
such aggregate Investments returned in cash or cash equivalents whether
through interest payments, principal payments, dividends or other
distributions (to the extent such amounts are not otherwise available for
making Restricted Payments pursuant to clause (b)(ii) of Section 4.05
hereof) and (B) the Net Cash Proceeds received by the Company or its
Wholly-Owned Subsidiaries from the disposition (other than to a Subsidiary
of the Company) of all or any portion of its Investments in such Restricted
Subsidiary; provided, however, that if such Restricted Subsidiary
subsequently becomes a Wholly-Owned Subsidiary of the Company, the Net
Investments in Restricted Subsidiaries for such Restricted Subsidiary shall
be zero. For purposes of the calculations to be made pursuant to clause
(vi) of the definition of Permitted Payments and clause (b)(iv) of Section
4.05 hereof, to the extent (i) above is greater than (ii) above, such
difference shall be positive and to the extent (ii) above is greater than
(i) above, such difference shall be negative.
"Net Restricted Purchase" means, with respect to any Restricted
Purchase by the Company, the difference between (i) the sum of the original
amount of such Restricted Purchase and all subsequent amounts paid or
contributed in respect of such Restricted Purchase by the Company or its
Wholly-Owned Subsidiaries (in the case of a Restricted Purchase or
subsequent contribution made other than in cash, the amount shall be
determined in good faith by the Board of Directors, whose determination
shall be conclusive), and (ii) the Net Cash Proceeds received by the
Company or its Wholly-Owned Subsidiaries from the disposition (other than
to a Subsidiary of the Company) of all or any portion of such Restricted
Purchase; provided, however, that if the entity that is the issuer or
obligor on the security underlying such Restricted Purchase subsequently
becomes a Wholly-Owned Subsidiary of the Company, the Net Restricted
Purchase for that Restricted Purchase shall be zero. For purposes of the
calculations to be made pursuant to paragraph (vi) of the definition of
Permitted Payments and clause (b) of Section 4.05 hereof, to the extent (i)
above is greater than (ii) above, such difference shall be positive and to
the extent (ii) above is greater than (i) above, such difference shall be
negative.
"Net Worth" of any Person as of any date means the aggregate of
capital attributable to Common Stock and Preferred Stock of such Person
having no sinking fund or mandatory redemption provisions payable prior to
the Maturity Date of all then outstanding series of Securities, surplus and
retained earnings of such Person and its Consolidated Subsidiaries as would
be shown on a consolidated balance sheet of such Person and its
Consolidated Subsidiaries prepared as of such date in accordance with GAAP.
"New Credit Facility" means, collectively, the Revolving Credit
Facility and the Term Loan Facility.
"Offer Amount" has the meaning provided in Section 4.09.
"Officer" means the Chairman of the Board of Directors, the Chief
Executive Officer, the President, any Vice President (whether or not
designated by a number or numbers or a word or words added before or after
the title "Vice President"), the Chief Financial Officer, Chief Operating
Officer, the Treasurer, the Secretary or the Controller of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary
of the Company on behalf of the Company and otherwise complying with the
requirements of Section 10.04 and Section 10.05 as they relate to the
making of an Officers' Certificate.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee, which may include counsel to
the Company, complying with the requirements of Section 10.04 and Section
10.05 as they relate to the giving of an Opinion of Counsel.
"Outstanding Subordinated Notes" means the $170 million principal
amount of 12-5/8% Senior Subordinated Notes due 1999 of the Company.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Payments" means, with respect to the Company or any of
its Subsidiaries: (i) any dividend or other distribution on shares of
Capital Stock payable solely in shares of Capital Stock (other than
Redeemable Stock) or in options, warrants or other rights to purchase
Capital Stock (other than Redeemable Stock); (ii) any dividend or other
distribution payable to the Company by any of its Subsidiaries or by a
Subsidiary to another Subsidiary (and in the case of a dividend or
distribution by a Subsidiary of the Company in which the Company owns,
directly or indirectly, less than 100% of the Capital Stock of such
Subsidiary, to any other holder of Capital Stock of such Subsidiary on a
pro rata basis); (iii) the purchase, redemption, retirement or other
acquisition by a Wholly-Owned Subsidiary of its Capital Stock; (iv) the
redemption, defeasance, repurchase or other acquisition or retirement for
value prior to scheduled maturity of any Debt which by its terms ranks pari
passu with, or subordinate in right of payment to, the Securities
(including any such redemption, defeasance, repurchase, acquisition or
retirement of any other series) with the proceeds from the issuance of (x)
Debt (including the issuance of a new series under this Indenture) which is
also pari passu with, or subordinate (on terms equally favorable to holders
of the Securities if such Debt is not a series issued under this Indenture)
in right of payment to, the Securities and which new Debt has no mandatory
prepayment (including at the option of the holder thereof, if such option
did not exist in the Debt being refinanced) prior to, and has a Stated
Maturity (including sinking fund payments) later than, the earlier of (A)
the Maturity Date of all outstanding series issued under this Indenture and
(B) the mandatory prepayment dates and Stated Maturity, as the case may be,
of the Debt being redeemed, defeased, repurchased or otherwise acquired,
provided that such Debt is called for redemption, defeased, repurchased or
otherwise acquired within 45 days after the date on which the additional
Debt is incurred or (y) Capital Stock (other than Redeemable Stock); (v)
the repurchase or other acquisition or retirement for value of any shares
of Capital Stock of the Company, or any option, warrant or other right to
purchase Capital Stock of the Company, with, or out of the proceeds of the
sale of, additional shares of Capital Stock of the Company other than
Redeemable Stock (unless the redemption provisions of such Redeemable Stock
prohibit the redemption thereof prior to the date on which the Capital
Stock to be acquired or retired was by its terms required to be redeemed);
provided that such proceeds are applied to the repurchase, retirement or
other acquisition within 45 days after the date on which the additional
shares of the Company's Capital Stock are issued; (vi) with respect to
any Restricted Purchase or Investment in a Restricted Subsidiary as to
which clause (iv) of the definition of Restricted Payments would be
applicable, the sum of (A) the aggregate amount of all Net Restricted
Purchases and all Net Investments in Restricted Subsidiaries, made on and
after the Initial Issue Date pursuant to this clause (vi) by the Company
and its Subsidiaries not in excess of $50 million, provided, however, that
the aggregate amount of all such Net Restricted Purchases shall not exceed
$20 million, plus (B) the sum of (x) the amount of all Investments existing
on the date hereof in Restricted Subsidiaries of the Company existing on
the Initial Issue Date returned in cash or cash equivalents whether through
interest payments, principal payments, dividends or other distributions (to
the extent such amounts are not otherwise available for making Restricted
Payments pursuant to clause (b)(ii) under Section 4.05 hereof) and (y) the
Net Cash Proceeds received by the Company or its Wholly-Owned Subsidiaries
from the disposition (other than to a Subsidiary of the Company) of all or
any portion of such Investments in such Restricted Subsidiaries; (vii)
Debt of the Company which is pari passu with or subordinated in right of
payment to the Securities purchased in anticipation of satisfying sinking
fund, principal installments or final maturity payments, in each case
within one year of the date of such purchase; (viii) the redemption (or
defeasance prior to redemption) of the Outstanding Subordinated Notes;
(ix) the repurchase of any Debt which is pari passu with or subordinated in
right of payment to any series of Securities (including any such
repurchases of any other series of Securities) ("Other Debt") pursuant to
a "change of control" or "asset disposition" covenant set forth in the
related indenture or other agreement pursuant to which such Debt is
outstanding (or pursuant to Section 4.07 or 4.09 hereof if such Other Debt
to be redeemed is Securities issued under this Indenture), provided that
such repurchase shall only be permitted if all of the terms and conditions
in such provisions have been fully complied with and such repurchases are
made in accordance with the provisions hereof and such indenture or
agreement, and provided, further, that the Company has repurchased all
Securities of any series required to be repurchased by the Company pursuant
to Sections 4.07 and 4.09 hereof prior to the repurchase of any Other Debt
pursuant to the "change of control" or "asset disposition" covenant in such
indenture or other agreement, if such Other Debt is not a series of
Securities issued under this Indenture, or the provisions described under
Sections 4.07 and 4.09 hereof if such Other Debt is a series of Securities
issued under this Indenture; (x) the acquisition and holding of
receivables owing to the Company or any of its Subsidiaries or acquired in
the ordinary course of business and payable or dischargeable in accordance
with customary trade terms, provided that nothing in this clause (x) shall
prevent the Company or any Subsidiary from offering such concessionary
trade terms as management deems appropriate; (xi) any securities received
in satisfaction or partial satisfaction thereof from financially troubled
debtors with whom the Company or any of its Subsidiaries has dealings in
the ordinary course of business; and (xii) the acquisition of any Debt or
securities received for assets sold or otherwise disposed of in accordance
with Section 4.09 hereof.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"principal" of a debt security means the principal amount of the
security plus, when appropriate, the premium, if any, on the security.
"Preferred Stock," as applied to the Capital Stock of any Person,
means Capital Stock of such Person (other than Common Stock of such Person)
of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary
or involuntary liquidation, dissolution or winding up of such Person, to
shares of Capital Stock of any other class of such Person.
"Pro Forma Coverage Ratio" means the ratio, on a pro forma basis,
of (i) the aggregate amount of Consolidated Cash Flow of any Person for the
Reference Period immediately prior to the Measurement Date to (ii) the
aggregate Consolidated Fixed Charges of such Person during such Reference
Period; provided that for purposes of such computation, in calculating
Consolidated Cash Flow and Consolidated Fixed Charges, (1) the Incurrence
of the Debt or the Subsidiary Preferred Stock giving rise to the need to
calculate the Pro Forma Coverage Ratio and the application of the proceeds
therefrom shall be assumed to have occurred on the first day of the
Reference Period, (2) Asset Sales and Asset Acquisitions which occur
during the Reference Period or subsequent to the Reference Period and prior
to the Measurement Date (but including any Asset Acquisition to be made
with the Debt Incurred pursuant to (1) above) shall be assumed to have
occurred on the first day of the Reference Period, (3) the Incurrence of
any Debt or Subsidiary Preferred Stock during the Reference Period or
subsequent to the Reference Period and prior to the Measurement Date and
the application of the proceeds therefrom shall be assumed to have occurred
on the first day of such Reference Period, (4) Consolidated Fixed Charges
attributable to any Debt or Subsidiary Preferred Stock (whether existing or
being Incurred) computed on a pro forma basis and bearing a floating
interest rate shall be computed as if the rate in effect on the Measurement
Date had been the applicable rate for the entire period unless such Person
or any of its Subsidiaries is a party to an Interest Rate Agreement or
Currency Agreement which has the effect of fixing the interest rate on the
date of computation, in which case such rate (whether higher or lower)
shall be used, and (5) there shall be excluded from Consolidated Fixed
Charges any Consolidated Fixed Charges related to any Debt or Subsidiary
Preferred Stock which was outstanding during or subsequent to the Reference
Period but is not outstanding on the Measurement Date. For the purposes of
making the computation referred to above, Asset Sales and Asset
Acquisitions which have been made by any Person which has become a
Subsidiary of the Company or been merged with or into the Company or any
Subsidiary of the Company during the Reference Period or subsequent to the
Reference Period and prior to the Measurement Date shall be calculated on a
pro forma basis (including all of the calculations referred to in numbers
(1) through (5) above) assuming such Asset Sales or Asset Acquisitions
occurred on the first day of the Reference Period.
"Proceeds Purchase Date" has the meaning set forth in Section 4.09.
"Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included on the most recent consolidated balance sheet of such Person in
accordance with GAAP.
"Purchase Money Obligations" means Debt of the Company or its
Subsidiaries secured by Liens (i) on Property or assets acquired after the
date hereof and used in the ordinary course of business by the Company and
its Subsidiaries and (ii) securing the payment of all or any part of the
purchase price of such Property or assets and limited to the Property or
assets so acquired and improvements thereof.
"Purchase Price" has the meaning provided in Section 4.07.
"Qualifying Business" means a business at least a majority of the
revenues of which result from the manufacture and/or sale of commercial
products.
"Redeemable Stock" means, with respect to the Company and its
Subsidiaries, any class or series of Capital Stock which is (i) redeemable
at the option of the holder or is subject to mandatory redemption prior to
the Maturity Date of all outstanding series issued under this Indenture or
(ii) convertible into or exchangeable for either Capital Stock referred to
in clause (i) or Debt having a scheduled maturity prior to the Maturity
Date of all outstanding series issued under this Indenture, provided that
any Capital Stock which would not constitute Redeemable Stock but for
provisions thereof giving holders thereof the right to require the Company
to repurchase or redeem such Capital Stock upon the occurrence of a "change
in control" or "asset disposition" occurring prior to the Maturity Date of
all outstanding series issued under this Indenture shall not constitute
Redeemable Stock if the "change in control" or "asset disposition"
provisions applicable to such Capital Stock are no more favorable to the
holders of such Capital Stock than the provisions described under Sections
4.07 and 4.09 hereof and such Capital Stock specifically provides that the
Company will not repurchase or redeem any such stock pursuant to such
provisions prior to the Company's repurchase of such Securities as are
required to be repurchased pursuant to the provisions described under
Sections 4.07 and 4.09 hereof.
"Reference Period" means the four fiscal quarters ending with the
most recent fiscal quarter for which financial information was required to
be sent to Holders of the Securities pursuant to the provisions hereof and
which ended immediately preceding the Measurement Date.
"Registrar" has the meaning provided in Section 2.03.
"Restricted Payments" means with respect to any Person (i) any
dividend or other distribution on any shares of such Person's Capital
Stock; (ii) any payment on account of the purchase, redemption, retirement
or other acquisition of (a) any shares of such Person's Capital Stock or
(b) any option, warrant or other right to acquire shares of such Person's
Capital Stock; (iii) any defeasance, redemption, repurchase or other
acquisition or retirement for value prior to the Stated Maturity of any
Debt ranked pari passu with or subordinated in right of payment to the
Securities and having a final Stated Maturity subsequent to the Maturity
Date; (iv) any Investment outside of the ordinary course of business in
any Restricted Subsidiary; or (v) any Restricted Purchase by the Company or
any of its Subsidiaries. Notwithstanding the foregoing, "Restricted
Payment" shall not include any "Permitted Payment."
"Restricted Purchase" means (i) any purchase by the Company or
any of its Subsidiaries of non-convertible debt securities or non-
convertible Preferred Stock of any entity (other than from a Wholly-Owned
Subsidiary or a Restricted Subsidiary described in clause (ii) of the
definition thereof) in any such case having a remaining term in excess of
one year from the date of purchase which at the time of purchase is not
rated investment grade by either Moody's Investors Service, Inc. or
Standard & Poor's Corporation and (ii) any purchase by the Company or any
of its Subsidiaries of Common Stock, or securities convertible into Common
Stock, of any entity (other than from a Wholly-Owned Subsidiary or a
Restricted Subsidiary) if after giving effect to such purchase the Company
and its Subsidiaries directly or indirectly own less than a majority of the
outstanding Common Stock of such entity.
"Revolving Credit Facility" means the Revolving Credit Facility
under a Credit Agreement dated as of ( ) among the Company, the lenders
listed therein and Bankers Trust Company, as Agent, as such Agreement may
be amended, restated, supplemented or otherwise modified from time to time,
and includes any agreements, documents or instruments extending the
maturity of, refinancing, replacing or restructuring (including, but not
limited to, the inclusion of additional borrowers thereunder that are
Subsidiaries of the Company and whose obligations are guaranteed by the
Company thereunder) all or any portion of, the Debt under such Agreement or
any successor agreements (which extensions, refinancings, replacements or
restructurings may not provide for borrowings in excess of $175 million
plus the direct costs and expenses incurred in connection therewith).
"Restricted Subsidiary" means (i) any Joint Venture in which the
Company or any of its Subsidiaries holds a 50% or less interest or (ii) any
Subsidiary of the Company which is not a Wholly-Owned Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Security" or "Securities" means any of the Senior Subordinated
Notes issued, authenticated and delivered under this Indenture, as amended
or supplemented from time to time pursuant to the terms hereof.
"Senior Indebtedness" means all Debt of the Company, including
principal, premium, if any, and interest on or in connection with Debt of
the Company (other than the Securities), whether presently outstanding or
hereafter created, incurred or assumed, other than Debt which by its terms
or the terms of the instrument creating or evidencing it is subordinate in
right of payment to or pari passu with the Securities, provided that Senior
Indebtedness shall not include (A) any Debt, liability or obligation of the
Company to (i) any of its Subsidiaries, (ii) trade creditors or (iii) any
Person arising out of any lawsuit against the Company or any of
Subsidiaries or any settlement thereof, (B) any liability for
taxes, (C) any redemption of or other payments on Preferred Stock, (D) any
Debt Incurred in violation of the provisions hereof, (E) any Debt of the
Company which when incurred and without regard to any election under
Section 1111(b) of the Bankruptcy Code, was without recourse to the Company
or (F) the Outstanding Subordinated Notes, which shall rank pari passu with
the Securities.
"Senior Representative" means the trustee, agent or
representative of holders of a class of Senior Indebtedness of the Company
who has been identified in writing to the Trustee and the Company.
"series" means a series of Securities or the Securities of the series.
"State" means each of the states of the United States, the
District of Columbia and the Commonwealth of Puerto Rico.
"Stated Maturity" means, with respect to any security or
Indebtedness, the date specified in such security or Indebtedness as the
fixed date on which the principal of such security or Indebtedness is due
and payable, including pursuant to any mandatory redemption provision
(other than pursuant to any provision providing for the repurchase of such
security at the option of the holder thereof).
"Subsidiary" means, with respect to any Person, any corporation
or other entity of which a majority of the Capital Stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions is at the time
directly or indirectly owned by such Person. Unless the context otherwise
requires, the term "Subsidiary" as used herein means a Subsidiary of the
Company.
"Subsidiary Preferred Stock" with respect to any Person means any
series of Preferred Stock issued by a Subsidiary of such Person.
"Term Loan Facility" means the Term Loan Facility under a Credit
Agreement dated as of ( ) among the Company, the lenders listed therein and
Bankers Trust Company, as Agent, as such Agreement may be amended,
restated, supplemented or otherwise modified from time to time, and
includes any agreements, documents or instruments extending the maturity
of, refinancing, replacing or restructuring (including, but not limited to,
the inclusion of additional borrowers thereunder that are Subsidiaries of
the Company and whose obligations are guaranteed by the Company thereunder)
all or any portion of, the Debt under such Agreement or any successor
agreements (which extensions, refinancings, replacements or restructurings
may not provide for borrowings in excess of $100 million less mandatory
prepayments actually made plus the direct costs and expenses incurred in
connection therewith).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture
except as otherwise provided in Section 9.03.
"Transfer Agent" has the meaning provided in Section 2.03.
"Trustee" means the party named in this Indenture as "Trustee"
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"Trust Officer" means an officer or assistant officer of the
Trustee assigned to the Corporate Trustee Administration Department or
similar department performing corporate trust work, or any successor to
such department or, in the case of a successor trustee, an officer assigned
to the department, division or group performing the corporate trust work of
such successor.
"U.S. Government Obligations" means securities which are (i)
direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which in either case are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt issued
by a bank or trust company as custodian with respect to any such U.S.
Government Obligations or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account
of the holder of a depository receipt; provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government
Obligation evidenced by such depository receipt.
"Wholly-Owned Subsidiary" means, with respect to the Company,
Sealed Air S.A. (and any successor thereto) and any other Subsidiary of
the Company of which all outstanding voting stock (other than directors'
qualifying shares) is owned directly or indirectly by the Company.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision shall be deemed incorporated by reference in and made a part of
this Indenture. The following TIA terms used in this Indenture have the
following meanings:
(1) "Commission" means the SEC;
(2) "indenture securities" means the Securities;
(3) "indenture security holder" means a Securityholder;
(4) "indenture to be qualified" means this Indenture;
(5) "indenture trustee" or "institutional trustee" means the
Trustee; and
(6) "obligor" on the indenture securities means the Company or
any other obligor on the 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
and not otherwise defined herein have the meanings so assigned to them
therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words in the
plural include the singular;
(4) provisions apply to successive events and transactions;
(5) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section
or other subdivision; and
(6) unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with GAAP as in effect from
time to time, applied on a basis consistent with the most recent
audited consolidated financial statements of the Company.
ARTICLE II.
THE SECURITIES
SECTION 2.01. Designation; Issuable in Series.
(The Debt evidenced by the Securities and otherwise arising under
this Indenture is hereby irrevocably designated as "senior indebtedness"
with respect to any existing or future Debt of the Company that is
subordinated to any Debt of the Company that ranks pari passu with the
Securities. The Securities shall be senior to such subordinated Debt to
the same extent and in the same manner as such subordinated Debt is
subordinated to any such pari passu Debt.)
The aggregate principal amount of Securities that may be issued
under this Indenture is unlimited. The Securities may be issued from time
to time in one or more series. Each series shall be created by a Bond
Resolution or a supplemental indenture that establishes the terms of the
series, which may include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate, if any, or method of calculating the
interest rate;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Registered
Securities;
(6) the dates when principal and interest are payable;
(7) the manner of paying principal and interest;
(8) the places where principal and interest are payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemption by the
Company;
(11) the terms of any redemption at the option of Holders;
(12) the denominations in which Securities are issuable;
(13) whether and upon what terms Registered Securities may be
exchanged;
(14) whether any Securities will be represented by a Security in
global form;
(15) the terms of any global Security;
(16) the terms of any tax indemnity;
(17) if amounts of principal or interest may be determined by
reference to an index, formula or other method, the manner
for determining such amounts;
(18) provisions for electronic issuance of Securities or for
Securities in uncertificated form;
(19) the portion of principal payable upon acceleration of a
Discounted Security;
(20) any Events of Default or covenants in addition to or in lieu
of those set forth in this Indenture;
(21) whether and upon what terms Securities may be defeased;
(22) the forms of the Securities or any coupon, which may be in
the form of Exhibit A;
(23) any terms that may be required by or advisable under U.S. or
other applicable laws; and
(24) any other terms not inconsistent with this Indenture.
All Securities of one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened for issuances of
additional Securities of such series.
The creation and issuance of a series and the authentication and
delivery thereof are not subject to any conditions precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities. An
Officer shall sign any coupons by facsimile signature.
If an Officer whose signature is on a Security or its coupons no
longer holds that office at the time the Security is authenticated or
delivered, the Security and coupons shall nevertheless be valid.
A Security and its coupons shall not be valid until the Security
is authenticated by the manual or facsimile signature of the Trustee. The
signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
Each Registered Security shall be dated the date of its
authentication.
Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreement or usage.
SECTION 2.03. Bond Agents.
The Company shall maintain an office or agency where Securities
may be authenticated ("Registrar"), where Securities may be presented for
registration of transfer or for exchange ("Transfer Agent") and where
Securities may be presented for payment ("Paying Agent"). Whenever the
Company must issue or deliver Securities pursuant to this Indenture, the
Registrar shall authenticate the Securities at the Company's request.
The Transfer Agent shall keep a register of the Securities and of their
transfer and exchange.
The Company may appoint more than one Registrar, Transfer Agent
or Paying Agent for a series. The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture. If the
Company fails to maintain a Registrar, Transfer Agent or Paying Agent for a
series, the Trustee shall act as such.
SECTION 2.04. Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent for a series other
than the Trustee to agree in writing that the Paying Agent will hold in
trust for the benefit of the persons entitled thereto all money held by the
Paying Agent for the payment of principal of or interest on the series, and
will notify the Trustee of any default by the Company in making any such
payment.
While any such default continues, the Trustee may require a
Paying Agent to pay all money so held by it to the Trustee. The Company at
any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent shall have no
further liability for the money.
If the Company or an Affiliate acts as Paying Agent for a series,
it shall segregate and hold as a separate trust fund all money held by it
as Paying Agent for the series.
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 Transfer Agent, the Company
shall furnish to the Trustee semiannually and at such other times as the
Trustee may request a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders.
SECTION 2.06. Transfer and Exchange.
Where Securities of a series are presented to the Transfer Agent
with a request to register a transfer or to exchange them for an equal
principal amount of Securities of other denominations of the series, the
Transfer Agent shall register the transfer or make the exchange if its
requirements for such transactions are met.
The Transfer Agent may require a Holder to pay a sum sufficient
to cover any taxes imposed on a transfer or exchange.
SECTION 2.07. Replacement Securities.
If the Holder of a Security or coupon claims that it has been
lost, destroyed or wrongfully taken, then, in the absence of notice to the
Company or the Trustee that the Security or coupon has been acquired by a
bona fide purchaser, the Company shall issue a replacement Security or
coupon if the Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or
taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and any
taxes for replacing the Security or coupon.
A replacement Security shall have coupons attached corresponding to those,
if any, on the replaced Security.
Every replacement Security or coupon is an additional obligation
of the Company.
SECTION 2.08. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Registrar except for those cancelled by it, those
delivered to it for cancellation, and those described in this Section as
not outstanding.
If a Security is replaced pursuant to Section 2.08, 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 Securities are considered paid under Section 4.01, they cease
to be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company
or an Affiliate holds the Security.
SECTION 2.09. Discounted Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
the principal amount of a Discounted Security shall be the amount of
principal that would be due as of the date of such determination if payment
of the Security were accelerated on that date.
SECTION 2.10. Treasury Securities.
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 an Affiliate shall be disregarded,
except that for the purposes 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.
SECTION 2.11. Global Securities.
If the Bond Resolution so provides, the Company may issue some or
all of the Securities of a series in temporary or permanent global form. A
global Security may be in registered form, in bearer form with or without
coupons or in uncertificated form. A global Security shall represent that
amount of Securities of a series as specified in the global Security or as
endorsed thereon from time to time. At the Company's request, the
Registrar shall endorse a global Security to reflect the amount of any
increase or decrease in the Securities represented thereby.
The Company may issue a global Security only to a depository
designated by the Company. A depository may transfer a global Security
only as a whole to its nominee or to a successor depository.
The Bond Resolution may establish, among other things, the manner
of paying principal and interest on a global Security and whether and upon
what terms a beneficial owner of an interest in a global Security may
exchange such interest for definitive Securities.
The Company, an Affiliate, the Trustee and any Agent shall not be
responsible for any acts or omissions of a depository, for any depository
records of beneficial ownership interests or for any transactions between
the depository and beneficial owners.
SECTION 2.12. Temporary Securities.
Until definitive Securities of a series are ready for delivery,
the Company may use 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. Temporary
Securities may be in global form. Without unreasonable delay, the Company
shall deliver definitive Securities in exchange for temporary Securities.
SECTION 2.13. Cancellation.
The Company at any time may deliver Securities to the Registrar
for cancellation. The Transfer Agent and the Paying Agent shall forward to
the Registrar any Securities and coupons surrendered to them for payment,
exchange or registration of transfer. The Registrar shall cancel all
Securities or coupons surrendered for payment, registration of transfer,
exchange or cancellation as follows: the Registrar will cancel all
Securities and matured coupons. The Registrar shall destroy cancelled
Securities and coupons unless the Company otherwise directs.
Unless the Bond Resolution otherwise provides, the Company may
not issue new Securities to replace Securities that the Company has paid or
that the Company has delivered to the Registrar for cancellation.
SECTION 2.14. Defaulted Interest.
If the Company defaults in a payment of interest on Securities,
it need not pay the defaulted interest to Holders on the regular record
date. The Company may fix a special record date for determining Holders
entitled to receive defaulted interest or the Company may pay defaulted
interest in any other lawful manner.
ARTICLE III.
REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before maturity shall
be redeemable in accordance with their terms and, unless the Bond
Resolution otherwise provides, in accordance with this Article.
In the case of a redemption by the Company, the Company shall
notify the Trustee of the redemption date and the principal amount of
Securities to be redeemed. The Company shall notify the Trustee at least
45 days before the redemption date unless a shorter notice is satisfactory
to the Trustee.
If the Company is required to redeem Securities, it may reduce
the principal amount of Securities required to be redeemed to the extent it
is permitted a credit by the terms of the Securities and it notifies the
Trustee of the amount of the credit and the basis for it. If the reduction
is based on a credit for acquired or redeemed Securities that the Company
has not previously delivered to the Registrar for cancellation, the Company
shall deliver the Securities at the same time as the notice.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all the Securities of a series are to be redeemed,
the Trustee shall select the Securities to be redeemed by a method the
Trustee considers fair and appropriate. The Trustee shall make the
selection from Securities of the series outstanding not previously called
for redemption. The Trustee may select for redemption portions of the
principal of Securities having denominations larger than the minimum
denomination for the series. Securities and portions thereof selected for
redemption shall be in amounts equal to the minimum denomination for the
series or an integral multiple thereof. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of
Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption by first-class mail to
each Holder of Registered Securities whose Securities are to be redeemed.
A notice shall identify the Securities of the series 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, together with all
coupons, if any, maturing after the redemption date, must be
surrendered to the Paying Agent to collect the redemption
price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date; and
(6) whether the redemption by the Company is mandatory or
optional.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is given, Securities called for
redemption become due and payable on the redemption date at the redemption
price stated in the notice.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall deposit with
the Paying Agent money sufficient to pay the redemption price of and
accrued interest on all Securities to be redeemed on that date.
When the Holder of a Security surrenders it for redemption in
accordance with the redemption notice, the Company shall pay to the Holder
on the redemption date the redemption price and accrued interest to such
date, except that:
(1) the Company will pay any such interest (except defaulted
interest) to Holders on the record date of Securities if the
redemption date occurs on an interest payment date; and
(2) the Company will pay any such interest to Holders of coupons
that mature on or before the redemption date upon surrender
of such coupons to the Paying Agent.
Coupons maturing after the redemption date on a called Security
are void absent a payment default on that date.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Company shall deliver to the Holder a new Security of the same series equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV.
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a series
in accordance with the terms of the Securities for the series, any related
coupons and this Indenture.
An installment of principal or interest on a series shall be
considered paid on the date due if the Paying Agent for the series holds on
such date immediately available funds designated for and sufficient to pay
such installment then due on such series.
The Company shall pay interest on overdue principal of a Security
of a series and on overdue installments of interest of a Security of a
series, in each case at the rate per annum (or Yield to Maturity in the
case of a Discounted Security) specified in the series, to the extent
lawful.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City
of New York, an office or agency, where each of the Securities may be
surrendered for registration of transfer or exchange or for presentation
for payment and where notices and demands to or upon the Company in respect
of the series and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address of the Trustee set forth
in Section 10.02.
The Company may also from time to time designate one or more
other offices or agencies where a series may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations, provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York, for such
purposes. The Company will give prompt written notice to the Trustee of
any such designation or rescission and of any change in the location of any
such other office or agency.
The Company hereby initially designates the corporate trust
office of the Trustee set forth in Section 10.02 as an agency of the
Company in accordance with Section 2.03.
SECTION 4.03. Compliance Certificates.
(a) The Company shall deliver to the Trustee of each series,
within 120 days after the end of its Fiscal Year, Officers' Certificates of
the Company stating (i) that a review of the activities of the Company
during the preceding Fiscal Year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture and
the Securities, and (ii) that, to the best knowledge of such Officer after
due inquiry, the Company is not in default in the performance or observance
of any of the terms, provisions and conditions hereof (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge, their status
and what action the Company is taking or proposes to take with respect
thereto). The first certificate to be delivered pursuant to this Section
4.03(1) shall be for the first Fiscal Year of the Company ending after the
Initial Issue Date.
(b) The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee of each series, forthwith upon any
Officer becoming aware of (i) any Default, Event of Default or default in
the performance of any covenant, agreement or condition contained in the
Securities or this Indenture or (ii) any event of default under any other
Indebtedness referred to in Section 6.01(a)(iv) or (v) continuing beyond 45
days, an Officers' Certificate specifying such Default, Event of Default,
default or event of default and what action the Company is taking or
proposes to take with respect thereto.
SECTION 4.04. Reports.
So long as any Security of any series is outstanding, the Company
shall file with the SEC the annual reports, quarterly reports and the
information, documents and other reports required to be filed by the
Company with the SEC pursuant to Sections 13 and 15 of the Exchange Act,
whether or not the Company has or is required to have a class of securities
registered under the Exchange Act, at the time it is or would be required
to file the same with the SEC and within 15 days after it is or would be
required to file such reports, information or documents with the SEC shall
mail such reports, information and documents to the Holders at their
addresses set forth in the Register of Securities maintained by the
Registrar and the Trustee. In accordance with the provisions of TIA
Section 314(a), at any time that the Company has (whether or not required
by the Exchange Act) a class of securities registered under the Exchange
Act, and at any time that the Company is required to file such reports,
information and documents pursuant to the first sentence of this Section
4.04, the Company (at its own expense) shall file with the Trustee, within
15 days after it is or would be required to file them with the SEC, copies
of the annual reports 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 is required to file with the
SEC pursuant to Section 13 or 15 of the Exchange Act or pursuant to the
first sentence of this Section 4.04. The Company also shall comply with
the other provisions of TIA Section 314(a).
If the Company is required to furnish annual or quarterly reports
to its stockholders pursuant to the Exchange Act, the Company shall cause
any annual report furnished to its stockholders generally and any quarterly
or other financial reports furnished by it to its stockholders generally to
be filed with the Trustee and mailed, no later than the date such materials
are mailed or made available to the Company's stockholders, to the Holders
at their addresses appearing in the register of Securities maintained by
the Registrar and the Trustee. If the Company is not required to furnish
annual or quarterly reports to its stockholders pursuant to the Exchange
Act, the Company shall cause its financial statements, including any notes
thereto (and with respect to annual reports, an auditors' report by a firm
of established national reputation reasonably satisfactory to the Trustee),
and a "Management's Discussion and Analysis of Financial Condition and
Results of Operations," to be so mailed to the Holders within 120 days
after the end of each of its Fiscal Years and within 60 days after the end
of each of its first three fiscal quarters. The Company will cause to be
disclosed in a statement accompanying any annual report or comparable
information as of the date of the most recent financial statements in each
such report or comparable information the amount available for payments
pursuant to Section 4.05 hereof.
SECTION 4.05. Limitation on Restricted Payments.
On and after the Initial Issue Date, the Company will not, and
will not permit any Subsidiary to, directly or indirectly make any
Restricted Payment if after giving effect thereto
(a) an Event of Default, or an event that through the passage of
time or the giving of notice, or both, would become an Event of Default,
shall have occurred and be continuing; or
(b) the aggregate amount of all Restricted Payments (described in
clauses (i), (ii) and (iii) of the definition thereof) and the Net
Investments in Restricted Subsidiaries and the Net Restricted Purchasers
(in each case other than those made pursuant to clause (vi) of the
definition of Restricted Payments) made by the Company and its Subsidiaries
(the amount expended or distributed for such purposes, if other than in
cash, to be valued at its fair market value as of the date of determination
(declaration in the case of a dividend) as determined in good faith by the
Board of Directors, whose determination shall be conclusive and evidenced
by a resolution of the Board of Directors delivered to the Trustee) from
and after the Initial Issue Date shall exceed the sum (without duplication)
of:
(i) $50,000,000;
(ii) the aggregate of 50% of the Consolidated Net Income of the
Company accrued for the period (taken as one accounting period)
commencing with the first day of the Company's Fiscal Quarter in which
the Initial Issue Date occurs to and including the fiscal quarter
ended immediately prior to the date of such calculation, provided that
if Consolidated Net Income for such period is less than zero, then
minus 100% of the amount of such loss; and
(iii) the aggregate net proceeds, including the fair market value
of Property other than cash (as determined in good faith by the Board
of Directors, whose determination shall be conclusive and evidenced by
a resolution of the Board of Directors filed with the Trustee),
received by the Company from the issuance or sale (other than to a
Subsidiary of the Company) of its Capital Stock from and after the
first day of the Company's fiscal quarter in which the Initial Issue
Date occurs (excluding Redeemable Stock, but including Capital Stock
other than Redeemable Stock issued upon conversion of, or in exchange
for, Redeemable Stock or securities other than its Capital Stock), and
options, warrants and rights to purchase its Capital Stock (other than
Redeemable Stock);
provided that the foregoing clauses (a) and (b) shall not prevent Permitted
Payments and the foregoing clause (b) shall not prevent (y) the payment of
any dividend or other distribution within 60 days after the date of its
declaration if such dividend or other distribution could have been made on
the date of its declaration without violation of the provisions of this
covenant, or (z) the purchase or redemption of Capital Stock of the Company
or options in respect thereof issued in connection with the Company's
employee benefit plans in an agrregate amount of up to $1,000,000, provided
that in determining the aggregate amount of purchases or redemptions
permitted pursuant to this clause (z) such amount shall be increased by the
amount of cash received upon sale of any Capital Stock that is sold to
employees of the Company or any of its Subsidiaries pursuant to such
employee benefits plans (the "Additional Repurchase Amount"). For purposes
of this Section 4.05, the amount of Restricted Payments made pursuant to
clauses (y) and (z) above shall be included in any computation of the
amount of Restricted Payments made pursuant to this Section 4.05 (for
purposes of this sentence, the amount of Restricted Payments made with
respect to this clause (z) above shall be equal to the excess of the
amounts actually purchased or redeemed over the Additional Repurchase
Amount). For purposes of clause (b)(iii) of this Section 4.05, the
aggregate net proceeds received by the Company (x) from the issuance of its
Capital Stock upon the conversion of, or exchange for, securities
evidencing Debt of the Company, shall be calculated on the assumption that
the gross proceeds from such issuance are equal to the aggregate principal
amount (or, if discount Debt, the accreted principal amount) of the Debt
evidenced by such securities converted or exchanged and (y) upon the
conversion or exchange of other securities of the Company shall be equal to
the aggregate net proceeds of the original sale of the securities so
converted or exchanged if such proceeds of such original sale were not
previously included in any calculation for the purposes of clause (b)(iii)
of this Section 4.05 plus any additional sums payable upon conversion or
exchange.
SECTION 4.06. Limitation on Debt.
The Company will not, and will not permit any of its Subsidiaries
to, Incur any Debt, including Acquisition Debt, or Subsidiary Preferred
Stock, if the Pro Forma Coverage Ratio of the Company is less than 2.25 to
1 through December 31, 1996; and 2.5 to 1 thereafter.
Notwithstanding the foregoing, the Company and its Subsidiaries
may incur each and all of the following:
(a) Debt of the Company evidenced by the Securities provided
that Securities of any series to be issued subsequent to the Initial
Issue Date may be issued under this Indenture only if such subsequent
series of Securities may be incurred pursuant to the Pro Forma
Coverage Ratio or pursuant to clauses (h) or (i) below (except that if
incurred pursuant to the Pro Forma Coverage Ratio or pursuant to
clause (h) below, such subsequent series shall for all purposes be
considered Securities permitted under this clause (a));
(b) Debt of the Company evidenced by the Outstanding
Subordinated Notes (or borrowings under the Term Loan Facility under
the New Credit Facility if such borrowings are used to finance
redemption of the Outstanding Subordinated Notes);
(c) other Debt of the Company and its Subsidiaries or Subsidiary
Preferred Stock outstanding on the Initial Issue Date;
(d) all obligations of the Company and its Subsidiaries now or
hereafter existing under the New Credit Facility, whether for
principal, interest, or reimbursement of amounts drawn under letters
of credit issued pursuant thereto, guarantees in respect thereof,
fees, expenses, premium, indemnities or otherwise;
(e) obligations under Interest Rate Agreements and Currency
Agreements;
(f) Debt of the Company to any of its Wholly-owned Subsidiaries
or Debt or Subsidiary Preferred Stock of a Subsidiary to the Company
or to a Wholly-owned Subsidiary of the Company, provided that if the
Company is the obligor of such Debt, such Debt is expressly
subordinate to the Securities on terms at least as favorable to the
holders of the Securities as the subordination provisions set forth in
the Securities are to holders of Senior Indebtedness;
(g) Capitalized Lease Obligations and Purchase Money Obligations
of the Company and its Subsidiaries, in each case with respect to
hereafter acquired Property or equipment or Capitalized Lease
Obligations resulting from sale/leaseback transactions, and not to
exceed for all such Capitalized Lease Obligations and Purchase Money
Obligations in the aggregate $25 million incurred in any one year or
$70 million outstanding at any one time;
(h) Debt issued in exchange for, or the proceeds of which are
used to refinance, replace or refund outstanding Debt of the Company
(other than Debt referred to in clause (b) above) or any of its
Subsidiaries or Subsidiary Preferred Stock in an amount (or, if such
new Debt is issued at a price less than the principal amount thereof,
with an original issue price) not to exceed the amount so exchanged or
refinanced (plus accrued interest and fees and expenses related
thereto), provided that the new Debt exchanged for, or the proceeds of
which are used to refinance, the Securities or other Debt of the
Company which is pari passu or subordinated to the Securities shall
only be permitted (1) if, in case the Securities of a series are
refinanced or exchanged in part, such new Debt is expressly made pari
passu or subordinate in right of payment to the remaining Securities,
(2) if the Debt to be exchanged or refinanced is subordinate to the
Securities, such new Debt is subordinate to the Securities at least to
the extent and in the manner that the Debt to be exchanged or
refinanced is subordinate to the Securities, and (3) if, in case the
Securities of a series are exchanged or refinanced in part or the Debt
to be exchanged or refinanced is subordinated to the Securities, no
payments of principal of such new Debt by way of sinking fund,
mandatory redemption or otherwise (including defeasance) may be made
by the Company (including, without limitation, at the option of the
holder thereof other than an option given to a holder pursuant to
Sections 4.07 and 4.09 hereof, if such new Debt is a series of
Securities issued under this Indenture, or a "change of control" or
"asset disposition" covenant which is no more favorable to the holders
of such Debt than the provisions described under Sections 4.07 and
4.09 hereof, if such new Debt is not a series of Securities issued
under this Indenture, and such new Debt provides that the Company will
not repurchase such Debt pursuant to such provisions prior to the
Company's repurchase of the Securities of any series required to be
repurchased by the Company pursuant to the provisions described under
Sections 4.07 and 4.09) hereof at any time prior to the Maturity Date
of all outstanding series of Securities;
(i) Debt of the Company or a Subsidiary of the Company, whether
secured or unsecured, and Subsidiary Preferred Stock in each case not
otherwise permitted hereby; provided that the sum of the aggregate
principal amount of such Debt (or, if such Debt is issued at a price
less than the principal amount thereof, the original issue price) and
the aggregate liquidation value of such Subsidiary Preferred Stock
does not exceed $60,000,000 at any one time outstanding;
(j) Debt in an aggregate amount not to exceed $10,000,000 at any
one time outstanding in respect of performance bonds and surety bonds
provided in the ordinary course of business, and refinancings thereof;
(k) Except in the case of daylight overdrafts, Debt arising from
the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient
funds in the ordinary course of business; provided that such Debt is
extinguished within two business days of its Incurrence;
(l) Debt in an aggregate amount not to exceed $5,000,000 at any
time outstanding under guarantees Incurred in the ordinary course of
business of obligations of suppliers, licensees or customers;
(m) obligations under standby letters of credit issued for the
purpose of supporting (a) workers' compensation liabilities of the
Company or any of its Subsidiaries as required by law, (b) obligations
with respect to leases of the Company or any of its Subsidiaries or
(c) performance, payment, deposit or surety obligations of the Company
or any of its Subsidiaries, not exceeding an aggregate amount of
$5,000,000 at any one time outstanding in addition to any amounts
required by law; provided that in each case such standby letters of
credit are obtained in the ordinary course of business;
(n) Debt of Subsidiaries of the Company which represents the
assumption by such Subsidiaries of Debt of another Subsidiary of the
Company in connection with the merger of such other Subsidiary with
and into the assuming Subsidiary or the purchase of all or
substantially all the assets of such other Subsidiary; and
(o) guarantees resulting from endorsement of negotiable
instruments for collection in the ordinary course of business.
For purposes of determining any particular amount of Debt under
this Section 4.06, guarantees of (or obligations with respect to letters of
credit supporting) Debt otherwise included in the determination of such
amount shall not also be included. For the purpose of determining
compliance with this Section 4.06, (A) in the event that an item of Debt
meets the criteria of more than one of the types of Debt described in the
above clauses, the Company, in its sole discretion, shall classify such
item of Debt and only be required to include the amount and type of such
Debt in one of such clauses; (B) the amount of Debt issued at a price
which is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in accordance with
GAAP; and (C) the amount of any Debt denominated in a currency other than
U.S. dollars will be the Dollar Equivalent of such currency at the date of
its issuance, provided that the Company or any of its Subsidiaries may
always incur Debt denominated in a foreign currency for the purpose of
extending, renewing or replacing any Debt incurred pursuant to this Section
4.06 and denominated in such foreign currency, in a principal amount equal
to the then outstanding foreign currency amount. Notwithstanding anything
herein to the contrary, the maximum amount of Debt which the Company or any
of its Subsidiaries may Incur pursuant to this covenant shall not be deemed
to be exceeded solely as a result of fluctuations in exchange rates of
currencies.
SECTION 4.07. Change of Control.
(a) Upon the occurrence of a Change of Control (the "Change of
Control Date"), each Securityholder shall have the right to require the
repurchase by the Company of all or any part (equal to $1,000 or integral
multiples thereof) of such Securityholder's Securities pursuant to the
offer described in subsection (b) below (the "Change of Control Offer") at
a purchase price equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase (the
"Purchase Price"). Prior to the mailing of the notice to Holders provided
for in paragraph (b) below but in any event within 30 days following any
Change of Control, the Company hereby covenants to (i) repay in full all
Debt under the New Credit Facility or, if the Lenders under the New Credit
Facility are then permitted to accept payments on a non-pro rata basis, to
offer to repay in full all such Debt and to repay the Debt of each lender
which has accepted such offer or (ii) obtain the requisite consent under
the New Credit Facility to permit the repurchase of the Securities as
provided for in paragraph (b) below. The Company shall first comply with
the covenant in the preceding sentence before it shall be required to
repurchase Securities pursuant to this Section 4.07.
The notice shall contain all instructions and materials necessary
to enable Holders to tender Securities. The Company shall notify the
Trustee of its obligation to make a Change of Control Offer at least 15
days (or such shorter period as may be acceptable to the Trustee) prior to
the date that notice thereof will be sent to the Holder.
(b) Within 30 days following any Change of Control, the Company
shall mail, or at the Company's request the Trustee shall mail in the name
and at the expense of the Company, a notice to each Holder stating:
(1) that the Change of Control Offer is being made pursuant
to this Section 4.07 and that all Securities tendered will be
accepted for payment;
(2) the Purchase Price and the purchase date (which shall be
no earlier than 30 days nor later than 60 days from the date such
notice is mailed) (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue
interest;
(4) that unless the Company defaults in payment due on the
Change of Control Payment Date any Security accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to
surrender the Security, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Security duly completed,
to the Paying Agent at the address specified in the notice prior
to the close of business on the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of
business on the third Business Day (or such shorter period as may
be required by applicable law) preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
Securities the Holder delivered for purchase, and a statement
that such Holder is withdrawing his election to have such
Securities purchased; and
(7) that Holders whose Securities are purchased only in part
will be issued new Securities of the same series in a principal
amount equal to the unpurchased portion of the Securities
surrendered.
On the Change of Control Payment Date, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Trustee money sufficient to
pay the Purchase Price of all Securities or portions thereof so tendered
and (iii) deliver or cause to be delivered to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof tendered to the Company. The Trustee shall promptly mail
to the Holders of Securities so accepted payment in an amount equal to the
Purchase Price, and promptly authenticate and mail to such Holders a new
Security of the same series in a principal amount equal to any unpurchased
portion of the Security surrendered. The Company will publicly announce
the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
SECTION 4.08. Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly enter into any transaction (including, without
limitation, the sale, purchase or lease of any assets or properties or the
rendering of any services) involving aggregate consideration in excess of
$5 million with any Affiliate of the Company (other than a Wholly-Owned
Subsidiary of the Company) except for transactions (including any loans or
advances by or to, or guarantee on behalf of, any such Affiliate) made in
good faith the terms of which are fair and reasonable to the Company or
such Subsidiary, as the case may be, and are at least as favorable as the
terms which could be obtained by the Company or such Subsidiary, as the
case may be, in a comparable transaction made on an arm's-length basis with
Persons who are not such an Affiliate; provided that any such transaction
shall be conclusively deemed to be on terms which are fair and reasonable
to the Company or any of its Subsidiaries and on terms which are at least
as favorable as the terms which could be obtained on an arm's-length basis
with Persons who are not such an affiliate if either (a) such transaction
is approved by a majority of the Company's directors who do not have
material interest in the transaction or (b) the Company shall obtain a
written opinion of an Independent Financial Advisor stating that the terms
of such transaction are fair to the Company or its Subsidiary, as the case
may be, from a financial point of view. This Section 4.08 shall not apply
to (a) transactions in the ordinary course of business, (b) transactions
between the Company or any of its Subsidiaries and any employee of the
Company or any of its Subsidiaries that are approved by the Board of
Directors (in the case of an employee who is an officer or director, by a
majority of the independent members of the Board of Directors), (c) the
payment of reasonable and customary regular fees to directors of the
Company, (d) any transaction between the Company and any of its Wholly-
Owned Subsidiaries or between any of its Wholly-Owned Subsidiaries or (e)
any Permitted Payment and any Restricted Payment not otherwise prohibited
by Section 4.05 hereof.
SECTION 4.09. Limitation on Asset Dispositions.
From and after the Initial Issue Date the Company will not make,
and will not permit any of its Subsidiaries to make, any Asset Disposition
(other than (a) to Restricted Subsidiaries of the Company or any of its
Subsidiaries to the extent such Asset Disposition is either a Permitted
Payment or a Restricted Payment permitted to be made under Section 4.05
hereof or (b) other Asset Dispositions the fair market value (as determined
in good faith by the Board of Directors as of the time of such Asset
Disposition, which determination shall be conclusive) of which aggregates
(i) in any one transaction or series of related transactions, not more than
$10 million and (ii) not more than $25 million in any twelve month period
commencing on and after the Initial Issue Date, which Asset Dispositions
shall take place at such fair market value) unless (i) the Company (or the
Subsidiary, as the case may be) receives consideration at the time of such
Asset Disposition at least equal to the fair market value of the shares or
assets sold or otherwise disposed of (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 $5,000,000, whose determination
shall be conclusive and evidenced by a resolution of the Board of Directors
delivered to the Trustee), except that an Asset Disposition may be for less
than fair market value if either (x) the Asset Disposition is the result of
an expropriation or (y) the amount to be paid to the Company or its
Subsidiary, as the case may be, is determined or mandated by applicable
law; (ii) not less than 75% of the consideration received by the Company
(or such Subsidiary, as the case may be) is in the form of cash, provided
that any note or other obligation received by the Company (or such
Subsidiary, as the case may be) that is immediately converted into cash
shall be deemed to be cash for purposes of this clause (ii); and (iii) Net
Cash Proceeds from the Asset Disposition in the amount by which such Asset
Disposition exceeds the amounts set forth in clause (b) above ("Excess Cash
Proceeds") are within nine months of the date of such Asset Disposition, at
the Company's election, either (x) applied to the payment of the principal
of and interest on any Senior Indebtedness of the Company or, in the case
of an Asset Disposition by a Subsidiary, any Senior Indebtedness of the
Company or any Debt of such Subsidiary or any other Wholly-Owned Subsidiary
(other than Debt owed to the Company or another Subsidiary) and in
connection with any such payment, any related loan commitment, standby
facility or the like shall be permanently reduced in an amount equal to the
principal amount so repaid, (y) in the case of an Asset Disposition by the
Company, reinvested in capital assets, or a Qualifying Business, of the
Company or (z) in the case of an Asset Disposition by a Subsidiary,
reinvested in capital assets, or a Qualifying Business, of the Company, the
Subsidiary which disposed of such assets or in any other Wholly-Owned
Subsidiary of the Company, provided that in the case of clause (y) or (z)
above, such reinvestment shall have been made within the nine month period
referred to above, or, within such period, the Company or the applicable
Subsidiary, as the case may be, shall have entered into a definitive
agreement to make such reinvestment within 12 months from the end of such
nine month period. Notwithstanding the foregoing, to the extent that any
or all of the Net Cash Proceeds of any Asset Disposition are prohibited or
delayed by applicable local law from being repatriated to the United
States, the portion of such Net Cash Proceeds so affected will not be
required to be applied in accordance with this Section 4.09 (other than (i)
to repay Debt of the Subsidiary making such Asset Disposition or Debt of a
Wholly-Owned Subsidiary of the Company, in each case to the extent such
Debt may be repaid or (ii) reinvested in capital assets, or a Qualifying
Business, of the Subsidiary making such Asset Dispositions or capital
assets, or a Qualifying Business, of a Wholly-Owned Subsidiary) at the time
provided above but may be retained by the applicable Subsidiary so long,
but only so long, as the applicable local law will not permit repatriation
to the United States (the Company hereby agreeing to cause the applicable
Subsidiary to promptly take all actions required by the applicable local
law to permit such repatriation) and once such repatriation of any of such
affected Net Cash Proceeds is permitted under the applicable local law,
such repatriation will be immediately effected and such repatriated Net
Cash Proceeds will be applied within nine months of such repatriation in
the manner set forth in this Section 4.09.
To the extent Excess Cash Proceeds are not actually applied in
accordance with clause (x), (y) or (z) above, or after being so applied
there remain Excess Cash Proceeds, subject to the last sentence of the
preceding paragraph, the Company will make an offer (an "Excess Proceeds
Offer") to purchase Securities either in whole or in part in accordance
with the procedures (including proration in the event of oversubscription)
set forth herein on a date (the "Proceeds Purchase Date") not less than 30
nor more than 60 days following the date of such Excess Proceeds Offer at a
purchase price of 100% of the principal amount of the Securities plus
accrued interest to the Proceeds Purchase Date, such Proceeds Purchase Date
to be not later than the expiration of the nine month period referred to in
the preceding paragraph. Notwithstanding the foregoing, the Company will
not be required to make an Excess Proceeds Offer for Securities pursuant to
this Section 4.09 if the Excess Cash Proceeds required to be applied
thereto as provided in the first sentence of this paragraph are less than
$5,000,000, which lesser amounts not applied to an Excess Proceeds Offer
shall be carried forward and cumulated for purposes of determining whether
an Excess Proceeds Offer is required with respect to any Excess Cash
Proceeds thereafter received.
Notice of an Excess Proceeds Offer shall be mailed by the Trustee
to all holders of Securities not less than 30 nor more than 60 days prior
to the Proceeds Purchase Date to such holders at their last registered
address. The Excess Proceeds Offer shall remain open from the time of
mailing until 5 days (or such shorter period as may be required under
applicable law) before the Proceeds Purchase Date. The notice shall
contain all instructions and materials necessary to enable holders to
tender Securities pursuant to the Excess Proceeds Offer. The notice, which
shall govern the terms of the Excess Proceeds Offer, shall state: (1) that
the Excess Proceeds Offer is being made pursuant to this Section 4.09; (2)
the amount of the Excess Proceeds Offer (the "Offer Amount"), the purchase
price and the Proceeds Purchase Date; (3) that any Securities not tendered
or accepted for payment will continue to accrue interest; (4) that any
Securities or portions thereof accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest after the Proceeds Purchase
Date; (5) that each Holder of Securities electing to have such Securities
purchased pursuant to an Excess Proceeds Offer will be required to
surrender such Securities, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Securities completed, to the Paying
Agent at the address specified in the notice prior to the close of business
on the fifth day (or such shorter period as may be required under
applicable law) prior to the Proceeds Purchase Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the third day (or such shorter period
as may be required by applicable law) next preceding the Proceeds Purchase
Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Securities the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Securities purchased; and (7) that Holders whose
Securities are purchased only in part will be issued new Securities of the
same series in a principal amount equal to the unpurchased portion of the
Securities surrendered. If upon expiration of the period for which the
Excess Proceeds Offer remains open, the aggregate principal amount of
Securities surrendered by Holders exceeds the Offer Amount, the Trustee
shall select the Securities to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Trustee so that only
Securities in denominations of $1,000 or multiples thereof shall be
purchased).
On the Proceeds Purchase Date, the Company shall (i) accept for
payment on a pro rata basis (if necessary) such Securities or portions
thereof tendered pursuant to the Excess Proceeds Offer, (ii) deposit with
the Trustee money sufficient to pay the purchase price of all such
Securities or portions thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all such Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof accepted
for payment by the Company. The Trustee shall promptly mail or deliver to
the Holders of such Securities so accepted payment in an amount equal to
the purchase price of the Securities or portions thereof accepted for
payment, and the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security of the same series in principal amount equal to
any unpurchased portion of the respective Security surrendered. Any
Securities not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof. If the aggregate purchase price of
Securities tendered and accepted pursuant to an Excess Proceeds Offer is
less than the Offer Amount, the Company may use the remaining Excess Cash
Proceeds for general corporate purposes and such remaining Excess Cash
Proceeds will not be available for any future Excess Proceeds Offer.
SECTION 4.10. Limitation on Liens.
The Company will not directly or indirectly create, incur, assume
or permit to exist any Debt of the Company (i) which is, by the terms of
the instrument creating or evidencing such Debt or pursuant to which it is
outstanding, pari passu or subordinate in right of payment to the
Securities and (ii) which is secured, directly or indirectly, with a Lien
on the Property, assets or any income or profits thereon of the Company or
any Subsidiary unless contemporaneously therewith or prior thereto the
Securities are equally and ratably secured for so long as such other Debt
is so secured, except for (a) any such Debt secured by Liens on the assets
of any entity existing at the time such assets are acquired by the Company
or any of its Subsidiaries, whether by merger, consolidation, purchase of
assets or otherwise; provided that such Liens (x) are not created, incurred
or assumed in connection with, or in contemplation of, such assets being
acquired by the Company or any of its Subsidiaries and (y) do not extend to
any other Property or assets of the Company or any of its Subsidiaries, or
(b) any other Debt required to be equally and ratably secured as a result
of the Incurrence of such Debt.
SECTION 4.11. Limitation on Senior Subordinated Indebtedness.
The Company will not create, incur, assume or suffer to exist any
indebtedness that is subordinate in right of payment to any Debt of the
Company unless such Debt by its terms or the terms of the instrument
creating or evidencing it is subordinate in right of payment or pari passu
with the Securities.
ARTICLE V.
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, etc.
The Company shall not consolidate or merge with another Person,
or sell, lease or convey all or substantially all of its assets (as an
entirety or substantially as an entirety in one transaction or a succession
of related transactions) to another Person (except a Wholly-owned
Subsidiary of the Company with a positive Net Worth) unless
(i) (x) the Company is the continuing corporation in the case of a
merger or (y) the resulting, surviving or transferee entity (the
"Surviving Entity") shall be a corporation or partnership organized
under the laws of the United States, any State thereof or the District
of Columbia and expressly assumes by supplemental indenture
(satisfactory in form to the Trustee) all of the obligations of the
Company under the Securities and this Indenture;
(ii) no Event of Default (or event or condition which after notice
or lapse of time or both would become an Event of Default) shall have
occurred and be continuing immediately after giving effect to such
transaction;
(iii) immediately after giving effect to such transaction, the Net
Worth of the Company or Surviving Entity, as the case may be, on a pro
forma basis shall be no less than the Net Worth the Company immediately
prior to such transaction; and
(iv) immediately after giving effect to such transaction, the
Company or the Surviving Entity, as the case may be, would have a Pro
Forma Coverage Ratio of not less than 2.0 to 1 prior to January 1, 1997
or 2.25 to 1 thereafter.
Notwithstanding the foregoing, clauses (iii) and (iv) of this
Section 5.01 shall not prohibit a transaction, the principal purpose of
which is (as determined in good faith by the Board of Directors of the
Company whose determination shall be conclusive and evidenced by the
resolution of the Board of Directors delivered to the Trustee) to change
the state of incorporation of the Company, and such transaction does not
have as one of its purposes the evasion of the limitations imposed by this
Section 5.01.
The Pro Forma Coverage Ratio for purposes of this Section 5.01
shall be determined on the basis of the Consolidated Cash Flow and
Consolidated Fixed Charges of the Company or the Surviving Entity, as the
case may be, after giving effect to the transaction.
SECTION 5.02. Opinion of Counsel to Trustee; Officers' Certificate.
The Trustee, subject to the provisions of Sections 10.04 and
10.05, shall receive an Officers' Certificate and an Opinion of Counsel
each stating that such consolidation, merger, sale, lease or conveyance,
and any such assumption, complies with the applicable provisions of this
Indenture and that all conditions precedent herein provided relating to
such transaction have been complied with.
SECTION 5.03. Successor Corporation Substituted.
Upon any consolidation, merger, sale, lease or conveyance in
accordance with Sections 5.01 and 5.02, the successor corporation or
partnership formed by such consolidation or into which the Company is
merged or the Person to which any such transfer is made shall succeed to,
and be substituted for and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein, all
without any further act or deed on the part of such successor being
required.
ARTICLE VI.
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
(a) "Event of Default," on a series wherever used herein, means
any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court
or any order, rule or regulation of any administrative or governmental
body):
(i) the Company defaults in the payment of any installment of
interest on any Securities of the series when due (including any interest
payable in connection with any optional redemption payment) and
continuance of such default for 30 days or more, whether or not such
payment is prohibited by the provisions of Article XI hereof; or
(ii) the Company defaults in the payment of principal of, or
premium, if any, on, any Securities of the series when due at maturity,
upon repurchase, upon acceleration or otherwise, including, without
limitation, failure of the Company to repurchase the Securities on the
date required pursuant to Section 4.07 or Section 4.09 and failure to
make any optional redemption payment when due, whether or not such
payment is prohibited by the provisions of Article XI hereof; or
(iii) the Company defaults in the performance of or breaches any
covenant, warranty or agreement in, or provision of, the series or this
Indenture (other than defaults specified in clause (i) or (ii) above or
clause (vi) below), and such Default or breach continues for a period of
60 days or more after written notice to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the then outstanding Securities in the series,
specifying such Default and requiring that it be remedied; or
(iv) the Company or any Material Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of an order for relief against it in
an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its Property, or
(D) makes a general assignment for the benefit of its
creditors, or
(E) files an answer or consent seeking reorganization or
relief, or
(F) shall admit in writing its inability to pay its debts
generally; or
(v) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its Material
Subsidiaries in an involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any of its Material
Subsidiaries for all or substantially all of its properties, or
(C) orders the liquidation of the Company or any of its
Material Subsidiaries,
and in each case the order or decree remains unstayed and in effect for 60
days; or
(vi) the Company or any Material Subsidiary of the Company
defaults in the obligation to pay at final maturity one or more classes
of Indebtedness of the Company (other than the Securities) or of a
Material Subsidiary of the Company, whether such Indebtedness exists on
the Issue Date or shall be incurred after the Issue Date, having,
individually or in the aggregate, an outstanding principal amount of
$25,000,000 or more; or
(vii) one or more classes of Indebtedness of the Company (other
than the Securities) or of any Material Subsidiary of the Company,
whether such Indebtedness exists on the Issue Date or shall be incurred
after the Issue Date, having, individually or in the aggregate, an
outstanding principal amount of $25,000,000 or more, is declared due and
payable prior to its Stated Maturity; or
(viii) one or more final judgments, orders or decrees for the
payment of money in an aggregate amount in excess of $20,000,000 are
entered by a court of competent jurisdiction against the Company or any
Material Subsidiary of the Company or any of their respective properties
or assets that are not covered by insurance written by third parties,
which judgments, orders or decrees have not been vacated, discharged,
satisfied or stayed pending appeal within 60 days from the entry thereof;
(ix) any other Event of Default provided for in the series.
(b) For purposes of this Section 6.01, the term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official charged with maintaining possession or control over Property for
one or more creditors.
SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing on a series
(other than an Event of Default specified in clause 6.01(a)(iv) or
6.01(a)(v) relating to the Company), unless the principal of all of the
Securities in the series shall have already become due and payable, the
Trustee or the holders of (x) 25% in aggregate principal amount of the
series then outstanding in the case of Events of Default referred to in
clauses 6.01(a)(i) and 6.01(a)(ii) or (y) 40% in aggregate principal amount
of the series then outstanding in the case of Events of Default referred to
in clauses 6.01(a)(iii), 6.01(a)(vi), 6.01(a)(vii), 6.01(a)(viii) and, with
respect to any Material Subsidiary, 6.01(a)(iv) and 6.01(a)(v), by notice
in writing to the Company (and to the Trustee if given by Holders of the
series) (an "Acceleration Notice"), may declare all principal and accrued
interest thereon to be due and payable (i) immediately if no Debt under the
New Credit Facility is outstanding or (ii) if Debt under the New Credit
Facility is outstanding upon the earlier of (a) 5 days after such
Acceleration Notice is received by the Company or (b) the acceleration of
the Debt under the New Credit Facility provided, that such acceleration
shall be automatically rescinded and annulled without any further action
required on the part of the holders in the event that any default specified
in the Acceleration Notice under the series shall have been cured, waived
or otherwise remedied prior to the expiration of such period. If an Event
of Default specified in clause 6.01(a)(iv) or 6.01(a)(v) relating to the
Company occurs, all principal (or, if Securities of any series are original
issue discount Securities, such portion of the prinicipal amount as may be
specified in the terms of such series) and accrued interest shall be
immediately due and payable on all outstanding Securities without any
declaration or other act on the part of the Trustee or the Securityholders.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity 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,
and any such proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 6.07 and 9.02, prior to a declaration of
acceleration pursuant to Section 6.02 hereof, the Holders of, in the
aggregate, at least a majority in principal amount of Securities of a
series by notice to the Trustee may waive, on behalf of the holders of the
series, an existing Default or Event of Default and its consequences,
except a Default or Event of Default specified in Section 6.01(a)(i) or
(ii) or a Default or Event of Default in respect of any provision hereof
which cannot be modified or amended without the consent of each Holder so
affected pursuant to Section 9.02. When a Default or Event of Default is
so waived, it shall be deemed cured and cease to exist; but no such waiver
shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereto.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of a series may (i)
direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred
on it, including, without limitation, any remedies provided for in Section
6.03, and (ii) direct the Trustee to notify each trustee under any
instrument governing the rights of holders of Indebtedness subordinated in
right of payment to the Securities for the purpose of effecting the payment
blockage provisions thereunder. The Trustee may refuse, however, to follow
any direction that conflicts with law, the Securities or this Indenture, or
that the Trustee determines may be unduly prejudicial to the rights of
another Securityholder, that may involve the Trustee in personal liability
or if the Trustee determines that it does not have adequate indemnification
against any loss or expense, provided that the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such
direction.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default on the series;
(b) the Holders of at least 25% in principal amount of the series
make a written request to the Trustee to pursue a remedy;
(c) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity reasonably satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 30 days
after receipt of the request; and
(e) during such 30-day period the Holders of at least a majority
in principal amount of the series do not give the Trustee a direction
which is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
such other 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
series, on or after the respective due dates expressed in the Securities of
the series, or to bring suit for the enforcement of any such payment on or
after such respective dates, is absolute and unconditional and shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a)(i) or (ii)
occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Company or any other obligor
on the series for the whole amount of principal and accrued interest
remaining unpaid, together with interest overdue on principal and, to the
extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the Interest Rate and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee shall be entitled and empowered to file such proofs
of claim and other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Securityholders allowed in any
judicial proceedings relative to the Company or any of its Subsidiaries (or
any other obligor upon the Securities), its creditors or its Property and
shall be entitled and empowered to collect and receive any monies or other
Property payable or deliverable on any such claims and to distribute the
same, and any Custodian in any such judicial proceedings is hereby
authorized by each Securityholder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, and any other amounts due the Trustee
under Section 7.07. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article VI, it
shall, subject to the provisions of Article XI hereof, pay out such money
in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: subject to Article XI, to Holders for interest accrued on the
series, ratably, without preference or priority of any kind, according
to the amounts due and payable on the Securities of the series for
interest; and
Third: subject to Article XI, to Holders for principal amounts owing
under the series, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities of the
series for principal.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
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 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit
by any Holder, or group of Holders, holding in the aggregate more than 10%
in principal amount of the outstanding Securities.
SECTION 6.12. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder
or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.13. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given
by this Article 6 or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
SECTION 6.14. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every case, subject
to any determination in such proceeding, the Company, the Trustee and the
Holders shall be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been
instituted.
ARTICLE VII.
TRUSTEE
SECTION 7.01. Rights and Duties of Trustee.
(a) If an Event of Default known to the Trustee has occurred and
is continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture or the TIA and no others
and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
(ii) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall
examine such certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct,
except that:
(i) This paragraph does not limit the effect of paragraph
(b) of this Section 7.01.
(ii) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(iii) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Sections 6.02, 6.04 and
6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.01.
(f) 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.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Subject to subsections (a) through (f) of this Section 7.01:
1. The Trustee may rely and shall be protected in acting or
refraining from acting upon any document reasonably believed by it to
be genuine and to have been signed or presented by the proper Person.
The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled during normal business
hours and upon reasonable advance notice to the Company to examine the
books, records and premises of the Company, personally or by agent or
attorney.
2. Before the Trustee acts or refrains from acting with respect
to any matter contemplated by this Indenture, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to
the provisions of Section 10.04. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
3. The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
(other than the negligence or willful misconduct of an agent who is an
employee of the Trustee) appointed with due care.
4. The Trustee shall not be liable for any action it takes or
omits to take in good faith and without negligence which it reasonably
believes to be authorized or within its rights or powers conferred
upon it by this Indenture or the TIA.
5. The Trustee may consult with counsel and the advice or
opinion of such counsel as to matters of law shall be full and
complete authorization and protection from liability in respect of any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
SRECTION 7.02. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities or coupons and may otherwise deal with
the Company or an Affiliate with the same rights it would have if it were
not Trustee. Any Agent may do the same with like rights.
SECTION 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities or any coupons; it shall not
be accountable for the Company's use of the proceeds from the Securities;
it shall not be responsible for any statement in the Securities or any
coupons; it shall not be responsible for any overissue; it shall not be
responsible for determining whether the form and terms of any Securities or
coupons were established in conformity with this Indenture; and it shall
not be responsible for determining whether any Securities were issued in
accordance with this Indenture.
SECTION 7.04. Notice of Defaults.
If a Default occurs and is continuing on a series and if it is
known to the Trustee, the Trustee shall mail a notice of the Default within
90 days after it occurs to Holders of Registered Securities of the series.
Except in the case of a Default in payment on a series, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in
good faith determines that withholding the notice is in the interest of
Holders of the series.
SECTION 7.05. Reports by Trustee to Holders.
Any report required by TIA Section 313(a) to be mailed to
Securityholders shall be mailed by the Trustee on or before June 30 of each
year.
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 any Securities are listed. The Company shall notify the Trustee when
any Securities are listed on a stock exchange.
SECTION 7.06. 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 by it. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or
liability incurred by it. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without
its consent.
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 and any coupons on all
money or property held or collected by the Trustee, except that held in
trust to pay principal or interest on particular securities.
SECTION 7.07. Replacement of Trustee.
A resignation of removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders
of a majority in principal amount of the Securities may remove the Trustee
by so notifying the Trustee and may appoint a successor Trustee with the
Company's consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA Section 310(a) or
Section 310(b) or with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a Custodian or other public officer takes charge of the
Trustee or its property;
(4) the Trustee becomes incapable or acting; or
(5) an event of the kind described in Section 6.01(4) or (5)
occurs with respect to the Trustee.
The Company also may remove the Trustee with or without cause if
the Company so notifies the Trustee six months in advance and if no Default
occurs during the six-month period.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
If a successor Trustee does not take office within 30 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 TIA Section 310(a) or Section
310(b) or with Section 7.09, any Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of 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 Holders of Registered Securities. 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 7.06.
SECTION 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act
shall be the successor Trustee.
SECTION 7.09. Trustee's Capital and Surplus.
The Trustee at all times shall have a combined capital and
surplus of at least $25,000,000 as set forth in its most recent published
report of condition.
SECTION 7.10. No Conflicting Interest.
The Trustee shall comply with TIA Section 310(b), provided 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. The provisions of TIA Section 310 shall apply to the
Company, as obligor of the Securities.
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 therein. The provisions of TIA Section 311 shall apply to
the Company as obligor on
ARTICLE VIII.
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of the Company's Obligations.
The Company may terminate its obligations as to a series under
this Indenture, except those obligations referred to in the penultimate
paragraph of this Section 8.01, if all Securities of the series previously
authenticated and delivered (other than destroyed, lost or stolen
Securities which have been replaced or paid or Securities for whose payment
money has theretofore been deposited with the Trustee or the Paying Agent
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company, as provided in Section 8.04) have been delivered to
the Trustee for cancellation and the Company has paid all sums payable by
it hereunder, or if:
(a) either (i) pursuant to Article III, the Company shall have
given notice to the Trustee and mailed a notice of redemption to each
Holder of Securities of the series of the redemption of all of the
Securities of the series under arrangements satisfactory to the
Trustee for the giving of such notice or (ii) all Securities of the
series have otherwise become due and payable hereunder;
(b) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee,
under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds in trust solely
for the benefit of the Holders for that purpose, money and/or U.S.
Government Obligations in such amount as is sufficient without
consideration of reinvestment of such interest, to pay principal of,
premium, if any, and interest on the outstanding Securities of the
series to maturity or redemption, provided that the Trustee shall have
been irrevocably instructed to apply such money to the payment of said
principal, premium, if any, and interest with respect to the
Securities of the series, and, provided, further, that from and after
the time of deposit, the money deposited shall not be subject to the
rights of holders of Senior Indebtedness of the Company pursuant to
the provisions of Article XI;
(c) no Default or Event of Default with respect to this Indenture
or Securities under the series shall have occurred and be continuing
on the date of such deposit or shall occur as a result of such deposit
and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company
is a party or by which it is bound;
(d) the Company shall have paid all other sums payable by it
hereunder;
(e) the Company shall have delivered to the Trustee (i)(A) a
ruling directed to the Trustee from the Internal Revenue Service to
the effect that the holders of Securities of the series will not
recognize income, gain or loss for federal income tax purposes as a
result of such deposit and defeasance of this Indenture 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, or (B) an opinion of counsel
(who may be an employee of or counsel for the Company), reasonably
satisfactory to the Trustee, to the same effect as clause (i)(A) above
accompanied by a ruling to the same effect published by the Internal
Revenue Service, and (ii) an Officers' Certificate and an Opinion of
Counsel (who may be an employee of or counsel for the Company), each
stating that all conditions precedent providing for the termination of
the Company's obligations as to the series under this Indenture have
been complied with, and such Opinion of Counsel shall also state that
such satisfaction and discharge does not result in a default under any
Senior Indebtedness of the Company (if then in effect) or any other
agreement or instrument then known to such counsel that binds or
affects the Company.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 4.01, 4.02 and
7.06 shall survive until the Securities are no longer outstanding pursuant
to the last paragraph of Section 2.09. After the Securities are no longer
outstanding, the Company's obligations in Sections 7.06, 8.04 and 8.05
shall survive.
After such delivery or irrevocable deposit the Trustee upon
request shall acknowledge in writing the discharge of the Company's
obligations as to the series under this Indenture except for those
surviving obligations specified above.
SECTION 8.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution of the
Board of Directors of the Company, at any time, with respect to the series,
elect to have either paragraph (b) or paragraph (c) below be applied to the
outstanding Securities of the series upon compliance with the conditions
set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (b), the Company shall be deemed to
have been released and discharged from its obligations with respect to the
outstanding Securities of the series on the date the conditions set forth
below are satisfied (hereinafter, "legal defeasance"). For this purpose,
such legal defeasance means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by the outstanding
Securities of the series, which shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (e) below and the other
Sections of and matters under this Indenture referred to in (i) and (ii)
below, and to have satisfied all its other obligations as to such series
under this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), and Holders of the Securities of the series and
any amounts deposited under paragraph (d) below shall cease to be subject
to any obligations to, or the rights of, any holder of Senior Indebtedness
of the Company under Article XI or otherwise, except for the following
which shall survive until otherwise terminated or discharged hereunder:
(i) the rights of Holders of outstanding Securities of the series to
receive solely from the trust fund described in paragraph (d) below and as
more fully set forth in such paragraph, payments in respect of the
principal of, premium, if any, and interest on such Securities when such
payments are due, (ii) the Company's obligations with respect to such
Securities under Sections 2.06, 2.07 and 4.02, and, with respect to the
Trustee, under Section 7.06, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (iv) this Section 8.02 and Section
8.05. Subject to compliance with this Section 8.02, the Company may
exercise its option under this paragraph (b) notwithstanding the prior
exercise of its option under paragraph (c) below with respect to the
series.
(c) Upon the Company's exercise under paragraph (a) of the
option applicable to this paragraph (c), the Company shall be released and
discharged from its obligations under any covenant contained in Article XI
and in Sections 4.03 through through 4.11, clauses (iii) and (iv) of
Section 5.01 and clauses (a)(vi), (a)(vii) and (a)(viii) of Section 6.01
with respect to the outstanding Securities of the series on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the Securities of the series shall thereafter be deemed
to be not "outstanding" for the purpose of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder and Holders of the
Securities of the series and any amounts deposited under paragraph (d)
below shall cease to be subject to any obligations to, or the rights of,
any holder of Senior Indebtedness of the Company under Article XI or
otherwise. For this purpose, such covenant defeasance means that, with
respect to the series, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any
reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.01(a)(iii), but, except as specified
above, the remainder of this Indenture and such series shall be unaffected
thereby.
(d) The following shall be the conditions to application of
either paragraph (b) or paragraph (c) above to the outstanding Securities:
(i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 who shall agree to comply with the
provisions of this Section 8.02 applicable to it) as trust funds in
trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities, (x) money in an amount
or (y) direct non-callable obligations of, or non-callable
obligations guaranteed by, the United States of America for the
payment of which guarantee or obligation the full faith and credit
of the United States is pledged ("U.S. Government Obligations")
maturing as to principal, premium, if any, and interest in such
amounts of money and at such times as are sufficient without
consideration of any reinvestment of such interest, to pay
principal of and interest on the outstanding Securities of the
series not later than one day before the due date of any payment,
or (z) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge
principal of, premium, if any, and interest on the outstanding
Securities of the series on the Maturity Date or otherwise in
accordance with the terms of this Indenture and of such Securities,
provided that the Trustee (or other qualifying trustee) shall have
received an irrevocable written order from the Company instructing
the Trustee (or other qualifying trustee) to apply such money or
the proceeds of such U.S. Government Obligations to said payments
with respect to the Securities of the series;
(ii) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default
with respect to the Securities of the series shall have occurred
and be continuing on the date of such deposit or, insofar as
Section 6.01(a)(i) is concerned, at any time during the period
ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until
the expiration of such period);
(iii) such legal defeasance or covenant defeasance shall not cause
the Trustee to have a conflicting interest with respect to any
series of Securities of the Company;
(iv) such legal defeasance or covenant defeasance shall not result
in a breach or violation of, or constitute a Default or Event of
Default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;
(v) in the case of an election under paragraph (b) above, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) 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 shall confirm that, the
Holders of the outstanding Securities of the series will not
recognize income, gain or loss for Federal income tax purposes as a
result of such legal 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 legal defeasance had not
occurred;
(vi) in the case of an election under paragraph (c) above, the
Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of the outstanding Securities of the
series 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;
(vii) in the case of an election under either paragraph (b) or (c)
above, an Opinion of Counsel to the effect that, (x) the trust
funds will not be subject to any rights of any other holders of
Indebtedness of the Company other than any such rights as may exist
under the Uniform Fraudulent Transfer Act (the "UFTA") or
Bankruptcy Law (assuming none of the Holders are insiders as
defined under Bankruptcy Law and the UFTA), and (y) after the 91st
day following the deposit, the trust funds will not be subject to
the effect of any applicable Bankruptcy Law, provided that if a
court were to rule under any such law in any case or proceeding
that the trust funds remained Property of the Company, no opinion
needs to be given as to the effect of such laws on the trust funds
except the following: (A) assuming the allowance of the claims of
the Holders and assuming such trust funds remained in the Trustee's
possession prior to such court ruling to the extent not paid to
Holders of Securities of the series, the Trustee will hold, for the
benefit of the Holders of Securities of the series, a valid and
enforceable security interest in such trust funds that is not
avoidable (assuming perfection in such trust funds) in bankruptcy
or otherwise, subject only to principles of equitable
subordination, (B) the Holders of Securities of the series will be
entitled to receive adequate protection of their interests in such
trust funds if such trust funds are used, and (C) no Property,
rights in Property or other interests granted to the Trustee or the
Holders of Securities in exchange for or with respect to any of
such funds will be subject to any prior rights of any other Person,
subject only to prior Liens granted under Section 364 of Title 11
of the U.S. Bankruptcy Code (or any section of any other
Bankruptcy Law having the same effect), but still subject to the
foregoing clause (B); and
(viii) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that (x) all
conditions precedent provided for relating to either the legal
defeasance under paragraph (b) above or the covenant defeasance
under paragraph (c) above, as the case may be, have been complied
with and (y) if any other Indebtedness of the Company shall then be
outstanding or committed, such legal defeasance or covenant
defeasance will not violate the provisions of the agreements or
instruments evidencing such Indebtedness.
(e) All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this paragraph (e), the "Trustee") pursuant to
paragraph (d) above in respect of the outstanding Securities of the series
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (other than the Company or any
Affiliate of the Company) as the Trustee may determine, to the Holders of
Securities of the series all sums due and to become due thereon in respect
of principal, premium and interest, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to paragraph (d) above or the principal,
premium, if any, and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the
Holders of the outstanding Securities of the series.
Anything in this Section 8.02 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request, in writing, by the Company any money or U.S. Government
Obligations held by it as provided in paragraph (d) above which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are
in excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Sections 8.01 and 8.02, and shall
apply the deposited money and the money from U.S. Government Obligations
in accordance with this Indenture to the payment of principal of, premium,
if any, and interest on the Securities of the series.
SECTION 8.04. Repayment to Company.
Subject to Sections 7.06, 8.01 and 8.02, the Trustee shall
promptly pay to the Company, upon receipt by the Trustee of an Officers'
Certificate, any excess money, determined in accordance with Section 8.02,
held by it at any time. The Trustee and the Paying Agent shall pay to the
Company, upon receipt by the Trustee or the Paying Agent, as the case may
be, of an Officers' Certificate, any money held by it for the payment of
principal, premium, if any, or interest that remains unclaimed for two
years after payment to the Holders is required, provided that the Trustee
and the Paying Agent before being required to make any payment may, but
need not, at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York or mail to each
Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein, which shall be at least 30 days from
the date of such publication or mailing, any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Securityholders of the series entitled to money must look solely
to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person, and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 8.05. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with this Indenture 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, then and only then the Company's obligations under this
Indenture and the Securities of the series shall be revived and reinstated
as though no deposit had been made pursuant to this Indenture until such
time as the Trustee is permitted to apply all such money or U.S.
Government Obligations in accordance with this Indenture, provided that if
the Company has made any payment of principal of, premium, if any, or
interest on any Securities of the series because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the
holders of Securities of the series 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, the
Securities or any coupons without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article V;
(3) to provide that specific provisions of this Indenture shall
not apply to a series not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or more series; or
(6) to make any change that does not materially adversely affect
the rights of any Securityholder.
SECTION 9.02. With Consent of Holders.
Unless the Bond Resolution otherwise provides, the Company and
the Trustee may amend this Indenture, the Securities and any coupons with
the written consent of the Holders of a majority in principal amount of the
outstanding Securities of each series affected by the amendment voting as
one class. However, without the consent of each Securityholder
affected, an amendment under this Section may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment;
(2) reduce the rate of interest on or extend the time for payment
of interest on any Security;
(3) reduce the principal of or change the Maturity Date of any
Security;
(4) reduce any amount payable on redemption or required
repurchase of any Security;
(5) impair or affect the right of any Holder to institute suit
for payment of any Security; or
(6) make any change in Section 6.04 or 9.02, except to increase
the amount of Securities whose Holders must consent to an
amendment or waiver or to provide that other provisions of
this Indenture cannot be amended or waived without the
consent of each Securityholder affected thereby.
Notwithstanding the foregoing, no such supplemental indenture shall modify
any provision of the Indenture so as to affect adversely the rights of any
holder of Senior Indebtedness at the time outstanding to the benefits of
subordination under the Indenture without the consent of such holder.
The holders of a majority in aggregate principal amount of the
outstanding Securities of a series may, on behalf of all holders of
Securities of such series, waive compliance by the Company with Sections (
) of this Indenture. The holders of a majority in aggregate principal
amount of the outstanding Securities of a series may, on behalf of all
holders of Securities of such series, waive any past default under the
Indenture with respect to the Securities of such series, except a default
in the payment of principal, premium, if any, or interest or in respect of
a provision of this Indenture which cannot be modified without the consent
of each Securityholder affected thereby.
An amendment of a provision included solely for the benefit of
one or more series does not affect Securityholders of any other series.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 9.01 or 9.02 shall be set
forth in a supplemental indenture that complies with the TIA as then in
effect.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision
shall be automatically amended to like effect.
SECTION 9.04. Effect of Consents.
An amendment or waiver becomes effective in accordance with its
terms and thereafter binds every Securityholder entitled to consent to it.
A consent to an amendment or waiver by a Holder of a Security is
a continuing consent by the Holder and every subsequent Holder of a
Security that evidences the same debt as the consenting Holder's Security.
Any Holder or subsequent Holder may revoke the consent as to his Security
if the Trustee receives notice of the revocation before the amendment or
waiver becomes effective.
The Company may fix a record date for the determination of
Holders of Registered Securities entitled to give a consent. The record
date shall not be less than 10 nor more than 60 days prior to the first
written solicitation of Securityholders.
SECTION 9.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate notation
about an amendment or waiver on any Security thereafter authenticated. The
Company may issue in exchange for affected Securities new Securities that
reflect the amendment or waiver.
SECTION 9.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that
adversely affects its rights.
SECTION 9.07. Waiver of Covenants.
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 4.05, 4.06, 4.08 and 4.10
hereof with respect to the Securities of any Series if before or after the
time for such compliance the holders of a majority in aggregate principal
amount of the Securities of such Series at the time outstanding shall, by
action of such Securityholders in accordance with this Indenture, either
waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect
(x) any other Series of Securities or (y) such covenant or condition except
to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and duties of the Trustee in
respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act.
The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically deemed
included herein unless expressly excluded by this Indenture) are a part of
and govern this Indenture, whether or not physically contained herein.
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 by one party to another is duly given if in writing
and delivered in person, sent by facsimile transmission confirmed by mail
or mailed by first-class mail to the other's address shown below:
(a) if to the Company:
Sealed Air Corporation
Park 80 East
Saddlebrook, New Jersey 07662-5291
Attention: General Counsel
Telecopier Number: (201) 791-7600
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Christopher Mayer, Esq.
Telecopier Number: (212) 450-4500
(b) if to the Trustee:
( )
( )
( )
Attention: ( )
Telecopier Number: ( )
A party by notice to the other parties may designate additional
or different addresses for subsequent notices.
Any notice mailed to a Securityholder shall be mailed to his
address shown on the register kept by the Transfer Agent or on the list
referred to in Section 2.06. Failure to mail a notice to a Securityholder
or any defect in a notice mailed to a Securityholder shall not affect the
sufficiency of the notice mailed to other Securityholders or the
sufficiency of any published notice.
If a notice is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives
it.
If the Company mails a notice to Securityholders, it shall mail a
copy to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice
required to be mailed or to publish a notice required to be published, the
Company may give such substitute notice as the Trustee approves. Failure
to publish a notice as required or any defect in it shall not affect the
sufficiency of any mailed notice.
All notices shall be in the English language, except that any
published notice may be in an official language of the country of
publication.
A "notice" includes any communication required by this Indenture.
SECTIION 10.03. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall if so requested
furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in
this Indenture relating to the Proposed action have been
complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied
with.
SECTION 10.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant 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;
(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 condition or covenant has been complied with.
SECTION 10.05. Rules by Company and Agents.
The Company may make reasonable rules for action by or a meeting
of Securityholders. An Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 10.06. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which
banking institutions are not required to be open. If a payment date is a
Legal Holiday at a place of payment, unless the Bond Resolution otherwise
provides, payment may be made at that place on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening
period.
SECTION 10.07. No Recourse Against Others.
All liability described in the Securities of any director,
officer, employee or stockholder, as such, of the Company is waived and
released.
SECTION 10.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 10.09. Governing Law.
The laws of the State of New York shall govern this Indenture,
the Securities and any coupons, unless federal law governs.
SECTION 10.10. Communications 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
any other Person shall have the protection of TIA Section 312(c). The
Trustee shall comply with TIA Section 312(b).
ARTICLE XI.
SUBORDINATION OF SECURITIES
SECCTION 11.01. Securities Subordinated to Senior Indebtedness.
The Company for itself and its successors, and each Holder, by
its acceptance of the Securities, agrees that the payment of the Securities
by the Company is subordinated, to the extent and in the manner provided in
this Article XI, to the prior payment of Senior Indebtedness.
This Article XI will constitute a continuing offer to all Persons
who, in reliance upon its provisions, become holders of, or continue to
hold, Senior Indebtedness, and such provisions are made for the benefit of
the holders of Senior Indebtedness, and such holders are made obligees
under this Article XI and they and/or each of them may enforce its
provisions.
SECTION 11.02. No Payment on Securities in Certain Circumstances.
(1) No payment will be made on account of the principal of,
premium if any, or interest on the Securities, or to acquire any of the
Securities for cash or Property other than Capital Stock of the Company, or
on account of the redemption provisions of the Securities (other than a
redemption of Securities by the Trustee with funds irrevocably set aside in
trust with the Trustee in accordance with the provisions of Section 8.01
hereof) (x) upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, unless and until all such Senior Indebtedness
shall first be paid in full in cash or (y) in the event that the Company
defaults in the payment of any principal of or interest on or any other
amounts payable on or due in connection with any Senior Indebtedness when
it becomes due and payable, whether at its Stated Maturity or at a date
fixed for prepayment or by declaration or otherwise, unless and until such
default has been cured or waived in writing. The holders of a majority in
aggregate principal amount of the outstanding Designated Senior Debt shall
be entitled to waive, on behalf of all of the holders of Senior
Indebtedness, the benefits of this Section 11.02.
(2) Upon the happening of any event of default (or if an event
of default would result upon any payment with respect to the Securities)
with respect to any Designated Senior Debt, as such event of default is
defined in the instruments evidencing such Designated Senior Debt or under
which it is outstanding, permitting the holders to accelerate its maturity
(if the default is other than default in payment of the principal of or
interest on or any other amount due in connection with such Designated
Senior Debt) upon written notice of the event of default given to the
Company and the Trustee by the holders of such Designated Senior Debt,
then, unless and until such event of default has been cured or waived in
writing, no payment will be made by the Company with respect to the
principal of, premium if any, or interest on the Securities or to acquire
any of the Securities for cash or Property other than Capital Stock of the
Company or with regard to redemption of Securities; provided that this
paragraph (b) will not prevent the making of any payment for a period of
more than 180 days after the date the written notice of the default is
given unless such Designated Senior Debt in respect of which such event of
default exists has been declared due and payable in its entirety within
that period, and that declaration has not been rescinded. If such
Designated Senior Debt is not declared due and payable within 180 days
after the written notice of the default is given, promptly after the end of
the 180-day period the Company will pay to the Trustee all sums not paid
during the 180-day period because of this paragraph (b). During any 360-
day consecutive period only one such period during which payment of
principal of, or interest on, the Securities may not be made may commence
and the duration of such period may not exceed 180 days.
(3) If any payment or distribution of assets of the Company is
received by the Trustee or any Holder in respect of the Securities at a
time when that payment or distribution should not have been made because of
paragraph (a) or (b) of this Section 11.02, such payment or distribution
will be received and held and will be paid over to the holders of Senior
Indebtedness which is due and payable and remains unpaid or unprovided for
(pro rata as to each of such holders on the basis of the respective amounts
of Senior Indebtedness which is due and payable held by them) until all
such Senior Indebtedness has been paid in full, after giving effect to any
concurrent payment or distribution or provision therefor to the holders of
such Senior Indebtedness.
SECTION 11.03. Securities Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation or
Reorganization.
Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company
(whether in bankruptcy, insolvency, receivership or similar proceeding
related to the Company or its Property or upon an assignment for the
benefit of creditors or otherwise):
(1) the holders of all Senior Indebtedness will first be entitled
to receive payment in full of the principal of and interest due on
Senior Indebtedness and other amounts due in connection with Senior
Indebtedness (including interest accruing subsequent to an event
specified in Sections 6.01(a)(iv) and 6.01(a)(v) at the rate provided
for in the documents governing such Senior Indebtedness, whether or
not such interest is an allowed claim enforceable against the debtor
in a bankruptcy case under Title 11 of the United States Code) before
the Holders are entitled to receive any payment on account of the
principal of or interest on the Securities;
(2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, Property or securities, to which
the Holders or the Trustee would be entitled except for the provisions
of this Section will be paid by the liquidating trustee or agent or
other Person making such a payment or distribution directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis
of the respective amounts of Senior Indebtedness held by such holders)
or their representatives to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution to the holders of such
Senior Indebtedness or provision for that payment or distribution; and
(3) if, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character,
whether in cash, Property or securities is received by the Trustee or
the Holders on account of the principal of or interest on the
Securities before all Senior Indebtedness is paid in full in cash such
payment or distribution will be received and held for and will be paid
over to the holders of the Senior Indebtedness remaining unpaid or
unprovided for or their representatives for application to the payment
of such Senior Indebtedness until all such Senior Indebtedness has
been paid in full, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of such Senior
Indebtedness.
The Company will give prompt written notice to the Holders of any
dissolution, winding up, liquidation or reorganization of it or any
assignment for the benefit of its creditors. For purposes of this Article
XI, the words "cash, Property or securities" shall not be deemed to include
(x) shares of stock of the Company as reorganized or readjusted or (y)
securities of the Company or any other corporation provided for by a plan
of reorganization or readjustment which are subordinated, to at least the
same extent as the Securities, to the payment of all Senior Indebtedness
then outstanding.
SECTION 11.04. Holders of Securities To Be Subrogated to Rights
of Holders of Senior Indebtedness.
Subject to the payment in full in cash of all Senior
Indebtedness, the Holders shall be subrogated to the rights of the Holders
of Senior Indebtedness to receive payments or distributions of cash,
Property or securities of the Company applicable to the Senior Indebtedness
until all amounts owing on the Securities shall be paid in full; and, for
the purposes of such subrogation, (a) no payments or distributions to the
holders of the Senior Indebtedness of any cash, Property or securities to
which the Holders of the Securities or the Trustee on their behalf would be
entitled except for the provisions of this Article XI and no payment over
pursuant to the provisions of this Article XI to the holders of Senior
Indebtedness by Holders or the Trustee on their behalf shall, as between
the Company, its creditors other than holders of Senior Indebtedness, and
the Holders, be deemed to be a payment by the Company to or on account of
the Senior Indebtedness and (b) no payment or distributions of cash,
Property or securities to or for the benefit of the Holders pursuant to the
subrogation provision of this Article XI, which would otherwise have been
paid to the holders of Senior Indebtedness shall be deemed to be a payment
by the Company to or for the account of the Securities. It is understood
that the provisions of this Article XI are intended solely for the purpose
of defining the relative rights of the Holders, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
SECTION 11.05. Obligations of the Company Unconditional.
Nothing contained in this Article XI or elsewhere in this
Indenture or the Securities is intended to or will impair, as between the
Company and the Holders, the obligations of the Company, which are absolute
and unconditional, to pay to the Holders the principal of and interest on
the Securities as and when they become due and payable in accordance with
terms, or is intended to or will affect the relative rights of the Holders
and creditors of the Company other than the holders of the Senior
Indebtedness, nor will anything herein or therein prevent the Trustee or
any Holder from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any, under
this Article XI of the holders of Senior Indebtedness in respect of cash,
Property or securities of the Company received upon the exercise of any
such remedy.
SECTION 11.06. Trustee and Paying Agent Entitled To Assume
Payments Not Prohibited in Absence of Notice.
Notwithstanding any other provision of this Indenture, the
Trustee and paying agent will not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment
to or by the Trustee or any paying agent unless and until a Responsible
Officer of the Trustee or such paying agent has received written notice
thereof from the Company or from one or more holders of Senior Indebtedness
or from any representative therefor, and prior to the receipt of any such
written notice, the Trustee and any paying agent will be entitled in all
respects conclusively to assume that no such fact exists.
The Trustee will be entitled to rely on the delivery to it of a
written notice by a Person representing himself, herself, or itself to be a
holder of Senior Indebtedness (or a trustee on behalf of such holder).
Nothing contained in this Section 11.06 limits the rights of the
holders of Senior Indebtedness to recover payments as contemplated by
Section 11.02.
SECTION 11.07. Application by Trustee of Moneys Deposited with It.
Any deposit of moneys by the Company with the Trustee or any
paying agent for the payment of principal of or interest on the Securities,
except to the extent allocated and held by the Trustee for the payment of
principal of or interest on specific Securities which have been defeased in
accordance with Article VIII hereof or called for redemption in accordance
with Article III or Section 4.07 or 4.09 hereof, will be subject to the
provisions of Sections 11.01, 11.02, 11.03 and 11.04 except that, prior to
the receipt of the notice provided for in Section 11.06, the Trustee will
be entitled to assume that no such facts exist; provided, however, that if
on a date not less than three Business Days prior to the date on which by
the terms of this Indenture any such moneys may become payable for any
purpose (including, without limitation, the payment of either principal of
or interest on the Securities) the Trustee or such paying agent have not
received with respect to such moneys the notice provided for in Section
11.06, then the Trustee or such payment agent will have full power and
authority to receive such moneys and to apply the same to the purpose for
which they were received, and will not be affected by any notice to the
contrary which may be received by it on or after such date. Nothing herein
will be construed to relieve any Holders from duties imposed upon them
under Section 11.03(c) with respect to moneys received in violation of the
provisions of this Article.
SECTION 11.08. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein will at any time
in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act by any such holder, or
by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or
otherwise be charged with. The holders of Senior Indebtedness may extend,
renew, modify or amend the terms of the Senior Indebtedness or any security
therefor and release, sell or exchange such security and otherwise deal
freely with the Company, all without affecting the liabilities and
obligations of the parties to the Indenture or the Holders. No provision
in any supplemental Indenture which affects the superior position of the
holders of the Senior Indebtedness will be effective against the holders of
the Senior Indebtedness who have not consented thereto.
SECTION 11.09. Securityholders Authorize Trustee To Effectuate
Subordination of Securities.
Each Holder of Securities by his acceptance of them authorizes
and expressly directs the Trustee on his behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided in
this Article XI, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company or the filing of a
claim for the unpaid balance of its or his Securities in the form required
in those proceedings. If the Trustee does not file a proper claim or proof
of debt in the form required in such proceeding at least 30 days before the
expiration of the time to file such claim or claims, then the holders of
Senior Indebtedness are hereby authorized to have the right to file and are
hereby authorized to file an appropriate claim for and on behalf of the
Holders of Securities.
SECTION 11.10. Right of Trustee and Paying Agent
To Hold Senior Indebtedness.
Subject to the provisions of Sections 310(b) and 311 of the Trust
Indenture Act of 1939, the Trustee and any paying agent will be entitled to
all of the rights set forth in this Article XI in respect of any Senior
Indebtedness at any time held by any of them to the same extend as any
other holder of Senior Indebtedness, and nothing in this Indenture will be
construed to deprive the Trustee or any paying agent of any of its rights
as such holder.
SECTION 11.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of the principal of or
interest on the Securities by reason of any provision of this Article XI
will not be construed as presenting the occurrence of an Event of Default.
SECTION 11.12. No Fiduciary Duty Created to Holders of Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XI, and no
implied obligations or covenants with respect to the holders of Senior
Indebtedness will be read into this Indenture against the Trustee. The
Trustee will not be deemed to owe any fiduciary duty to holders of Senior
Indebtedness if it mistakenly pays over or delivers to Holders of
Securities, the Company, or any Person, money or assets to which any holder
of Senior Indebtedness will be entitled by virtue of this Article XI or
otherwise.
SECTION 11.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article XI will apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 11.14. Representative of Senior Indebtedness.
Any notices to be given or payments to be made to any holders of
Senior Indebtedness pursuant to this Indenture may be made or given to
their authorized representative.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
SEALED AIR CORPORATION,
as Company
By: ___________________________
Name:
Title:
FIRST NATIONAL BANK OF BOSTON,
as Trustee
By: ___________________________
Name:
Title:
Exhibit A
A Form of Registered Security
No. $ ( )
( )% SENIOR SUBORDINATED NOTE DUE ( )
SERIES ( )
SEALED AIR CORPORATION promises to pay to
( ) or registered assigns the
principal sum of ( ) Dollars on
( ), ( ).
Interest Payment Dates: ( ), ( ) and at maturity
Record Dates: ( ), ( ) and 15 days prior to
maturity
By:_____________________________
Authorized Officer
By:_____________________________
Authorized Officer
Dated: ( ), ( )
Certificate of Authentication
This is one of the ( )% Senior Subordinated Notes referred to in
the within-mentioned Indenture.
FIRST NATIONAL BANK OF BOSTON,
as Trustee
By:_____________________________
Authorized Officer
(REVERSE OF NOTE)
( )% SENIOR SUBORDINATED NOTE DUE ( )
1. Interest. SEALED AIR CORPORATION, a Delaware corporation
(the "Company", which definition shall include any successor thereto in
accordance with the Indenture), promises to pay, until the principal hereof
is paid or made available for payment, interest on the principal amount set
forth on the reverse side hereof at a rate of ( )% per annum. Interest on
the Notes will accrue from and including the most recent date to which
interest has been paid or, if no interest has been paid, from and including
( ), ( ) through but excluding the date on which interest is paid.
Interest shall be payable in arrears on ( ), ( ), and at the stated
maturity (each an "Interest Payment Date"), commencing ( ), ( ). Interest
will be computed on the basis of a 360-day year of twelve full 30-day
months and the actual number of days elapsed. Interest on overdue
principal and (to the extent permitted by law) on overdue installments of
interest will accrue at a rate equal to ( )% per annum.
2. Method of Payment. The Company will pay interest on the
Notes (except defaulted interest) to the Persons who are registered Holders
of Notes at the close of business on the ( ) or ( ) next preceding the
Interest Payment Date. Holders must surrender the Notes to a Paying Agent
to collect principal payments. The Company will pay principal, premium, if
any, and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. At the Company's
option, interest may be paid by check mailed to the registered address of
the Holder of this Note.
3. Paying Agent and Registrar. Initially, FIRST NATIONAL BANK
OF BOSTON (the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar without
notice. Neither the Company nor any of its Subsidiaries may act as Paying
Agent, Registrar or co-Registrar.
4. Indenture. The Company issued the Notes of this series under
an Indenture dated as of ( ), 1994 (the "Indenture") between the Company
and the Trustee. This Note is one of an issue of Notes of the Company
issued under the Indenture. The terms of the Notes include those stated in
the Indenture and in the Bond Resolution creating the Notes and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S. Code Sections 77aaa-77bbbb) as amended from time to time. The
Notes are subject to all such terms, and Noteholders are referred to the
Indenture and such Act for a statement of them. Capitalized terms used
herein and not otherwise defined have the meanings set forth in the
Indenture. The Notes are general unsecured obligations of the Company
limited in aggregate principal amount to ($ ). The Indenture limits,
among other things, the incurrence of certain Indebtedness by the Company
and its Subsidiaries; purchases, redemptions, and other acquisitions or
retirements of equity interests of the Company; transactions by the Company
and its Subsidiaries with certain Affiliates; the granting of Liens by the
Company and the ability of the Company to merge with or into another
entity. The limitations are subject to a number of important
qualifications and exceptions. The Company must report to the Trustee
annually in compliance with the limitations contained in the Indenture.
5. Optional Redemption. The Company, at its option, may redeem
all or any of the Notes, in whole or in part, at any time on or after ( ),
( ) at the redemption prices (expressed in percentages of principal amount)
set forth below plus accrued and unpaid interest to the Redemption Date, if
redeemed during the 12-month period beginning ( ) of the years indicated
below:
Year Percentage
---- ----------
( )......................... ( )%
( )......................... ( )%
( )......................... ( )%
( ) and thereafter.......... 100.000%
Additionally, the Company may, at its option, redeem the Notes at
( )% of the principal amount thereof, together with accrued and unpaid
interest to the Redemption Date, if prior to ( ), 19( ) a Change of Control
(as defined in the Indenture) with respect to the Company has occurred.
6. Change of Control. Upon the occurrence of a Change of
Control (the "Change of Control Date"), each holder of a Note shall have
the right to require the repurchase of all or any part (equal to $1,000 or
integral multiples thereof) of such holder's Notes pursuant to the offer
described in the next paragraph (the "Change of Control Offer") at a
purchase price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of purchase.
Within 30 days following any Change of Control, the Company shall
mail a notice to each holder stating: (1) that the Change of Control is
being made pursuant to this covenant and that all Notes tendered will be
accepted for payment; (2) the purchase price and the purchase date (which
shall be no earlier than 30 days nor later than 40 days from the date such
notice is mailed) (the "Change of Control Payment Date"); (3) that any
Note not tendered will continue to accrue interest; (4) that unless the
Company defaults in payment on the Change of Control Payment Date any Note
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that holders
electing to have a Note purchased pursuant to a Change of Control Offer
will be required to surrender such Note, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note duly completed, to the
Trustee at the address specified in the notice prior to the close of
business on the Change of Control Payment Date; (6) that holders will be
entitled to withdraw their election if the Trustee receives, not later than
the close of business on the third business day (or such shorter period as
may be required by applicable law) preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the
name of the holder, the principal amount of Notes the holder delivered for
purchase, and a statement that such holder is withdrawing his election to
have such Notes purchased; and (7) that holders whose Notes are purchased
only in part will be issued a new Note in a principal amount equal to the
unpurchased portion of the Notes surrendered. If such repurchase
constitutes a "tender offer" for purposes of Rule 14e-1 under the
Securities Exchange Act of 1934, as amended, the Company will comply with
Rule 14e-1 and any other applicable securities laws or regulations with
respect to repurchasing the Notes.
On the Change of Control Payment Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Trustee money sufficient to
pay the purchase price of all Notes or portions thereof so tendered plus
accrued and unpaid interest, if any, to the date of repurchase, and (iii)
deliver or cause to be delivered to the Trustee Notes so accepted together
with an officers' certificate stating the Notes or portions thereof
tendered to the Company. The Trustee shall promptly mail to the Noteholder
so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Noteholders a new Note
in a principal amount equal to any unpurchased portion of the Notes
surrendered. The Company will publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
7. 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 Notes to be redeemed at his registered address. On and after the
Redemption Date, unless the Company defaults in making the redemption
payment, interest ceases to accrue on the Notes or portions thereof called
for redemption.
8. Offers to Purchase. Sections 4.07 and 4.09 of the Indenture
provides upon the occurrence of a Change of Control, and with the Excess
Proceeds and certain Asset Dispositions and subject to further limitations
contained therein, the Company shall make an offer to purchase the Notes in
accordance with the procedures set forth in the Indenture.
9. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. A Holder may transfer or exchange the Notes in
accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
and to pay to it any taxes and fees required by law or permitted by the
Indenture. The Trustee need not transfer or exchange any Note or portion
of a Note selected for redemption, or transfer or exchange any Notes for a
period of 15 days before a selection of Notes to be redeemed.
10. Persons Deemed Owners. The registered holder of a Note may
be treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee or Paying Agent will
pay the money back to the Company at its request. After that, Holders
entitled to the money must look to the Company for payment as general
creditors unless an "abandoned property" law designates another Person.
12. Amendment, Supplement, Waiver. The Company and the Trustee
may, without the consent of the holders of any outstanding Notes, amend,
waive or supplement the Indenture or the Notes for certain specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies, maintaining the qualification of the Indenture under the
Trust Indenture Act of 1939 or making any other change that does not
adversely affect the rights of any Holder. Other amendments
and modifications of the Indenture or the Notes may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority
of the aggregate principal amount of the outstanding Notes, subject to
certain exceptions requiring the consent of the Holders of the particular
Notes to be affected.
13. Successor Corporation. When a successor corporation assumes
all the obligations of its predecessor under the Notes and the Indenture
and the transaction complies with the terms of Article V of the Indenture,
the predecessor corporation, subject to certain exceptions, will be
released from those obligations.
14. Defaults and Remedies. Events of Default are set forth in
Section 6.01 of the Indenture. Subject to certain limitations in the
Indenture, if an Event of Default occurs and is continuing (other than an
Event of Default specified in clause 6.01(a)(iv) or 6.01(a)(v) relating to
the Company), unless the principal of all of the Notes shall have already
become due and payable, the Trustee or the holders of (x) 25% in aggregate
principal amount of the Notes then outstanding in the case of Events of
Default referred to in clauses 6.01(a)(i) and 6.01(a)(ii) or (y) 40% in
aggregate principal amount of the Notes then outstanding in the case of
Events of Default referred to in clauses 6.01(a)(iii), 6.01(a)(vi),
6.01(a)(vii), 6.01(a)(viii) and, with respect to any Material Subsidiary,
6.01(a)(iv) and 6.01(a)(v), by notice in writing to the Company (and to the
Trustee if given by Noteholders) (an "Acceleration Notice"), may declare
all principal and accrued interest thereon to be due and payable (i)
immediately if no Debt under the New Credit Facility is outstanding or (ii)
if Debt under the New Credit Facility is outstanding upon the earlier of
(a) 5 days after such Acceleration Notice is received by the Company or (b)
the acceleration of the Debt under the New Credit Facility provided, that
such acceleration shall be automatically rescinded and annulled without any
further action required on the part of the holders in the event that any
default specified in the Acceleration Notice is received by the Company or
(b) the acceleration shall be automatically rescinded and annulled without
any further action required on the part of the holders in the event that
any default specified in the Acceleration Notice under the Notes shall have
been cured, waived or otherwise remedied prior to the expiration of such
period. If an Event of Default specified in clause 6.01(a)(iv) or
6.01(a)(v) relating to the Company occurs, all principal and accrued
interest shall be immediately due and payable on all outstanding Notes
without any declaration or other act on the part of the Trustee or the
Noteholders. Noteholders may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee may require indemnity reasonably
satisfactory to it before it enforces the Indenture or the Notes. Subject
to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Noteholders notice of any
continuing default (except a default in payment of principal or interest)
if it determines that withholding notice is in their interests. The
Company must furnish an annual compliance certificate to the Trustee.
15. Trustee Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from,
and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.
16. No Recourse Against Others. A director, officer, employee,
stockholder or beneficiary, as such, of the Company shall not have any
liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Noteholder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
17. Defeasance. The Indenture contains provisions (which
provisions apply to this Note) for defeasance at any time of (a) the entire
indebtedness of the Company under this Note and (b) certain restrictive
covenants and related Defaults and Events of Default, in each case upon
compliance by the Company with certain conditions set forth therein.
18. Authentication. This Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this
Note.
19. Abbreviations. Customary abbreviations may be used in the
name of a Noteholder or an assignee, such as: TEN COM (= tenants in
common), TENANT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= Custodian),
and U/G/M/A (= Uniform Gifts to Minors Act).
20. Subordination. The Company's payment of principal of,
premium, if any, and interest on the Notes is subordinated in right of
payment, to the extent and in the manner provided in Article XI of the
Indenture, to the prior payment in full in cash of the Senior Indebtedness
of the Company. Each Holder of the Notes, by his acceptance hereof,
covenants and agrees that all payments of the principal of, premium, if
any, and interest on the Notes by the Company shall be subordinated in
accordance with the provisions of Article XI of the Indenture, and each
Holder accepts and agrees to be bound by such provisions.
21. GOVERNING LAW. THE INDENTURE AND THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The Company will furnish to any Noteholder upon written request
and without charge a copy of the Indenture. Requests may be made to:
Sealed Air Corporation
Park 80 East
Saddlebrook, New Jersey 07662-5291
Telephone: (201) 791-7600
Attention: General Counsel
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Note to
_________________________________________________________________
(Insert assignee's social security or tax ID number) ____________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint
_________________________________________________________________
agent to transfer this Note 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 Note)
Signature Guarantee: ______________________________________________________
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant
to Section 4.07 or Section 4.09 of the Indenture, check the Box: ( )
If you wish to have a portion of this Note purchased by the
Company pursuant to Section 4.07 or Section 4.09 of the Indenture, state
the amount:
$_____________
Date: ________________ Your Signature: _____________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: _______________________
EXHIBIT 12
Sealed Air Corporation
Computation of Ratio of Earnings to Fixed Charges
(In thousands of dollars, except for ratios)
Historical
-------------------------------------------------------------
Three months
Year ended December 31, ended March 31,
------------------------------------------- ----------------
1989 1990 1991 1992 1993 1993 1994
------- ------- ------- ------- ------- ------- -------
Earnings:
Fixed charges 33,427 43,217 37,475 33,709 31,429 8,097 6,857
------- ------- ------- ------- ------- ------- -------
$57,573 $67,691 $68,941 $72,527 $76,890 $18,915 $19,437
======= ======= ======= ======= ======= ======= =======
Fixed charges:
Interest on
indebtedness,
excluding
amortization
of deferred
financing
costs $29,826 $36,704 $30,918 $28,425 $26,216 $ 6,815 $ 6,012
Amortization of
deferred
financing
costs 1,986 4,653 4,341 2,655 2,612 658 184
Portion of rent
expense deemed
to represent
interest 1,615 1,860 2,216 2,629 2,601 624 661
------- ------- ------- ------- ------- ------- -------
$33,427 $43,217 $37,475 $33,709 $31,429 $ 8,097 $ 6,857
======= ======= ======= ======= ======= ======= =======
Earnings before
income taxes 24,146 24,474 31,466 38,818 45,461 10,818 12,580
Excess of earnings
over fixed
charges $24,146 $24,474 $31,466 $38,818 $45,461 $10,818 $12,580
======= ======= ======= ======= ======= ======= =======
Ratio of earnings
to fixed
charges 1.7 to 1 1.6 to 1 1.8 to 1 2.2 to 1 2.4 to 1 2.3 to 1 2.8 to 1
======== ======== ======== ======== ======== ======== ========
EXHIBIT 23.1
Independent Auditors' Consent
The Board of Directors
Sealed Air Corporation:
We consent to the use of our reports dated January 19, 1994 on the
consolidated financial statements and related schedules of Sealed Air
Corporation and subsidiaries as of December 31, 1993 and 1992, and for each
of the years in the three-year period then ended incorporated herein by
reference and to the reference to our Firm under the headings "Selected
Financial Data" and "Experts" in the prospectus. Our report on the
aforementioned consolidated financial statements refers to a change in the
Company's method of accounting for income taxes in 1993.
KPMG Peat Marwick
Short Hills, New Jersey
May 23, 1994
SECURITIES ACT OF 1933 FILE NO: (IF APPLICATION TO DETERMINE
ELIGIBILITY OF TRUSTEE FOR DELAYED OFFERING PURSUANT
TO SECTION 305(b)(2)
===========================================================================
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
_______________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
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) X
-----
THE FIRST NATIONAL BANK OF BOSTON
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
04-2472499
(I.R.S. EMPLOYER IDENTIFICATION NO.)
100 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
GARY A. SPIESS, CASHIER AND GENERAL COUNSEL
100 FEDERAL STREET, 24TH FLOOR, BOSTON, MASSACHUSETTS 02110 (617) 434-2870
__________________________
SEALED AIR CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-1682767
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
PARK 80 EAST 07662
SADDLEBROOK, NEW JERSEY (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
SENIOR SUBORDINATED DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
===========================================================================
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.
Comptroller of the Currency of the United States,
Washington D.C. Board of Governors of the Federal
Reserve System, Washington, D.C. Federal Deposit
Insurance Corporation, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
POWERS.
Trustee is authorized to exercise corporate trust powers.
2. AFFILIATIONS WITH OBLIGER AND UNDERWRITERS.
IF THE OBLIGOR OR ANY UNDERWRITER FOR THE OBLIGOR IS AN
AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.
None with respect to the Trustee.
(See Notes on page 2)
None with respect to Bank of Boston Corporation.
16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT
OF ELIGIBILITY AND QUALIFICATION.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE
AS NOW IN EFFECT.
A certified copy of the Articles of Association of the
trustee is filed as Exhibit No. 1 to statement of eligibility and
qualification No. 22-9514 and is incorporated herein by reference
thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
TRUSTEE TO COMMENCE BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF
ASSOCIATION.
A copy of the certificate of T. McLean Griffin, Cashier
of the trustee, dated February 3, 1978, as to corporate
succession containing copies of the Certificate of the
Comptroller of the Currency that The Massachusetts Bank, National
Association, into which The First National Bank of Boston was
merged effective January 4, 1971, is authorized to commence the
2
business of banking as a national banking association, as well as
a certificate as to such merger is filed as Exhibit No. 2 to
statement of eligibility and qualification No. 22-9514 and is
incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO
EXERCISE CORPORATE TRUST POWERS, IF SUCH AUTHORIZATION IS NOT
CONTAINED IN THE DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2)
ABOVE.
A copy of a certificate of the Office of the Currency
dated February 6, 1978 is filed as Exhibit No. 3 to statement of
eligibility and qualification No. 22-9514 and is incorporated
herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR
INSTRUMENTS CORRESPONDING THERETO.
A certified copy of the existing By-Laws of the trustee
dated December 23,1993 is filed as Exhibit No. 4 to statement of
eligibility and qualifications No. 22-25754 and is incorporated
herein by reference thereto.
5. THE CONSENT OF THE TRUSTEE REQUIRED BY SECTION
321(B) OF THE ACT.
The consent of the trustee required by Section 321 (b) of
the Act is annexed hereto and made a part hereof.
6. A COPY OF THE LATEST REPORT OF CONDITION OF THE
TRUSTEE PUBLISHED PURSUANT TO LAW OR THE REQUIREMENTS OF ITS
SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority is annexed hereto as Exhibit 6 and made a
part hereof.
In answering any item in this Statement of Eligibility
and Qualification which relates to matters peculiarly within the
knowledge of the obligor or any underwriter for the obligor, the
trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims
responsibility for the accuracy or completeness of such
information.
The answer furnished to Item 2 of this statement will be
amended, if necessary, to reflect any facts which differ from
those stated and which would have been required to be stated if
known at the date hereof.
3
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939,
THE TRUSTEE, THE FIRST NATIONAL BANK OF BOSTON, A NATIONAL
BANKING ASSOCIATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE
UNITED STATES OF AMERICA, HAS DULY CAUSED THIS STATEMENT OF
ELIGIBILITY AND QUALIFICATION TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF BOSTON
AND COMMONWEALTH OF MASSACHUSETTS, ON THE 20TH DAY OF MAY, 1994.
THE FIRST NATIONAL BANK OF BOSTON, TRUSTEE
BY ROBERT DOUGHERTY
ROBERT DOUGHERTY
SENIOR ACCOUNT ADMINISTRATOR
EXHIBIT 5
CONSENT OF TRUSTEE
PURSUANT TO THE REQUIREMENTS OF SECTION 321(B) OF THE
TRUST INDENTURE ACT OF 1939, IN CONNECTION WITH THE PROPOSED
ISSUANCE FROM TIME TO TIME BY SEALED AIR CORPORATION OF SENIOR
SUBORDINATED DEBT SECURITIES, WE HEREBY CONSENT THAT REPORTS
OF EXAMINATIONS BY FEDERAL, STATE, TERRITORIAL, OR DISTRICT
AUTHORITIES MAY BE FURNISHED BY SUCH AUTHORITIES TO THE SECURITIES
AND EXCHANGE COMMISSION UPON REQUEST THEREFOR.
THE FIRST NATIONAL BANK OF BOSTON, TRUSTEE
BY ROBERT DOUGHERTY
ROBERT DOUGHERTY
SENIOR ACCOUNT ADMINISTRATOR
4
EXHIBIT 6
CONSOLIDATED REPORT OF CONDITION, INCLUDING DOMESTIC AND FOREIGN
SUBSIDIARIES, OF
THE FIRST NATIONAL BANK OF BOSTON
In the Commonwealth of Massachusetts, at the close of business on
December 31, 1993. Published in response to call made by
Comptroller of the Currency, under Title 12, United States Code,
Section 161. Charter number 200. Comptroller of the Currency
Northeastern District.
ASSETS
DOLLAR
AMOUNTS IN
THOUSANDS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency
and coin . . . . . . . . . . . . . . . . . . . . $ 1,896,648
Interest-bearing balances . . . . . . . . . 989,983
Securities . . . . . . . . . . . . . . . . . . . . 2,120,299
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:
Federal funds sold . . . . . . . . . . . . . . . 786,594
Securities purchased under agreements to
resell . . . . . . . . . . . . . . . . . . . . . 0
Loans and lease financing receivables:
Loans and leases, net of unearned income . . . $21,760,082
LESS: Allowance for loan and lease losses . . . 488,235
LESS: Allocated transfer risk reserve . . . . . 0
Loans and leases, net of unearned income,
allowance and reserve . . . . . . . . . . . . . . 21,271,847
Assets held in trading accounts . . . . . . . . . . 303,841
Premises and fixed assets (including capitalized
leases) . . . . . . . . . . . . . . . . . . . . . 317,599
Other real estate owned . . . . . . . . . . . . . . 42,600
Investments in unconsolidated subsidiaries and
associated companies . . . . . . . . . . . . . . . 118,921
Customers' liability to this bank on acceptances
outstanding . . . . . . . . . . . . . . . . . . . . 374,873
Intangible assets . . . . . . . . . . . . . . . . . 307,582
Other assets . . . . . . . . . . . . . . . . . . . 1,020,881
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . $29,551,668
5
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . $13,331,731
Noninterest-bearing . . . . . . . . . . . . . . $3,780,365
Interest-bearing . . . . . . . . . . . . . . . 9,551,366
In foreign offices, Edge and Agreement subsidiaries,
and IBF's . . . . . . . . . . . . . . . . . . . . . . 7,295,863
Noninterest-bearing . . . . . . . . . . . . . . . 525,888
Interest-bearing . . . . . . . . . . . . . . . . 6,769,975
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:
Federal funds purchased . . . . . . . . . . . . . . . 1,302,034
Securities sold under agreements to repurchase . . . 199,132
Demand notes issued to the US Treasury . . . . . . . 48,780
Other borrowed money . . . . . . . . . . . . . . . . 3,590,568
Mortgage indebtedness and obligations under
capitalized leases . . . . . . . . . . . . . . . . . 14,180
Bank's liability on acceptances executed and
outstanding . . . . . . . . . . . . . . . . . . . . . 375,153
Subordinated notes and debentures . . . . . . . . . . . 598,835
Other liabilities . . . . . . . . . . . . . . . . . . . 723,480
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . $27,479,757
Limited-life preferred stock and equity capital . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus . . . . . $ 0
Common stock . . . . . . . . . . . . . . . . . . . . . 75,200
Surplus . . . . . . . . . . . . . . . . . . . . . . 893,227
Undivided profits and capital reserves . . . . . . . . 1,076,870
LESS: Net unrealized loss on marketable equity
securities . . . . . . . . . . . . . . . . . . . . . . (34,746)
Cumulative foreign currency translation adjustments . . (8,132)
Total equity capital . . . . . . . . . . . . . . . . . 2,071,911
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND
EQUITY . . . . . . . . . . . . . . . . . . . . . . . . $29,551,668
6
1, Robert T. Jefferson, Comptroller of the above-named
bank, do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
ROBERT T. JEFFERSON
FEBRUARY 9,1994
We, the undersigned directors, attest to the correctness
of this statement of resources and liabilities. We 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 and
is true and correct.
CHARLES G. GIFFORD
IRA STEPANIAN
PAUL C. O'BRIEN
DIRECTORS
FEBRUARY 9, 1994
7
NOTES
In answering any item in this Statement of Eligibility
and Qualification which relates to matters peculiarly within the
knowledge of the obligor or any underwriter for the obligor, the
trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims
responsibility for the accuracy or completeness of such
information.
The answer furnished to Item 2 of this statement will be
amended, if necessary, to reflect any facts which differ from
those stated and which would have been required to be stated if
known at the date hereof.
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939,
THE TRUSTEE, THE FIRST NATIONAL BANK OF BOSTON, A NATIONAL
BANKING ASSOCIATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE
UNITED STATES OF AMERICA, HAS DULY CAUSED THIS STATEMENT OF
ELIGIBILITY AND QUALIFICATION TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ALL IN THE CITY OF BOSTON
AND COMMONWEALTH OF MASSACHUSETTS, ON THE 20TH DAY OF MAY, 1994.
THE FIRST NATIONAL BANK OF BOSTON, TRUSTEE,
BY /s/ ROBERT DOUGHERTY
________________________________
ROBERT DOUGHERTY
SENIOR ACCOUNT ADMINISTRATOR
EXHIBIT 5
CONSENT OF TRUSTEE
PURSUANT TO THE REQUIREMENTS OF SECTION 321(B) OF THE
TRUST INDENTURE ACT OF 1939, IN CONNECTION WITH THE PROPOSED
ISSUANCE FROM TIME TO TIME BY SEALED AIR CORPORATION OF SENIOR
SUBORDINATED DEBT SECURITIES, WE HEREBY CONSENT THAT REPORTS OF
EXAMINATIONS BY FEDERAL, STATE, TERRITORIAL, OR DISTRICT
AUTHORITIES MAY BE FURNISHED BY SUCH AUTHORITIES TO THE
SECURITIES AND EXCHANGE COMMISSION UPON REQUEST THEREFOR.
THE FIRST NATIONAL BANK OF BOSTON, TRUSTEE
BY /s/ ROBERT DOUGHERTY
________________________________
ROBERT DOUGHERTY
SENIOR ACCOUNT ADMINISTRATOR
8
