Filed Pursuant to Rule 424(b)(3)
Registration No. 333-176961
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 11, 2016)
Hexion Inc. | Hexion Nova Scotia Finance, ULC |
$114,016,000
9.00% Second-Priority Senior Secured Notes due 2020
This is supplement No. 5 to the prospectus dated May 11, 2016 that relates to the 9.00% Second-Priority Senior Secured Notes due 2020 (the Notes), issued by Hexion Inc. (Hexion), as successor by merger to Hexion U.S. Finance Corp., and Hexion Nova Scotia Finance, ULC, which is a wholly-owned subsidiary of Hexion (each a Co-Issuer and also referred to herein as, an Issuer or the Issuers). The Notes and the related guarantees thereof have previously been registered under the Securities Act of 1933, as amended, on a registration statement bearing File No. 333-176961.
The selling security holder may sell the Notes covered by this prospectus in one or more transactions, directly to purchasers or through underwriters, brokers or dealers or agents, in public or private transactions, at fixed prices, prevailing market prices at the times of sale, prices related to the prevailing market prices, varying prices determined at the times of sale or negotiated prices. See Plan of Distribution.
We will not receive any of the proceeds from the sale of the Notes by the selling security holder. The selling security holder will pay any brokerage commissions and/or similar charges incurred for the sale of the Notes.
Recent Developments
We have attached to this prospectus supplement the Current Report on Form 8-K of Hexion filed on February 10, 2017. The attached information updates and supplements, and should be read together with, the Issuers prospectus dated May 11, 2016, as supplemented from time to time.
See Risk Factors beginning on page 19 of the prospectus for a discussion of certain risks you should consider before making an investment decision in the Notes.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is February 10, 2017.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 8, 2017
HEXION INC.
(Exact Name of Registrant as Specified in Its Charter)
New Jersey
(State or Other Jurisdiction of Incorporation)
1-71 | 13-0511250 | |||
Commission File Number | (I.R.S. Employer Identification No.) | |||
180 East Broad Street, Columbus, Ohio | 43215-3799 | |||
(Address of Principal Executive Offices) | (Zip Code) |
614-225-4000
(Registrants Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 | Entry into a Material Definitive Agreement. |
First Lien Indenture and First-Priority Senior Secured Notes due 2020
On February 8, 2017, Hexion Inc. (the Issuer or Hexion) assumed $485,000,000 aggregate principal amount of 10.375% First-Priority Senior Secured Notes due 2022 (the First Lien Notes), which mature on February 1, 2022, pursuant to a supplemental indenture (the Supplemental Indenture), dated as of February 8, 2017, among the Issuer, the other subsidiaries of the Issuer party thereto (the First Lien Guarantors) and Wilmington Trust, National Association, as trustee (the First Lien Trustee), to an indenture, dated as of February 8, 2017, between Hexion 2 U.S. Finance Corp. (the Escrow Issuer), a wholly owned subsidiary of the Issuer, and the Trustee (together with the Supplemental Indenture, the First Lien Indenture). The First Lien Notes were offered in the United States only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and outside the United States, only to non-U.S. investors pursuant to Regulation S under the Securities Act.
The First Lien Notes are guaranteed, jointly and severally, on a senior secured basis by the Issuers existing domestic subsidiaries that guarantee obligations under its senior secured asset-based revolving credit facility (the ABL Facility) and its future domestic subsidiaries that guarantee any debt of the Issuer or any guarantor. The First Lien Notes and guarantees are secured by first-priority liens on the notes priority collateral (which generally includes most of the Issuers and the Issuers domestic subsidiaries assets other than the ABL priority collateral) and by second-priority liens on the ABL priority collateral (which generally includes most of the Issuers and the Issuers domestic subsidiaries inventory and accounts receivable and related assets), in each case subject to certain exceptions and permitted liens.
The First Lien Notes are the Issuers senior obligations, and rank pari passu in right of payment with the Issuers and the First Lien Guarantors existing and future senior indebtedness, including debt under the ABL Facility, its other senior secured notes and the guarantees thereof; equal in priority as to collateral with respect to its and the First Lien Guarantors existing and future first-priority secured debt obligations under its 6.625% First-Priority Senior Secured Notes due 2020 and 10.00% First-Priority Senior Secured Notes due 2020 (collectively, the Existing First Lien Notes) and any other future obligations secured by a first-priority lien on the collateral to the extent of the collateral securing such debt; senior in priority as to collateral with respect to its and the First Lien Guarantors indebtedness under the ABL Facility, to the extent of the notes priority collateral; junior in priority with respect to its and the First Lien Guarantors indebtedness under the ABL Facility, to the extent of the ABL priority collateral; senior in priority as to collateral with respect to its and the First Lien Guarantors existing and future obligations under any obligation secured by a junior-priority lien on the collateral, including its other secured notes; senior in right of payment to its and the First Lien Guarantors existing and future subordinated indebtedness; and effectively junior in right of payment to all existing and future indebtedness and other liabilities of any subsidiary that does not guarantee the First Lien Notes, including its foreign subsidiaries; subject to certain permitted liens and exceptions as further described in the First Lien Indenture and the security documents relating thereto.
The Issuer will pay interest on the First Lien Notes at 10.375% per annum, semiannually to holders of record at the close of business on January 15 or July 15 immediately preceding the interest payment date on February 1 and August 1 of each year, commencing on August 1, 2017.
The Issuer may redeem some or all of the First Lien Notes at any time on or after February 1, 2019 at redemption prices set forth in the First Lien Indenture. In addition, the Issuer may redeem in the aggregate up to 35% of the aggregate original principal amount of the First Lien Notes (which includes additional notes, if any) on or prior to February 1, 2019 at a redemption price of 110.375% plus accrued and unpaid interest, if any, of the face amount thereof in an amount equal to the net cash proceeds of one or more equity offerings so long as at least 50% of the aggregate principal amount of the First Lien Notes (which includes additional notes, if any) remains outstanding after each such redemption. Prior to February 1, 2019, the Issuer may redeem some or all of the First Lien Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if any, plus a make-whole premium.
The First Lien Indenture contains covenants that limit the Issuers and its restricted subsidaries ability to, among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends on or make other distributions in respect of its capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create or permit to exist dividend and/or payment restrictions affecting restricted subsidiaries; (vi) create liens on certain assets to secure debt; (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and (viii) enter into certain transactions with their affiliates. These covenants are subject to a number of important limitations and exceptions. The First Lien Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding First Lien Notes to be due and payable immediately.
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Senior Secured Notes Indenture and Senior Secured Notes due 2022
On February 8, 2017, the Issuer entered into an indenture (the Senior Secured Notes Indenture) among the Issuer, the guarantors party thereto (the Senior Secured Notes Guarantors) and Wilmington Trust, National Association, as trustee (the 1.5 Lien Trustee), governing the Issuers $225,000,000 aggregate principal amount of 13.75% Senior Secured Notes due 2022 (the Senior Secured Notes), which mature on February 1, 2022. The Senior Secured Notes were offered in the United States only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S under the Securities Act.
The Senior Secured Notes are guaranteed, jointly and severally, on a senior secured basis by the Issuers existing domestic subsidiaries that guarantee obligations under the ABL Facility and its future domestic subsidiaries that guarantee any debt of the Issuer or the Senior Secured Notes Guarantors. The Senior Secured Notes and the guarantees are secured by a lien on its and its domestic subsidiary guarantors assets that is junior in priority to the liens securing the first-priority lien obligations and senior in priority to the 9.00% Second-Priority Senior Secured Notes due 2020 (the Second Lien Notes) issued by the Issuer and Hexion Nova Scotia, ULC (Hexion Nova Scotia), in each case subject to certain exceptions and permitted liens.
The Senior Secured Notes are the Issuers senior obligations, and rank pari passu in right of payment with the Issuers and the Senior Secured Notes Guarantors existing and future senior indebtedness, including debt under the ABL Facility, the First Lien Notes, the Existing First Lien Notes, the Second Lien Notes and the guarantees thereof; effectively junior in priority as to collateral with respect to its and the Senior Secured Notes Guarantors indebtedness under the ABL Facility, the First Lien Notes, the Existing First Lien Notes and any other future obligations secured by a first-priority lien on the collateral to the extent of the collateral securing such debt; pari passu in priority as to collateral with respect to its and the Senior Secured Notes Guarantors indebtedness under any other existing and future indebtedness permitted to be incurred and secured on a pari passu basis with the Senior Secured Notes; senior in priority as to collateral with respect to the Issuers and the Senior Secured Notes Guarantors existing and future obligations secured by a junior priority lien on the collateral, including the Second Lien Notes, to the extent of the value of the collateral securing the Senior Secured Notes; senior in right of payment to its and the Senior Secured Notes Guarantors existing and future subordinated indebtedness; and effectively junior in right of payment to all existing and future indebtedness (including indebtedness under the ABL Facility) and other liabilities of any subsidiary that does not guarantee the Senior Secured Notes, including its foreign subsidiaries; subject to certain permitted liens and exceptions as further described in the Senior Secured Notes Indenture and the security documents relating thereto.
The Issuer will pay interest on the Senior Secured Notes at 13.75% per annum, semiannually to holders of record at the close of business on January 15 or July 15 immediately preceding the interest payment date on February 1 and August 1 of each year, commencing on August 1, 2017.
The Issuer may redeem some or all of the Senior Secured Notes at any time on or after February 1, 2019 at redemption prices set forth in the Senior Secured Notes Indenture. In addition, the Issuer may redeem in the aggregate up to 35% of the aggregate original principal amount of the Senior Secured Notes (which includes additional notes, if any) on or prior to February 1, 2019 at a redemption price of 113.75% plus accrued and unpaid interest, if any, of the face amount thereof in an amount equal to the net cash proceeds of one or more equity offerings so long as at least 50% of the aggregate principal amount of the Senior Secured Notes (which includes additional notes, if any) remains outstanding after each such redemption. Prior to February 1, 2019, the Issuer may redeem some or all of the Senior Secured Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, if any, plus a make-whole premium.
The Senior Secured Notes Indenture contains covenants that limit the Issuers and its restricted subsidaries ability to, among other things: (i) incur additional debt or issue certain preferred shares; (ii) pay dividends on or make other distributions in respect of its capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain assets; (v) create or permit to exist dividend and/or payment restrictions affecting restricted subsidiaries; (vi) create liens on certain assets to secure debt; (vii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and (viii) enter into certain transactions with their affiliates. These covenants are subject to a number of important limitations and exceptions. The Senior Secured Notes Indenture also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding Senior Secured Notes to be due and payable immediately.
3
Additional Secured Party Consent
On February 8, 2017, Hexion, the subsidiaries of Hexion party thereto, Wilmington Trust, National Association, as collateral agent (the First Lien Collateral Agent), Wilmington Trust, National Association, as authorized representative for the notes obligations, Wilmington Trust, National Association, as authorized representative for the initial other first priority obligations, and the First Lien Trustee, as authorized representative for the new secured parties, entered into an Additional Secured Party Consent (the Additional Secured Party Consent) to the Collateral Agreement, dated as of March 28, 2013 (the First Lien Collateral Agreement), among Hexion, Hexions subsidiaries party thereto and the Collateral Agent. Pursuant to the Additional Secured Party Consent, the First Lien Trustee, representing holders of the First Lien Notes, (x) has become a party to the First Lien Collateral Agreement and a party to the intercreditor agreement, dated as of April 15, 2015, among the First Lien Collateral Agent, Wilmington Trust, National Association, as authorized representative under the existing first lien agreement, Wilmington Trust, National Association, as the initial other authorized representative, and each additional authorized representative from time to time party thereto, Hexion LLC, Hexion, and each subsidiary of Hexion from time to time party thereto (as supplemented to the date hereof, the First Lien Intercreditor Agreement), in each case on behalf of such holders, and (y) has appointed and authorized the First Lien Collateral Agent to act as collateral agent on behalf of the authorized representative and the holders of the First Lien Notes and to exercise various powers under the First Lien Collateral Agreement.
Third Joinder and Supplement to the Second Lien Intercreditor Agreement
On February 8, 2017, the First Lien Trustee entered into a third joinder and supplement to the intercreditor agreement (the Third Joinder to the Second Lien Intercreditor Agreement), dated as of January 31, 2013, among JPMorgan Chase Bank, N.A., as intercreditor agent, JPMorgan Chase Bank, N.A., as senior-priority agent for the ABL secured parties, Wilmington Trust Company, as trustee and collateral agent for the Second Lien Notes, Wilmington Trust, National Association, as senior-priority agent for the Existing First Lien Notes, Wilmington Trust, National Association, as senior-priority agent for the First Lien Notes, Wilmington Trust, National Association, as senior-priority agent for the Senior Secured Notes, Hexion LLC, Hexion, and each subsidiary of Hexion from time to time party thereto (as supplemented to the date hereof, the Second Lien Intercreditor Agreement). Pursuant to the Third Joinder to the Second Lien Intercreditor Agreement, the First Lien Trustee became a party to and agreed to be bound by the terms of the Second Lien Intercreditor Agreement as another senior agent, as if it had originally been party to the Second Lien Intercreditor Agreement as a senior agent.
The Second Lien Intercreditor Agreement governs the relative priorities of the respective security interests in the Grantors (as defined below) certain assets securing (i) the First Lien Notes, (ii) the Senior Secured Notes, (iii) the Existing First Lien Notes, (iv) the Second Lien Notes and (v) the borrowings under the ABL Facility and certain other matters relating to the administration of security interests.
Second Joinder Agreement to the ABL Intercreditor Agreement
On February 8, 2017, the First Lien Trustee entered into a second joinder agreement to the intercreditor agreement (the Second Joinder to the ABL Intercreditor Agreement), dated as of March 28, 2013, among JPMorgan Chase Bank, N.A., as ABL Facility collateral agent, Wilmington Trust, National Association, as applicable first-lien agent, Wilmington Trust, National Association, as First Lien Collateral Agent, and Hexion (as supplemented to the date hereof, the ABL Intercreditor Agreement). Pursuant to the Second Joinder to the ABL Intercreditor Agreement, the First Lien Trustee became a party to and agreed to be bound by the terms of the ABL Intercreditor Agreement as another first-priority lien obligations representative, as if it had originally been party to the ABL Intercreditor Agreement as such. The ABL Intercreditor Agreement governs the relative priorities of the respective security interests in the Grantors certain assets securing (i) the First Lien Notes, (ii) the Existing First Lien Notes and (iii) the borrowings under the ABL Facility and certain other matters relating to the administration of security interests.
4
1.5 Lien Collateral Agreement
On February 8, 2017, Hexion entered into a collateral agreement (the 1.5 Lien Collateral Agreement) among Hexion, the subsidiaries of Hexion party thereto and Wilmington Trust, National Association, as collateral agent (the 1.5 Lien Collateral Agent), pursuant to which Hexion and the subsidiaries of Hexion party thereto (such subsidiaries, together with Hexion, the Grantors) granted a security interest in certain collateral to the 1.5 Lien Collateral Agent for the benefit of the secured parties under the Senior Secured Notes Indenture.
Amended and Restated 1.5 Lien Intercreditor Agreement
On February 8, 2017, the 1.5 Lien Collateral Agent, JPMorgan Chase Bank, N.A., as intercreditor agent and as ABL Facility collateral agent, Wilmington Trust, National Association, as senior-priority agent for the Existing First Lien Notes, Wilmington Trust, National Association, as senior-priority agent for the First Lien Notes, Wilmington Trust, National Association, as trustee and second-priority agent for the Senior Secured Notes, Hexion LLC, Hexion and the subsidiaries of Hexion party thereto entered into an amended and restated intercreditor agreement (the 1.5 Lien Intercreditor Agreement). The 1.5 Lien Intercreditor Agreement governs the relative priorities of the respective security interests in the Grantors certain assets securing (i) the First Lien Notes, (ii) the Existing First Lien Notes, (iii) the Senior Secured Notes and (iv) the borrowings under the ABL Facility, and certain other matters relating to the administration and enforcement of security interests.
Fourth Joinder and Supplement to the Second Lien Intercreditor Agreement
On February 8, 2017, the 1.5 Lien Trustee entered into a fourth joinder and supplement to the Second Lien Intercreditor Agreement (the Fourth Joinder to the Second Lien Intercreditor Agreement). Pursuant to the Fourth Joinder to the Second Lien Intercreditor Agreement, the 1.5 Lien Trustee became a party to and agreed to be bound by the terms of the Second Lien Intercreditor Agreement as another senior agent, as if it had originally been party to the Second Lien Intercreditor Agreement as a senior agent.
The foregoing summary is qualified in its entirety by reference to the First Lien Indenture, the Senior Secured Notes Indenture, the Additional Secured Party Consent, the Third Joinder to the Second Lien Intercreditor Agreement, the Second Joinder to the ABL Intercreditor Agreement, the 1.5 Lien Collateral Agreement, the 1.5 Lien Intercreditor Agreement and the Fourth Joinder to the Second Lien Intercreditor Agreement, attached hereto as Exhibits 4.1, 4.2, 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, respectively, and incorporated herein by reference.
Item 1.02 | Termination of a Definitive Material Agreement. |
On February 8, 2017, the Issuer caused a notice of redemption to be made to redeem all of the Issuers and Hexion Nova Scotias outstanding 8.875% Senior Secured Notes due 2018 (the Existing Senior Secured Notes) on March 10, 2017, at a redemption price equal to 100.00% of the principal amount of the Existing Senior Secured Notes, plus accrued and unpaid interest to the redemption date. The Issuer also irrevocably deposited with Wilmington Trust, National Association, as trustee for the Existing Senior Secured Notes, an amount sufficient to satisfy and discharge its obligations under the Existing Senior Secured Notes and the Indenture, dated as of January 29, 2010, among the Issuer, Hexion Novia Scotia, the guarantors party thereto and Wilmington Trust, National Association, as trustee, governing the Existing Senior Secured Notes.
Item 2.03 | Creation of a Direct Financial Obligation. |
The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.
5
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
Exhibit 4.1 | Indenture, dated as of February 8, 2017, between Hexion 2 U.S. Finance Corp. and Wilmington Trust, National Association, as trustee, related to the $485,000,000 10.375% First-Priority Senior Secured Notes due 2022. | |
Exhibit 4.2 | Supplemental Indenture, dated as of February 8, 2017, among Hexion Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee, related to the $485,000,000 10.375% First-Priority Senior Secured Notes due 2022. | |
Exhibit 4.3 | Indenture, dated as of February 8, 2017, among Hexion Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee, related to the $225,000,000 13.75% Senior Secured Notes due 2022. | |
Exhibit 10.1 | Additional Secured Party Consent, dated as of February 8, 2017, among Wilmington Trust, National Association, as authorized representative for the new secured parties, Wilmington Trust, National Association, as collateral agent, Wilmington Trust, National Association, as authorized representative of the new secured parties, Wilmington Trust, National Association, as authorized representative for the notes obligations, Wilmington Trust, National Association, as authorized representative for the initial other first priority obligations, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
Exhibit 10.2 | Third Joinder and Supplement to Intercreditor Agreement, dated as of February 8, 2017, by and among JPMorgan Chase Bank, N.A., as intercreditor agent, JPMorgan Chase Bank, N.A., as senior-priority agent for the ABL secured parties, Wilmington Trust, National Association, as trustee and senior-priority agent for the existing first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new 1.5 lien notes, Wilmington Trust Company, as trustee and second-priority agent for the existing second lien notes, Hexion LLC, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
Exhibit 10.3 | Second Joinder Agreement to ABL Intercreditor Agreement, dated as of February 8, 2017, among JPMorgan Chase Bank, N.A., as ABL facility collateral agent, Wilmington Trust, National Association, as new representative, applicable first-lien agent and first-lien collateral agent, and Hexion Inc. | |
Exhibit 10.4 | Collateral Agreement, dated as of February 8, 2017, among Wilmington Trust, National Association, as collateral agent, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
Exhibit 10.5 | Amended and Restated Intercreditor Agreement, dated as of February 8, 2017, among JPMorgan Chase Bank, N.A., as intercreditor agent, JPMorgan Chase Bank, N.A., as senior-priority agent for the ABL secured parties, Wilmington Trust, National Association, as senior-priority agent for the existing first lien notes, Wilmington Trust, National Association, as trustee and senior-priority agent for the new first lien notes, Wilmington Trust, National Association, as trustee and second-priority agent for the new 1.5 lien notes, Hexion LLC, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
Exhibit 10.6 | Fourth Joinder and Supplement to Intercreditor Agreement, dated as of February 8, 2017, among JPMorgan Chase Bank, N.A., as intercreditor agent, JPMorgan Chase Bank, N.A., as senior-priority agent for the ABL secured parties, Wilmington Trust, National Association, as trustee and senior-priority agent for the existing first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new 1.5 lien notes, Wilmington Trust Company, as trustee and second-priority agent for the existing second lien notes, Hexion LLC, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. |
6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HEXION INC. | ||||||
Date: February 10, 2017 | By: | /s/ George F. Knight | ||||
George F. Knight | ||||||
Executive Vice President and Chief Financial Officer |
EXHIBIT INDEX
Exhibit No. |
Description | |
4.1 | Indenture, dated as of February 8, 2017, between Hexion 2 U.S. Finance Corp. and Wilmington Trust, National Association, as trustee, related to the $485,000,000 10.375% First-Priority Senior Secured Notes due 2022. | |
4.2 | Supplemental Indenture, dated as of February 8, 2017, among Hexion Inc., the guarantors party thereto and Wilmington Trust, National Association, as trustee, related to the $485,000,000 10.375% First-Priority Senior Secured Notes due 2022. | |
4.3 | Indenture, dated as of February 8, 2017, among Hexion Inc., the guarantors named therein and Wilmington Trust, National Association, as trustee, related to the $225,000,000 13.75% Senior Secured Notes due 2022. | |
10.1 | Additional Secured Party Consent, dated as of February 8, 2017, among Wilmington Trust, National Association, as authorized representative for the new secured parties, Wilmington Trust, National Association, as collateral agent, Wilmington Trust, National Association, as authorized representative of the new secured parties, Wilmington Trust, National Association, as authorized representative for the notes obligations, Wilmington Trust, National Association, as authorized representative for the initial other first priority obligations, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
10.2 | Third Joinder and Supplement to Intercreditor Agreement, dated as of February 8, 2017, by and among JPMorgan Chase Bank, N.A., as intercreditor agent, JPMorgan Chase Bank, N.A., as senior-priority agent for the ABL secured parties, Wilmington Trust, National Association, as trustee and senior-priority agent for the existing first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new 1.5 lien notes, Wilmington Trust Company, as trustee and second-priority agent for the existing second lien notes, Hexion LLC, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
10.3 | Second Joinder Agreement to ABL Intercreditor Agreement, dated as of February 8, 2017, among JPMorgan Chase Bank, N.A., as ABL facility collateral agent, Wilmington Trust, National Association, as new representative, applicable first-lien agent and first-lien collateral agent, and Hexion Inc. | |
10.4 | Collateral Agreement, dated as of February 8, 2017, among Wilmington Trust, National Association, as collateral agent, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
10.5 | Amended and Restated Intercreditor Agreement, dated as of February 8, 2017, among JPMorgan Chase Bank, N.A., as intercreditor agent, JPMorgan Chase Bank, N.A., as senior-priority agent for the ABL secured parties, Wilmington Trust, National Association, as senior-priority agent for the existing first lien notes, Wilmington Trust, National Association, as trustee and senior-priority agent for the new first lien notes, Wilmington Trust, National Association, as trustee and second-priority agent for the new 1.5 lien notes, Hexion LLC, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. | |
10.6 | Fourth Joinder and Supplement to Intercreditor Agreement, dated as of February 8, 2017, among JPMorgan Chase Bank, N.A., as intercreditor agent, JPMorgan Chase Bank, N.A., as senior-priority agent for the ABL secured parties, Wilmington Trust, National Association, as trustee and senior-priority agent for the existing first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new first lien notes, Wilmington Trust, National Association, as senior-priority agent for the new 1.5 lien notes, Wilmington Trust Company, as trustee and second-priority agent for the existing second lien notes, Hexion LLC, Hexion Inc. and subsidiaries of Hexion Inc. party thereto. |
Exhibit 4.1
EXECUTION VERSION
HEXION 2 U.S. FINANCE CORP.
as Issuer
$485,000,000 10.375% FIRST-PRIORITY SENIOR SECURED NOTES DUE 2022
INDENTURE
Dated as of February 8, 2017
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
TABLE OF CONTENTS
Page | ||||||
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE | ||||||
SECTION 1.01. |
Definitions | 1 | ||||
SECTION 1.02. |
Other Definitions | 43 | ||||
SECTION 1.03. |
No Incorporation by Reference of Trust Indenture Act | 44 | ||||
SECTION 1.04. |
Rules of Construction | 44 | ||||
ARTICLE 2 THE NOTES | ||||||
SECTION 2.01. |
Amount of Notes | 44 | ||||
SECTION 2.02. |
Form and Dating | 45 | ||||
SECTION 2.03. |
Execution and Authentication | 46 | ||||
SECTION 2.04. |
Registrar and Paying Agent | 46 | ||||
SECTION 2.05. |
Paying Agent to Hold Money in Trust | 47 | ||||
SECTION 2.06. |
Holder Lists | 47 | ||||
SECTION 2.07. |
Transfer and Exchange | 47 | ||||
SECTION 2.08. |
Replacement Notes | 48 | ||||
SECTION 2.09. |
Outstanding Notes | 49 | ||||
SECTION 2.10. |
Temporary Notes | 49 | ||||
SECTION 2.11. |
Cancellation | 49 | ||||
SECTION 2.12. |
Defaulted Interest | 49 | ||||
SECTION 2.13. |
CUSIP Numbers, ISINs, etc. | 50 | ||||
SECTION 2.14. |
Calculation of Principal Amount of Notes | 50 | ||||
ARTICLE 3 REDEMPTION | ||||||
SECTION 3.01. |
Redemption | 50 | ||||
SECTION 3.02. |
Applicability of Article | 50 | ||||
SECTION 3.03. |
Notices to Trustee | 50 | ||||
SECTION 3.04. |
Selection of Notes to Be Redeemed | 51 | ||||
SECTION 3.05. |
Notice of Optional Redemption | 51 | ||||
SECTION 3.06. |
Effect of Notice of Redemption | 52 | ||||
SECTION 3.07. |
Deposit of Redemption Price | 53 | ||||
SECTION 3.08. |
Notes Redeemed in Part | 53 | ||||
ARTICLE 4 COVENANTS | ||||||
SECTION 4.01. |
Payment of Notes | 53 | ||||
SECTION 4.02. |
Reports and Other Information | 53 | ||||
SECTION 4.03. |
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock | 55 | ||||
SECTION 4.04. |
Limitation on Restricted Payments | 61 | ||||
SECTION 4.05. |
Dividend and Other Payment Restrictions Affecting Subsidiaries | 70 | ||||
SECTION 4.06. |
Asset Sales | 72 | ||||
SECTION 4.07. |
Transactions with Affiliates | 77 | ||||
SECTION 4.08. |
Change of Control | 79 |
TABLE OF CONTENTS
(continued)
Page | ||||||
SECTION 4.09. |
Compliance Certificate | 81 | ||||
SECTION 4.10. |
Further Instruments and Acts | 81 | ||||
SECTION 4.11. |
Future Guarantors | 81 | ||||
SECTION 4.12. |
Liens | 82 | ||||
SECTION 4.13. |
Maintenance of Office or Agency | 83 | ||||
SECTION 4.14. |
After-Acquired Property | 83 | ||||
SECTION 4.15. |
Limitation on Indenture Restricted Subsidiaries | 84 | ||||
SECTION 4.16. |
Limitation on Hexion Nova Scotia Finance, ULC | 84 | ||||
ARTICLE 5 MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS | ||||||
SECTION 5.01. |
Merger, Consolidation or Sale of All or Substantially All Assets |
84 | ||||
ARTICLE 6 DEFAULTS AND REMEDIES | ||||||
SECTION 6.01. |
Events of Default |
86 | ||||
SECTION 6.02. |
Acceleration |
89 | ||||
SECTION 6.03. |
Other Remedies |
89 | ||||
SECTION 6.04. |
Waiver of Past Defaults |
89 | ||||
SECTION 6.05. |
Control by Majority |
89 | ||||
SECTION 6.06. |
Limitation on Suits |
90 | ||||
SECTION 6.07. |
Rights of the Holders to Receive Payment |
90 | ||||
SECTION 6.08. |
Collection Suit by Trustee |
90 | ||||
SECTION 6.09. |
Trustee May File Proofs of Claim |
90 | ||||
SECTION 6.10. |
Priorities |
91 | ||||
SECTION 6.11. |
Undertaking for Costs |
91 | ||||
SECTION 6.12. |
Waiver of Stay or Extension Laws |
91 | ||||
ARTICLE 7 TRUSTEE | ||||||
SECTION 7.01. |
Duties of Trustee |
92 | ||||
SECTION 7.02. |
Rights of Trustee |
93 | ||||
SECTION 7.03. |
Individual Rights of Trustee |
94 | ||||
SECTION 7.04. |
Trustees Disclaimer |
95 | ||||
SECTION 7.05. |
Notice of Defaults |
95 | ||||
SECTION 7.06. |
[Intentionally Omitted] |
95 | ||||
SECTION 7.07. |
Compensation and Indemnity |
95 | ||||
SECTION 7.08. |
Replacement of Trustee |
96 | ||||
SECTION 7.09. |
Successor Trustee by Merger |
97 | ||||
SECTION 7.10. |
Eligibility; Disqualification |
97 | ||||
SECTION 7.11. |
Preferential Collection of Claims Against Issuer |
97 | ||||
SECTION 7.12. |
Limitation on Duty of Trustee in Respect of Collateral; Indemnification |
98 |
2
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE | ||||||
SECTION 8.01. |
Discharge of Liability on Notes; Defeasance |
98 | ||||
SECTION 8.02. |
Conditions to Defeasance |
100 | ||||
SECTION 8.03. |
Application of Trust Money |
101 | ||||
SECTION 8.04. |
Repayment to the Issuer |
101 | ||||
SECTION 8.05. |
Indemnity for Government Obligations |
101 | ||||
SECTION 8.06. |
Reinstatement |
102 | ||||
ARTICLE 9 AMENDMENTS AND WAIVERS | ||||||
SECTION 9.01. |
Without Consent of the Holders |
102 | ||||
SECTION 9.02. |
With Consent of the Holders |
103 | ||||
SECTION 9.03. |
[Intentionally Omitted] |
105 | ||||
SECTION 9.04. |
Revocation and Effect of Consents and Waivers |
105 | ||||
SECTION 9.05. |
Notation on or Exchange of Notes |
105 | ||||
SECTION 9.06. |
Trustee to Sign Amendments |
105 | ||||
SECTION 9.07. |
Additional Voting Terms; Calculation of Principal Amount |
106 | ||||
ARTICLE 10 GUARANTEES | ||||||
SECTION 10.01. |
Guarantees |
106 | ||||
SECTION 10.02. |
Limitation on Liability |
108 | ||||
SECTION 10.03. |
Successors and Assigns |
109 | ||||
SECTION 10.04. |
No Waiver |
109 | ||||
SECTION 10.05. |
Modification |
109 | ||||
SECTION 10.06. |
Execution of Supplemental Indenture for Future Guarantors |
109 | ||||
ARTICLE 11 SECURITY DOCUMENTS | ||||||
SECTION 11.01. |
Collateral and Security Documents |
110 | ||||
SECTION 11.02. |
Recordings and Opinions |
112 | ||||
SECTION 11.03. |
Release of Collateral |
112 | ||||
SECTION 11.04. |
Permitted Releases Not To Impair Lien |
114 | ||||
SECTION 11.05. |
Certificates of the Trustee. |
114 | ||||
SECTION 11.06. |
Suits To Protect the Collateral |
114 | ||||
SECTION 11.07. |
Authorization of Receipt of Funds by the Trustee Under the Security Documents |
115 | ||||
SECTION 11.08. |
Purchaser Protected |
115 | ||||
SECTION 11.09. |
Powers Exercisable by Receiver or Trustee |
115 | ||||
SECTION 11.10. |
Release Upon Termination of the Issuers Obligations |
115 | ||||
SECTION 11.11. |
First Lien Collateral Agent |
116 | ||||
SECTION 11.12. |
Designations |
118 |
3
TABLE OF CONTENTS
(continued)
Page | ||||||
ARTICLE 12 MISCELLANEOUS | ||||||
SECTION 12.01. |
[Intentionally Omitted] | 118 | ||||
SECTION 12.02. |
Notices | 118 | ||||
SECTION 12.03. |
[Intentionally Omitted] | 119 | ||||
SECTION 12.04. |
Certificate and Opinion as to Conditions Precedent | 119 | ||||
SECTION 12.05. |
Statements Required in Certificate or Opinion | 119 | ||||
SECTION 12.06. |
When Notes Disregarded | 120 | ||||
SECTION 12.07. |
Rules by Trustee, Paying Agent and Registrar | 120 | ||||
SECTION 12.08. |
Legal Holidays | 120 | ||||
SECTION 12.09. |
Governing Law | 120 | ||||
SECTION 12.10. |
No Recourse Against Others | 120 | ||||
SECTION 12.11. |
Successors | 120 | ||||
SECTION 12.12. |
Multiple Originals | 121 | ||||
SECTION 12.13. |
Table of Contents; Headings | 121 | ||||
SECTION 12.14. |
Indenture Controls | 121 | ||||
SECTION 12.15. |
Severability | 121 | ||||
SECTION 12.16. |
U.S.A. Patriot Act | 121 | ||||
ARTICLE 13 ISSUERS ASSUMPTION | ||||||
SECTION 13.01. |
Issuers Assumption |
121 |
4
Appendix A Provisions Relating to Initial Notes
EXHIBIT INDEX
Exhibit A Form of Initial Note
Exhibit B Form of Transferee Letter of Representation
Exhibit C Form of Supplemental Indenture
Exhibit D Form of Issuers Assumption Supplemental Indenture
Exhibit E Form of Note Following Issuers Assumption
INDENTURE dated as of February 8, 2017 between Hexion 2 U.S. Finance Corp., a Delaware corporation (the Escrow Issuer or the Issuer; provided, that, for purposes of this Indenture, after the consummation of the Issuers Assumption (as defined below), the references to the Issuer will only refer to Hexion Inc., a New Jersey corporation), and Wilmington Trust, National Association, as trustee (the Trustee).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of Notes issued under this Indenture.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
6.625% First-Priority Senior Secured Notes means the Issuers 6.625% First-Priority Senior Secured Notes due 2020.
6.625% First-Priority Senior Secured Notes Obligations means the Notes Obligations as defined in the 6.625% First Lien Notes Indenture.
6.625% First-Priority Senior Secured Notes Trustee means Wilmington Trust, National Association, as trustee under the 6.625% First-Priority Senior Secured Notes or its successors or assigns.
6.625% First Lien Notes Indenture means the indenture among the Issuer (as successor issuer via merger to Hexion U.S. Finance Corp.), Wilmington Trust, National Association, as trustee, and the other parties thereto dated March 14, 2012 with respect to the Issuers 6.625% First-Priority Senior Secured Notes due 2020, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
10.00% First-Priority Senior Secured Notes means the Issuers 10.00% First-Priority Senior Secured Notes due 2020.
10.00% First-Priority Senior Secured Notes Trustee means Wilmington Trust, National Association, as trustee under the 10.00% First-Priority Senior Secured Notes or its successors or assigns.
10.00% First Lien Notes Indenture means the indenture among the Issuer, Wilmington Trust, National Association, as trustee, and the other parties thereto dated April 15, 2015 with respect to the Issuers 10.00% First-Priority Senior Secured Notes due 2020, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
ABL Collateral Agent means the Collateral Agent under the ABL Facility Documents and any successor thereto in such capacity.
ABL Facility means (i) the Amended and Restated Asset-Based Revolving Credit Agreement, dated as of December 21, 2016, among Hexion LLC (f/k/a Momentive Specialty Chemicals Holdings LLC), the Issuer, as U.S. borrower, Hexion Canada Inc., as Canadian borrower, Hexion B.V. (f/k/a Momentive Specialty Chemicals B.V.), as Dutch borrower, Hexion UK Limited (f/k/a Momentive Specialty Chemicals UK Limited) and Borden Chemical UK Limited, as U.K. borrowers, and Hexion GMBH, a company organized under the laws of Germany, as German borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, swingline lender and initial issuing bank, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time after the Issue Date, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (except to the extent any such refinancing, replacement or restructuring is designated by Hexion to not be included in the definition of ABL Facility), and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by Hexion to be included in the definition of ABL Facility, one or more (A) asset-based debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, securitization or receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
ABL Facility Documents means the agreements and other instruments governing the ABL Facility, together with any guarantees thereof and any security documents, other collateral documents and other instruments relating thereto (including documents and instruments governing Hedging Obligations required by the ABL Facility or relating to ABL Obligations).
ABL Intercreditor Agreement means the ABL Intercreditor Agreement, dated as of March 28, 2013, by and among JPMorgan Chase Bank, N.A., as ABL Facility Collateral Agent, Wilmington Trust, National Association, as Applicable First-Lien Agent, Wilmington Trust, National Association, as First-Lien Collateral Agent, Wilmington Trust, National Association, as an Other First Priority Lien Obligations Representative, the Issuer and each of its Subsidiaries party thereto from time to time, and each additional authorized representative from time to time party thereto, as amended, modified or supplemented in accordance with its terms.
ABL Obligations means the Obligations of the borrowers and other obligors under the ABL Facility or any of the other ABL Facility Documents, to pay principal, premium, if any, and interest (including any interest accruing after the commencement of bankruptcy or insolvency proceedings) when due and payable, and all other amounts due or to become due under or in connection with the ABL Facility Documents and the performance of all other Obligations of the obligors thereunder to the lenders and agents under the ABL Facility Documents, according to the respective terms thereof.
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ABL Priority Collateral means any and all of the following assets and properties now owned or at any time hereafter acquired by the Pledgors, in each case to the extent otherwise constituting Collateral for the Notes (and not Excluded Assets): (a) all accounts; (b) all inventory; (c) to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses (a) and (b), all (i) general intangibles, (ii) chattel paper, (iii) instruments and (iv) documents; (d) all payment intangibles (including corporate tax refunds), other than any payment intangibles that represent tax refunds in respect of or otherwise relate to real property, fixtures or equipment; (e) all payments received from the Pledgors credit card clearinghouses and processors or otherwise in respect of all credit card charges for sales of inventory by the Pledgors; (f) all collection accounts, deposit accounts, securities accounts and commodity accounts and any cash or other assets in any such accounts (other than separately identified cash proceeds of Notes Priority Collateral in a segregated account) and securities entitlements and other rights with respect thereto; (g) to the extent relating to any of the items referred to in the preceding clauses (a) through (f) constituting ABL Priority Collateral, all supporting obligations and letter-of-credit rights; (h) all books and records related to the foregoing; and (i) all products and proceeds of any and all of the foregoing in whatever form received, including proceeds of insurance policies related to inventory of any Pledgor and business interruption insurance (in each case, except to the extent constituting proceeds of Notes Priority Collateral).
Acquired Indebtedness means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person,
in each case, other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by such Person, or such asset was acquired by such Person, as applicable.
Additional Notes means the 10.375% First-Priority Senior Secured Notes due 2022 issued under the terms of this Indenture subsequent to the Issue Date.
Additional First Lien Secured Party means the holders of any Additional First Priority Lien Obligations, including the holders of the Existing First Lien Notes, and any Authorized Representative with respect thereto.
Additional First Priority Lien Obligations means any First Priority Lien Obligations, other than the Notes Obligations, that are Incurred prior to or after the Issue Date and secured by the Common Collateral on a pari passu basis with the Notes Obligations and designated as such in writing to the First Lien Collateral Agent pursuant to the Security Documents, including the Existing First Lien Notes Obligations.
3
Adjusted EBITDA means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) Consolidated Interest Expense; provided, however, such amount will be included in Adjusted EBITDA notwithstanding that such amount was not deducted in calculating Consolidated Net Income; plus
(3) Consolidated Non-cash Charges; plus
(4) the amount of management, monitoring, consulting and advisory fees and related expenses paid to the Sponsor or its predecessor (or any accruals relating to such fees and related expenses) during such period; provided, however, that such amount shall not exceed in any four-quarter period commencing after September 30, 2006 the amount determined in accordance with clause (iii) of Section 4.07(b); plus
(5) plant closure and severance costs and charges; plus
(6) impairment charges, including the write-down of Investments; plus
(7) non-operating expenses; plus
(8) restructuring expenses and charges; plus
(9) the cost (or amortization of prior service cost) of subsidizing coverage for persons affected by amendments to medical benefit plans implemented prior to the Issue Date; provided, however, such amount will be included in Adjusted EBITDA notwithstanding that such amount was not deducted in calculating Consolidated Net Income;
less, without duplication,
(10) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period and any items for which cash was received in a prior period, including the amortization of employee benefit plan prior service costs); minus
(11) non-operating income.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control (including, with correlative meanings, the
4
terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Applicable Premium means, with respect to any Note on any applicable redemption date as determined by the Issuer, the greater of:
(1) 1.0% of the then outstanding principal amount of such Note; and
(2) the excess of:
(A) the present value at such redemption date of the sum of (i) the redemption price of such Note at February 1, 2019 (such redemption price being set forth in paragraph 5 of such Note) plus (ii) all required interest payments due on such Note through February 1, 2019 (excluding accrued but unpaid interest), such present value to be computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(B) the then outstanding principal amount of such Note.
Asset Sale means:
(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of assets (including by way of a Sale/Leaseback Transaction) of Hexion or any Restricted Subsidiary of Hexion other than in the ordinary course of business (each referred to in this definition as a disposition) or
(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than to Hexion or another Restricted Subsidiary of Hexion other than directors or other legally required qualifying shares) (whether in a single transaction or a series of related transactions),
in each case other than:
(a) a disposition of Cash Equivalents or Investment Grade Securities;
(b) disposition of obsolete, damaged or worn out equipment or disposals of equipment in connection with reinvestment in or replacement of equipment, in each case, in the ordinary course of business;
(c) the disposition of all or substantially all of the assets of Hexion in a manner permitted pursuant to Section 5.01(a) or any disposition that constitutes a Change of Control;
(d) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;
5
(e) any disposition of assets of Hexion or any Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary, which disposition or issuance has an aggregate Fair Market Value (as determined in good faith by Hexion) of less than $12.5 million;
(f) any disposition of assets to Hexion or any Restricted Subsidiary of Hexion, including by way of merger;
(g) any exchange of assets for assets related to a Similar Business to the extent of comparable or better market value, as determined in good faith by Hexion;
(h) any disposition of assets received by Hexion or any of its Restricted Subsidiaries upon the foreclosure on a Lien;
(i) any disposition of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(j) any disposition of inventory in the ordinary course of business;
(k) the lease, assignment or sub-lease of any real or personal property in the ordinary course of business;
(l) any disposition of accounts receivable and related assets of the type specified in the definition of Receivables Financing to a Receivables Subsidiary in a Qualified Receivables Financing or in factoring or similar transactions;
(m) a transfer of accounts receivable and related assets of the type specified in the definition of Receivables Financing (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;
(n) any agreement or arrangement involving, relating to or otherwise facilitating, (i) requirements contracts, (ii) tolling arrangements or (iii) the reservation or presale of production capacity of Hexion or any of its Restricted Subsidiaries by one or more third parties;
(o) sales or grants of licenses or sublicenses to use Hexions or any of its Restricted Subsidiaries patents, trade secrets, know-how and technology to the extent that such license does not prohibit the licensor from using the patent, trade secret, know-how or technology;
(p) any Sale/Leaseback Transaction pursuant to which Hexion or any Restricted Subsidiaries receives with respect to such transaction aggregate consideration of less than $15 million; and
(q) to the extent constituting an Asset Sale, any termination, settlement or extinguishment of Hedging Obligations.
6
Authorized Representative means (i) in the case of any Credit Agreement Obligations or the Credit Agreement Secured Parties, the administrative agent under such Credit Agreement, (ii) in the case of Notes Obligations or the holders of the Notes, the Trustee, (iii) in the case of the 6.625% First-Priority Senior Secured Notes Obligations or the holders of the 6.625% First-Priority Senior Secured Notes, the 6.625% First-Priority Senior Secured Notes Trustee, (iv) in the case of the 10.00% First-Priority Senior Secured Notes Obligations or the holders of the 10.00% First-Priority Senior Secured Notes, the 10.00% First-Priority Senior Secured Notes Trustee, and (v) in the case of any Series of Additional First Priority Lien Obligations or Additional First Lien Secured Parties that become subject to the First Lien Intercreditor Agreement, the Authorized Representative named for such Series in the applicable joinder agreement.
Bank Indebtedness means any and all amounts payable under or in respect of any Credit Agreement or the other Senior Credit Documents, as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Hexion whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.
Board of Directors means as to any Person, the board of directors or managers, as applicable, of such Person or any direct or indirect parent of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.
Business Day means each day which is not a Legal Holiday.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
Capitalized Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.
7
Cash Contribution Amount means the aggregate amount of cash contributions made to the capital of Hexion described in the definition of Contribution Indebtedness.
Cash Equivalents means:
(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;
(2) securities issued or directly and fully guaranteed or insured by the government of, or any agency or instrumentality thereof, the United States of America, Australia, Great Britain, Canada, the Netherlands or any other member state of the European Union, in each case with maturities not exceeding two years after the date of acquisition;
(3) in the case of any Foreign Subsidiary, securities issued or directly and fully guaranteed or insured by the government of the jurisdiction of such Foreign Subsidiary, or any agency or instrumentality thereof, in each case with maturities not exceeding 270 days after the date of acquisition and held by it from time to time in the ordinary course of business;
(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers acceptances, in each case with maturities not exceeding one year and overnight bank deposits and demand deposits (in their respective local currencies), in each case with any commercial bank having capital and surplus in excess of $500 million or the foreign currency equivalent thereof and whose long-term debt is rated A or the equivalent thereof by Moodys or S&P (or, in the case of an obligor domiciled outside of the United States, reasonably equivalent ratings of another internationally recognized credit rating agency);
(5) repurchase obligations for underlying securities of the types described in clauses (2) and (4) above entered into with any financial institution meeting the qualifications specified in clause (4) above;
(6) commercial paper issued by a corporation (other than an Affiliate of Hexion) rated at least A-1 or the equivalent thereof by Moodys or S&P (or, in the case of an obligor domiciled outside of the United States, reasonably equivalent ratings of another internationally recognized credit rating agency) and in each case maturing within one year after the date of acquisition;
(7) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moodys or S&P in each case with maturities not exceeding two years from the date of acquisition;
8
(8) Indebtedness issued by Persons (other than the Sponsor or any of their Affiliates) with a rating of A or higher from S&P or A-2 or higher from Moodys (or, in the case of an obligor domiciled outside of the United States, reasonably equivalent ratings of another internationally recognized credit rating agency) in each case with maturities not exceeding two years from the date of acquisition;
(9) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (8) above; and
(10) instruments equivalent to those referred to in clauses (1) through (8) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.
Change of Control means the occurrence of any of the following events:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Hexion and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or
(2) Hexion becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Hexion; or
(3) individuals who on the Issue Date constituted the Board of Directors of Hexion (together with any new directors whose election by such Board of Directors of Hexion or whose nomination for election by the shareholders of Hexion was approved by (a) a vote of a majority of the directors of Hexion then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved or (b) the Permitted Holders) cease for any reason to constitute a majority of the Board of Directors of Hexion then in office.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means all the collateral described in the Security Documents.
Collateral Agreement means the Collateral Agreement, dated and effective as of March 28, 2013, among Hexion, the subsidiaries of Hexion party thereto from time to time, the Trustee as authorized representative with respect to the Notes, each other authorized representative party thereto from time to time and the First Lien Collateral Agent, as amended, modified or supplemented in accordance with its terms.
9
Collateral Agreement Supplement means the Additional Secured Party Consent, dated as of the Issue Date, among Hexion Inc., the First Lien Collateral Agent and the Trustee, as Authorized Representative for the holders of the Notes.
Common Collateral means, at any time, Collateral in which the holders of two or more Series of First Priority Lien Obligations (or their respective Authorized Representatives) hold a valid and perfected security interest at such time. If more than two Series of First Priority Lien Obligations are outstanding at any time and the holders of less than all Series of First Priority Lien Obligations hold a valid and perfected security interest in any Collateral at such time then such Collateral shall constitute Common Collateral for those Series of First Priority Lien Obligations that hold a valid security interest in such Collateral at such time and shall not constitute Common Collateral for any Series which does not have a valid and perfected security interest in such Collateral at such time.
consolidated means, with respect to any Person, such Person consolidated with its Restricted Subsidiaries and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary shall be accounted for as an Investment.
Consolidated Interest Expense means, with respect to any Person (the Specified Person) for any period, the sum, without duplication, of:
(1) consolidated interest expense of the Specified Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees and expensing of any bridge or other financing fees);
(2) consolidated capitalized interest of the Specified Person and its Restricted Subsidiaries for such period, whether paid or accrued;
(3) commissions, discounts, yield and other fees and charges Incurred for such period in connection with any Receivables Financing of the Specified Person or any of its Restricted Subsidiaries which are payable to Persons other than Hexion and its Restricted Subsidiaries;
(4) dividends accrued for such period in respect of all Disqualified Stock of the Specified Person and any of its Restricted Subsidiaries and all Preferred Stock (including Designated Preferred Stock) of any such Restricted Subsidiaries, in each case held by Persons other than Hexion or a Wholly Owned Subsidiary (in each such case other than (x) dividends payable solely in Capital Stock (other than Disqualified Stock) of Hexion and (y) dividends that are payable only at such time as there are no Notes outstanding); and
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(5) interest accruing for such period on any Indebtedness of any other Person to the extent such Indebtedness is guaranteed by (or secured by the assets of) the Specified Person or any of its Restricted Subsidiaries;
less
(6) interest income of the Specified Person and its Restricted Subsidiaries for such period.
Consolidated Net Income means, with respect to any Person for any period, the aggregate Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided, however, that:
(1) any net after-tax extraordinary nonrecurring or unusual gains or losses or income , expenses or charges (less all fees and expenses relating thereto), including any severance expenses, expenses related to any reconstruction, decommissioning or reconfiguration of fixed assets for alternate uses, fees, expenses or charges relating to new product lines, plant shutdown costs and acquisition integration cost and fees, expenses or charges related to any Equity Offering, Permitted Investment, acquisition or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), including any such fees, expenses, charges or change in control payments related to the Hexion Recapitalization or otherwise, in each case, shall be excluded;
(2) any increase in amortization or depreciation or any one-time non-cash charges (such as purchased in-process research and development or capitalized manufacturing profit in inventory) resulting from purchase accounting in connection with any acquisition that is consummated after the Existing Second Lien Notes Issue Date shall be excluded;
(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4) any net after-tax income or loss from discontinued operations and any net after-tax gains or losses on disposal of discontinued operations shall be excluded;
(5) any net after-tax gains or losses, or any subsequent charges or expenses (less all fees and expenses or charges relating thereto), attributable to business dispositions or asset dispositions having occurred at any time other than in the ordinary course of business (as determined in good faith by the Board of Directors of Hexion) shall be excluded;
(6) any net after-tax gains or losses attributable to the early extinguishment of Indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7) the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
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(8) solely for the purpose of determining the amount available for Restricted Payments under Section 4.04(a)(3)(A), the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions have been legally waived; provided, however, that (without duplication) the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;
(9) an amount equal to the amount of Tax Distributions actually made to the holders of Capital Stock of such Person or any parent company of such Person in respect of such period in accordance with Section 4.04(b)(xii) shall be included, to the extent not otherwise deducted, as though such amounts had been paid as income taxes directly by such Person for such period;
(10) any impairment charges or asset write-offs and amortization of intangibles and other fair value adjustments in each case arising pursuant to the application of GAAP shall be excluded;
(11) any non-cash compensation expense realized from any deferred stock compensation plan or grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors and employees of such Person or any of its Restricted Subsidiaries shall be excluded;
(12) solely for purposes of calculating Adjusted EBITDA, (a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-wholly-owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included;
(13) (a)(i) the non-cash portion of straight-line rent expense shall be excluded and (ii) the cash portion of straight-line rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by Statement of Financial Accounting Standards No. 133 shall be excluded;
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(14) accruals and reserves that are established within twelve months after the Issue Date and that are so required to be established in accordance with GAAP shall be excluded;
(15) non-cash charges for deferred tax asset valuation allowances shall be excluded;
(16) any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) the costs and expenses after the Issue Date related to employment of terminated employees, (d) costs or expenses realized in connection with, resulting from or in anticipation of the Hexion Recapitalization or (e) costs or expenses realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors, managers and employees, in each case of such Person or any of its Restricted Subsidiaries, shall be excluded; and
(17) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries of Hexion or a Restricted Subsidiary of Hexion to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Sections 4.04(a)(3)(D) and (E).
Consolidated Non-cash Charges means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, but excluding any such charge which consists of or requires an accrual of, or cash reserve for, anticipated cash charges for any future period.
Consolidated Secured Debt Ratio means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness of Hexion and its Restricted Subsidiaries on the date of determination that constitutes First Priority Lien Obligations or ABL Obligations to (b) the aggregate amount of Adjusted EBITDA for the then most recent four fiscal quarters for which internal financial statements of Hexion and its Restricted Subsidiaries are available in each case with such pro forma adjustments to Consolidated Total Indebtedness and Adjusted EBITDA as are consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio; provided, however, that solely for purposes of the calculation of the Consolidated Secured Debt Ratio, in connection with the Incurrence of any Lien pursuant to clause (8) of the definition of Permitted Liens, Hexion or its Restricted Subsidiaries may elect, pursuant to an Officers Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness (including any Bank Indebtedness) which is to be secured by such Lien as being Incurred at such time and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
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Consolidated Taxes means provision for taxes based on income, profits or capital, including state, franchise and similar taxes and any Tax Distributions taken into account in calculating Consolidated Net Income.
Consolidated Total Indebtedness means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate amount of all outstanding Indebtedness of Hexion and its Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers acceptances, Indebtedness for borrowed money and Indebtedness in respect of the deferred purchase price of property or services, plus (2) the aggregate amount of all outstanding Disqualified Stock of Hexion and its Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries of Hexion, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, minus (3) the aggregate amount of all Unrestricted Cash on the consolidated balance sheet of Hexion and its Restricted Subsidiaries as of such date of determination, in each case determined on a consolidated basis in accordance with GAAP.
Contingent Obligations means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (primary obligations) of any other Person (the primary obligor) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds:
(a) for the purchase or payment of any such primary obligation; or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
Contribution Indebtedness means Indebtedness of Hexion or any of its Restricted Subsidiaries that is a Guarantor in an aggregate principal amount not greater than twice the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of Hexion by any stockholder of Hexion (other than a Restricted Subsidiary) after the Issue Date; provided, however, that:
(1) if the aggregate principal amount of such Contribution Indebtedness is greater than one times such cash contributions to the capital of Hexion, the amount in excess shall be Indebtedness (other than Secured Indebtedness) with a Stated Maturity later than the Stated Maturity of any Notes then outstanding;
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(2) such Contribution Indebtedness (a) is Incurred within 180 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officers Certificate on the Incurrence date thereof; and
(3) such cash contribution is not and has not been included in the calculation of permitted Restricted Payments under Section 4.04.
Credit Agreement means, if designated by Hexion to be included in the definition of Credit Agreement, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, securitization or receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
Credit Agreement Obligations means the Obligations in respect of any agreement or instrument designated as a Credit Agreement pursuant to the definition of Credit Agreement.
Credit Agreement Secured Parties means the holders of Credit Agreement Obligations, including the administrative agent or other authorized representative under the applicable Credit Agreement.
Default means any event which is, or after notice or passage of time or both would be, an Event of Default.
Designated Non-cash Consideration means the Fair Market Value (as determined in good faith by Hexion) of non-cash consideration received by Hexion or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.
Designated Preferred Stock means Preferred Stock of Hexion or any direct or indirect parent company of Hexion, as applicable (other than Disqualified Stock), that is issued for cash (other than to Hexion or any of its Subsidiaries or an employee stock ownership plan or trust established by Hexion or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).
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Discharge of 6.625% First-Priority Senior Secured Notes Obligations means, with respect to any Common Collateral, the date on which the 6.625% First-Priority Senior Secured Notes Obligations are no longer secured by such Common Collateral; provided that the Discharge of 6.625% First-Priority Senior Secured Notes Obligations shall not be deemed to have occurred in connection with a refinancing of the 6.625% First-Priority Senior Secured Notes with additional First Priority Lien Obligations secured by such Common Collateral under an agreement relating to Additional First Priority Lien Obligations which has been designated in writing by the Issuer to the First Lien Collateral Agent and each other Authorized Representative as the 6.625% First Lien Notes Indenture for purposes of the First Lien Intercreditor Agreement.
Disqualified Stock means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided, however, that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)),
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person or any of its Restricted Subsidiaries, or
(3) is redeemable at the option of the holder thereof, in whole or in part,
in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Hexion or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by Hexion in order to satisfy applicable statutory or regulatory obligations or as a result of such employees termination, death or disability; provided further, however, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
Domestic Subsidiary means a Restricted Subsidiary that is not a Foreign Subsidiary.
EBITDA means Adjusted EBITDA but without giving effect to clause (9) contained therein.
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
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Equity Offering means any public or private sale after the Issue Date of common stock or Preferred Stock of Hexion or any direct or indirect parent company of Hexion, as applicable (other than Disqualified Stock), other than:
(1) public offerings with respect to Hexions or such direct or indirect parent companys common stock registered on Form S-8;
(2) any such public or private sale that constitutes an Excluded Contribution; and
(3) any Cash Contribution Amount.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Excluded Assets means the property and other assets of the Issuer and the Subsidiary Guarantors that is excluded from the grant of security interest in favor of the First Lien Collateral Agent, on behalf of the holders of the Notes, pursuant to the terms of this Indenture and the Security Documents.
Excluded Contributions means Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of Hexion) received by Hexion after the Issue Date from:
(1) contributions to its common equity capital, and
(2) the sale (other than to a Subsidiary of Hexion or to any Hexion or Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Hexion,
in each case designated as Excluded Contributions pursuant to an Officers Certificate executed by an Officer of Hexion, the cash proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).
Existing Debenture Payoff Date means the date on which the Existing Debentures are repaid in full, defeased or discharged.
Existing Debentures means (i) Hexions 77/8% Debentures due 2023 and (ii) Hexions 9.20% Debentures due 2021.
Existing Debentures Subsidiary means each corporation of which Hexion, or Hexion and one or more Existing Debentures Subsidiaries, or any one or more Existing Debentures Subsidiaries, directly or indirectly own securities entitling the holders thereof to elect a majority of the directors, either at all times or so long as there is no default or contingency which permits the holders of any other class or classes of securities to vote for the election of one or more directors.
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Existing First Lien Notes means, collectively, the 6.625% First-Priority Senior Secured Notes and the 10.00% First-Priority Senior Secured Notes.
Existing First Lien Notes Indentures means (i) the 6.625% First Lien Notes Indenture and (ii) the 10.00% First Lien Notes Indenture.
Existing First Lien Notes Obligations means, collectively, the Notes Obligations as defined in each of the applicable Existing First Lien Notes Indentures.
Existing First Lien Notes Trustees means Wilmington Trust, National Association, as trustee under the Existing First Lien Notes Indentures.
Existing Second Lien Notes means the 9% Second Priority Senior Secured Notes due 2020 issued by the Issuer (as successor issuer by merger to Hexion U.S. Finance Corp.) and Hexion Nova Scotia Finance, ULC.
Existing Second Lien Notes Indenture means the indenture among the Issuer (as successor by merger to Hexion U.S. Finance Corp.), Hexion Nova Scotia Finance, ULC, Wilmington Trust Company, as trustee, and the other parties thereto dated November 5, 2010 with respect to the Existing Second Lien Notes due 2020, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
Existing Second Lien Notes Issue Date means November 3, 2006.
Existing Second Lien Notes Offering Circular means the Offering Circular dated October 27, 2006, with respect to the Second Priority Senior Secured Floating Rate Notes due 2014 issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC.
Existing Senior Secured Notes means the 8.875% Senior Secured Notes due 2018 issued by Hexion Finance Escrow LLC and Hexion Escrow Corporation and assumed by the Issuer (as successor issuer by merger to Hexion U.S. Finance Corp.) and Hexion Nova Scotia Finance, ULC.
Existing Senior Secured Notes Indenture means the indenture among the Issuer (as successor by merger to Hexion U.S. Finance Corp.), Hexion Nova Scotia Finance, ULC, Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB) as trustee, and the other parties thereto dated January 29, 2010 with respect to the Existing Senior Secured Notes, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
Fair Market Value means, with respect to any asset or property, the price which could be negotiated in an arms-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
First Lien Collateral Agent shall mean Wilmington Trust, National Association, in its capacity as collateral agent for the First Lien Secured Parties, together with its successors and permitted assigns under this Indenture, each of the Existing First Lien Notes Indentures and
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the First Lien Documents exercising substantially the same rights and powers; and in each case provided that if such First Lien Collateral Agent is not Wilmington Trust, National Association, such First Lien Collateral Agent shall have become a party to the First Lien Intercreditor Agreement and the other applicable First Lien Security Documents.
First Lien Documents means the credit, guarantee and security documents governing the First Priority Lien Obligations, including, without limitation, this Indenture, the Existing First Lien Notes Indentures and the First Lien Security Documents.
First Lien Intercreditor Agreement means the First Lien Intercreditor Agreement, dated as of April 15, 2015, by and among the First Lien Collateral Agent, the Existing First Lien Notes Trustees and the Trustee, as the Initial Other Authorized Representative, Hexion and each of its Subsidiaries party thereto from time to time, and each additional Authorized Representative from time to time party thereto, as amended, modified or supplemented in accordance with its terms.
First Lien Secured Parties means (a) the First Lien Collateral Agent, the holders of the Notes, the Trustee, the beneficiaries of each indemnification obligation undertaken by the Issuer and its Subsidiaries under any Security Document and (b) any Additional First Lien Secured Parties.
First Lien Security Documents means the Security Documents and any other agreement, document or instrument pursuant to which a Lien is granted or purported to be granted securing First Priority Lien Obligations or under which rights or remedies with respect to such Liens are governed.
First Priority After-Acquired Property means any property (other than the initial collateral as of the Issue Date) of Hexion or any Subsidiary Guarantor that secures any First Priority Lien Obligations or, with respect to ABL Priority Collateral, any ABL Obligation, other than in each case any Excluded Assets.
First Priority Lien Obligations means (i) all Secured Bank Indebtedness, (ii) all Existing First Lien Notes Obligations, (iii) all Notes Obligations, (iv) all other Obligations (not constituting Indebtedness) of the Issuer and its Subsidiaries under the agreements governing Secured Bank Indebtedness, (v) all other Obligations of the Issuer or any of its Subsidiaries in respect of Hedging Obligations or Obligations in respect of cash management services in each case that are secured by Liens granted pursuant to any Senior Credit Document and (vi) all Additional First Priority Lien Obligations. For the avoidance of doubt, the ABL Obligations shall not constitute First Priority Lien Obligations.
Fixed Charge Coverage Ratio means, with respect to any Person for any period, the ratio of Adjusted EBITDA of such Person for such period to the Consolidated Interest Expense of such Person for such period. In the event that Hexion or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings or revolving advances under any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock
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or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period (including in the case of any Incurrence or issuance a pro forma application of the net proceeds therefrom).
For purposes of making the computation referred to above, Investments, acquisitions or dispositions of operating units of a business, mergers, consolidations, discontinued operations (as determined in accordance with GAAP), and any operational changes, business realignment projects and initiatives, restructurings and reorganizations (each a pro forma event) that Hexion or any of its Restricted Subsidiaries has either determined to make or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions or dispositions of an operating unit of a business, mergers, consolidations, discontinued operations and any operational changes, business realignment projects and initiatives, restructurings and reorganizations (and the change of any associated fixed charge obligations, consolidated interest expense and the change in Adjusted EBITDA resulting therefrom), had occurred on the first day of the four-quarter reference period. If, since the beginning of such period any Person that subsequently became a Restricted Subsidiary of Hexion or was merged with or into Hexion or any Restricted Subsidiary of Hexion since the beginning of such period shall have made any Investment, acquisition or disposition of an operating unit of a business, merger, consolidation, discontinued operation or operational change, business realignment project or initiative, restructuring or reorganization, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, consolidation, operational change, business realignment project or initiative, restructuring, or reorganization had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Hexion. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Hexion as set forth in an Officers Certificate, to reflect (i) operating expense reductions, other operating improvements or synergies reasonably expected to result from the applicable pro forma event (including, to the extent applicable, from the Hexion Recapitalization) and (ii) all adjustments used in connection with the calculation of Adjusted EBITDA to the extent such adjustments, without duplication, continue to be applicable to such four quarter period.
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Flow Through Entity means (i) an entity that is treated as a partnership not taxable as a corporation for U.S. federal income tax purposes or (ii) a disregarded entity for U.S. federal income tax purposes whose beneficial owner is a partnership for U.S. federal income tax purposes.
Foreign Subsidiary means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any direct or indirect subsidiary of such Restricted Subsidiary.
GAAP means generally accepted accounting principles set forth in (i) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements and pronouncements of the Financial Accounting Standards Board and (iii) in such other statements by such other entity as have been approved by a significant segment of the accounting profession, in each case which were in effect on the Existing Second Lien Notes Issue Date. For the purposes of this Indenture, the term consolidated with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.
Government Obligations means securities that are:
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or a member of the European Union, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligations or a specific payment of principal of or interest on any such Government Obligations held by such custodian for the account of the holder of such depository receipt; provided, however, 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 Government Obligations or the specific payment of principal of or interest on the Government Obligations evidenced by such depository receipt.
guarantee means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
Guarantee means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Person in accordance with the provisions of this Indenture.
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Guarantor means any Person that Incurs a Guarantee with respect to the Notes; provided, however, that upon the release or discharge of such Person from its Guarantee in accordance with this Indenture, such Person ceases to be a Guarantor.
HAI means HA-International, LLC, a Delaware limited liability company, and any successor in interest thereto.
Hedging Obligations means, with respect to any Person, the obligations of such Person under:
(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
Hexion means Hexion Inc. (formerly known as Momentive Specialty Chemicals Inc.), a New Jersey corporation, and any successor in interest thereto.
Hexion Canada means Hexion Canada Inc. (formerly known as Momentive Specialty Chemicals Canada Inc.), a Canadian corporation, and any successor in interest thereto.
Hexion Coop means Hexion International Holdings Coöperatief U.A. (formerly known as Momentive International Holdings Coöperatief U.A.) and any successor in interest thereto.
Hexion Recapitalization means the Hexion Recapitalization described in the Existing Second Lien Notes Offering Circular.
holder, Holder, noteholder or Noteholder means the Person in whose name a Note is registered on the Registrars books.
Incur means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.
Indebtedness means, with respect to any Person:
(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP),
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which purchase price is due more than twelve months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business);
(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Hexion) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person; and
(4) to the extent not otherwise included, with respect to Hexion and its Restricted Subsidiaries, the amount then outstanding (including amounts advanced, and received by, and available for use by, Hexion or any of its Restricted Subsidiaries) under any Receivables Financing (as set forth in the books and records of Hexion or any Restricted Subsidiary and confirmed by the agent, trustee or other representative of the institution or group providing such Receivables Financing);
provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; or (4) Obligations under or in respect of Qualified Receivables Financing.
Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.
Indenture means this Indenture as amended or supplemented from time to time.
Indenture Restricted Subsidiary means any Existing Debenture Subsidiary which owns, operates or leases one or more Principal Properties and shall not include any other Existing Debenture Subsidiary.
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Independent Financial Advisor means an accounting, appraisal or investment banking firm or consultant to Persons engaged in a Similar Business, in each case of nationally recognized standing that is, in the good faith determination of Hexion, qualified to perform the task for which it has been engaged.
Initial Existing First Lien Notes means the $450.0 million aggregate principal amount of Existing First Lien Notes incurred on March 14, 2012, and any exchange notes in respect thereof.
Initial Notes means the $485,000,000 in aggregate principal amount of 10.375% First-Priority Senior Secured Notes due 2022 issued by the Issuer on the Issue Date.
Investment Grade Securities means:
(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents) and in each case with maturities not exceeding two years from the date of acquisition,
(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moodys or BBB- (or equivalent) by S&P, or an equivalent rating by any other rating agency, but excluding any debt securities or loans or advances between and among Hexion and its Subsidiaries,
(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment or distribution, and
(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.
Investments means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of Hexion in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of Unrestricted Subsidiary and Section 4.04:
(1) Investments shall include the portion (proportionate to Hexions equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Hexion) of the net assets of a Subsidiary of Hexion at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Hexion shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary equal to an amount (if positive) equal to:
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(A) Hexions Investment in such Subsidiary at the time of such redesignation less
(B) the portion (proportionate to Hexions equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Hexion) of the net assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors of Hexion.
Issue Date means February 8, 2017.
Issuers Assumption means the consummation of the transactions whereby Hexion will assume all of the Obligations of the Escrow Issuer under the Notes and this Indenture pursuant to a supplemental indenture and other agreements as set forth in Article 13 hereof.
Junior Priority Intercreditor Agent means each Intercreditor Agent as defined in a Junior Priority Intercreditor Agreement.
Junior Priority Intercreditor Agreements means, collectively, (i) the Amended and Restated Intercreditor Agreement, dated as of January 31, 2013, among JPMorgan Chase Bank, N.A., as agent under the ABL Facility and intercreditor agent, Wilmington Trust, National Association, as senior-priority agent for the holders of Existing First Lien Notes, Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as senior-priority agent for the holders of the Existing Senior Secured Notes, Wilmington Trust Company, as second-priority agent for the holders of the Existing Second Lien Notes, the Issuer and each Subsidiary Guarantor, as it may have been or may be amended, restated, supplemented or otherwise modified from time to time in accordance with this Indenture, and (ii) the New Senior Secured Intercreditor Agreement.
Junior Priority Notes means the Existing Second Lien Notes, the Existing Senior Secured Notes and the New Senior Secured Notes.
Junior Priority Notes Indentures means the Existing Second Lien Notes Indenture, the Existing Senior Secured Notes Indenture and the New Senior Secured Notes Indenture.
Junior Priority Obligations means the Junior Priority Notes and Obligations with respect to other Indebtedness permitted to be Incurred under the Junior Priority Notes Indentures, the ABL Facility Documents, the Existing First Lien Notes Indentures and this Indenture, as applicable, which is by its terms intended to be secured equally and ratably with any series of the Junior Priority Notes or on a basis junior to the Liens securing any series of the Junior Priority Notes or First Priority Lien Obligations; provided such Lien is permitted to be Incurred under the Junior Priority Notes Indentures, the ABL Facility Documents, the Existing First Lien Notes Indentures and this Indenture.
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Junior Trustee means the respective party named as trustee in the applicable Junior Priority Notes Indentures until a successor replaces it and, thereafter, means the successor.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York or the place of payment.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any other agreement to give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided, however, that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.
Management Group means all of the individuals consisting of the directors, managers, executive officers and other management personnel of Hexion or any direct or indirect parent company of Hexion, as the case may be, on the Issue Date together with (1) any new directors or managers whose election by such boards of directors or managers or whose nomination for election by the shareholders of Hexion or any direct or indirect parent company of Hexion, as the case may be, as applicable, was approved by (x) a vote of a majority of the directors or managers of Hexion or any direct or indirect parent of Hexion as applicable, then still in office who were either directors or managers on the Issue Date or whose election or nomination was previously so approved or (y) the Permitted Holders and (2) executive officers and other management personnel of Hexion or any direct or indirect parent company of Hexion, as the case may be, as applicable, hired at a time when the directors or managers on the Issue Date together with the directors or managers so approved constituted a majority of the directors or managers of Hexion or any direct or indirect parent company of Hexion, as the case may be, as applicable.
Moodys means Moodys Investors Service, Inc. or any successor to the rating agency business thereof.
Net Income means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
Net Proceeds means the aggregate cash proceeds received by Hexion or any of its Restricted Subsidiaries in respect of any Asset Sale (including any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset
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Sale and the sale or disposition of such Designated Non-cash Consideration (including legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof, amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)) to be paid as a result of such transaction (including to obtain any required consent therefor), and any deduction of appropriate amounts to be provided by Hexion as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Hexion after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
New Senior Secured Intercreditor Agreement means the Amended and Restated Intercreditor Agreement, dated as of the Issue Date, among JPMorgan Chase Bank N.A., as intercreditor agent and agent under the ABL Facility, Wilmington Trust, National Association, as senior-priority agent for the Notes and holders of Existing First Lien Notes, Wilmington Trust, National Association, as second-priority agent for the holders of the New Senior Secured Notes, Hexion and each Subsidiary Guarantor party thereto from time to time, and each other authorized representative party thereto from time to time, as amended, restated, supplemented or otherwise modified from time to time in accordance with this Indenture.
New Senior Secured Notes Indenture means the indenture entered into by and among the Issuer, the Guarantors party thereto and Wilmington Trust, National Association, as trustee with respect to the New Senior Secured Notes.
New Senior Secured Notes means the 13.75% Senior Secured Notes due 2022 issued by the Issuer in connection with the Offering Transactions.
Notes means the Initial Notes and Additional Notes issued pursuant to this Indenture, in each case, in the form set forth in Appendix A.
Notes Obligations means Obligations in respect of the Notes, this Indenture and the Security Documents, including, for the avoidance of doubt, Obligations in respect of Additional Notes (to the extent incurred in compliance with this Indenture) and guarantees thereof.
Notes Priority Collateral means any and all of the following assets and properties now owned or at any time hereafter acquired by the Issuer or any of the Pledgors, in each case to the extent otherwise constituting Collateral for the Notes (and not Excluded Assets): (a) all fixtures and equipment; (b) all intellectual property; (c) all equity interests in each Pledgors subsidiaries (limited to 65% of the interests of the Pledgors foreign subsidiaries); (d) all general intangibles, chattel paper, instruments and documents (other than general intangibles, chattel paper, instruments and documents that are ABL Priority Collateral); (e) all payment intangibles that represent tax refunds in respect of or otherwise relate to real property, fixtures or equipment; (f) all intercompany indebtedness of Hexion and its subsidiaries; (g) all permits and licenses related to any of the foregoing (including any permits or licenses related to the ownership or operation of real property, fixtures or equipment of any Pledgor); (h) all
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proceeds of insurance policies (which excludes any such proceeds that relate to ABL Priority Collateral); (i) all books and records related to the foregoing and not relating to ABL Priority Collateral; (j) all products and proceeds of any and all of the foregoing (other than any such proceeds that are ABL Priority Collateral); and (k) all other collateral not constituting ABL Priority Collateral.
Obligations means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided, however, that Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee, the First Lien Collateral Agent and the Holders of such Notes.
Offering Circular means the Offering Circular dated January 25, 2017, with respect to the Notes.
Offering Transactions means the Transactions described under SummaryTransactions in the Offering Circular.
Officer means the Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of Hexion.
Officers Certificate means a certificate signed on behalf of Hexion by two Officers of Hexion, one of whom must be the Chief Executive Officer, the principal financial officer, the Treasurer or the principal accounting officer of Hexion that meets the requirements set forth in this Indenture.
Opinion of Counsel means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Hexion.
Pari Passu Indebtedness means:
(1) with respect to the Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes; and
(2) with respect to any Guarantor, its Guarantee and any Indebtedness which ranks pari passu in right of payment to such Guarantors Guarantee.
Permitted Holders means, at any time, each of (i) the Sponsor, (ii) the Management Group, (iii) any Person that has no material assets other than the Capital Stock of Hexion or another Permitted Holder and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Hexion, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i), (ii), (iii) and (iv) of this definition, holds more than 50% of the total voting power of the Voting Stock thereof and (iv) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders
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specified in clauses (i), (ii) and (iii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Hexion (a Permitted Holder Group), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member (or more favorable rights in the case of any Permitted Holder) and (2) no Person or other group (other than Permitted Holders specified in clauses (i), (ii) and (iii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.
Permitted Investments means:
(1) any Investment in Hexion or any Restricted Subsidiary of Hexion;
(2) any Investment in Cash Equivalents or Investment Grade Securities;
(3) any Investment by Hexion or any Restricted Subsidiary of Hexion in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of Hexion, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Hexion or a Restricted Subsidiary of Hexion;
(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.06 or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on the Issue Date;
(6) loans and advances to officers, directors, managers, employees or consultants of Hexion or any Restricted Subsidiary not in excess of $25 million outstanding at any one time in the aggregate;
(7) any Investment acquired by Hexion or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable or claims held by Hexion or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Hexion or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8) Hedging Obligations permitted under Section 4.03(b)(x);
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(9) any Investment by Hexion or any of its Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed the greater of (a) $150 million and (b) 4.5% of Total Assets at the time of such Investment, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (9) (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary of Hexion at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of Hexion after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;
(10) additional Investments by Hexion or any of its Restricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (a) $150 million and (b) 4.5% of Total Assets at the time of such Investment, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (10) (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);
(11) loans and advances to officers, directors, managers or employees for business-related travel expenses, moving expenses, payroll payments expenses and other similar expenses, in each case Incurred in the ordinary course of business;
(12) Investments the payment for which consists of Equity Interests (other than Disqualified Stock) of Hexion or any direct or indirect parent company of Hexion, as applicable; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under Section 4.04(a)(3);
(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except transactions described in clauses (ii), (vi), (vii), (xi)(B), (xvii) and (xxi) of such Section);
(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(15) guarantees issued in accordance with Sections 4.03 and 4.11;
(16) any Investment by Restricted Subsidiaries of Hexion in other Restricted Subsidiaries of Hexion and Investments by Subsidiaries that are not Restricted Subsidiaries in other Subsidiaries that are not Restricted Subsidiaries of Hexion;
(17) Investments consisting of purchases and acquisitions of real estate, inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;
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(18) any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness; provided, however, that any Investment in a Receivables Subsidiary is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest;
(19) Investments resulting from the receipt of non-cash consideration in an Asset Sale received in compliance with Section 4.06;
(20) additional Investments in joint ventures of Hexion or any of its Restricted Subsidiaries in an aggregate amount outstanding not to exceed $50 million, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (20);
(21) any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Qualified Receivables Financing; and
(22) Investments of a Restricted Subsidiary of Hexion acquired after the Issue Date or of an entity merged into or consolidated with Hexion or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation.
Permitted Liens means, with respect to any Person:
(1) pledges or deposits and other Liens granted by such Person under workmens compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(2) Liens imposed by law, such as carriers, warehousemens and mechanics Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;
(3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings;
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(4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit (or deposits to secure letters of credit or surety bonds for the same purpose), bankers acceptances or similar obligations issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, servicing agreements, development agreements, site plan agreements and other similar encumbrances incurred in the ordinary course of business or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(6) Liens securing Indebtedness (including Capitalized Lease Obligations) Incurred to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or Capital Stock of any Person owning such assets) of such Person; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or appurtenant thereto and except for customary cross collateral arrangements with respect to property or equipment financed by the same financing source pursuant to the same financing scheme), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 270 days after the latest of the (i) acquisition of the property subject to the Lien, (ii) completion of construction, repair, improvement or addition of the property subject to the Lien and (iii) commencement of full operation of the property subject to the Lien;
(7) Liens securing Indebtedness of a Foreign Subsidiary permitted to be Incurred pursuant to Section 4.03; provided, however, that such Liens do not extend to the property or assets of Hexion or any Domestic Subsidiary (other than a Domestic Subsidiary that is owned by one or more Foreign Subsidiaries);
(8) Liens incurred to secure (A) the Existing First Lien Notes outstanding on the Issue Date and the Guarantees and (B) Indebtedness Incurred pursuant to Section 4.03(a), or clause (i) or (xii) (or (xiii) to the extent it guarantees any such Indebtedness) of Section 4.03(b), to the extent such Lien is incurred pursuant to this clause (8) as designated by Hexion; provided, however, that, other than with respect to Liens incurred to secure Indebtedness Incurred pursuant to clause (i) or (xii) (or (xiii) to the extent it guarantees such Indebtedness) of Section 4.03(b), at the time of incurrence and after giving pro forma effect thereto (including a pro forma application of the net proceeds therefrom), the Consolidated Secured Debt Ratio would be no greater than 4.0 to 1.0; provided further, however, that the immediately preceding proviso shall not apply to any Lien which is deemed to be incurred under this clause (8) by reason of the second proviso to clause (20) of this definition of Permitted Liens (except to the extent such Lien also secures Indebtedness in addition to the Indebtedness permitted to be secured thereby under clause (20));
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(9) Liens existing on the Issue Date (other than Liens described in clause (8) above);
(10) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary (and such other assets, property or shares of stock subject to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition); provided, however, such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Liens may not extend to any other property owned by Hexion or any Restricted Subsidiary of Hexion (other than such Person becoming a Subsidiary and Subsidiaries of such Person);
(11) Liens on property at the time Hexion or a Restricted Subsidiary of Hexion acquired the property, including any acquisition by means of a merger or consolidation with or into Hexion or any Restricted Subsidiary of Hexion; provided, however, that such Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (xv) of Section 4.03(b)) are not created or Incurred in connection with, or in contemplation of, such acquisition; provided further, however, that the Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (xv) of Section 4.03(b)) may not extend to any other property owned by Hexion or any Restricted Subsidiary of Hexion (other than pursuant to after acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(12) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to Hexion or a Restricted Subsidiary of Hexion permitted to be Incurred in accordance with Section 4.03;
(13) Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligations;
(14) Liens on specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of documentary letters of credit, bank guarantees or bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(15) licenses, sublicenses, leases and subleases which do not materially interfere with the ordinary conduct of the business of Hexion or any of its Restricted Subsidiaries;
(16) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases or other obligations not constituting Indebtedness;
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(17) Liens in favor of the Issuer or any Guarantor or Liens on assets of a Restricted Subsidiary of Hexion that is not a Guarantor in favor solely of another Restricted Subsidiary of Hexion that is not a Guarantor;
(18) Liens on equipment of Hexion or any Restricted Subsidiary granted in the ordinary course of business to Hexions or such Restricted Subsidiarys client at which such equipment is located;
(19) Liens on accounts receivable and related assets of the type specified in the definition of Receivables Financing Incurred in connection with a Qualified Receivables Financing;
(20) Liens to secure any refinancing, refunding, extension or renewal (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10) and (11); provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that was subject to the original Lien (plus improvements on and accessions to such property, proceeds and products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the Indebtedness being refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10) and (11) at the time the original Lien became a Permitted Lien under this Indenture, (B) unpaid accrued interest and premiums (including tender premiums) and (C) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension, renewal or replacement of Indebtedness secured by a Lien referred to in clause (8), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension, renewal or replacement shall be deemed secured by a Lien under clause (8) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (8) and for purposes of the definition of Secured Bank Indebtedness;
(21) judgment Liens not giving rise to an Event of Default, so long as such Lien is adequately bonded any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall have expired;
(22) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods;
(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by Hexion or any of its Restricted Subsidiaries in the ordinary course of business;
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(24) Liens securing insurance premium financing arrangements; provided that such Lien is limited to the applicable insurance carriers;
(25) Liens incurred to secure cash management services in the ordinary course of business;
(26) other Liens securing obligations in an aggregate principal amount not to exceed $30 million at any one time outstanding;
(27) pledges and deposits and other Liens made in the ordinary course of business to secure liability to insurance carriers;
(28) Liens on the Equity Interests of Unrestricted Subsidiaries;
(29) leases or subleases, and licenses or sublicenses (including with respect to intellectual property), granted to others in the ordinary course of business;
(30) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(31) any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of the Issuer or any Restricted Subsidiary; and
(32) Liens (i) arising by virtue of any statutory or common law provisions relating to bankers liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business or (iii) encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes.
Any provider of additional extensions of credit shall be entitled to rely on the determination of an Officer that Liens incurred satisfy clause (8) above if such determination is set forth in an Officers Certificate delivered to such provider; provided, however, that such determination will not affect whether such Lien actually was incurred as permitted by clause (8).
Permitted Transfer has the meaning set forth in Section 5.01(b).
Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Pledgors shall mean the Issuer and the Guarantors.
Preferred Stock means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution or winding up.
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Presumed Tax Rate means the highest effective marginal statutory combined U.S. federal, state and local income tax rate prescribed for an individual residing in New York City (taking into account (i) the deductibility of state and local income taxes for U.S. federal income tax purposes, assuming the limitation of Section 68(a)(2) of the Code applies, and (ii) the character (long-term or short-term capital gain, dividend income or other ordinary income) of the applicable income).
Principal Property means any single manufacturing or processing plant or warehouse owned or leased by Hexion or any Existing Debentures Subsidiary of Hexion and located within the United States of America (excluding its territories and possessions and the Commonwealth of Puerto Rico) other than any such plant or warehouse or portion thereof which the Board of Directors of Hexion reasonably determines not to be a Principal Property after due consideration of the materiality of such property to the business of Hexion and its Subsidiaries as a whole. After the Existing Debenture Payoff Date, Principal Property means any single manufacturing or processing plant or warehouse owned or leased by Hexion or any Existing Debentures Subsidiary of Hexion and located within the United States (excluding its territories and possessions and the Commonwealth of Puerto Rico) other than any such plant or warehouse or portion thereof which has a Fair Market Value (as determined in good faith by the Issuer) of less than $10,000,000.
Purchase Money Note means a promissory note of a Receivables Subsidiary evidencing a line of credit, which may be irrevocable, from Hexion or any Subsidiary of Hexion to a Receivables Subsidiary in connection with a Qualified Receivables Financing, which note is intended to finance that portion of the purchase price that is not paid by cash or a contribution of equity.
Qualified Receivables Financing means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:
(1) the Board of Directors of Hexion shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Hexion and the Receivables Subsidiary,
(2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Hexion), and
(3) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by Hexion) and may include Standard Securitization Undertakings.
The grant of a security interest in any accounts receivable of Hexion or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the Notes or any Indebtedness incurred to refinance the Notes shall not be deemed a Qualified Receivables Financing.
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Receivables Financing means any transaction or series of transactions that may be entered into by Hexion or any of its Subsidiaries pursuant to which Hexion or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by Hexion or any of its Subsidiaries), and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Hexion or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by Hexion or any such Subsidiary in connection with such accounts receivable.
Receivables Repurchase Obligation means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.
Receivables Subsidiary means a Wholly Owned Restricted Subsidiary of Hexion (or another Person formed for the purposes of engaging in a Qualified Receivables Financing with Hexion in which Hexion or any Subsidiary of Hexion makes an Investment and to which Hexion or any Subsidiary of Hexion transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of Hexion and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of Hexion (as provided below) as a Receivables Subsidiary and:
(a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Hexion or any other Subsidiary of Hexion (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates Hexion or any other Subsidiary of Hexion in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Hexion or any other Subsidiary of Hexion, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings,
(b) with which neither Hexion nor any other Subsidiary of Hexion has any material contract, agreement, arrangement or understanding other than on terms which Hexion reasonably believes to be no less favorable to Hexion or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Hexion, and
(c) to which neither Hexion nor any other Subsidiary of Hexion has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results.
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Any such designation by the Board of Directors of Hexion shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Hexion giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing conditions.
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Subsidiary means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person; provided, however, that, unless HAI would be a Subsidiary without giving effect to the specific 50% test for HAI as set forth in the definition of Subsidiary, HAI will not be treated as a Restricted Subsidiary that is subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11, 4.12 and 4.15. Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Hexion.
S&P means S&P Global Ratings or any successor to the rating agency business thereof.
Sale/Leaseback Transaction means an arrangement relating to property now owned or hereafter acquired by Hexion or a Restricted Subsidiary whereby Hexion or a Restricted Subsidiary transfers such property to a Person and Hexion or such Restricted Subsidiary leases it from such Person, other than leases between Hexion and a Restricted Subsidiary of Hexion or between Restricted Subsidiaries of Hexion.
SEC means the Securities and Exchange Commission.
Secured Bank Indebtedness means any Bank Indebtedness that is secured by a Permitted Lien incurred or deemed incurred pursuant to clause (8) of the definition of Permitted Lien, as designated by Hexion to be included in this definition.
Secured Indebtedness means any Indebtedness secured by a Lien.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Security Documents means the Collateral Agreement and the other security agreements, pledge agreements, collateral assignments and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in the Collateral for the benefit of the First Lien Collateral Agent, the Trustee and the holders of the Notes as contemplated by this Indenture.
Senior Credit Documents means the collective reference to the Credit Agreement, the notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.
Senior Intercreditor Agreements means collectively (i) the ABL Intercreditor Agreement and (ii) the First Lien Intercreditor Agreement.
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Series means (a) with respect to the First Lien Secured Parties, each of (i) the holders of Existing First Lien Notes Obligations (in their capacities as such), (ii) the holders of the Notes and the Trustee (each in their capacity as such), (iii) any future holders of Credit Agreement Obligations (in their capacities as such) and (iv) any other Additional First Lien Secured Parties that become subject to the First Lien Intercreditor Agreement after the Issue Date that are represented by a common Authorized Representative (in its capacity as such for such Additional First Lien Secured Parties) and (b) with respect to any First Priority Lien Obligations, each of (i) the Existing First Lien Notes Obligations, (ii) the Notes Obligations, (iii) the Credit Agreement Obligations and (iv) any other Additional First Priority Lien Obligations incurred pursuant to any applicable agreement, which pursuant to any joinder agreement, are to be represented under the First Lien Intercreditor Agreement by a common Authorized Representative (in its capacity as such for such Additional First Priority Lien Obligations).
Significant Subsidiary means any Restricted Subsidiary that would be a Significant Subsidiary of Hexion within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
Similar Business means any business, the majority of whose revenues are derived from (i) the business or activities of Hexion and its Subsidiaries anticipated to be conducted as of the Issue Date or (ii) any business that is a natural outgrowth or a reasonable extension, development or expansion of any such business or any business similar, reasonably related, incidental, complementary or ancillary to any of the foregoing.
Sponsor means (i) Apollo Management, L.P., one or more investment funds controlled by Apollo Management, L.P. and any of their respective Affiliates (collectively, the Apollo Sponsors) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors, provided that any Apollo Sponsor (x) owns (directly or indirectly) a majority of the Voting Stock and (y) controls a majority of the Board of Directors of Hexion.
Standard Securitization Undertakings means representations, warranties, covenants, indemnities and guarantees of performance entered into by Hexion or any Subsidiary of Hexion which Hexion has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.
Stated Maturity means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).
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Subordinated Indebtedness means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee.
Subsidiary means, with respect to any Person (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% (or, in the case of HAI, 50% or more) of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% (or in the case of HAI, 50% or more) of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity (or, in the case of HAI, such Person or any Restricted Subsidiary of such Person has the right to designate at least 50% of the members of the Board of Directors of such entity).
Subsidiary Guarantor means any Restricted Subsidiary that Incurs a Guarantee; provided, however, that upon the release or discharge of such Restricted Subsidiary from its Guarantee in accordance with this Indenture, such Restricted Subsidiary will cease to be a Subsidiary Guarantor.
Tax Distributions means any dividends and distributions described in Section 4.04(b)(xii).
TIA means the Trust Indenture Act of 1939 as in effect on the date of this Indenture.
Total Assets means the total consolidated assets of Hexion and its Restricted Subsidiaries, as shown on the most recent balance sheet of Hexion.
Treasury Rate means, as of the applicable redemption date as determined by the Issuer, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to February 1, 2019; provided, however, that if no published maturity exactly corresponds with such date, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities; provided further, however, that if the period from such redemption date to February 1, 2019 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
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Trust Officer means:
(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons knowledge of and familiarity with the particular subject, and
(2) who shall have direct responsibility for the administration of this Indenture.
Trustee means the respective party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.
Uniform Commercial Code means the New York Uniform Commercial Code as in effect from time to time.
Unrestricted Cash means cash or Cash Equivalents of Hexion or any of its Restricted Subsidiaries that would not appear as restricted on a consolidated balance sheet of Hexion or any of its Restricted Subsidiaries.
Unrestricted Subsidiary means:
(1) any Subsidiary of Hexion that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Hexion in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of Hexion may designate any Subsidiary of Hexion (including any newly acquired or newly formed Subsidiary of Hexion but excluding the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, Hexion or any other Subsidiary of Hexion that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of Hexion or any of its Restricted Subsidiaries, unless otherwise permitted as an Investment in such Unrestricted Subsidiary by Hexion or such Restricted Subsidiary under Section 4.04; provided, further, however, that either:
(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or
(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.
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The Board of Directors of Hexion may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:
(x) (1) Hexion could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed Charge Coverage Ratio for Hexion and its Restricted Subsidiaries would be no less than such ratio for Hexion and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and
(y) no Event of Default shall have occurred and be continuing.
Any such designation by the Board of Directors of Hexion shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of Hexion giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
Notwithstanding anything to the contrary herein, and without any further condition, qualification or action hereunder, subsidiaries designated as Unrestricted Subsidiaries as of the Issue Date under the 6.625% First Lien Notes Indenture will be Unrestricted Subsidiaries.
Notwithstanding anything to the contrary herein, the Escrow Issuer shall be an Unrestricted Subsidiary (unless and until otherwise designated as a Restricted Subsidiary in accordance with the terms hereof).
Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness or Disqualified Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
Wholly Owned Restricted Subsidiary is any Wholly Owned Subsidiary that is a Restricted Subsidiary.
Wholly Owned Subsidiary of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors qualifying shares or shares required to be held by Foreign Subsidiaries) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
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SECTION 1.02. Other Definitions.
Term |
Defined in Section | |
Affiliate Transaction |
4.07 | |
Agent Member |
Appendix A | |
Applicable Procedures |
Appendix A | |
Asset Sale Offer |
4.06(b) | |
Bankruptcy Law |
6.01 | |
Collateral Asset Sale Offer |
4.06(b) | |
Collateral Excess Proceeds |
4.06(b) | |
covenant defeasance option |
8.01(b) | |
Custodian |
6.01 | |
Definitive Note |
Appendix A | |
Depository |
Appendix A | |
Distribution Compliance Period |
Appendix A | |
Event of Default |
6.01 | |
Global Notes Legend |
Appendix A | |
Guaranteed Obligations |
10.01(a) | |
IAI |
Appendix A | |
Initial Purchasers |
Appendix A | |
legal defeasance option |
8.01(b) | |
Notes Custodian |
Appendix A | |
Notice of Default |
6.01 | |
Offer Period |
4.06(d) | |
Paying Agent |
2.04 | |
Permanent Regulation S Global Note |
Appendix A | |
protected purchaser |
2.08 | |
Purchase Agreement |
Appendix A | |
QIB |
Appendix A | |
Refinancing Indebtedness |
4.03(b) | |
Refunding Capital Stock |
4.04(b) | |
Registrar |
2.04 | |
Regulation S |
Appendix A | |
Restricted Notes Legend |
Appendix A | |
Restricted Payment |
4.04(a) | |
Retired Capital Stock |
4.04(b) | |
Rule 144A |
Appendix A | |
Rule 144A Global Note |
Appendix A | |
Rule 144A Notes |
Appendix A | |
Rule 3-10 |
11.01(b) | |
Rule 3-16 |
11.01(b) | |
Securities Act |
Appendix A | |
Successor Issuer |
5.01(a) | |
Successor Guarantor |
5.01(b) | |
Temporary Regulation S Global Note |
Appendix A | |
Transfer Restricted Notes |
Appendix A |
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SECTION 1.03. No Incorporation by Reference of Trust Indenture Act. This Indenture is not qualified under the TIA, and the TIA shall not apply to or in any way govern the terms of this Indenture. As a result, no provisions of the TIA are incorporated into this Indenture unless expressly incorporated pursuant to this Indenture.
SECTION 1.04. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c) or is not exclusive;
(d) including means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;
(g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP; and
(h) 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.
ARTICLE 2
THE NOTES
SECTION 2.01. Amount of Notes. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $485,000,000. The Initial Notes and any Additional Notes may, at our election, be treated as a single series or class of Notes for purposes of this Indenture.
The Issuer may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03 and Section 4.12 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture. Additional Notes shall have identical terms as the Initial Notes issued on the Issue Date, other than with respect to the date of issuance and issue price. With
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respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.07, 2.08, 2.09, 2.10, 3.06, 4.06(g), 4.08(c) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of Directors of Hexion and (b) (i) set forth or determined in the manner provided in an Officers Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(1) | the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture, |
(2) | the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes will accrue; and |
(3) | if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Appendix A hereto and any circumstances in addition to or in lieu of those set forth in Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof. |
If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officers Certificate or the indenture supplemental hereto setting forth the terms of the Additional Notes. Any Additional Notes that are not fungible with the Initial Notes for U.S. federal income tax purposes shall have a separate CUSIP number.
SECTION 2.02. Form and Dating. Provisions relating to the Notes are set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Notes and the Trustees certificate of authentication and (ii) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustees certificate of authentication shall each be substantially in the form set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer or any Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in fully registered form without interest coupons and only in minimum denominations of $2,000 and any integral multiples of $1,000 in excess thereof, provided that Notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by participants of the Depository in denominations of less than $2,000.
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SECTION 2.03. Execution and Authentication. (a) The Trustee shall authenticate and make available for delivery upon a written order of the Issuer signed by one Officer (i) (x) Notes for original issue on the date hereof in an aggregate principal amount of $485,000,000 and (ii) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein. Such order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes or Additional Notes. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and any integral multiples of $1,000 in excess thereof.
(b) One Officer shall sign the Notes for the Issuer by manual or facsimile signature.
(c) If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
(d) A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
(e) The Trustee may appoint one or more authenticating agents reasonably acceptable to the Issuer to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
(f) The Trustee is hereby authorized to enter into a letter of representations with the Depository in the form provided by the Issuer and to act in accordance with such letter.
SECTION 2.04. Registrar and Paying Agent. (a) The Issuer shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (the Registrar), and (ii) an office or agency where Notes may be presented for payment (the Paying Agent). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuer may have one or more co-registrars and one or more additional paying agents. The term Registrar includes any co-registrars. The Issuer initially appoints the Trustee as (i) Registrar and Paying Agent in connection with the Notes and (ii) the Custodian with respect to the Global Notes.
(b) The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. Hexion or any of Hexions domestically organized Wholly Owned Subsidiaries may act as Paying Agent or Registrar.
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(c) The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to each due date of the principal of and interest on any Note, the Issuer shall deposit with each Paying Agent (or if Hexion or a Wholly Owned Subsidiary of Hexion is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. If Hexion or a Wholly Owned Subsidiary of Hexion acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder 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 Holders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.
SECTION 2.07. Transfer and Exchange. (a) The Notes shall be issued in fully registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of the same series of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Notes at the Registrars request. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Issuer shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before a selection of Notes to be redeemed.
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(b) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Guarantors, the Trustee, each Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, any Guarantor, the Trustee, a Paying Agent or the Registrar shall be affected by notice to the contrary.
(c) Any Holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.
(d) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
SECTION 2.08. Replacement Notes. (a) If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note of the same series if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuer or the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a protected purchaser) and (c) satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Issuer, the Trustee, a Paying Agent and the Registrar from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note (including attorneys fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuer in its discretion may pay such Note instead of issuing a new Note in replacement thereof.
(b) Every replacement Note is an additional obligation of the Issuer and the Guarantors.
(c) The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
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SECTION 2.09. Outstanding Notes. (a) Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those redeemed pursuant to Article 3 and those described in this Section 2.09 as not outstanding. Subject to Section 12.06, a Note does not cease to be outstanding because the Issuer, a Guarantor or an Affiliate of the Issuer or a Guarantor holds the Note.
(b) If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.
(c) If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Notes. In the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate Definitive Notes and make them available for delivery in exchange for temporary Notes upon surrender of such temporary Notes at the office or agency of the Issuer, without charge to the Holder. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as Definitive Notes.
SECTION 2.11. Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures or deliver canceled Notes to the Issuer pursuant to written direction by an Officer. The Issuer may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
SECTION 2.12. Defaulted Interest. If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay the defaulted interest then borne by the Notes, as the case may be (plus interest on such defaulted interest to the extent lawful), in any lawful manner. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly send or cause to be sent to each affected Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
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SECTION 2.13. CUSIP Numbers, ISINs, etc. The Issuer in issuing the Notes may use CUSIP numbers, ISINs and Common Code numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers, ISINs and Common Code numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption, that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall advise the Trustee of any change in the CUSIP numbers, ISINs and Common Code numbers.
SECTION 2.14. Calculation of Principal Amount of Notes. The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes outstanding at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes then outstanding, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 12.06 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officers Certificate.
ARTICLE 3
REDEMPTION
SECTION 3.01. Redemption. The Notes may be redeemed, in whole, or from time to time in part, subject to the conditions and at the redemption prices set forth in paragraph 5 of the form of Notes set forth in Appendix A, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest, if any, to the redemption date.
SECTION 3.02. Applicability of Article. Redemption of Notes at the election of the Issuer or otherwise, as permitted or required by the Notes or any provision of this Indenture, shall be made in accordance with the Notes, such provision and this Article 3.
SECTION 3.03. Notices to Trustee. If the Issuer elects to redeem the Notes pursuant to the optional redemption provisions of paragraph 5 of the applicable Note, it shall notify the Trustee in writing of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price. The Issuer shall give notice to the Trustee provided for in this paragraph at least 30 days but not more than 60 days before a redemption date if the redemption is pursuant to paragraph 5 of the applicable Note, unless a shorter period is acceptable to the Trustee. Such notice shall be accompanied by an Officers Certificate and Opinion of Counsel from the Issuer to the effect that such redemption will comply with the conditions herein. If fewer than all of the Notes are to be redeemed, the record date relating to such redemption shall be selected by the Issuer and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being sent to any Holder and shall thereby be void and of no effect.
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SECTION 3.04. Selection of Notes to Be Redeemed. In the case of any partial redemption of the Notes, selection of the Notes for redemption will be made by the Trustee on a pro rata basis to the extent practicable or by lot or such other method as deemed appropriate by the Trustee (and, in such manner that complies with the requirements of the Depository, if applicable); provided, however, that no Notes of $2,000 or less shall be redeemed in part. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $2,000 and portions of them the Trustee selects shall be in amounts of $2,000 or a multiple of $1,000. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Issuer promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.05. Notice of Optional Redemption. (a) At least 30 days but not more than 60 days before a redemption date, the Issuer shall mail or cause to be mailed by first-class mail, or delivered electronically if held by the Depository, a notice of redemption to each Holder whose Notes are to be redeemed.
Any such notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest to the redemption date;
(iii) the name and address of a Paying Agent;
(iv) that Notes called for redemption must be surrendered to a Paying Agent to collect the redemption price, plus accrued interest;
(v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption;
(vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(vii) the CUSIP number, ISIN or Common Code number, if any, printed on the Notes being redeemed;
(viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN or Common Code number, if any, listed in such notice or printed on the Notes;
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(ix) the applicable provision in this Indenture or the Notes pursuant to which the Issuer is redeeming such Notes;
(x) if the redemption is subject to the satisfaction of one or more conditions precedent, the notice thereof shall describe each such condition and, if applicable, shall state that, in the Issuers discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed; and
(xi) at the Issuers option, that the payment of the redemption price and performance of the Issuers obligations with respect to such redemption may be performed by another Person.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption or notice thereof may, at Hexions discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event. For the avoidance of doubt, if any redemption date shall be delayed as contemplated by this Section 3.05 and the terms of the applicable notice of redemption, such redemption date as so delayed may occur at any time after the original redemption date set forth in the applicable notice of redemption and after the satisfaction of any applicable conditions precedent, including, without limitation, on a date that is less than 30 days after the original redemption date or more than 60 days after the date of the applicable notice of redemption. To the extent that the redemption date will occur on a date other than the original redemption date set forth in the applicable notice of redemption, the Issuer shall notify the holders and the Trustee of the final redemption date prior to such date; provided that the failure to give such notice, or any defect therein, shall not impair or affect the validity of any redemption under this Article 3.
(b) At the Issuers written request, the Trustee shall give the notice of redemption in the Issuers name and at the Issuers expense. In such event, the Issuer shall provide the Trustee with the information required by this Section 3.05.
SECTION 3.06. Effect of Notice of Redemption. Once notice of redemption is sent in accordance with Section 3.05, except as provided in the sixth paragraph under paragraph 5 of the Notes, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to any Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date; provided, however, that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
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SECTION 3.07. Deposit of Redemption Price. With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuer shall deposit with the Paying Agent (or, if Hexion or a Wholly Owned Subsidiary of Hexion is a Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuer to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Notes to be redeemed.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder (at the Issuers expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes. (a) The Issuer shall promptly pay the principal of (and premium, if any) and interest, on the Notes on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest on the Notes shall be considered paid on the date it is due if on such date the Trustee or any Paying Agent (other than Hexion or any of its Affiliates) holds in accordance with this Indenture as of noon, New York City time, money sufficient to pay all principal and interest then due.
(b) The Issuer shall pay interest on overdue principal at the rate specified therefor in the Notes and shall pay interest on overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. Reports and Other Information.
(a) For so long as any Notes are outstanding, Hexion will provide to the Trustee a copy of all of the information and reports referred to below:
(i) within 15 days after the time period specified in the SECs rules and regulations for non-accelerated filers, annual reports of the Reporting Entity (as defined below) for such fiscal year containing the information that would have been required to be contained in an annual report on Form 10-K (or any successor or comparable form) if the Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC;
(ii) within 15 days after the time period specified in the SECs rules and regulations for non-accelerated filers, quarterly reports of the Reporting Entity for such fiscal quarter containing the information that would have been required to be contained in a quarterly report on Form 10-Q (or any successor or comparable form) if the Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC; and
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(iii) within 15 days after the time period specified in the SECs rules and regulations for filing current reports on Form 8-K, current reports containing substantially all of the information that would be required to be filed in a current report on Form 8-K under the Exchange Act on the Issue Date pursuant to Sections 1, 2 and 4, Items 5.01, 5.02 (other than compensation information), 5.03(b) and Item 9.01 (only to the extent relating to any of the foregoing) of Form 8-K if Hexion had been a reporting company under the Exchange Act; provided, however, that no such current reports (or Items thereof or all or a portion of the financial statements that would have otherwise been required thereby) will be required to be provided (or included) if Hexion determines in its good faith judgment that such event (or information) is not material to holders or the business, assets, operations, financial position or prospects of Hexion and its Restricted Subsidiaries, taken as a whole.
In addition to providing such information to the Trustee, Hexion shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts the information required to be provided pursuant to the foregoing clauses (i), (ii) or (iii), by posting such information to its website (or any of Hexions parent companies) or on IntraLinks or any comparable online data system or website.
Notwithstanding the foregoing, (A) Hexion will not be required to furnish any information, certificates or reports that would otherwise be required by (i) Section 302 or Section 404 of the Sarbanes Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K, or (ii) Item 10(e) of Regulation S-K promulgated by the SEC with respect to any non-generally accepted accounting principles financial measures contained therein, (B) such reports will not be required to contain the separate financial information for Subsidiary Guarantors contemplated by Rule 3-09, Rule 3-10 or Rule 3-16 of Regulation S-X, or include any exhibits or certifications required by Form 10 K, Form 10-Q or Form 8-K (or successor or comparable forms) or related rules under Regulation S-K and (C) such reports shall be subject to exceptions, exclusions and other differences consistent with the presentation of financial and other information in the Offering Circular and shall not be required to present compensation or beneficial ownership information.
(b) The financial statements, information and other documents required to be provided as described above, may be those of (i) Hexion or (ii) any direct or indirect parent of Hexion (any such entity, a Reporting Entity), so long as in the case of (ii) such direct or indirect parent of Hexion shall not conduct, transact or otherwise engage, or commit to conduct, transact or otherwise engage, in any business or operations other than its direct or indirect ownership of all of the Equity Interests in, and its management of Hexion; provided that, if the financial information so furnished relates to such direct or indirect parent of Hexion, the same is accompanied by a reasonably detailed description of the quantitative differences between the information relating to such parent, on the one hand, and the information relating to Hexion and its Restricted Subsidiaries on a standalone basis, on the other hand.
(c) Hexion shall, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3 2(b) of the Exchange Act, furnish to the holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
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(d) Notwithstanding the foregoing, Hexion will be deemed to have delivered such reports and information referred to in this Section 4.02 to the Trustee and the holders if Hexion or another Reporting Entity has filed such reports with the SEC via the EDGAR filing system (or any successor system) and such reports are publicly available. In addition, the requirements of this Section 4.02 shall be deemed satisfied by the posting of reports that would be required to be provided to the Trustee and the holders on Hexions website (or that of any of Hexions parent companies). The Trustee shall have no obligation to monitor whether Hexion (or any of Hexions parent companies) posts such reports, information and documents on its website or the SECs EDGAR service, or collect any such information from Hexions (or any of Hexions parent companies) website or the SECs EDGAR service. The Trustee shall have no liability or responsibility for the content, filing or timeliness of any report delivered or filed under or in connection with this Indenture or the transactions contemplated hereunder.
SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock and (ii) Hexion shall not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any shares of Preferred Stock; provided, however, that Hexion and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Hexion for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by Hexion or its Restricted Subsidiaries of Indebtedness (including under any Credit Agreement or ABL Facility and the issuance and creation of letters of credit and bankers acceptances thereunder (with letters of credit and bankers acceptances being deemed to have a principal amount equal to the face amount thereof) (including any Indebtedness Incurred and represented by the Notes, the 10.00% First Priority Senior Secured Notes or any other First Priority Lien Obligations (other than the Initial Existing First Lien Notes)) up to an aggregate principal amount of (x) $2.175 billion plus (y) an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations or ABL Obligations outstanding at any one time that does not cause the Consolidated Secured Debt Ratio of Hexion to exceed 3.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom);
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(ii) the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the Initial Existing First Lien Notes and the related guarantees thereof;
(iii) Indebtedness existing on the Issue Date (after giving effect to the Offering Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)), including the Existing Debentures and the Junior Priority Notes and the related guarantees thereof;
(iv) Indebtedness (including Capitalized Lease Obligations) Incurred by Hexion or any of its Restricted Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding that was Incurred (or deemed Incurred pursuant to clause (xiv) below) pursuant to this clause (iv), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness Incurred by Hexion or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(vi) Indebtedness arising from agreements of Hexion or any of its Restricted Subsidiaries providing for adjustment of purchase price or similar obligations, in each case, Incurred in connection with any Investments, the disposition of any business, assets or a Subsidiary of Hexion in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided, however, that, at the time of closing, the amount of such Indebtedness is not determinable and, to the extent such Indebtedness thereafter becomes fixed and determined, the Indebtedness is paid within 60 days thereafter;
(vii) Indebtedness of Hexion to a Restricted Subsidiary; provided, however, that any such Indebtedness owed to a Restricted Subsidiary that is not the Issuer or a Guarantor is subordinated in right of payment to the obligations of Hexion under its Guarantee; provided further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
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(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Hexion or another Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Hexion or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to Hexion or another Restricted Subsidiary; provided, however, that if a Guarantor Subsidiary Incurs such Indebtedness to a Restricted Subsidiary that is not the Issuer or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred for speculative purposes: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;
(xi) obligations (including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of performance, bid, appeal, surety bonds, completion guarantees and other similar obligations provided by Hexion or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
(xii) Indebtedness or Disqualified Stock of Hexion or any Restricted Subsidiary in an aggregate principal amount or liquidation preference, as applicable, which, when aggregated with the principal amount or liquidation preference of all other Indebtedness and Disqualified Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which Hexion, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by Hexion or any of its Restricted Subsidiaries of Indebtedness or other obligations of Hexion or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Hexion or such Restricted Subsidiary is permitted under the terms of this Indenture; provided, however, that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of any Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantors Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Guarantor, as applicable;
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(xiv) the Incurrence by Hexion or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or defease any Indebtedness Incurred as permitted under Section 4.03(a) and clauses (i)(y), (ii), (iii), (iv), (xiv), (xv) and/or (xix) of this Section 4.03(b) or any Indebtedness Incurred to so refund or refinance such Indebtedness, including, in each case, any Indebtedness Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, Refinancing Indebtedness); provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being refunded or refinanced that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(2) has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of any Notes then outstanding;
(3) to the extent such Refinancing Indebtedness refinances Indebtedness junior to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Guarantee of such Restricted Subsidiary, as applicable;
(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Hexion that is not a Guarantor that refinances Indebtedness of Hexion or another Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) Indebtedness of Hexion or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) and (xx) of this Section 4.03(b);
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provided further, however, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of (A) the Notes, (B) any Secured Indebtedness constituting a First Priority Lien Obligation or ABL Obligation or (C) any Existing Debentures consisting of pollution control bonds;
(xv) Indebtedness or Disqualified Stock of (x) Hexion or any of its Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by Hexion or any of its Restricted Subsidiaries or merged with or into Hexion or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition and the Incurrence of such Indebtedness either:
(1) Hexion would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Hexion or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of its Incurrence;
(xviii) Indebtedness of Hexion or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries of Hexion for working capital purposes or any other purposes; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx) other than for working capital purposes, when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $150 million and 5.0% of Total Assets at the time of Incurrence;
(xxi) Indebtedness of Hexion or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take or pay obligations contained in supply arrangements, in each case, entered into in the ordinary course of business;
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(xxii) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Hexion or any Restricted Subsidiary not in excess, at any one time outstanding, of $7.5 million; and
(xxiii) Indebtedness issued by Hexion or a Restricted Subsidiary to current or former officers, directors, managers and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Hexion or any of its direct or indirect parent companies to the extent permitted under clause (iv) of Section 4.04(b).
(c) For purposes of determining compliance with this Section 4.03, (A) Indebtedness, Disqualified Stock or Preferred Stock need not be Incurred solely by reference to one category of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxiii) above or pursuant to Section 4.03(a) but is permitted to be Incurred in part under any combination thereof; (B) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in clauses (i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a), Hexion shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 4.03 and will only be required to include the amount and type of such item of Indebtedness (or any portion thereof) in one of the above clauses and such item of Indebtedness will be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided, however, that all Indebtedness under the Existing First Lien Notes outstanding on the Issue Date (other than the Initial Existing First Lien Notes) and all Indebtedness under the Notes outstanding on the Issue Date shall be deemed at all times to have been incurred pursuant to Section 4.03(b)(i) and all Indebtedness under the Initial Existing First Lien Notes outstanding on the Issue Date shall be deemed at all times to have been Incurred pursuant to Section 4.03(b)(ii), and none of such Indebtedness referred to in this proviso may later be reclassified; provided further, however that any other Indebtedness initially incurred after the Issue Date pursuant to Section 4.03(b)(i) above may also not later be reclassified; (C) at the time of incurrence, Hexion will be entitled to divide and classify an item of Indebtedness (or any portion thereof) in more than one of the types of Indebtedness described in clauses (b)(i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a) without giving pro forma effect to the Indebtedness Incurred pursuant to any other clause or paragraph above (or any portion thereof) when calculating the amount of Indebtedness that may be Incurred pursuant to any such clause or paragraph (or any portion thereof); and (D) in connection with the Incurrence or issuance, as applicable, of any Indebtedness, Disqualified Stock or Preferred Stock, Hexion or the applicable Restricted Subsidiary may elect at any time prior to the actual Incurrence or issuance of such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, to treat all or any portion of the commitments relating to such Indebtedness, Disqualified Stock or Preferred Stock as being Incurred or issued on the date of such election (such date, the Deemed Date), and any related subsequent actual Incurrence or issuance of such Indebtedness, Disqualified Stock or Preferred Stock will be deemed for all purposes under this Indenture to have been Incurred on such Deemed Date, including without limitation for purposes of calculating the Fixed Charge Coverage Ratio, usage of any baskets hereunder (if applicable), the Consolidated Secured Debt
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Ratio, EBITDA and Adjusted EBITDA (and all such calculations on the Deemed Date and thereafter shall be made on a pro forma basis after giving effect to the deemed Incurrence or issuance and related transactions in connection therewith). Accrual of interest, the accretion of accreted value, amortization of original issue discount, deferred financing costs, the payment of interest in the form of additional Indebtedness, Disqualified Stock or Preferred Stock with the same terms or in the form of common stock of Hexion, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of Indebtedness shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided, however, that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.
(e) Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that the Issuer and its Restricted Subsidiaries may Incur pursuant to this covenant shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
SECTION 4.04. Limitation on Restricted Payments. (a) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of Hexions or any of its Restricted Subsidiaries Equity Interests, including any payment with respect to such Equity Interests made in connection with any merger or consolidation (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Hexion; or (B) dividends or distributions by a
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Restricted Subsidiary; provided, however, that in the case of any dividend or distribution payable on or in respect of any Equity Interests issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, Hexion or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its ownership percentage of such Equity Interests);
(ii) purchase or otherwise acquire or retire for value any Equity Interests of Hexion or any direct or indirect parent company of Hexion;
(iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of Hexion or any Subsidiary Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b)); or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as Restricted Payments), unless, at the time of such Restricted Payment:
(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma basis, Hexion could Incur $1.00 of additional Indebtedness under Section 4.03(a); and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Hexion and its Restricted Subsidiaries after the Existing Second Lien Notes Issue Date (including Restricted Payments permitted by clauses (i), (iv) (only to the extent of one-half of the amounts paid pursuant to such clause), (vi) and (viii) of Section 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the sum of, without duplication,
(A) 50% of the Consolidated Net Income of Hexion for the period (taken as one accounting period) from June 30, 2006 to the end of Hexions most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus
(B) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by Hexion after the Existing Second Lien Notes Issue Date from the issue or sale of Equity Interests of Hexion (excluding Refunding
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Capital Stock, Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock), including Equity Interests issued upon conversion of Indebtedness or upon exercise of warrants or options (other than an issuance or sale to a Subsidiary of Hexion or an employee stock ownership plan or trust established by Hexion or any of its Subsidiaries), plus
(C) 100% of the aggregate amount of cash contributions to the capital of Hexion, and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received after the Existing Second Lien Notes Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, contributions from the issuance of Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock), plus
(D) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Hexion or any Restricted Subsidiary issued after the Existing Second Lien Notes Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Hexion (other than Disqualified Stock) or any direct or indirect parent of Hexion (provided that, in the case of any parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus
(E) 100% of the aggregate amount received by Hexion or any Restricted Subsidiary in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by Hexion or any Restricted Subsidiary, in each case subsequent to the Existing Second Lien Notes Issue Date, from:
(I) the sale or other disposition (other than to Hexion or a Restricted Subsidiary of Hexion) of Restricted Investments made by Hexion and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Hexion and its Restricted Subsidiaries by any Person (other than Hexion or any of its Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (vii) or (x) of Section 4.04(b)),
(II) the sale (other than to Hexion or a Restricted Subsidiary of Hexion) of the Capital Stock of an Unrestricted Subsidiary, or
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(III) a distribution or dividend from an Unrestricted Subsidiary, plus
(F) in the event any Unrestricted Subsidiary of Hexion has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Hexion or a Restricted Subsidiary of Hexion, in each case subsequent to the Existing Second Lien Notes Issue Date, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of Hexion in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), after deducting any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (vii) or (x) of Section 4.04(b) or constituted a Permitted Investment).
The Fair Market Value of property other than cash covered by clauses (3)(B), (C), (D), (E) and (F) of this Section 4.04(a) shall be determined in good faith by Hexion and
(x) in the event of property with a Fair Market Value in excess of $15 million, shall be set forth in an Officers Certificate,
(y) in the event of property with a Fair Market Value in excess of $25 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of Hexion, or
(z) in the event of property with a Fair Market Value in excess of $50 million, shall be set forth in writing by an Independent Financial Advisor.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend or distribution (i) within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture or (ii) declared on or prior to the Existing Second Lien Notes Issue Date;
(ii) (A) the repurchase, retirement or other acquisition of any Equity Interests (Retired Capital Stock) of Hexion or any direct or indirect parent company of Hexion or Subordinated Indebtedness of Hexion or any Subsidiary Guarantor in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of Hexion or any direct or indirect parent company of Hexion or contributions to the equity capital of Hexion (other than Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock or any Equity Interests sold to a Subsidiary of Hexion or to an employee stock ownership plan or any trust established by Hexion or any
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of its Subsidiaries) (collectively, including any such contributions, Refunding Capital Stock); and (B) the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Hexion or to an employee stock ownership plan or any trust established by Hexion or any of its Subsidiaries) of Refunding Capital Stock;
(iii) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of Hexion or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or such Subsidiary Guarantor, respectively, which is Incurred in accordance with Section 4.03 so long as:
(A) the principal amount of such new Indebtedness does not exceed the principal amount, plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired plus any tender premiums, defeasance costs or other fees and expenses incurred in connection therewith),
(B) such Indebtedness is subordinated to the Notes or the related Guarantees, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(C) such Indebtedness has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Subordinated Indebtedness being redeemed, repurchased, acquired or retired or (y) one year following the last maturity date of any Notes then outstanding, and
(D) such Indebtedness has a Weighted Average Life to Maturity which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased or acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, acquired or retired that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(iv) the redemption, repurchase, retirement or other acquisition (or dividends to any direct or indirect parent company of Hexion to finance any such repurchase, retirement or other acquisition) for value of Equity Interests of Hexion or any direct or indirect parent company of Hexion held by any future, present or former employee,
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director, officer, manager or consultant of Hexion or any direct or indirect parent company of Hexion or any Subsidiary of Hexion pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate amounts paid under this clause (iv) do not exceed $15.0 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years); provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed:
(A) the cash proceeds received by Hexion or any of its Restricted Subsidiaries from the sale of Equity Interests (excluding Refunding Capital Stock, Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock) of Hexion or any direct or indirect parent company of Hexion (to the extent contributed to Hexion) to employees, directors, officers, managers or consultants of Hexion and its Restricted Subsidiaries or any direct or indirect parent company of Hexion that occurs after the Issue Date; provided, however, that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend shall not increase the amount available for Restricted Payments under Section 4.04(a)(3); plus
(B) the cash proceeds of key man life insurance policies received by Hexion or any direct or indirect parent company of Hexion (to the extent contributed to Hexion) and its Restricted Subsidiaries after the Issue Date; (provided, however, that Hexion may elect to apply all or any portion of the aggregate increase contemplated by clause (A) above and this clause (B) in any calendar year and, to the extent any payment described under this clause (iv) is made by delivery of Indebtedness and not in cash, such payment shall be deemed to occur only when, and to the extent, the obligor on such Indebtedness makes payments with respect to such Indebtedness);
provided that cancellation of Indebtedness owing to Hexion or any Restricted Subsidiary from any present or former employees, directors, officers, managers or consultants of Hexion, any Restricted Subsidiary or the direct or indirect parents of Hexion in connection with a repurchase of Equity Interests of Hexion or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provision of this Indenture;
(v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of Hexion or any of its Restricted Subsidiaries issued or incurred in accordance with Section 4.03;
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(vi) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Existing Second Lien Notes Issue Date and the declaration and payment of dividends to any direct or indirect parent company of Hexion, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent company of Hexion issued after the Issue Date the proceeds of which were contributed to Hexion; provided, however, that (A) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), Hexion would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate amount of dividends declared and paid pursuant to this clause (vi) does not exceed the net cash proceeds actually received by Hexion from the issuance of Designated Preferred Stock (other than Disqualified Stock) issued after the Existing Second Lien Notes Issue Date;
(vii) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Investments made pursuant to this clause (vii) that are at that time outstanding, not to exceed the greater of $40 million and 1.0% of Total Assets at the time of such Investment, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (vii) (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (vii) is made in any Person that is not a Restricted Subsidiary of Hexion at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of Hexion after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) of the definition of Permitted Investments and shall cease to have been made pursuant to this clause (vii) for so long as such Person continues to be a Restricted Subsidiary;
(viii) the payment of dividends on Hexions common stock (or the payment of dividends to any direct or indirect parent of Hexion to fund the payment by any direct or indirect parent of Hexion of dividends on such entitys common stock) of up to 6.0% per annum of the net proceeds received by Hexion from any public offering of common stock or contributed to Hexion by any direct or indirect parent of Hexion from any public offering of common stock;
(ix) Restricted Payments in an aggregate amount not to exceed the aggregate amount of Excluded Contributions;
(x) other Restricted Payments in an aggregate amount not to exceed the greater of $50 million and 1.0% of Total Assets at the time of such Restricted Payment;
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(xi) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Hexion or a Restricted Subsidiary of Hexion by, Unrestricted Subsidiaries;
(xii) (A) with respect to each tax year or portion thereof that Hexion qualifies as a Flow Through Entity, the distribution by Hexion to any direct or indirect parent of Hexion of an amount equal to the product of (i) the amount of aggregate net taxable income of Hexion allocated to the holders of Capital Stock of Hexion for such period and (ii) the Presumed Tax Rate for such period; and (B) with respect to any tax year or portion thereof that Hexion and any direct or indirect parent of Hexion does not qualify as a Flow Through Entity, the payment of dividends or other distributions to any direct or indirect parent company of Hexion that files a consolidated U.S. federal tax return that includes Hexion and its Subsidiaries in an amount not to exceed the amount that Hexion and its Restricted Subsidiaries would have been required to pay in respect of federal, state or local taxes (as the case may be) in respect of such year if Hexion and its Restricted Subsidiaries paid such taxes directly as a stand-alone taxpayer (or stand-alone group);
(xiii) the payment of any Restricted Payment, if applicable:
(A) in amounts required for any direct or indirect parent of Hexion to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnity provided on behalf of, officers and employees of any direct or indirect parent of Hexion and general corporate overhead expenses of any direct or indirect parent of Hexion, in each case to the extent such fees, expenses, salaries, bonuses, benefits and indemnities are attributable to the ownership or operation of Hexion and its respective Subsidiaries;
(B) in amounts required for any direct or indirect parent of Hexion to pay interest or principal on Indebtedness the proceeds of which have been contributed to Hexion or any of its Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, Hexion Incurred in accordance with Section 4.03; provided, however, that any such contribution shall not increase the amount available for Restricted Payments under Section 4.04(a)(3) or be used to Incur Contribution Indebtedness or to make a Restricted Payment pursuant to Section 4.04(b) (other than payments permitted by this clause (xiii); provided further, however, any such dividends, other distributions or other amounts used to pay interest are treated as interest payments of Hexion for purposes of this Indenture; and
(C) in amounts required for any direct or indirect parent of Hexion to pay fees and expenses, other than to Affiliates of Hexion, related to any equity or debt offering of such parent;
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(xiv) cash dividends or other distributions on Hexions Capital Stock used to, or the making of loans to any direct or indirect parent of Hexion to, fund the payment of fees and expenses incurred in connection with the Hexion Recapitalization, the Offering Transactions or in respect of amounts owed by Hexion or any Restricted Subsidiary of Hexion to Affiliates, in each case to the extent permitted by Section 4.07;
(xv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(xvi) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing;
(xvii) in the event of a Change of Control, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness or Disqualified Stock of Hexion or Subordinated Indebtedness of any Guarantor or Disqualified Stock or Preferred Stock of any Restricted Subsidiary, in each case, at a purchase price not greater than 101% of the principal amount or liquidation preference, as applicable (or, if such Subordinated Indebtedness was issued with original issue discount, 101% of the accreted value), of such Subordinated Indebtedness, Disqualified Stock or Preferred Stock, plus any accrued and unpaid interest or dividends thereon; provided, however, that prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Issuer (or a third party to the extent permitted by this Indenture) has made a Change of Control Offer with respect to the Notes as a result of such Change of Control and has repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer;
(xviii) in the event of an Asset Sale that requires the Issuer to offer to purchase Notes pursuant to Section 4.06, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness or Disqualified Stock of Hexion or Subordinated Indebtedness of any Guarantor or Disqualified Stock or Preferred Stock of any Restricted Subsidiary, in each case, at a purchase price not greater than 100% of the principal amount or liquidation preference, as applicable (or, if such Subordinated Indebtedness was issued with original issue discount, 100% of the accreted value), of such Subordinated Indebtedness, Disqualified Stock or Preferred Stock, plus any accrued and unpaid interest or dividends thereon; provided, however, that (i) prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Issuer (or a third party to the extent permitted by this Indenture) has made an Asset Sale Offer or Collateral Asset Sale Offer, as applicable, with respect to the Notes as a result of such Asset Sale and have repurchased all Notes validly tendered and not withdrawn in connection with such Asset Sale Offer or Collateral Asset Sale Offer, as applicable, and (ii) the aggregate amount of all such payments, purchases, redemptions, defeasances or other acquisitions or retirements of all such Subordinated Indebtedness, Disqualified Stock and Preferred Stock may not exceed the amount of the Excess Proceeds or Collateral Excess Proceeds, as applicable, used to determine the aggregate purchase price of the Notes tendered for in such Asset Sale Offer or Collateral Asset Sale Offer, as applicable, less the aggregate amount applied in connection with such Asset Sale Offer or Collateral Asset Sale Offer, as applicable;
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(xix) any Restricted Payments made in connection with the consummation of the Hexion Recapitalization, as set forth under the heading Use of Proceeds in the Existing Second Lien Notes Offering Circular, the payment of the dividend declared in May, 2005 but not yet paid, in the amount included in other long-term liabilities as of June 30, 2006, and the repayment or repurchase of the Parish of Ascension, Louisiana Industrial Revenue Bonds of Hexion; and
(xx) Restricted Payments by Hexion or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (vi), (vii), (x), (xi), (xvii) and (xviii) of this Section 4.04(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.
(c) Hexion shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Hexion and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of Investments. Such designation shall only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
(d) For the purposes of this Section 4.04, any payment made on or after the Existing Second Lien Notes Issue Date but prior to the Issue Date will be deemed to be a Restricted Payment to the extent that such payment would have been a Restricted Payment had this Indenture been in effect at the time of such payment (and, to the extent that such Restricted Payment was permitted by clauses (b)(i) through (xx) above or as a Permitted Investment, such Restricted Payment may be deemed by Hexion to have been made pursuant to such clause or as such a Permitted Investment).
SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries. Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to Hexion or any of its Restricted Subsidiaries (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or by, its profits; or (ii) pay any Indebtedness owed to Hexion or any of its Restricted Subsidiaries;
(b) make loans or advances to Hexion or any of its Restricted Subsidiaries; or
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(c) sell, lease or transfer any of its properties or assets to Hexion or any of its Restricted Subsidiaries;
except in each case for such encumbrances or restrictions existing under or by reason of:
(1) | contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to each of the Existing First Lien Notes Indentures, the ABL Facility, the Senior Credit Documents, the Existing Debentures, the Junior Priority Notes and the guarantees thereof; |
(2) | this Indenture, the Notes (and any guarantees thereof), the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements; |
(3) | applicable law or any applicable rule, regulation or order; |
(4) | any agreement or other instrument of a Person acquired by Hexion or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or its Subsidiaries, or the property or assets of the Person or its Subsidiaries, so acquired; |
(5) | contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; |
(6) | Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.03 and 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness; |
(7) | restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; |
(8) | customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business; |
(9) | purchase money obligations or Capitalized Lease Obligations, in each case for property so acquired or leased in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired; |
(10) | customary provisions contained in leases and other similar agreements entered into in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property subject to such lease; |
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(11) | any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided, however, that such restrictions apply only to such Receivables Subsidiary; |
(12) | other Indebtedness |
(i) of (A) Hexion or (B) any Restricted Subsidiary of Hexion, in each case that (x) is Incurred subsequent to the Issue Date pursuant to Section 4.03 and (y) in the case of a Restricted Subsidiary that is not a Subsidiary Guarantor, an Officer determines reasonably in good faith that any such encumbrance or restriction will not materially adversely affect Hexions ability to honor its payment obligations on the Notes, or
(ii) that is Incurred by a Foreign Subsidiary of Hexion subsequent to the Issue Date pursuant to Section 4.03; provided, however, that such encumbrance or restriction applies only to Foreign Subsidiaries of Hexion; or
(13) | any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) above; provided, however, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Hexion, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing. |
For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to Hexion or a Restricted Subsidiary to other Indebtedness Incurred by Hexion or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
SECTION 4.06. Asset Sales. (a) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) Hexion or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by Hexion) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by Hexion or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided, however, that the amount of:
(i) any liabilities (as shown on Hexions or such Restricted Subsidiarys most recent balance sheet or in the notes thereto) of Hexion or any Restricted Subsidiary of Hexion (other than liabilities that are by their terms subordinated to the Notes or the Guarantees of the Notes, as the case may be) that are assumed by the transferee of any such assets or that are otherwise cancelled,
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(ii) any Notes or other obligations or other securities or assets received by Hexion or such Restricted Subsidiary from such transferee that are converted by Hexion or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received), and
(iii) any Designated Non-cash Consideration received by Hexion or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of 3% of Total Assets and $70 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value)
shall be deemed to be Cash Equivalents for the purposes of this Section 4.06(a).
(b) Within 365 days after Hexions or any Restricted Subsidiary of Hexions receipt of the Net Proceeds of any Asset Sale, Hexion or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale at its option to any one or more of the following:
(i) to permanently reduce (A) any Indebtedness constituting First Priority Lien Obligations (and, in the case of revolving Obligations, to correspondingly reduce commitments with respect thereto); provided that (x) to the extent that the terms of First Priority Lien Obligations other than the Notes, as such agreements are in existence on the Issue Date, require that such First Priority Lien Obligations are repaid with the Net Proceeds of Asset Sales prior to repayment of other Indebtedness, Hexion or any Restricted Subsidiary shall be entitled to repay such other First Priority Lien Obligations prior to repaying the Notes and (y) subject to the foregoing clause (x), if the Issuer shall so reduce First Priority Lien Obligations, the Issuer will equally and ratably reduce Indebtedness under the Notes in any manner set forth in clause (E) below, (B) the Notes, (C) Indebtedness constituting Pari Passu Indebtedness other than First Priority Lien Obligations so long as the Asset Sale proceeds are with respect to non-Collateral (provided that if Hexion shall so reduce Pari Passu Indebtedness under this clause (C), Hexion will equally and ratably reduce Indebtedness under the Notes in any manner set forth in clause (E) below), (D) Indebtedness of a Restricted Subsidiary that is not a Guarantor, (E) Indebtedness under the Notes as provided under Article 3 of this Indenture, through open-market purchases (provided that such purchases are at or above 100% of the principal amount thereof) and/or by making an offer to all holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, the pro rata principal amount of the Notes (such offer to be conducted in accordance with the procedures set forth below for an Asset Sales Offer or a Collateral Asset Sale Offer but without any further limitation in amount), or (F) if such proceeds are from an Asset Sale of ABL Priority Collateral (including indirect Asset Sales of ABL Priority Collateral due to the sale of the Capital Stock of a Person), any Indebtedness constituting ABL Obligations; or
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(ii) to make an Investment in any one or more businesses or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale or to reimburse the cost of any of the foregoing incurred on or after the date on which the Asset Sale giving rise to such Net Proceeds was contractually committed; provided, however, that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Hexion or, if such Person is a Restricted Subsidiary of Hexion, in an increase in the percentage ownership of such Person by Hexion or any Restricted Subsidiary of Hexion; or
(iii) to make an Investment in any one or more businesses; provided, however, that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Hexion or, if such Person is a Restricted Subsidiary of Hexion, in an increase in the percentage ownership of such Person by Hexion or any Restricted Subsidiary of Hexion.
Pending the final application of any such Net Proceeds, Hexion or such Restricted Subsidiary of Hexion may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not otherwise prohibited by this Indenture.
Any Net Proceeds from any Asset Sale of Collateral that are not invested or applied as provided and within the time period set forth in the first sentence of the preceding paragraph of this covenant (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in Section 4.06(b)(i), shall be deemed to have been applied whether or not such offer is accepted) will be deemed to constitute Collateral Excess Proceeds. When the aggregate amount of Collateral Excess Proceeds exceeds $20 million, the Issuer shall make an offer to all holders of the Notes and, if required by the terms of any First Priority Lien Obligations or Obligations secured by a Lien permitted under this Indenture (which Lien is not subordinate to the Lien of the Notes with respect to the Collateral), to the holders of such First Priority Lien Obligations or such other Obligations (a Collateral Asset Sale Offer), to purchase the maximum aggregate principal amount of the Notes and such First Priority Lien Obligations or such other Obligations that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Collateral Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such First Priority Lien Obligations were issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or, in respect of such First Priority Lien Obligations, such lesser price, if any, as may be provided for by the terms of such First Priority Lien Obligations), to, but excluding the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuer will commence a Collateral Asset Sale Offer with respect to Collateral Express Proceeds within ten (10) Business Days after the date that Collateral Excess Proceeds exceed $20 million by sending the notice required pursuant to the terms of Section 4.06(f) or delivering electronically if held by DTC, with a copy to the Trustee.
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Any Net Proceeds from any Asset Sale of non-Collateral that are not invested or applied as provided and within the time period set forth in the first sentence of the second preceding paragraph of this Section 4.06(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in Section 4.06(b)(i), shall be deemed to have been applied whether or not such offer is accepted) shall be deemed to constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $20 million, the Issuer shall make an offer to all Holders of Notes (and, at the option of the Issuer, to holders of any Pari Passu Indebtedness) (an Asset Sale Offer) to purchase the maximum principal amount of Notes (and such Pari Passu Indebtedness) that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to, but excluding the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceeds $20 million by sending the notice required pursuant to the terms of Section 4.06(f), with a copy to the Trustee.
To the extent that the aggregate amount of Notes and such other First Priority Lien Obligations or Obligations secured by a Lien permitted by this Indenture (which Lien is not subordinate to the Lien of the Notes with respect to the Collateral) tendered pursuant to a Collateral Asset Sale Offer is less than the Collateral Excess Proceeds, the Issuer may use any remaining Collateral Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes or other First Priority Lien Obligations or such other Obligations surrendered by such holders thereof exceeds the amount of Collateral Excess Proceeds, the Issuer shall select the Notes and such other First Priority Lien Obligations or such other Obligations to be purchased in the manner described in Section 4.06(e). To the extent that the aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes (and such Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the applicable issuers shall select the Notes (and such Pari Passu Indebtedness) to be purchased in the manner described in Section 4.06(e). Upon completion of any such Collateral Asset Sale Offer or Asset Sale Offer, the amount of Collateral Excess Proceeds or Excess Proceeds, as the case may be, which served as the basis for such Asset Sale Offer shall be reset at zero.
(c) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in this Indenture by virtue thereof.
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(d) Not later than the date upon which written notice of an Asset Sale Offer or Collateral Asset Sale Offer is delivered to the Trustee as provided above, the Issuer shall deliver to the Trustee an Officers Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer or Collateral Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b). On the Asset Sale Offer purchase date, the Issuer shall also irrevocably deposit with the Trustee or with a paying agent (or, if Hexion or a Wholly Owned Restricted Subsidiary of Hexion is acting as a Paying Agent, segregate and hold in trust) an amount equal to the Asset Sale Offer purchase price to be paid in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer or Collateral Asset Sale Offer remains open (the Offer Period), the Issuer shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuer. The Trustee (or a Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the Asset sale purchase price delivered by the Issuer to the Trustee is greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuer immediately after the expiration of the Offer Period for application in accordance with Section 4.06.
(e) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the Purchase Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered by the Holder for purchase and a statement that such Holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes (and First Priority Lien Obligations or Pari Passu Indebtedness, as applicable) are tendered pursuant to an Asset Sale Offer or a Collateral Asset Sale Offer than the Issuer is required to purchase, the selection of such Notes for purchase will be made by the Issuer in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed (and the Issuer shall notify the Trustee of any such listing), or if such Notes are not so listed on a pro rata basis to the extent practicable, by lot or by such other method as the Issuer shall deem fair and appropriate (and in such manner as complies with the procedures of DTC, if applicable); provided, that no Notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness shall be made pursuant to the terms of such Pari Passu Indebtedness.
(f) Notices of an Asset Sale Offer or Collateral Asset Sale Offer shall be mailed by first class mail, postage prepaid, or delivered electronically if held by the Depository, at least 30 but not more than 60 days before the purchase date to each Holder at such Holders registered address. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.
(g) A new Note in principal amount equal to the unpurchased portion of any Note purchased in part shall be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the purchase date, unless the Issuer defaults in payment of the purchase price, interest shall cease to accrue on Notes or portions thereof purchased.
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SECTION 4.07. Transactions with Affiliates. (a) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Hexion (each of the foregoing, an Affiliate Transaction) involving aggregate consideration in excess of $7.5 million, unless:
(i) such Affiliate Transaction is on terms that are not materially less favorable to Hexion or the relevant Restricted Subsidiary than those that could reasonably have been obtained in a comparable transaction by Hexion or such Restricted Subsidiary with an unaffiliated Person; and
(ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25 million, Hexion delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Hexion, approving such Affiliate Transaction and set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (i) above.
(b) The provisions of Section 4.07(a) shall not apply to the following:
(i) (A) transactions between or among Hexion or any of its Restricted Subsidiaries and (B) any merger of Hexion and any direct parent company of Hexion; provided; however, that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Hexion and such merger is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;
(ii) Restricted Payments permitted by Section 4.04 and Permitted Investments;
(iii) (x) the entering into of any agreement to pay, and the payment of, management, consulting, monitoring, transaction, advisory or similar fees and expenses to the Sponsor in an aggregate amount in any fiscal year not to exceed the greater of (a) $6.0 million and (b) 2.0% of EBITDA of Hexion and its Restricted Subsidiaries for the immediately preceding fiscal year, and out-of-pocket expense reimbursement; provided, however, any payment not made in any fiscal year may be carried forward and paid in the following two fiscal years, and (y) the payment of the present value of all amounts payable pursuant to any agreement described in clause (x) above in connection with the termination of such agreement;
(iv) the payment of customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, managers, employees or consultants of Hexion or any Restricted Subsidiary or any direct or indirect parent company of Hexion;
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(v) payments by Hexion or any of its Restricted Subsidiaries to the Sponsor made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are (x) approved by a majority of the Board of Directors of Hexion in good faith or (y) made pursuant to any agreement or arrangement described in the Offering Circular (or in the documents incorporated by reference therein);
(vi) transactions in which Hexion or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Hexion or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);
(vii) payments or loans (or cancellation of loans) to employees or consultants that are approved by a majority of the Board of Directors of Hexion in good faith;
(viii) the existence of, or the performance by Hexion or any of its Restricted Subsidiaries under the terms of, any agreement or instrument as in effect as of the Issue Date or any amendment thereto or replacement (so long as any such agreement or instrument together with all amendments thereto or replacements, taken as a whole, are not more disadvantageous to the Holders of the Notes in any material respect than the original agreement or instrument as in effect on the Issue Date, in each case, as determined in good faith by Hexion) or any transaction contemplated thereby;
(ix) the existence of, or the performance by Hexion or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or investor rights agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, any agreement described in the Offering Circular (or in the documents incorporated by reference in the Offering Circular) and any amendment thereto or similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by Hexion or any of its Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (ix) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date, as determined in good faith by Hexion;
(x) the execution of the Offering Transactions and the payment of all fees and expenses related to the Offering Transactions, including fees to the Sponsor, which are described in the Offering Circular;
(xi) (A) transactions with customers, clients, suppliers, toll manufacturers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, on terms at least as favorable as could reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries for the purchase or sale of chemicals, equipment and services entered into in the ordinary course of business;
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(xii) any transaction effected as part of a Qualified Receivables Financing;
(xiii) the issuance of Equity Interests (other than Disqualified Stock) of Hexion;
(xiv) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Hexion or of a Restricted Subsidiary, as appropriate, in good faith;
(xv) the entering into of any tax sharing agreement or arrangement and any payments (whether or not pursuant to any such tax sharing agreement or arrangement) permitted by Section 4.04(b)(xii) and the performance under any such agreement or arrangement;
(xvi) any contribution to the capital of Hexion;
(xvii) transactions permitted by, and complying with, the provisions of Section 5.01;
(xviii) pledges of Equity Interests of Unrestricted Subsidiaries;
(xix) any employment agreements entered into by Hexion or any of the Restricted Subsidiaries in the ordinary course of business;
(xx) intercompany transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Hexion in an Officers Certificate) for the purpose of improving the consolidated tax efficiency of Hexion and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture;
(xxi) transactions between Hexion or any Restricted Subsidiary and any Person that is an Affiliate solely because a director or manager thereof is also a director or manager of Hexion or any direct or indirect parent of Hexion; provided, however, that such director or manager abstains from voting as a director or manager of Hexion or such direct or indirect parent, as the case may be, on any matter involving such other Person; and
(xxii) the Issuers Assumption.
SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change of Control, the Issuer shall (i)(A) make an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a Change of Control Offer) at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (the Change of Control Payment) (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date) in accordance with the terms contemplated in this Section 4.08; and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercise its right, within 30 days following such Change of Control, to redeem all the Notes in accordance with Article 3 of this Indenture.
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(b) (i) A Change of Control Offer means a notice sent to each Holder of the Notes with a copy to the Trustee (or delivered pursuant to the procedures of DTC) stating:
(1) | that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holders Notes at a purchase price in cash equal to the Change of Control Payment (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date); |
(2) | the circumstances regarding such Change of Control; |
(3) | the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent); and |
(4) | the instructions determined by the Issuer, consistent with this Section, that a Holder must follow in order to have its Notes purchased. |
(ii) A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
(c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. The Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the purchase date a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
(d) On the purchase date, all Notes purchased by the Issuer under this Section shall be delivered to the Trustee for cancellation, and the Issuer shall pay the purchase price plus accrued and unpaid interest to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, the Issuer shall be deemed to have made a Change of Control Offer upon a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in Section 4.08(b) applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer; or (ii) a notice of redemption of all outstanding Notes has been given pursuant to Section 3.05, unless and until there is a default in payment of the applicable redemption price.
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(f) At the time the Issuer delivers Notes to the Trustee which are to be accepted for purchase, the Issuer shall also deliver an Officers Certificate stating that such Notes are to be accepted by the Issuer pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering Holder.
(g) Prior to any Change of Control Offer, the Issuer shall deliver to the Trustee an Officers Certificate stating that all conditions precedent contained herein to the right of the Issuer to make such offer have been complied with.
(h) If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described above, purchase all of the Notes validly tendered and not withdrawn by such holders, the Issuer or such third party will have the right upon not less than 30 nor more than 60 days prior written notice to the holders (with a copy to the Trustee), given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment. Any such redemption shall be effected pursuant to Article 3.
(i) The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have failed to make a Change of Control Offer or purchase the Notes pursuant thereto as described under this Section by virtue thereof.
SECTION 4.09. Compliance Certificate. The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer an Officers Certificate stating that in the course of the performance by the signers of their duties as Officers of the Issuer they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Issuer is taking or proposes to take with respect thereto.
SECTION 4.10. Further Instruments and Acts. Upon request of the Trustee, the Issuer shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 4.11. Future Guarantors. Following the Issuers Assumption, Hexion shall cause each of its Restricted Subsidiaries (other than (x) a Foreign Subsidiary; (y) a Receivables Subsidiary or (z) a Domestic Subsidiary that is wholly owned by one or more Foreign Subsidiaries) that guarantees any Indebtedness of Hexion or any Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit C pursuant to which such Subsidiary shall guarantee payment of the Notes. The parties hereto hereby acknowledge that the Subsidiary Guarantors party to this Indenture as of the date any supplemental indenture is to be executed need not be party to such supplemental indenture.
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SECTION 4.12. Liens. Hexion shall not, and shall not permit any Subsidiary Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien (except Permitted Liens) that secures any Indebtedness on any asset or property of Hexion or any Subsidiary Guarantor, other than Liens securing Indebtedness that are junior in priority to the Liens on such property or assets securing the Notes pursuant to the terms of the Junior Priority Intercreditor Agreements or an intercreditor agreement not materially less favorable to the holders of the Notes than the Junior Priority Intercreditor Agreements.
For purposes of determining compliance with this Section 4.12, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described in clauses (1) through (32) of the definition of Permitted Liens under Section 1.01 or pursuant to the first paragraph of this Section 4.12 but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in clauses (1) through (32) of the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.12, Hexion shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will be entitled to include the amount and type of such Lien or such item of Indebtedness secured by such Lien (or portion thereof) in one of the categories of permitted Liens (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.12 and, in such event, such Lien securing such item of Indebtedness (or any portion thereof) will be treated as being Incurred or existing pursuant to only such clause or clauses (or any portion thereof) or pursuant to the first paragraph hereof. Notwithstanding the foregoing, (i) the Liens securing the Initial Existing First Lien Notes shall at all times be deemed to have been incurred under clause (8)(A) under Permitted Liens and may not later be reclassified, (ii) Liens securing the Existing First Lien Notes (other than the Initial Existing First Lien Notes) and the Notes outstanding on the Issue Date shall at all times be deemed to have been incurred under clause (8)(B) under Permitted Liens and may not later be reclassified and (iii) Liens securing any Indebtedness initially incurred after the Issue Date pursuant to Section 4.03(b)(i) shall at all times be deemed to have been incurred under clause 8(B) under Permitted Liens and may not later be reclassified.
With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The Increased Amount of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount or deferred financing costs, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of Hexion, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or deferred financing costs or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of Indebtedness under Section 1.01. In addition, for the avoidance of doubt, Liens may secure ABL Obligations so long as the Notes are given a junior priority lien on ABL Priority Collateral (other than Excluded Assets) in a manner consistent with the ABL Intercreditor Agreement.
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SECTION 4.13. Maintenance of Office or Agency.
(a) The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall 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 Issuer 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 corporate trust office of the Trustee as set forth in Section 12.02.
(b) The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall 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.
(c) The Issuer hereby designates the corporate trust office of the Trustee or its Agent as such office or agency of the Issuer in accordance with Section 2.04.
SECTION 4.14. After-Acquired Property. Upon the acquisition by Hexion or any Guarantor of any First Priority After-Acquired Property, Hexion or such Guarantor shall, as promptly as practicable after the acquisition of such property or such Subsidiary becoming a Guarantor, execute and deliver such mortgages, deeds of trust, security instruments, financing statements and certificates and opinions of counsel as shall be reasonably necessary to vest in the First Lien Collateral Agent a perfected security interest, subject only to Permitted Liens, in such First Priority After-Acquired Property and to have such First Priority After-Acquired Property (but subject to certain limitations, if applicable, including as described under Section 11.01(b)) added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to include to such First Priority After-Acquired Property to the same extent and with the same force and effect. Notwithstanding the foregoing, upon the acquisition by Hexion or any Guarantor of any First Priority After-Acquired Property consisting of ABL Priority Collateral, Hexion or such Guarantor shall only be required to grant junior priority liens on such Collateral to secure the Notes (and only take actions with respect to the granting of such liens that are otherwise consistent with actions required to be taken by the ABL Collateral Agent). In addition, after the Existing Debenture Payoff Date, Hexion shall, as promptly as practicable after such date, grant a perfected security interest in the assets constituting Principal Property on such date, to the same extent as if such assets were acquired on such date by Hexion or the applicable Subsidiary that owns such assets on such date, by executing and delivering customary mortgages or deeds of trust with respect to such real property, in each case subject to Permitted Liens and Excluded Assets (other than those described in clauses (l), (m), and (n) of the second paragraph of Section 3.01 of the Collateral Agreement as in effect on the date hereof).
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SECTION 4.15. Limitation on Indenture Restricted Subsidiaries. Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, take or knowingly or negligently omit to take any action which action or omission could reasonably be expected to or would have the result of any Existing Debentures Subsidiary being an Indenture Restricted Subsidiary at any time when the negative covenants contained in the Existing Debentures are applicable to an Indenture Restricted Subsidiary unless such Subsidiary concurrently becomes a Subsidiary Guarantor and, after giving effect thereto, there is no default under the Existing Debentures.
SECTION 4.16. Limitation on Hexion Nova Scotia Finance, ULC. So long as Hexion Nova Scotia Finance, ULC is an issuer under the Junior Priority Notes: (i) Hexion Nova Scotia Finance, ULC shall not own any material assets or other property, other than Indebtedness or other obligations owing to Hexion Nova Scotia Finance, ULC by Hexion and its Restricted Subsidiaries and Cash Equivalents, or engage in any trade or conduct any business other than treasury, cash management, hedging and cash pooling activities and activities incidental thereto; (ii) Hexion Nova Scotia Finance, ULC shall not Incur any material liabilities or obligations other than their obligations (if any) pursuant to the Notes, this Indenture, the Credit Agreement, the Security Documents and other Indebtedness outstanding on the Issue Date or permitted to be Incurred under Section 4.03 and liabilities and obligations pursuant to business activities permitted by this Section 4.16; and (iii) if Hexion Nova Scotia Finance, ULC at any time has assets in excess of $100 million, including intercompany Indebtedness, it shall guarantee the Notes by executing and delivering to the Trustee a supplemental indenture substantially in the form of Exhibit C pursuant to which such Subsidiary shall guarantee payment of the Notes (which such guarantee shall be automatically released if at any time such Subsidiary shall have assets of less than $100 million, including intercompany Indebtedness).
ARTICLE 5
MERGER, CONSOLIDATION OR SALE OF ALL
OR SUBSTANTIALLY ALL ASSETS
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets. (a) Hexion shall not consolidate or merge with or into or wind up into (whether or not Hexion is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(i) Hexion is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than Hexion) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership, limited liability company or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Hexion or such Person, as the case may be, being herein called the Successor Issuer);
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(ii) the Successor Issuer (if other than Hexion) expressly assumes all the obligations of Hexion under this Indenture and the Notes pursuant to supplemental indentures;
(iii) immediately after giving effect to such transaction no Default shall have occurred and be continuing;
(iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Issuer or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Issuer or such Restricted Subsidiary at the time of such transaction), either
(A) the Successor Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(B) the Fixed Charge Coverage Ratio for the Successor Issuer and its Restricted Subsidiaries would be no less than the Fixed Charge Coverage Ratio for Hexion and its Restricted Subsidiaries immediately prior to such transaction; and
(v) Hexion shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures (if any) comply with this Indenture.
The Successor Issuer shall be the successor to the Issuer and shall succeed to, and be substituted for, and may exercise every right and power of, Hexion under this Indenture and the Notes and Hexion and the Guarantors shall be released from the obligation to guarantee, or, to pay, if applicable, the principal of and interest on the Notes. Notwithstanding the foregoing clauses (iii) and (iv), (a) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to Hexion or to another Restricted Subsidiary, and (b) Hexion may merge with an Affiliate incorporated solely for the purpose of reincorporating or reorganizing Hexion in another state of the United States so long as the amount of Indebtedness of Hexion and its Restricted Subsidiaries is not increased thereby.
(b) Hexion shall not permit any Subsidiary Guarantor to consolidate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(i) such Subsidiary Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership, limited liability company or similar entity organized and existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the Successor Guarantor);
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(ii) the Successor Guarantor (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantors Guarantee of the Notes pursuant to a supplemental indenture;
(iii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any of its Subsidiaries as a result of such transaction as having been Incurred by the Successor Guarantor or such Subsidiary at the time of such transaction) no Default shall have occurred and be continuing; and
(iv) the Successor Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.
The Successor Guarantor shall succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantors Guarantee of the Notes and such Guarantor shall be released from its obligation to guarantee or to pay, if applicable, the principal of, or interest on, the Notes. Notwithstanding the foregoing clause (iii), (1) a Guarantor may merge with an Affiliate incorporated solely for the purpose of reincorporating or reorganizing such Guarantor in another state of the United States, the District of Columbia or any territory thereof or may convert into a corporation, partnership, limited liability company or similar entity, so long as the amount of Indebtedness of the Guarantor is not increased thereby and (2) a Guarantor may merge with another Guarantor or the Issuer.
In addition, notwithstanding the foregoing, any Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a Permitted Transfer) to (x) Hexion or any Guarantor or (y) any Restricted Subsidiary of Hexion that is not a Guarantor; provided that at the time of each such Permitted Transfer pursuant to clause (y) the aggregate amount of all such Permitted Transfers since the Issue Date shall not exceed 5.0% of the Total Assets as shown on the most recent available balance sheet of Hexion and the Restricted Subsidiaries after giving effect to each such Permitted Transfer and including all Permitted Transfers occurring from and after the Existing Second Lien Notes Issue Date (excluding Permitted Transfers in connection with the Hexion Recapitalization).
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. An Event of Default with respect to all of the Notes occurs if:
(a) Hexion defaults in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days,
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(b) Hexion defaults in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,
(c) Hexion fails to comply with its obligations under Sections 4.08 or 5.01,
(d) Hexion or any of its Restricted Subsidiaries fails to comply with any of its obligations under the covenants set forth in Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.11, 4.12, 4.14, 4.15 or 4.16 (in each case, other than a failure to purchase Notes when required under Section 4.06) and such failure continues for 30 days after the notice specified below,
(e) Hexion or any of its Restricted Subsidiaries fails to comply with its other agreements contained in the Notes or this Indenture (other than those referred to in (a), (b), (c), or (d) above) and such failure continues for 60 days after the notice specified below,
(f) Hexion or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to Hexion or a Restricted Subsidiary of Hexion) within any applicable grace period after final maturity or the acceleration of any such Indebtedness (or, with respect to the pollution control bonds constituting Existing Debentures, failure to pay under the guarantees of Hexion and its applicable Restricted Subsidiaries related thereto) by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $50 million or its foreign currency equivalent,
(g) Hexion or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors
or takes any comparable action under any foreign laws relating to insolvency,
(h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against Hexion or any Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of Hexion or any Significant Subsidiary or for any substantial part of its property; or
(iii) orders the winding up or liquidation of Hexion or any Significant Subsidiary;
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or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days,
(i) Hexion or any Significant Subsidiary fails to pay final judgments aggregating in excess of $50 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof,
(j) the Guarantee of the Notes by a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof or by this Indenture) or any Guarantor denies or disaffirms its obligations under this Indenture or any Guarantee of the Notes (except as contemplated by the terms thereof or by this Indenture) and such Default continues for 10 days,
(k) unless such Liens have been released in accordance with the provisions of the Security Documents or this Indenture, Liens in favor of the Holders of the Notes with respect to all or substantially all of the Collateral cease to be valid or enforceable, or Hexion shall assert or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable (except as contemplated by the terms thereof or by this Indenture) and, in the case of any such Subsidiary Guarantor, Hexion fails to cause such Subsidiary Guarantor to rescind such assertions within 30 days after Hexion has actual knowledge of such assertions, or
(l) the failure by Hexion or any Subsidiary Guarantor to comply for 60 days after notice with its other agreements contained in the Security Documents except for a failure that would not be material to the Holders and would not materially affect the value of the Collateral taken as a whole.
The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is 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.
The term Bankruptcy Law means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term Custodian means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
A Default under clause (d), (e) or (l) above shall not constitute an Event of Default until the Trustee notifies the Issuer or the Holders of at least 25% in aggregate principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clauses (d), (e) or (l) above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a Notice of Default. Hexion shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.
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SECTION 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h) with respect to Hexion) occurs with respect to the Notes and is continuing, the Trustee by written notice to Hexion or the Holders of at least 25% in aggregate principal amount of outstanding Notes by written notice to the Issuer and the Trustee, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(g) or (h) with respect to Hexion occurs, the principal of, premium, if any, and interest on all the Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. The Holders of a majority in principal amount of the outstanding Notes by notice to the Trustee may rescind any such acceleration with respect to the Notes and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. When a Default is waived, it is deemed cured and the Issuer, the Trustee and the Holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders) or that would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.
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SECTION 6.06. Limitation on Suits. (a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless:
(i) the Holder gives to the Trustee written notice stating that an Event of Default is continuing;
(ii) the Holders of at least 25% in aggregate principal amount of the outstanding Notes make a written request to the Trustee to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and
(v) the Holders of a majority in principal amount of the outstanding Notes do not give the Trustee a direction inconsistent with the request during such 60-day period.
(b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of the Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the contractual right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the Holders allowed in any judicial proceedings relative to the Issuer or any Guarantor, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07.
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SECTION 6.10. Priorities. If the Trustee or the First Lien Collateral Agent, as the case may be, collects any money or property pursuant to this Article 6 (including proceeds from the exercise of any remedies on the Collateral), they shall, subject to the terms of the Security Documents and the Senior Intercreditor Agreements, pay out the money or property in the following order:
FIRST: to the payment of all amounts due to the Trustee under Section 7.07;
SECOND: to Holders for payment of amounts due and unpaid on the Notes for principal, premium, if any, and interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, if any, respectively; and
THIRD: the balance, if any, to the Issuer or, to the extent the Trustee or the First Lien Collateral Agent, as the case may be, collects any amount for any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section. At least 15 days before such record date, the Trustee shall mail to each Holder and the Issuer a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Notes.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Issuer nor any Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer and each Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
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ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) 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;
(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 Section 6.05; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
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(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustees conduct does not constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes 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.
(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Notes at the time outstanding and indemnified in accordance with Section 6.05, 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 to examine the books, records and premises of the Issuer, personally or by agent or attorney, at the expense of the Issuer and shall incur no liability of any kind by reason of making or not making such inquiry or investigation.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
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(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(i) The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the Holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture.
(j) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the Holder of any Note shall be conclusive and binding upon future Holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.
(k) The Trustee shall not be deemed to have notice of any Default or Event of Default unless the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee from the Issuer, any Subsidiary Guarantor or any Holder, and such notice references the Notes and this Indenture.
(l) The Trustee may request that the Issuer deliver an Officers Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers Certificate may be signed by any Person authorized to sign an Officers Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
(m) The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.
(n) The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.
(o) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil or military authorities and governmental action.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with Hexion or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
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SECTION 7.04. Trustees Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, any Guarantee or the Notes, it shall not be accountable for the Issuers use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer or any Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustees certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (i), (j), (k) or (l) or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received notice thereof in accordance with Section 12.02 hereof from the Issuer, any Guarantor or any Holder. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the Holders of the Notes and the Issuer having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.
SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall mail to each Holder notice of the Default within the later of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, 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 interests of the Holders.
SECTION 7.06. [Intentionally Omitted].
SECTION 7.07. Compensation and Indemnity. The Issuer and each Guarantor, jointly and severally, shall pay to the Trustee from time to time reasonable compensation for its services. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer and each Guarantor, jointly and severally, shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustees agents, counsel, accountants and experts. The Issuer and each Guarantor, jointly and severally shall indemnify the Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys fees and expenses) incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Guarantee against the Issuer or a Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Issuer, any Guarantor, any Holder or any other Person). The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuer shall not relieve the Issuer or any Guarantor of its indemnity obligations hereunder. The Issuer shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers expense in the defense. Such indemnified parties may have separate counsel and the Issuer and the Guarantors, as applicable shall pay the fees and expenses of such counsel; provided, however, that the Issuer shall not be required to pay such fees and expenses if it assumes such indemnified parties defense and, in such indemnified parties reasonable
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judgment, there is no conflict of interest between the Issuer and the Guarantors, as applicable, and such parties in connection with such defense. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such partys own willful misconduct, negligence or bad faith.
To secure the Issuers and the Guarantors payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Issuers and the Guarantors payment obligations pursuant to this Section shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(g) or (h) with respect to Hexion or the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
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 repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction.
SECTION 7.08. Replacement of Trustee. (a) The Trustee may resign at any time by so notifying the Issuer. The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuer shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. 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 the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07.
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(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Notes may petition at the expense of the Issuer any court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, unless the Trustees duty to resign is stayed as provided in Section 310(b) of the TIA, any Holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuers obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.
SECTION 7.11. Preferential Collection of Claims Against Issuer. The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.
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SECTION 7.12. Limitation on Duty of Trustee in Respect of Collateral; Indemnification.
(a) Beyond the exercise of reasonable care in the custody thereof, the Trustee and the First Lien Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Trustee and the First Lien Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. Each of the Trustee and the First Lien Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee or the First Lien Collateral Agent in good faith.
(b) The Trustee and the First Lien Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on their respective part hereunder or under any Security Document, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Issuer to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. Subject to Section 7.01 of this Indenture, the Trustee and the First Lien Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement, the Junior Priority Intercreditor Agreements, the Collateral Agreement or any other Security Document by the Issuer or the Guarantors. The Trustee and the First Lien Collateral Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser or other expert or adviser, whether retained or employed by the Issuer or by the Trustee or the Collateral Agent, in relation to any matter arising in the administration of this Indenture, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement, the Junior Priority Intercreditor Agreements or the Security Documents.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of registration of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes and their obligations under this Indenture with respect to the Holders of the Notes:
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(i) when (1) all the Notes theretofore authenticated and delivered (other than Notes pursuant to Section 2.08 which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation or (2) all of the Notes not delivered to the Trustee for cancellation (a) have become due and payable, (b) will become due and payable at their Stated Maturity within one year or (c) if redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee funds in respect of the Notes, cash in U.S. Dollars, U.S. Government Obligations or a combination thereof in an amount sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if Government Obligations have been so deposited) to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit (in the case of Notes that have become due and payable) or to the date of maturity or redemption, as applicable, together with irrevocable written instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date the notice of redemption is delivered, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the redemption;
(ii) the Issuer or the Guarantors have paid all other sums payable under this Indenture; and
(iii) the Issuer has delivered to the Trustee an Officers Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.
(b) Subject to Sections 8.01(c) and 8.02, the Issuer at any time may terminate (i) all of its obligations under the Notes and this Indenture with respect to the Notes (legal defeasance option) or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.14, 4.15 and 4.16 for the benefit of the Notes and the operation of Section 5.01(a)(iv) and Sections 6.01(d), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries only), 6.01(h) (with respect to Significant Subsidiaries only), 6.01(i) (with respect to Significant Subsidiaries only), 6.01(j), 6.01(k) and 6.01(l) for the benefit of the Notes (covenant defeasance option). The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. In the event that the Issuer terminates all of its obligations under the Notes and this Indenture with respect to such Notes by exercising its legal defeasance option or their covenant defeasance option, the obligations of each Guarantor under its Guarantee of the Notes shall be terminated simultaneously with the termination of such obligations.
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If the Issuer exercises its legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default. If the Issuer exercises its covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Sections 6.01(c), 6.01(d), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries only), 6.01(h) (with respect to Significant Subsidiaries only), 6.01(i) (with respect to Significant Subsidiaries only), 6.01(j), 6.01(k) or 6.01(l) or because of the failure of Hexion to comply with Section 5.01(a)(iv).
Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminates.
(c) Notwithstanding clauses (a) and (b) above, the Issuers obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in this Article 8 shall survive until all the Notes have been paid in full. Thereafter, the Issuers obligations in Sections 7.07, 8.05 and 8.06 shall survive such satisfaction and discharge.
SECTION 8.02. Conditions to Defeasance. (a) The Issuer may exercise its legal defeasance option or its covenant defeasance option only if:
(i) the Issuer irrevocably deposits in trust with the Trustee in respect of cash in U.S. Dollars, U.S. Government Obligations or a combination thereof in an amount sufficient or Government Obligations, the principal of and the interest on which will be sufficient, or a combination thereof sufficient, to pay the principal of, and premium (if any) and interest on the applicable Notes when due at maturity or redemption, as the case may be, including interest thereon to maturity or such redemption date;
(ii) the Issuer delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be;
(iii) 123 days pass after the deposit is made and during the 123-day period no Default specified in Section 6.01(g) or (h) with respect to the Issuer occurs which is continuing at the end of the period;
(iv) the deposit does not constitute a default under any other agreement binding on Hexion and its Restricted Subsidiaries;
(v) the Issuer delivers to the Trustee an Opinion of Counsel stating that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940;
(vi) in the case of the legal defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date
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of this Indenture there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the beneficial owners will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. Notwithstanding the foregoing, the Opinion of Counsel required with respect to a legal defeasance need not be delivered if all the Notes, not theretofore delivered to the Trustee for cancellation have become due and payable;
(vii) in the case of the covenant defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that the beneficial owners will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and
(viii) the Issuer delivers to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article 8 have been complied with.
(b) Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or Government Obligations (including proceeds thereof) deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased.
SECTION 8.04. Repayment to the Issuer. Each of the Trustee and each Paying Agent shall promptly turn over to the Issuer upon request any money or Government Obligations held by it as provided in this Article which, in the written opinion of nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article.
Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.
SECTION 8.05. Indemnity for Government Obligations. The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited Government Obligations or the principal and interest received on such Government Obligations.
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SECTION 8.06. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers and the Guarantors obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or any Paying Agent is permitted to apply all such money or Government Obligations in accordance with this Article 8; provided, however, that, if the Issuer has made any payment of principal of or interest on, any such Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or any Paying Agent.
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of the Holders. The Issuer, the Guarantors, the Trustee and the First Lien Collateral Agent may amend this Indenture, the Notes, any Security Document, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements without notice to or consent of any Holder:
(i) to cure any ambiguity, omission, defect, mistake or inconsistency;
(ii) to comply with Article 5;
(iii) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code);
(iv) to add Guarantees with respect to the Notes;
(v) to add additional secured creditors holding Junior Priority Obligations or other First Priority Lien Obligations or ABL Obligations, in each case so long as such obligations are not prohibited by this Indenture;
(vi) to add to the covenants of Hexion or any Restricted Subsidiaries for the benefit of the Holders or to surrender any right or power herein conferred upon the Issuer or any Guarantor;
(vii) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA (if the Issuer elects to qualify this Indenture under the TIA);
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(viii) to make any change that does not adversely affect the rights of any Holder;
(ix) to conform the text of this Indenture, the Notes, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements, to any provision of the Description of the Notes in the Offering Circular to the extent that such provision in such Description of the Notes was intended by the Issuer to be a verbatim recitation of a provision of this Indenture, the Notes, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements, as stated in an Officers Certificate;
(x) to provide for the issuance of Additional Notes;
(xi) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes; provided, however, that (a) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of holders to transfer Notes;
(xii) to secure the Notes or to add additional assets as Collateral; or
(xiii) to release Collateral from the Lien pursuant to this Indenture, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements when permitted or required by this Indenture or the Security Documents or the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements.
After an amendment under this Section 9.01 becomes effective, the Issuer shall send to the respective Holders a notice briefly describing such amendment. The failure to give such notice to all Holders entitled to received such notice, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01. In addition, to the extent permitted by the ABL Intercreditor Agreement, any amendment, waiver or consent to any of the collateral documents with respect to the ABL Obligations in respect of any ABL Priority Collateral shall apply automatically to the Security Documents with respect to the Notes in respect of such ABL Priority Collateral and, to the extent permitted by the First Lien Intercreditor Agreement, any amendment, waiver or consent to any of the collateral documents with respect to First Priority Lien Obligations under each of the Existing First Lien Notes Indentures in respect of any Collateral (or, to the extent a Credit Agreement is incurred in the future, such Credit Agreement) shall also apply automatically to the Security Documents with respect to the Notes in respect of such Collateral.
SECTION 9.02. With Consent of the Holders. (a) The Issuer, the Trustee and, if applicable, the First Lien Collateral Agent, may amend this Indenture, the Notes, any Security Document, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding (which consents may be
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obtained in connection with a tender offer or exchange offer for the Notes) and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes). Notwithstanding the foregoing, without the consent of each Holder of an outstanding Note affected, no amendment may:
(i) reduce the amount of Notes whose Holders must consent to an amendment,
(ii) reduce the rate of or extend the time for payment of interest on any Note,
(iii) reduce the principal of or change the Stated Maturity of any Note,
(iv) reduce the amount payable upon the redemption of any Note or change the time when any Note may be redeemed in accordance with Article 3,
(v) make any Note payable in money other than that stated in such Note,
(vi) make any change in Section 6.07 or the second sentence of this Section 9.02,
(vii) impair the contractual right of any holder to receive payment of principal of, premium, if any, and interest on such holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holders Notes,
(viii) expressly subordinate the Notes or any Guarantee to any other Indebtedness of the Issuer or any Guarantor,
(ix) except as expressly permitted by this Indenture, modify the Guarantees in any manner adverse to the Holders, or
(x) make any change to the provisions of the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement, the Junior Priority Intercreditor Agreements or the provisions of this Indenture with respect to the pro rata application of proceeds of Collateral in respect of the Notes required thereby in a manner that by its terms modifies the application of such proceeds in respect of the Notes required thereby to be on a less than pro rata basis to the holder of such Note.
Without the consent of the holders of at least two-thirds in aggregate principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes), no amendment or waiver may release from the Lien of this Indenture and the Security Documents all or substantially all of the Collateral.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
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(b) After an amendment under this Section 9.02 becomes effective, the Issuer shall send to the Holders a notice briefly describing such amendment. However, the failure to give such notice to all Holders entitled to receive such notice, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03. [Intentionally Omitted].
SECTION 9.04. Revocation and Effect of Consents and Waivers. (a) A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holders Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holders Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers Certificate from the Issuer certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuer or the Trustee of consents by the Holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee.
(b) The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of a Note, the Issuer may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities, protections, privileges, indemnities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and the Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).
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SECTION 9.07. Additional Voting Terms; Calculation of Principal Amount. Except as expressly provided in this Indenture, including under Section 9.02, all Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class. Determinations as to whether Holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article 9 and Section 2.14.
ARTICLE 10
GUARANTEES
SECTION 10.01. Guarantees. (a) Following the Issuers Assumption, each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety on a senior basis, to each Holder and to the Trustee and its successors and assigns (i) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Issuer under this Indenture (including obligations to the Trustee) and the Notes, whether for payment of principal of, premium, if any, or interest on in respect of the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuer whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the Guaranteed Obligations). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation. The Guaranteed Obligations of a Guarantor will be secured by security interests in the Collateral owned by such Guarantor to the extent provided for in the Security Documents and as required pursuant to Sections 4.12 and 4.14.
(b) Each Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuer or any other Person under this Indenture, the Notes, any Security Document, or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes, any Security Document or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes, any Security Document or any other agreement; (iv) the release of any security held by the First Lien Collateral Agent for the benefit of Holders and the Trustee for the Guaranteed Obligations or any Guarantor; (v) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor, except as provided in Section 10.02(b).
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(c) Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantors obligations would be less than the full amount claimed. Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuer or any other Guarantor first be used and depleted as payment of the Issuers or such Guarantors obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Issuer be sued prior to an action being initiated against such Guarantor.
(d) Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by the First Lien Collateral Agent on behalf of the Holders and the Trustee to any security held for payment of the Guaranteed Obligations.
(e) Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes, any Security Document or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.
(f) Each Guarantor agrees that, subject to Section 10.02, its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer or otherwise.
(g) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuer to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuer to the Holders and the Trustee.
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(h) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 10.01.
(i) Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.
(j) Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 10.02. Limitation on Liability. (a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Guarantor, voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
(b) A Guarantee as to any Restricted Subsidiary shall terminate and be of no further force or effect and such Subsidiary Guarantor shall be deemed to be released from all obligations under this Article 10 upon one or more of the following circumstances:
(i) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of all or substantially all the assets, of the applicable Subsidiary Guarantor if such sale, disposition or other transfer is made in compliance with this Indenture, in each case other than to Hexion or a Subsidiary of Hexion; provided, however, that such Guarantor is released from its guarantees, if any, of, and all pledges and security, if any, granted in connection with, the ABL Facility and any other Indebtedness of Hexion or any Subsidiary Guarantor;
(ii) Hexion designating such Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.04 and the definition of Unrestricted Subsidiary;
(iii) the release or discharge of all guarantees by such Restricted Subsidiary and the repayment of all Indebtedness and retirement of all Disqualified Stock of such Restricted Subsidiary which, if Incurred by such Restricted Subsidiary, would require such Restricted Subsidiary to guarantee the Notes under Section 4.11;
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(iv) the Issuers exercise of its legal defeasance option or covenant defeasance option as described under Section 8.01 with respect to the Notes, or if the Issuers obligations under this Indenture are discharged in accordance with the terms of this Indenture; and
(v) such Restricted Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest in favor of First Priority Lien Obligations, subject to, in each case, the application of the proceeds of such foreclosure in the manner described under Section 11.03.
SECTION 10.03. Successors and Assigns. This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.
SECTION 10.05. Modification. No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 10.06. Execution of Supplemental Indenture for Future Guarantors. Each Person which is required to become a Guarantor after the Issue Date pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to which such Person shall become a Guarantor under this Article 10 and shall guarantee the Guaranteed Obligations. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel and an Officers Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Person and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Guarantee of such Guarantor is a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms or to such other matters as the Trustee may reasonably request.
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ARTICLE 11
SECURITY DOCUMENTS
SECTION 11.01. Collateral and Security Documents. (a) On and after the Issue Date (following the Issuers Assumption), the due and punctual payment of the principal of and interest on the Notes when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of and interest on the Notes and performance of all other Notes Obligations of the Issuer and the Guarantors to the Holders, the Trustee or the First Lien Collateral Agent under this Indenture, the Notes and the Security Documents, according to the terms hereunder or thereunder, shall be secured as provided in the Security Documents, which define the terms of the Liens that secure such obligations, subject to the terms of the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements. The Trustee and the Issuer hereby acknowledge and agree that subject to the terms of the Senior Intercreditor Agreements and the Junior Priority Intercreditor Agreements, the First Lien Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, pursuant to the terms of the Security Documents, the Senior Intercreditor Agreements and the Junior Priority Intercreditor Agreements. Each Holder, by accepting a Note, consents and agrees to the terms of the Security Documents (including the provisions providing for foreclosure and release of Collateral) and the Senior Intercreditor Agreements as the same may be in effect or may be amended from time to time in accordance with their terms and this Indenture, and authorizes and directs the First Lien Collateral Agent and, as applicable, the Trustee to enter into the Security Documents, the Senior Intercreditor Agreements and the Junior Priority Intercreditor Agreements and any amendments, supplements, joinders or other modifications of the foregoing, in each case in accordance with its terms, to perform its obligations and exercise its rights thereunder in accordance therewith. The Issuer shall do or cause to be done all such acts and things as may be reasonably required by the next sentence of this Section 11.01, to assure and confirm to the First Lien Collateral Agent the security interest in the Collateral contemplated hereby, by the Security Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purposes herein expressed. Hexion shall take, and shall cause its Subsidiaries to take, any and all actions reasonably required to cause the Security Documents to create and maintain, as security for the Obligations of the Issuer and the Guarantors hereunder, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Senior Intercreditor Agreements and the Junior Priority Intercreditor Agreements), in favor of the First Lien Collateral Agent for the benefit of the Trustee and the Holders, on a pari passu basis with any and all security interests (other than property and assets of Foreign Subsidiaries and on Excluded Assets) at any time granted in the Collateral to secure the other First Priority Lien Obligations. Notwithstanding the foregoing, the First Lien Intercreditor Agreement and the Security Documents may be amended from time to time to add other parties holding other First Priority Lien Obligations permitted to be incurred under Sections 4.03 and 4.12, and the Senior Intercreditor Agreements and Junior Priority Intercreditor Agreements may be amended from time to time to add, as applicable, other parties holding other First Priority Lien Obligations, ABL Obligations and Junior Priority Obligations permitted to be incurred under Sections 4.03, 4.12 and 4.17.
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On the Issue Date (following the Issuers Assumption), the Issuer and the Guarantors shall grant a security interest in all their assets constituting Collateral (other than Excluded Assets) that are pledged to secure the other First Priority Lien Obligations on the Issue Date by executing a Collateral Agreement Supplement and such other security documents or joinders thereto that shall be reasonably necessary (as determined by the Issuer in good faith) to provide a security interest in such Notes Priority Collateral that is pari passu with the security interest in such Notes Priority Collateral that is securing the other First Priority Lien Obligations and a second-priority security interest in the ABL Priority Collateral that is junior to the security interest securing the ABL Facility, in each case, in effect on the Issue Date (following the Issuers Assumption). Notwithstanding the foregoing, to the extent that any instrument or deliverable that is required to be delivered pursuant to the preceding sentence is not delivered on or prior to the Issue Date (following the Issuers Assumption), the Issuer shall use commercially reasonable efforts to deliver such instruments and deliverables within 30 days after the Issue Date.
(b) Notwithstanding the foregoing, the Capital Stock and securities of the Subsidiaries of Hexion (other than Hexion Coop) that are owned by Hexion or any Guarantor will constitute Collateral only to the extent that such Capital Stock and securities can secure the Notes without Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act (Rule 3-10 and Rule 3-16, respectively) (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency):
(i) in the event that either Rule 3-10 or Rule 3-16 requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary (other than Hexion Coop) due to the fact that such Subsidiarys Capital Stock or securities secure the Notes, the performance of Guaranteed Obligations of the Issuer or any Guarantee, then the Capital Stock and/or securities of such Subsidiary shall automatically be deemed not to be part of the Collateral, but only to the extent necessary to not be subject to such requirement (and, in such event, the Security Documents may be amended or modified, without the consent of the Trustee or any Holder of the Notes, to the extent necessary to release the security interests on the shares of Capital Stock and securities that are so deemed to no longer constitute part of the Collateral); and
(ii) in the event that either Rule 3-10 or Rule 3-16 is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiarys Capital Stock and securities to secure the Notes in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Capital Stock and securities of such Subsidiary shall automatically be deemed to be a part of the Collateral but only to the extent necessary to not be subject to any such financial statement requirement (and, in such event, the Security Documents may be amended or modified, without the consent of any Holder of the Notes, to the extent necessary to subject to the Liens under the Security Documents securing the Notes such additional Capital Stock and securities).
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SECTION 11.02. Recordings and Opinions. The Issuer and the Guarantors shall furnish to the Trustee, on or before the time when Hexion is required to provide annual reports pursuant to Section 4.02 with respect to the preceding fiscal year, an Opinion of Counsel:
(1) | stating substantially to the effect that, in the opinion of such counsel, such action has been taken with respect to the recordings, registerings, filings, re-recordings, re-registerings and re-filings of this Indenture, the Security Documents and all financing statements, continuation statements or other instruments of further assurance as is necessary to maintain the Lien of this Indenture or any Security Documents in the Collateral and reciting with respect to the security interests in such Collateral the details of such action or referencing to prior Opinions of Counsel in which such details are given; or |
(2) | to the effect that, in the opinion of such counsel, no such action is necessary to maintain such Lien under this Indenture and the Security Documents. |
SECTION 11.03. Release of Collateral. (a) Subject to subsections (b) and (c) of this Section 11.03, Collateral may be released from the Lien and security interest created by the Security Documents at any time or from time to time in accordance with the provisions of the Security Documents, the ABL Intercreditor Agreement and the First Lien Intercreditor Agreement or as provided hereby. Upon the request of the Issuer pursuant to an Officers Certificate certifying that all conditions precedent hereunder have been met, the Issuer and the Guarantors will be entitled to a release of assets included in the Collateral from the Liens securing the Notes, and the First Lien Collateral Agent and the Trustee (if the Trustee is not then the First Lien Collateral Agent) shall release the same from such Liens at the Issuers sole cost and expense, under one or more of the following circumstances:
(1) | [Reserved.] |
(2) | to enable the Issuer or any Restricted Subsidiary to consummate the disposition of such property or assets to the extent not prohibited under Section 4.06; |
(3) | in the case of a Guarantor that is released from its Guarantee with respect to the Notes, the release of the property and assets of such Guarantor; |
(4) | if the Notes have been discharged or defeased pursuant to Section 8.01; |
(5) | in the case of a Guarantor making a Permitted Transfer to any Restricted Subsidiary of Hexion; provided that such Permitted Transfer is permitted by clause (y) of the last paragraph of Article 5; |
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(6) | in respect of the property and assets of a Restricted Subsidiary that is a Guarantor, upon the designation of such Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.04 and the definition of Unrestricted Subsidiary under Section 1.01; |
(7) | in respect of the property and assets of a Guarantor that at any time is not subject to a Lien securing any other First Priority Lien Obligations at such time (provided that if such property and assets is subsequently subject to a Lien securing any other First Priority Lien Obligations (other than Excluded Assets), such property and assets shall subsequently constitute Collateral hereunder) other than (x) if such release is in connection with a release or discharge by or as a result of payment in respect of other First Priority Lien Obligations or (y) if such release is due to a release of Liens by holders under other First Priority Lien Obligations, at any time that Indebtedness under such other First Priority Lien Obligations do not constitute a majority of the aggregate principal amount of Indebtedness constituting First Priority Lien Obligations outstanding at such time; |
(8) | pursuant to an amendment or waiver in accordance with Article 9 of this Indenture; or |
(9) | in respect of any property and assets of the Issuer or a Guarantor that would constitute ABL Priority Collateral but is at such time not subject to a Lien securing ABL Obligations, other than any assets or property that cease to be subject to a Lien securing ABL Obligations in connection with a release or discharge by or as a result of payment in full and termination of the ABL Facility; provided that if such property and assets are subsequently subject to a Lien securing ABL Obligations (other than Excluded Assets), such property and assets shall subsequently constitute Collateral hereunder. |
Upon receipt of such Officers Certificate and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuer, the First Lien Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Security Documents or the First Lien Intercreditor Agreement or the ABL Intercreditor Agreement.
(b) Except as otherwise provided in the First Lien Intercreditor Agreement or the ABL Intercreditor Agreement, no Collateral may be released from the Lien and security interest created by the Security Documents unless an Officers Certificate and Opinion of Counsel, dated not more than five days prior to the date of the application for such release, have been delivered to the First Lien Collateral Agent and the Trustee (if the Trustee is not then the First Lien Collateral Agent) certifying that all conditions precedent, including, without limitation, this Section 11.03, have been met and stating under which of the circumstances set forth in Section 11.03(a) above the Collateral is being released.
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(c) At any time when a Default or Event of Default has occurred and is continuing and the maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee (if not then the First Lien Collateral Agent) has delivered a notice of acceleration to the First Lien Collateral Agent, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents will be effective as against the Holders, except as otherwise provided in the First Lien Intercreditor Agreement or the ABL Intercreditor Agreement.
SECTION 11.04. Permitted Releases Not To Impair Lien. The release of any Collateral from the terms hereof and of the Security Documents or the release of, in whole or in part, the Liens created by the Security Documents, will not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral or Liens are released pursuant to (x) the applicable Security Documents and the terms of this Article 11 or (y) the First Lien Intercreditor Agreement or the ABL Intercreditor Agreement. The Trustee and each of the Holders acknowledge that a release of Collateral or a Lien strictly in accordance with the terms of the Security Documents, the First Lien Intercreditor Agreement or the ABL Intercreditor Agreement and of this Article 11 will not be deemed for any purpose to be in contravention of the terms of this Indenture.
SECTION 11.05. Certificates of the Trustee. In the event that the Issuer wishes to release Collateral in accordance with this Indenture and the Security Documents and the First Lien Intercreditor Agreement at a time when the Trustee is not itself also the First Lien Collateral Agent and the Issuer has delivered the certificates and documents required by the Security Documents and Section 11.03 hereof, the Trustee will determine whether it has received all documentation required by this Indenture in connection with such release and, based on such determination, will deliver a certificate to the First Lien Collateral Agent setting forth such determination.
SECTION 11.06. Suits To Protect the Collateral. Subject to the provisions of Article 7 hereof, the Security Documents and the Senior Intercreditor Agreements, the Trustee in its sole discretion and without the consent of the Holders, on behalf of the Holders, may or may direct the First Lien Collateral Agent to take all actions it deems necessary or appropriate in order to:
(a) enforce any of the terms of the Security Documents; and
(b) collect and receive any and all amounts payable in respect of the Guaranteed Obligations of the Issuer hereunder.
Subject to the provisions of the Security Documents and the Senior Intercreditor Agreements, the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits and proceedings as the Trustee, in its sole discretion, may deem expedient to preserve or protect its interests and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the Lien on the Collateral or be prejudicial to the interests of the Holders or the Trustee).
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SECTION 11.07. Authorization of Receipt of Funds by the Trustee Under the Security Documents. Subject to the provisions of the Senior Intercreditor Agreements, the Trustee is authorized to receive any funds for the benefit of the Holders distributed under the Security Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture.
SECTION 11.08. Purchaser Protected. In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the First Lien Collateral Agent or the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article 11 to be sold be under any obligation to ascertain or inquire into the authority of the Issuer or the applicable Guarantor to make any such sale or other transfer.
SECTION 11.09. Powers Exercisable by Receiver or Trustee. In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 11 upon the Issuer or a Guarantor with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Issuer or a Guarantor or of any officer or officers thereof required by the provisions of this Article 11; and if the Trustee, the First Lien Collateral Agent or a nominee of the Trustee or First Lien Collateral Agent shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee, the First Lien Collateral Agent or a nominee of the Trustee or First Lien Collateral Agent.
SECTION 11.10. Release Upon Termination of the Issuers Obligations. In the event that the Issuer delivers to the Trustee an Officers Certificate certifying that all the obligations under this Indenture and the Notes (and, to the extent relating to the foregoing, the Security Documents), have been satisfied and discharged by complying with the provisions of Article 8 and Section 7.07 or by the payment in full of the Issuers obligations under the Notes and this Indenture (and, to the extent relating to the foregoing, the Security Documents), and all such obligations have been so satisfied, the Trustee shall deliver to the Issuer and, if the Trustee is not then the First Lien Collateral Agent, the First Lien Collateral Agent a notice stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral (other than with respect to funds held by the Trustee pursuant to Article 8), and any rights it has under the Security Documents, and upon receipt by the First Lien Collateral Agent of such notice (or, if the Trustee is then the First Lien Collateral Agent, upon receipt of such Officers Certificate and upon satisfaction of all such obligations), the First Lien Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary to release such Lien as soon as is reasonably practicable.
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SECTION 11.11. First Lien Collateral Agent. (a) The First Lien Collateral Agent shall initially act as collateral agent and shall be authorized to appoint co-First Lien Collateral Agents as necessary in its sole discretion, to the extent set forth in the First Lien Intercreditor Agreement. Except as otherwise explicitly provided herein or in the Security Documents and the Senior Intercreditor Agreements, neither the First Lien Collateral Agent nor any of its respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The First Lien Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the First Lien Collateral Agent nor any of its officers, directors, employees or agents shall be responsible for any act or failure to act hereunder, except for its own willful misconduct, gross negligence or bad faith.
(b) The First Lien Collateral Agent is authorized and directed to (i) enter into the Collateral Agreement Supplement, the New Senior Secured Intercreditor Agreement and any other Security Documents, as of the Issue Date, and thereafter, any amendments, supplements, joinders or modifications thereto in accordance with the terms thereof, (ii)(x) as of the Issue Date, enter into joinders to the First Lien Intercreditor Agreement, ABL Intercreditor Agreement and the applicable Junior Priority Intercreditor Agreement, and (y) after the Issue Date, enter into any amendments, supplements, joinders or other modifications to each applicable Senior Intercreditor Agreement and each applicable Junior Priority Intercreditor Agreement in accordance with the terms of such applicable Senior Intercreditor Agreement and Junior Priority Intercreditor Agreement and the terms hereof, (iii) bind the Holders on the terms as set forth in the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements and (iv) perform and observe its obligations under the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements.
(c) If the Issuer (i) Incurs First Priority Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting First Priority Lien Obligations entitled to the benefit of the First Lien Intercreditor Agreement is concurrently retired, and (ii) delivers to the First Lien Collateral Agent an Officers Certificate so stating and requesting the First Lien Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the First Lien Intercreditor Agreement in effect on the Issue Date) in favor of a designated agent or representative for the holders of the First Priority Lien Obligations so Incurred, the First Lien Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement, in order to bind the Holders on the terms set forth therein and perform and observe its obligations thereunder. If the Issuer (i) Incurs Junior Priority Lien Obligations at any time when no junior lien intercreditor agreement is in effect or at any time when Indebtedness constituting Junior Priority Lien Obligations entitled to the benefit of each applicable Junior Lien Intercreditor Agreement is concurrently retired, and (ii) delivers to the First Lien Collateral Agent an Officers Certificate so stating and requesting the First Lien Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as each applicable Junior Lien Intercreditor Agreement in effect on the Issue Date) to effect the lien subordination and other terms contemplated by the terms of such Junior Priority Lien Obligations so Incurred, the First Lien Collateral Agent shall (and is hereby authorized and
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directed to) enter into such intercreditor agreement, in order to bind the Holders on the terms set forth therein and perform and observe its obligations thereunder. If the Issuer (i) Incurs ABL Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting ABL Obligations entitled to the benefit of the ABL Intercreditor Agreement is concurrently retired, and (ii) delivers to the First Lien Collateral Agent an Officers Certificate so stating and requesting the First Lien Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the ABL Intercreditor Agreement in effect on the Issue Date) to effect the lien subordination (solely with respect to ABL Priority Collateral) in favor of a designated agent or representative for the holders of the ABL Obligations so Incurred and the other terms contemplated by the terms of such ABL Obligations, the First Lien Collateral shall (and is hereby authorized and directed to) enter into such intercreditor agreement in order to bind the Holders on the terms set forth therein and perform and observe its obligations thereunder.
(d) Subject to Section 7.01, neither the Trustee nor the First Lien Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Lien security the Notes Obligations, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Liens security the Notes Obligations or the Security Documents or any delay in doing so.
(e) The First Lien Collateral Agent will be subject to such directions as may be given it by the Trustee from time to time (as required or permitted by this Indenture); provided that in the event of conflict between directions received pursuant to the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements and directions received hereunder, the First Lien Collateral Agent will be subject to directions received pursuant to the Security Documents and the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements. Except as directed by the Trustee as required or permitted by this Indenture and any other representatives pursuant to the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements, the First Lien Collateral Agent will not be obligated:
(x) to act upon directions purported to be delivered to it by any other Person;
(y) to foreclose upon or otherwise enforce any Lien securing the Notes Obligations; or
(z) to take any other action whatsoever with regard to any or all of the Liens securing the Notes Obligations, Security Documents or Collateral.
(f) The First Lien Collateral Agent will be accountable only for amounts that it actually receives as a result of the enforcement of the Liens securing the Notes Obligations or the Security Documents.
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(g) In acting as First Lien Collateral Agent or co-First Lien Collateral Agent, the First Lien Collateral Agent and each co-First Lien Collateral Agent may rely upon and enforce each and all of the rights, protections, privileges, powers, immunities, indemnities and benefits of the Trustee under Article 7 hereof.
(h) The Holders of Notes agree that the First Lien Collateral Agent shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the First Lien Collateral Agent by this Indenture and the Security Documents. Furthermore, each Holder of a Note, by accepting such Note, consents to the terms of and authorizes and directs the Trustee (in each of its capacities) and the First Lien Collateral Agent to enter into and perform each of the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement, the Junior Priority Intercreditor Agreements and Security Documents in each of its capacities thereunder.
(i) At all times when the Trustee is not itself the First Lien Collateral Agent, the Issuer will deliver to the Trustee copies of all Security Documents delivered to the First Lien Collateral Agent and copies of all documents delivered to the First Lien Collateral Agent pursuant to this Indenture and the Security Documents.
SECTION 11.12. Designations. Except as provided in the next sentence, for purposes of the provisions hereof and the First Lien Intercreditor Agreement, ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements requiring the Issuer to designate Indebtedness for the purposes of the terms First Priority Lien Obligations and Junior Priority Obligations or any other such designations hereunder or under the First Lien Intercreditor Agreement, ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements, any such designation shall be sufficient if the relevant designation is set forth in writing, signed on behalf of the Issuer by an Officer and delivered to the Trustee, the First Lien Collateral Agent, the ABL Collateral Agent, the Authorized Representative and the Junior Priority Intercreditor Agent. For all purposes hereof, the First Lien Intercreditor Agreement, ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements, the Issuer hereby designates the Obligations pursuant to the Existing First Lien Notes and the Notes as First Priority Lien Obligations and Obligations under the ABL Facility as in effect on the Issue Date as ABL Obligations (other than under the Junior Priority Intercreditor Agreements, in which such Obligations under the ABL Facility (in effect on the Issue Date) constitute Senior Lender Claims thereunder).
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. [Intentionally Omitted] .
SECTION 12.02. Notices. (a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:
if to the Issuer or a Guarantor: | ||
Hexion Inc. | ||
180 East Broad St. | ||
Columbus, OH 43215 | ||
Attention of: General Counsel | ||
Facsimile: (614) 225-3354
|
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if to the Trustee: | ||
Wilmington Trust, National Association | ||
50 South Sixth Street, Suite 1290 | ||
Minneapolis, MN 55402-1544 | ||
Attention of: Hexion Notes Administrator | ||
Facsimile: (612) 217-5651 |
The Issuer or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
(b) Any notice or communication mailed to a Holder shall be mailed, first class mail, to the Holder, or delivered electronically if held by the Depository, at the Holders address as it appears on the registration books of the Registrar and shall be sufficiently given if so sent within the time prescribed.
(c) Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.
SECTION 12.03. [Intentionally Omitted].
SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee at the request of the Trustee:
(a) an Officers Certificate in form reasonably satisfactory to the Trustee 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
(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:
(a) a statement that the individual making such certificate or opinion has read such covenant or condition;
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(b) 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;
(c) a statement that, in the opinion of such individual, 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
(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers Certificate or certificates of public officials.
SECTION 12.06. When Notes Disregarded. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, any Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of the Holders. The Registrar and a Paying Agent may make reasonable rules for their functions.
SECTION 12.08. Legal Holidays. If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular record date is not a Business Day, the record date shall not be affected.
SECTION 12.09. Governing Law. This Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the state of New York.
SECTION 12.10. No Recourse Against Others. No affiliate, director, officer, employee, incorporator or holder of any Equity Interests in Hexion or of any Guarantor or any direct or indirect parent corporation of Hexion, as such, shall have any liability for any obligations of the Issuer or the Guarantors under the Notes or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation; provided, however, the foregoing will not affect or limit any liability of any Guarantor under this Indenture or its Guarantee. Each Holder of Notes by accepting a Note waives and releases all such liability.
SECTION 12.11. Successors. All agreements of the Issuer and each Guarantor in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
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SECTION 12.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.
SECTION 12.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 12.14. Indenture Controls. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.
SECTION 12.15. Severability. In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.
SECTION 12.16. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee and the First Lien Collateral Agent, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee and the First Lien Collateral Agent. The parties to this Indenture agree that they will provide the Trustee and the First Lien Collateral Agent with such information as it may request in order for the Trustee and the First Lien Collateral Agent to satisfy the requirements of the U.S.A. Patriot Act.
ARTICLE 13
ISSUERS ASSUMPTION
SECTION 13.01. Issuers Assumption. Notwithstanding anything in this Indenture, on the Issue Date immediately after the Notes are issued (given the satisfaction of all Escrow Conditions (as defined in the Offering Circular) on the Issue Date), (i) Hexion shall assume all of the Escrow Issuers obligations (including Obligations) with respect to the Notes and this Indenture as if Hexion had itself issued the Notes, (ii) Hexion CI Holding Company (China) LLC, HSC Capital Corporation, Lawter International Inc., Hexion Investments Inc., Hexion International Inc., NL Coop Holdings LLC and Oilfield Technology Group, Inc. shall Guarantee the Obligations with respect to the Notes on the terms set forth in Article 10 hereof and (iii) the Escrow Issuers Obligations with respect to the Notes shall be released, pursuant to the Issuers Assumption so long as such parties shall have:
(a) executed and delivered to the Trustee a supplemental indenture substantially in the form of Exhibit D pursuant to which the foregoing assumptions, guarantees and releases shall be effected; and
(b) with respect to Hexion CI Holding Company (China) LLC, HSC Capital Corporation, Lawter International Inc., Hexion Investments Inc., Hexion International Inc., NL Coop Holdings LLC and Oilfield Technology Group, Inc., executed and delivered to the Initial Purchasers the Joinder to the Purchase Agreement.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
HEXION 2 U.S. FINANCE CORP. | ||
By: | /s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer |
[SIGNATURE PAGE TO 1L NOTES INDENTURE]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
By: | /s/ Jane Schweiger | |
Name: Jane Schweiger | ||
Title: Vice President |
[SIGNATURE PAGE TO 1L NOTES INDENTURE]
APPENDIX A
RULE 144A/REGULATION S/IAI APPENDIX
PROVISIONS RELATING TO INITIAL NOTES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the meanings indicated below:
Applicable Procedures means, with respect to any transfer or transaction involving a Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depository for such a Temporary Regulation S Global Note, to the extent applicable to such transaction and as in effect from time to time.
Definitive Note means a certificated Initial Note bearing, if required, the appropriate restricted notes legend set forth in Section 2.3(e).
Depository means The Depository Trust Company, its nominees and their respective successors.
Distribution Compliance Period, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Notes.
Global Notes Legend means the legend set forth under that caption in the applicable Exhibit to this Indenture.
IAI means an institutional accredited investor, as defined in Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act.
Initial Notes means the initial $485,000,000 in aggregate principal amount of 10.375% First-Priority Senior Secured Notes due 2022 issued on the Issue Date.
Initial Purchasers means (a) with respect to the Initial Notes issued on the Issue Date, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., Wells Fargo Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and Citizens Capital Markets, Inc., and (b) with respect to each issuance of Additional Notes, the Persons purchasing or underwriting such Additional Notes under the related Purchase Agreement.
Notes means the Initial Notes.
Notes Custodian means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto, and shall initially be the Trustee.
Purchase Agreement means (a) with respect to the Initial Notes issued on the Issue Date, (i) the Purchase Agreement dated January 25, 2017, among the Escrow Issuer and the Initial Purchasers and (b) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Issuer, the Guarantors and the Persons purchasing or underwriting such Additional Notes.
QIB means a qualified institutional buyer as defined in Rule 144A.
Restricted Notes Legend means the legend set forth under that caption in the applicable Exhibit to this Indenture.
Rule 144A Notes means all Notes offered and sold to QIBs in reliance on Rule 144A.
Securities Act means the Securities Act of 1933, as amended.
Transfer Restricted Notes means Notes that bear or are required to bear a legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e).
Appendix-2
1.2 Other Definitions
Term |
Defined in Section: | |
Agent Members |
2.1(b) | |
Global Notes |
2.1(a) | |
IAI Global Note |
2.1(a) | |
Permanent Regulation S Global Note |
2.1(a) | |
Regulation S |
2.1(a) | |
Regulation S Global Note |
2.1(a) | |
Rule 144A |
2.1(a) | |
Rule 144A Global Note |
2.1(a) | |
Temporary Regulation S Global Note |
2.1(a) |
2. The Notes
2.1 (a) Form and Dating. The Initial Notes will be offered and sold by the Issuer pursuant to the Purchase Agreement. The Initial Notes will be resold initially by the Initial Purchasers only to (i) QIBs in reliance on Rule 144A under the Securities Act (Rule 144A) and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act (Regulation S). Initial Notes may thereafter be transferred to, among others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the Rule 144A Global Note); Initial Notes initially resold to IAIs shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the IAI Global Note); and Initial Notes initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary global notes in fully registered form (collectively, the Temporary Regulation S Global Note), in each case without interest coupons and with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Notes Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. Except as set forth in this Section 2.1(a), beneficial ownership interests in the Temporary Regulation S Global Note will not be exchangeable for interests in the Rule 144A Global Note, the IAI Global Note, a permanent global note (the Permanent Regulation S Global Note, and together with the Temporary Regulation S Global Note, the Regulation S Global Note) or any other Note prior to the expiration of the Distribution Compliance Period and then, after the expiration of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Note, an IAI Global Note or the Permanent Regulation S Global Note only upon certification to the Trustee that (i) beneficial ownership interests in such Temporary Regulation S Global Note are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act and (ii) in the case of an exchange for an IAI Global Note, certification that the interest in the Temporary Regulation S Global Note is being transferred to an institutional accredited investor under the Securities Act that is an institutional accredited investor acquiring the notes for its own account or for the account of an institutional accredited investor.
Appendix-3
Beneficial interests in Temporary Regulation S Global Notes (after the expiration of the Distribution Compliance Period) or IAI Global Notes may be exchanged for interests in Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary Regulation S Global Note or the IAI Global Note, as applicable, first delivers to the Trustee a written certificate (in a form satisfactory to the Trustee) to the effect that the beneficial interest in the Temporary Regulation S Global Note or the IAI Global Note, as applicable, is being transferred to a Person (a) who the transferor reasonably believes to be a QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable notes laws of the States of the United States and other jurisdictions.
Beneficial interests in Temporary Regulation S Global Notes (after the expiration of the Distribution Compliance Period) and Rule 144A Global Notes may be exchanged for an interest in IAI Global Notes if (1) such exchange occurs in connection with a transfer of the notes in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Note or Rule 144A Global Note, as applicable, first delivers to the Trustee a written certificate (substantially in the form of Exhibit 2) to the effect that (A) the Regulation S Global Note or Rule 144A Global Note, as applicable, is being transferred (a) to an accredited investor within the meaning of 501(a)(1), (2), (3) and (7) under the Securities Act that is an institutional investor acquiring the notes for its own account or for the account of such an institutional accredited investor, in each case in a minimum principal amount of the notes of $250,000, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act and (B) in accordance with all applicable securities laws of the States of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Note or an IAI Global Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form provided in this Indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).
The Rule 144A Global Note, the IAI Global Note, the Temporary Regulation S Global Note and the Permanent Regulation S Global Note are collectively referred to herein as Global Notes. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.
Appendix-4
The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depositorys instructions or held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository (Agent Members) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Note, and the Issuer, the Trustee and any agent of the Issuer, the Guarantors or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Guarantors, the Trustee or any agent of the Issuer, the Guarantors or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Note.
(c) Definitive Notes. Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Definitive Notes.
2.2 Authentication
The Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $485,000,000 Initial Notes and (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Issuer pursuant to Section 2.03 of the Indenture. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance and Additional Notes pursuant to Section 2.01 of this Indenture, shall certify that such issuance is in compliance with Section 4.03 of this Indenture.
2.3 Transfer and Exchange
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request:
(x) | to register the transfer of such Definitive Notes; or |
(y) | to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations, |
the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and
Appendix-5
(ii) if such Definitive Notes are required to bear a restricted notes legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:
(A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or
(B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect; or
(C) if such Definitive Notes are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Note) and (ii) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Rule 144A Global Note, an IAI Global Note or a Permanent Regulation S Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the Note, that such Definitive Note is either (A) being transferred to a QIB in accordance with Rule 144A, (B) being transferred to an IAI or (C) being transferred after expiration of the Distribution Compliance Period by a Person who initially purchased such Note in reliance on Regulation S to a buyer who elects to hold its interest in such Note in the form of a beneficial interest in the Permanent Regulation S Global Note; and
(ii) written instructions directing the Trustee to make, or to direct the Notes Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A)), IAI Global Note (in the case of a transfer pursuant to clause (b)(i)(B) or Permanent Regulation S Global Note (in the case of a transfer pursuant to clause (b)(i)(C)) to reflect an increase in the aggregate principal amount of the Notes represented by the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Note and cause, or direct the Notes Custodian to cause, in accordance with the standing instructions and procedures existing between the Depository and the Notes Custodian, the aggregate principal amount of Notes represented by the
Appendix-6
Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, equal to the principal amount of the Definitive Note so canceled. If no Rule 144A Global Notes, IAI Global Notes or Permanent Regulation S Global Notes, as applicable, are then outstanding, the Issuer shall issue and the Trustee shall authenticate, upon written order of the Issuer in the form of an Officers Certificate of the Issuer, a new Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes.
(i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depositorys procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions, instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.
(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except 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 such nominee to a successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 of this Appendix, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.
Appendix-7
(d) Restrictions on Transfer of Temporary Regulation S Global Notes. During the Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (i) to the Issuer, (ii) in an offshore transaction in accordance with Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global Note), (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Global Notes (and all Notes issued in exchange therefor or in substitution thereof), in the case of Notes offered otherwise than in reliance on Regulation S, shall bear a legend in substantially the following form:
This note (or its predecessor) was originally issued in a transaction exempt from registration under the United States Securities Act of 1933, as amended (the Securities Act), and this note may not be offered, sold or otherwise transferred in the absence of such registration or an applicable exemption therefrom. Each purchaser of this note is hereby notified that the seller of this note may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A thereunder.
The holder of this note agrees for the benefit of the issuer that (a) this note may be offered, resold, pledged or otherwise transferred, only (i) to the issuer, (ii) in the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (iii) to an accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the issuer that such transfer is in compliance with the Securities Act, (iv) outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act, (v) pursuant to exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi), in accordance with any applicable securities laws of any state of the United States, and (b) the holder will, and each subsequent holder is required to, notify any purchaser of this note from it of the resale restrictions referred to in (a) above.
Appendix-8
Each certificate evidencing a Note offered in reliance on Regulation S shall, in lieu of the foregoing, bear a legend in substantially the following form:
This note (or its predecessor) was originally issued in a transaction originally exempt from registration under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be transferred in the United States or to, or for the account or benefit of, any U.S. person except pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities laws. Terms used above have the meanings given to them in Regulation S under the Securities Act.
Each Definitive Note shall also bear the following additional legend:
In connection with any transfer, the holder will deliver to the registrar and transfer agent such certificates and other information as such transfer agent may reasonably require to confirm that the transfer complies with the foregoing restrictions.
(ii) Upon any sale or transfer of a Transfer Restricted Note (including any Transfer Restricted Note represented by a Global Note) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Note for a certificated Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Note, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).
(f) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
Appendix-9
(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(h) Exchange of Global Securities Upon Issuers Assumption. Upon the consummation of the Issuers Assumption, beneficial interests in a Global Security will be exchanged into beneficial interests in a new Global Security without any action required by or on behalf of the Holder (the Automatic Exchange). In order to effect the exchange, the Issuer may pursuant to the applicable procedures of the Depository (i) provide written notice to the Trustee at least five Business Days prior to the date of the exchange (the Automatic Exchange Date), instructing the Trustee to direct the Depository to exchange all of the outstanding beneficial interests in the outstanding Global Securities to new Global Securities, which the Issuer shall have previously otherwise made eligible for exchange with the Depository, (ii) provide prior written notice (the Exchange Notice) to each Holder of a Global Security at such Holders address appearing in the register of Holders no later than five Business Days prior to the Automatic Exchange Date (the Automatic Exchange Notice Date), which notice must include (w) the Automatic Exchange Date, (x) the section of the Indenture or the Security pursuant to which the Automatic Exchange shall occur, (y) the CUSIP number of the Global Security from which such Holders beneficial interests will be transferred and the (z) CUSIP number of the Global Security into which such Holders beneficial interests will be transferred, and (iii) on or prior to the Automatic Exchange Date, deliver to the Trustee for authentication one or more Global Securities, duly executed by the Issuer, in an aggregate principal amount equal to the Global Securities to be exchanged. At the Issuers request on no less than five Business Days notice prior to the Automatic Exchange Date, the Trustee shall deliver, in the Issuers name and at its expense, the Exchange Notice to each Holder at such Holders address appearing in the register of Holders. As a condition to the Automatic Exchange, the Issuer shall provide, and the Trustee shall be entitled to rely upon, an Officers Certificate certifying that the Automatic Exchange is permitted under the Indenture and that all conditions precedent, if any, have been satisfied. Upon such exchange of beneficial interests pursuant to this Section 2.3(h), the Trustee, upon written order of the Issuer, shall authenticate new Global Securities in the form of Exhibit E. The Global Securities from which beneficial interests are exchanged pursuant to the Automatic Exchange shall be canceled following the Automatic Exchange.
2.4 Certificated Notes
(a) A Global Note deposited with the Depository or with the Trustee as Notes Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies
Appendix-10
with Section 2.3 hereof and (i) the Depository notifies the Issuer that it is unwilling or unable to continue as Depository for such Global Note and the Depository fails to appoint a successor depositary or if at any time such Depository ceases to be a clearing agency registered under the Exchange Act and, in either case, a successor Depository is not appointed by the Issuer within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing and upon request by the Depository or any of its participants or (iii) the Issuer, in its sole discretion, notifies the Trustee and the Depository in writing that it elects to cause the issuance of Definitive Notes under this Indenture.
(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its corporate trust office, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in minimum denominations of $2,000 principal amount and any integral multiple of $1,000 in excess thereof and registered in such names as the Depository shall direct. Any Definitive Note delivered in exchange for an interest in the Transfer Restricted Note shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted notes legend and definitive note legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.
(d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Issuer shall promptly make available to the Trustee a reasonable supply of Definitive Notes in definitive, fully registered form without interest coupons. In the event that such Definitive Notes are not issued, the Issuer expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.06 of this Indenture, the right of any beneficial owner of Notes to pursue such remedy with respect to the portion of the Global Note that represents such beneficial owners Notes as if such Definitive Notes had been issued.
Appendix-11
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (DTC), New York, New York, to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC) any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
Transfers of this Global Note shall be limited to transfers in whole, but not in part, to nominees of DTC or to a successor thereof or such successors nominee and transfers of portions of this Global Note shall be limited to transfers made in accordance with the restrictions set forth in the indenture referred to on the reverse hereof.
[[For Regulation S Global Note only] Until 40 days after the later of commencement or completion of the offering, an offer or sale of notes within the United States by a dealer (as defined in the Securities Act) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A thereunder.]
[Restricted Notes Legend for Notes Offered Otherwise than in Reliance
on Regulation S]
This note (or its predecessor) was originally issued in a transaction exempt from registration under the United States Securities Act of 1933, as amended (the Securities Act), and this note may not be offered, sold or otherwise transferred in the absence of such registration or an applicable exemption therefrom. Each purchaser of this note is hereby notified that the seller of this note may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A thereunder.
The holder of this note agrees for the benefit of the issuer that (a) this note may be offered, resold, pledged or otherwise transferred, only (i) to the issuer, (ii) within the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (iii) to an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the issuer that such
transfer is in compliance with the Securities Act, (iv) outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) in accordance with any applicable securities laws of any state of the United States, and (b) the holder will, and each subsequent holder is required to, notify any purchaser of this note from it of the resale restrictions referred to in (a) above.
[Restricted Notes Legend for Notes Offered in Reliance on Regulation S.]
This note (or its predecessor) was originally issued in a transaction originally exempt from registration under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be transferred in the United States or to, or for the account or benefit of, any U.S. person except pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities laws. Terms used above have the meanings given to them in Regulation S under the Securities Act.
[Temporary Regulation S Global Note Legend]
Except as set forth below, beneficial ownership interests in this Temporary Regulation S Global Note will not be exchangeable for interests in the Permanent Regulation S Global Note or any other note representing an interest in the notes represented hereby which do not contain a legend containing restrictions on transfer, until the expiration of the 40-day distribution compliance period (within the meaning of Rule 903(b)(2) of Regulation S under the Securities Act) and then only upon certification to the trustee that such beneficial interests are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act. During such 40-day distribution compliance period, beneficial ownership interests in this Temporary Regulation S Global Note may only be sold, pledged or transferred (i) to the Issuer, (ii) outside the United States in a transaction in accordance with Rule 904 of Regulation S under the Securities Act, or (iii) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (iii) in accordance with any applicable securities laws of any state of the United States. Holders of interests in this Temporary Regulation S Global Note will notify any purchaser of this note of the resale restrictions referred to above, if then applicable.
After the expiration of the distribution compliance period, beneficial interests in this Temporary Regulation S Global Note may be exchanged for interests in a Rule 144A Global Note only if (1) such exchange occurs in connection with a transfer of the notes in compliance with Rule 144A and (2) the transferor of the Regulation S Global Note first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that the Regulation S Global Note is being transferred (a) to a person who the transferor reasonably believes to be a qualified institutional buyer within the meaning of Rule 144A, (b) to a person who is purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable securities laws of the states of the United States and other jurisdictions.
2
After the expiration of the distribution compliance period, beneficial interests in this Temporary Regulation S Global Note may be exchanged for interests in an IAI Global Note only if (1) such exchange occurs in connection with a transfer of the notes in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Note first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that the Regulation S Global Note is being transferred (a) to an institutional accredited investor within the meaning of Rule 501(a)(1),(2),(3) or (7) under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the Issuer that such transfer is in compliance with the Securities Act and (b) in accordance with all applicable securities laws of the states of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Note or an IAI Global Note may be transferred to a person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the 40-day distribution compliance period, only if the transferor first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available).
[Definitive Notes Legend]
In connection with any transfer, the holder will deliver to the registrar and transfer agent such certificates and other information as such transfer agent may reasonably require to confirm that the transfer complies with the foregoing restrictions.
3
HEXION 2 U.S. FINANCE CORP.
10.375% First-Priority Senior Secured Notes due 2022
144A CUSIP No. 42829TAA5 144A ISIN No. US42829TAA51 REG S CUSIP No. U4321JAA7 REG S ISIN No. USU4321JAA70 |
No. [ ] | $ [ ] |
HEXION 2 U.S. FINANCE CORP., a Delaware corporation, promises to pay to [ ], or its registered assigns, the principal sum of [ ] Dollars ($[ ]) on February 1, 2022.
Interest Payment Dates: February 1 and August 1, commencing August 1, 2017
Record Dates: January 15 and July 15
Additional provisions of this Note are set forth on the other side of this Note.
Dated:
[SIGNATURE PAGE FOLLOWS]
4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
HEXION 2 U.S. FINANCE CORP. | ||||
by | ||||
Name: | ||||
Title: |
Dated:
TRUSTEES CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of | ||||
by | ||||
Authorized Signatory |
5
[FORM OF REVERSE SIDE OF INITIAL NOTE]
10.375% First-Priority Senior Secured Notes Due 2022
1. Interest
Hexion 2 U.S. Finance Corp., a Delaware corporation (such Person, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Issuer), promises to pay interest on the principal amount of this Note at a rate per annum of 10.375%. The Issuer will pay interest semiannually in arrears to the holders of record of the Notes on February 1 and August 1 of each year, commencing August 1, 2017. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer will pay interest on overdue principal at the rate borne by this Note plus 1.00% per annum, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Issuer 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 January 15 or July 15 next preceding the interest payment date even if Notes are canceled after the record date and on or before the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository. The Issuer will make all payments in respect of a certificated Note (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Wilmington Trust, National Association (the Trustee) will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice. Hexion or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Issuer issued the Notes under an Indenture dated as of February 8, 2017 (the Indenture), between the Issuer and the Trustee. The terms of the Notes include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and holders of the Notes are referred to the Indenture for a statement of those terms.
The Notes are secured obligations of the Issuer and consist of 10.375% First-Priority Senior Secured Notes due 2022, including any Additional Notes that may be issued after the Issue Date. The Indenture contains covenants that, among other things, limit the ability of the Issuer and its Restricted Subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; engage in transactions with affiliates; create liens on assets to secure indebtedness; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications contained in the Indenture.
5. Optional Redemption
Except as set forth below, the Issuer shall not be entitled to redeem the Notes.
On and after February 1, 2019, the Issuer shall be entitled at its option on one or more occasions to redeem all or a portion of the Notes upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to each holders registered address, or delivered electronically if held by the Depository, to each Holders registered address, at the following redemption prices (expressed as a percentage of principal amount on the redemption date), plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on February 1 of the years set forth below:
Period |
Redemption Price |
|||
2019 |
105.188 | % | ||
2020 |
102.594 | % | ||
2021 and thereafter |
100.000 | % |
In addition, prior to February 1, 2019, the Issuer may redeem Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail, or delivered electronically if held by the Depository, to each Holders registered address, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
Notwithstanding the foregoing, on or prior to February 1, 2019, the Issuer shall upon not less than 30 nor more than 60 days prior notice mailed by first-class mail, or delivered electronically if held by the Depository, to each Holders registered address, be entitled at their
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option on one or more occasions to redeem Notes (which includes Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the original aggregate principal amount of the Notes (which includes Additional Notes, if any) in an aggregate amount equal to the net cash proceeds of one or more Equity Offerings (1) by Hexion or (2) by any direct or indirect parent of Hexion, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of Hexion or used to purchase Capital Stock (other than Disqualified Stock) of Hexion from it, at a redemption price of 110.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds from one or more Equity Offerings (1) by Hexion or (2) by any direct or indirect parent of Hexion, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of Hexion or used to purchase Capital Stock (other than Disqualified Stock) of Hexion from it; provided, however, that (1) at least 50% of such aggregate principal amount of Notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption; and (2) each such redemption occurs within 180 days after the consummation of the related Equity Offering. Notwithstanding the foregoing, the Issuer may at any time and from time to time purchase Notes in the open market or otherwise.
If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described above, purchase all of the Notes validly tendered and not withdrawn by such holders, the Issuer or such third party will have the right upon not less than 30 nor more than 60 days prior written notice to the holders (with a copy to the Trustee), given not more than 30 days following such purchase pursuant to the Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment. Any such redemption shall be effected pursuant to paragraph 5 of this Note.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuers discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail, or sent electronically if held by the Depository, 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. Notes in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
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7. Put Provisions
Upon a Change of Control, the Issuer must (i)(A) make an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a Change of Control Offer) at a purchase price (the Change of Control Purchase Price) equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercise its right, within 30 days following such Change of Control, to redeem all the Notes as described under paragraph 5 of this Note.
8. Guarantee
Following the Issuers Assumption, the payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several basis by each of the Guarantors to the extent set forth in the Indenture.
9. Security
Following the Issuers Assumption, the Notes will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture, the Senior Intercreditor Agreements, the Junior Intercreditor Agreements and the Security Documents, such security interest to be pari passu in priority to security interests granted for the benefit of holders of other First Priority Lien Obligations. The First Lien Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders pursuant to, and subject to, the Security Documents and the Senior Intercreditor Agreements. Each Holder, by accepting this Note, consents and agrees to the terms of the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the First Lien Intercreditor Agreement, ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements in effect or as they may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the First Lien Collateral Agent to enter into a Collateral Agreement Supplement, the New Senior Secured Intercreditor Agreement, any other Security Documents and the joinders to the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the applicable Junior Priority Intercreditor Agreement, and to perform its obligations and exercise its rights thereunder in accordance therewith.
10. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in minimum denominations of $2,000 principal amount and whole multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed or 15 days before an interest payment date.
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11. Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the Issuer at any time shall be entitled to terminate some or all of their and the Guarantors obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money or, in certain cases, U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture and the First Lien Intercreditor Agreement, (a) the Indenture, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement, the Junior Priority Intercreditor Agreements and the related Security Documents may be amended with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes) and (b) any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes).
Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Issuer, the Guarantors, the Trustee and the First Lien Collateral Agent may amend the Indenture, the Notes, any Security Document, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements to: (i) cure any ambiguity, omission, defect, mistake or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Code); (iv) to add Guarantees with respect to the Notes; (v) to add additional secured creditors holding Junior Priority Obligations or other First Priority Lien Obligations or ABL Obligations, in each case so long as such obligations are not prohibited by the Indenture; (vi) to add to the covenants of Hexion or any Restricted Subsidiaries for the benefit of the holders or to surrender any right or power conferred upon the Issuer or any Guarantor; (vii) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA (if the Issuer elects to qualify the Indenture under the TIA); (viii) to make any change that does not adversely affect the rights of any holder; (ix) to conform the text of the Indenture, the notes, the Security Documents, the First Lien Intercreditor Agreement,
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the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements, to any provision of the Description of the Notes in the Offering Circular to the extent that such provision in such Description of the Notes was intended by the Issuer to be a verbatim recitation of a provision of the Indenture, the notes, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements, as stated in an Officers Certificate; (x) to make certain changes to the Indenture to provide for the issuance of additional notes; (xi) to make any amendment to the provisions of the Indenture relating to the transfer and legending of notes; provided, however, that (a) compliance with the Indenture as so amended would not result in notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of holders to transfer notes; (xii) to secure the notes or to add additional assets as Collateral; or (xiii) to release Collateral from the Lien pursuant to the Indenture, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements when permitted or required by the Indenture or the Security Documents or the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements.
15. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Notes; (b) default in payment of principal on the Notes at maturity, upon redemption pursuant to paragraph 5 of the Notes, upon acceleration or otherwise, or the failure by the Issuer to redeem or purchase Notes when required; (c) failure by the Issuer or certain Subsidiaries to comply with other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Issuer if the amount accelerated (or so unpaid) exceeds $50.0 million or its foreign currency equivalent; (e) certain events of bankruptcy or insolvency with respect to the Issuer, the Guarantors and the Significant Subsidiaries; (f) certain judgments or decrees for the payment of money in excess of $50.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days; (g) certain defaults with respect to Guarantees; and (h) certain defaults relating to the Collateral under the Security Documents. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare all such Notes to be due and payable immediately, subject to certain conditions set forth in the Indenture. Certain events of bankruptcy or insolvency are Events of Default which will result in the Notes being due and payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the 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 the interest of the Holders.
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16. Trustee Dealings with the Issuer
Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not have any liability for any obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation; provided, however, the foregoing will not affect or limit any liability of any Guarantor under the Indenture or its Guarantee. By accepting a Note, each Noteholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.
18. Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually 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), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
21. Issuers Assumption
On the Issue Date immediately after the Notes are issued (given the satisfaction of all Escrow Conditions (as defined in the Offering Circular) on the Issue Date), (i) Hexion Inc. (Hexion) shall assume all of the Issuers obligations (including Obligations) with respect to the Notes as if Hexion had itself issued the Notes, (ii) Hexion CI Holding Company (China) LLC, HSC Capital Corporation, Lawter International Inc., Hexion Investments Inc., Hexion International Inc., NL Coop Holdings LLC and Oilfield Technology Group, Inc. shall Guarantee the Obligations with respect to the Notes on the terms set forth under Article 10 of the Indenture and (iii) the Issuers Obligations with respect to the Notes shall be released, pursuant to the Issuers Assumption so long as such parties shall have met certain conditions under the Indenture.
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22. Governing Law
This Note shall be governed by, and construed in accordance with, the laws of the state of New York.
The Issuer will furnish to any Noteholder upon written request and without charge to the Noteholder a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to:
Hexion Inc.
180 East Broad St.
Columbus, OH 43215
Attention: General Counsel
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. 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.
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the applicable holding period referred to in Rule 144(d) under the Securities Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
☐ | to the Issuer; or |
(1) | ☐ | pursuant to an effective registration statement under the Securities Act of 1933; or | ||
(2) | ☐ | inside the United States to a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or | ||
(3) | ☐ | outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or | ||
(4) | ☐ | pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933; or |
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(5) | ☐ | to an institutional accredited investor (as defined in Rule 501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements. |
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (3), (4) or (5) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.
Signature |
Signature Guarantee:
Signature must be guaranteed |
Signature |
Signatures must be guaranteed by an eligible guarantor institution meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigneds foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: |
||||
Notice: To be executed by an executive officer |
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in |
Amount of increase in |
Principal amount of this |
Signature of authorized |
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
☐
If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the amount in principal amount: $
Dated: | Your Signature: | |||
(Sign exactly as your name appears on the other side of this Note.) |
Signature Guarantee: |
| |
(Signature must be guaranteed) |
Signatures must be guaranteed by an eligible guarantor institution meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B
Form of
Transferee Letter of Representation
Hexion Inc.
In care of
[ ]
[ ]
[ ]
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal amount of the 10.375% First-Priority Senior Secured Notes due 2022 (the Notes) of Hexion Inc., a New Jersey corporation (the Issuer).
Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
1. We are an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the Securities Act)), purchasing for our own account or for the account of such an institutional accredited investor at least $250,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase notes similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the Resale Restriction Termination Date) only (i) to the Issuer, (ii) in the United States to a person whom the seller reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (iii) to an institutional accredited investor within the meaning of Rule 501(a)(1),
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(2), (3) or (7) under the Securities Act that is an institutional accredited investor purchasing for its own account or for the account of an institutional accredited investor, in each case in a minimum principal amount of the Notes of $250,000, (iv) outside the United States in a transaction complying with the provisions of Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) subject to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (iii) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (iii), (iv) or (v) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.
TRANSFEREE: , | ||
by: |
| |
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EXHIBIT C
[FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY ADDITIONAL SUBSIDIARY GUARANTORS]
SUPPLEMENTAL INDENTURE (this Supplemental Indenture), dated as of [ ] among Hexion Inc., a New Jersey corporation (the Issuer), [ ] (the Additional Subsidiary Guarantor), a [ ] corporation and a [direct][indirect] subsidiary of the Issuer (or its permitted successor), and Wilmington Trust, National Association, as trustee (the Trustee).
W I T N E S S E T H :
WHEREAS, the Issuer and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee an Indenture (the Indenture), dated as of February 8, 2017, providing for the issuance of the 10.375% First-Priority Senior Secured Notes due 2022 (the Notes);
WHEREAS, Section 4.11 and Section 10.06 of the Indenture provide that under certain circumstances the Issuer will cause the Additional Subsidiary Guarantor to execute and deliver to the Trustee a guaranty agreement pursuant to which the Additional Subsidiary Guarantor will Guarantee payment of the Notes on the same terms and conditions as those set forth in Article 10 of the Indenture; and
WHEREAS, pursuant to Section 9.01(iv) of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, the Additional Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
SECTION 1. Capitalized Terms. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture.
SECTION 2. Guarantees. The Additional Subsidiary Guarantor hereby agrees, jointly and severally with all other Guarantors, to guarantee the Issuers obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture (including Article 11).
SECTION 3. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
SECTION 4. Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the state of New York.
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SECTION 5. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
SECTION 6. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 7. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction of this Supplemental Indenture.
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IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.
HEXION INC. | ||
by | ||
Name: Title: |
[ADDITIONAL SUBSIDIARY GUARANTOR] | ||
by | ||
Name: Title: |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
by | ||
Name: Title: |
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EXHIBIT D
[FORM OF ISSUERS ASSUMPTION SUPPLEMENTAL INDENTURE]
SUPPLEMENTAL INDENTURE (this Supplemental Indenture), dated as of [ ], 2017, among Hexion Inc., a New Jersey corporation (the New Issuer), the Subsidiary Guarantors listed on the signature pages hereto (the New Subsidiary Guarantors) and Wilmington Trust, National Association, as trustee under the indenture referred to below (the Trustee).
W I T N E S S E T H :
WHEREAS, Hexion 2 U.S. Finance Corp. (the Escrow Issuer) has heretofore executed and delivered to the Trustee an indenture (as amended, supplemented or otherwise modified, the Indenture) dated as of February 8, 2017, providing for the issuance of the Escrow Issuers 10.375% First-Priority Senior Secured Notes due 2022 (the Notes), initially in the aggregate principal amount of $485,000,000;
WHEREAS, Section 13.01 of the Indenture provides that the New Issuer and the New Subsidiary Guarantors shall execute and deliver to the Trustee a supplemental indenture pursuant to which the (i) New Issuer shall unconditionally assume all the Escrow Issuers obligations (including Obligations) with respect to the Notes and the Indenture, (ii) the New Subsidiary Guarantors shall Guarantee the obligations with respect to the Notes on the terms set forth in Article 10 thereof and (iii) the Escrow Issuers obligations with respect to the Notes shall be released on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the New Issuer, the New Subsidiary Guarantors and the Escrow Issuer are authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Issuer, the New Subsidiary Guarantors, the Escrow Issuer and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
SECTION 1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined. The words herein, hereof and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.
SECTION 2. Agreement to Assume Obligations. The New Issuer hereby agrees to unconditionally assume the Escrow Issuers obligations (including Obligations) with respect to the Notes and the Indenture on the terms and subject to the conditions set forth in Article 13 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of the Escrow Issuer under the Indenture.
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SECTION 3. Agreement to Guarantee. The New Subsidiary Guarantors hereby agree to unconditionally guarantee the New Issuers obligations with respect to the Notes on the terms set forth in Article 10 of the Indenture and to be bound by all other provisions of the Indenture and the Notes applicable to Guarantors.
SECTION 4. Notices. All notices or other communications to the New Issuer shall be given as provided in Section 12.02 of the Indenture.
SECTION 5. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
SECTION 6. Release of Obligations of the Escrow Issuer. Upon execution of this Supplemental Indenture by the New Issuer, the New Subsidiary Guarantors and the Trustee, the Escrow Issuer is unconditionally and irrevocably released and discharged from all obligations and liabilities under the Indenture and the Notes.
SECTION 7. Governing Law. THIS SUPPLEMENTAL INDENTURE 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.
SECTION 8. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
SECTION 9. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 10. Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction thereof.
SECTION 11. Covenants. Following the Issuers Assumption, the provisions of Article 4 of the Indenture shall be deemed to have been applicable to the New Issuer and its Restricted Subsidiaries beginning on the Issue Date.
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IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.
HEXION INC. | ||
By: |
| |
Name: | ||
Title: | ||
HSC CAPITAL CORPORATION | ||
By: |
| |
Name: | ||
Title: | ||
LAWTER INTERNATIONAL INC. | ||
By: |
| |
Name: | ||
Title: | ||
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: |
| |
Name: | ||
Title: | ||
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: | Lawter International Inc., as sole managing member | |
By: |
| |
Name: | ||
Title: |
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HEXION INTERNATIONAL INC. | ||
By: |
| |
Name: | ||
Title: | ||
HEXION INVESTMENTS INC. | ||
By: |
| |
Name: | ||
Title: | ||
NL COOP HOLDINGS LLC | ||
By: |
| |
Name: | ||
Title: |
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WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
By: |
| |
Name: | ||
Title: |
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Acknowledged by:
HEXION 2 U.S. FINANCE CORP.
By: |
| |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer |
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EXHIBIT E
[FORM OF FACE OF NOTE FOLLOWING ISSUERS ASSUMPTION]
[Global Notes Legend]
Unless this certificate is presented by an authorized representative of the Depository Trust Company, a New York corporation (DTC), New York, New York, to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC) any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
Transfers of this Global Note shall be limited to transfers in whole, but not in part, to nominees of DTC or to a successor thereof or such successors nominee and transfers of portions of this Global Note shall be limited to transfers made in accordance with the restrictions set forth in the indenture referred to on the reverse hereof.
[[For Regulation S Global Note only] Until 40 days after the later of commencement or completion of the offering, an offer or sale of notes within the United States by a dealer (as defined in the Securities Act) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A thereunder.]
[Restricted Notes Legend for Notes Offered Otherwise than in Reliance
on Regulation S]
This note (or its predecessor) was originally issued in a transaction exempt from registration under the United States Securities Act of 1933, as amended (the Securities Act), and this note may not be offered, sold or otherwise transferred in the absence of such registration or an applicable exemption therefrom. Each purchaser of this note is hereby notified that the seller of this note may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A thereunder.
The holder of this note agrees for the benefit of the issuer that (a) this note may be offered, resold, pledged or otherwise transferred, only (i) to the issuer, (ii) within the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (iii) to an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the issuer that such
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transfer is in compliance with the Securities Act, (iv) outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) in accordance with any applicable securities laws of any state of the United States, and (b) the holder will, and each subsequent holder is required to, notify any purchaser of this note from it of the resale restrictions referred to in (a) above.
[Restricted Notes Legend for Notes Offered in Reliance on Regulation S.]
This note (or its predecessor) was originally issued in a transaction originally exempt from registration under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be transferred in the United States or to, or for the account or benefit of, any U.S. person except pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities laws. Terms used above have the meanings given to them in Regulation S under the Securities Act.
[Temporary Regulation S Global Note Legend]
Except as set forth below, beneficial ownership interests in this Temporary Regulation S Global Note will not be exchangeable for interests in the Permanent Regulation S Global Note or any other note representing an interest in the notes represented hereby which do not contain a legend containing restrictions on transfer, until the expiration of the 40-day distribution compliance period (within the meaning of Rule 903(b)(2) of Regulation S under the Securities Act) and then only upon certification to the trustee that such beneficial interests are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act. During such 40-day distribution compliance period, beneficial ownership interests in this Temporary Regulation S Global Note may only be sold, pledged or transferred (i) to the Issuer, (ii) outside the United States in a transaction in accordance with Rule 904 of Regulation S under the Securities Act, or (iii) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (iii) in accordance with any applicable securities laws of any state of the United States. Holders of interests in this Temporary Regulation S Global Note will notify any purchaser of this note of the resale restrictions referred to above, if then applicable.
After the expiration of the distribution compliance period, beneficial interests in this Temporary Regulation S Global Note may be exchanged for interests in a Rule 144A Global Note only if (1) such exchange occurs in connection with a transfer of the notes in compliance with Rule 144A and (2) the transferor of the Regulation S Global Note first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that the Regulation S Global Note is being transferred (a) to a person who the transferor reasonably believes to be a qualified institutional buyer within the meaning of Rule 144A, (b) to a person who is purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable securities laws of the states of the United States and other jurisdictions.
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After the expiration of the distribution compliance period, beneficial interests in this Temporary Regulation S Global Note may be exchanged for interests in an IAI Global Note only if (1) such exchange occurs in connection with a transfer of the notes in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Note first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that the Regulation S Global Note is being transferred (a) to an institutional accredited investor within the meaning of Rule 501(a)(1),(2),(3) or (7) under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the Issuer that such transfer is in compliance with the Securities Act and (b) in accordance with all applicable securities laws of the states of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Note or an IAI Global Note may be transferred to a person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the 40-day distribution compliance period, only if the transferor first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available).
[Definitive Notes Legend]
In connection with any transfer, the holder will deliver to the registrar and transfer agent such certificates and other information as such transfer agent may reasonably require to confirm that the transfer complies with the foregoing restrictions.
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HEXION INC.
10.375% First-Priority Senior Secured Notes due 2022
144A CUSIP No. 42829LAD6 144A ISIN No. US42829LAD64 REG S CUSIP No. U4321LAB0 REG S ISIN No. USU4321LAB00 |
No. [ ] | $ [ ] |
HEXION INC., a New Jersey corporation, promises to pay to [ ], or its registered assigns, the principal sum of [ ] Dollars ($[ ]) on February 1, 2022.
Interest Payment Dates: February 1 and August 1, commencing August 1, 2017
Record Dates: January 15 and July 15
Additional provisions of this Note are set forth on the other side of this Note.
Dated:
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
HEXION INC. | ||||
by |
| |||
Name: | ||||
Title: |
Dated:
TRUSTEES CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
by |
| |
Authorized Signatory |
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[FORM OF REVERSE SIDE OF NOTE FOLLOWING ISSUERS ASSUMPTION]
10.375% First-Priority Senior Secured Notes Due 2022
1. Interest
Hexion Inc., a New Jersey corporation (such Person, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Issuer or Hexion), promises to pay interest on the principal amount of this Note at a rate per annum of 10.375%. The Issuer will pay interest semiannually in arrears to the holders of record of the Notes on February 1 and August 1 of each year, commencing August 1, 2017. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer will pay interest on overdue principal at the rate borne by this Note plus 1.00% per annum, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Issuer 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 January 15 or July 15 next preceding the interest payment date even if Notes are canceled after the record date and on or before the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository. The Issuer will make all payments in respect of a certificated Note (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Wilmington Trust, National Association (the Trustee) will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice. Hexion or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Issuer issued the Notes under an Indenture dated as of February 8, 2017 (the Indenture), between the Issuer and the Trustee. The terms of the Notes include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and holders of the Notes are referred to the Indenture for a statement of those terms.
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The Notes are secured obligations of the Issuer and consist of 10.375% First-Priority Senior Secured Notes due 2022, including any Additional Notes that may be issued after the Issue Date. The Indenture contains covenants that, among other things, limit the ability of the Issuer and its Restricted Subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; engage in transactions with affiliates; create liens on assets to secure indebtedness; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications contained in the Indenture.
5. Optional Redemption
Except as set forth below, the Issuer shall not be entitled to redeem the Notes.
On and after February 1, 2019, the Issuer shall be entitled at its option on one or more occasions to redeem all or a portion of the Notes upon not less than 30 nor more than 60 days prior notice mailed by first-class mail, or delivered electronically if held by the Depository, to each Holders registered address, at the following redemption prices (expressed as a percentages of principal amount on the redemption date), plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on February 1 of the years set forth below:
Period |
Redemption Price |
|||
2019 |
105.188 | % | ||
2020 |
102.594 | % | ||
2021 and thereafter |
100.000 | % |
In addition, prior to February 1, 2019, the Issuer may redeem Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail, or delivered electronically if held by the Depository, to each Holders registered address, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
Upon the occurrence of Change of Control, the Issuer shall (i)(A) make an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a Change of Control Offer) at a purchase price (the Change of Control Purchase Price) equal to 101% of the principal amount thereof, plus accrued and unpaid
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interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercise its right, within 30 days following such Change of Control, to redeem all the Notes as described under this paragraph 5.
Notwithstanding the foregoing, on or prior to February 1, 2019, the Issuer shall upon not less than 30 nor more than 60 days prior notice mailed by first-class mail, or delivered electronically if held by the Depository, to each Holders registered address, be entitled at their option on one or more occasions to redeem Notes (which includes Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the original aggregate principal amount of the Notes (which includes Additional Notes, if any) in an aggregate amount equal to the net cash proceeds of one or more Equity Offerings (1) by Hexion or (2) by any direct or indirect parent of Hexion, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of Hexion or used to purchase Capital Stock (other than Disqualified Stock) of Hexion from it, at a redemption price of 110.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds from one or more Equity Offerings (1) by Hexion or (2) by any direct or indirect parent of Hexion, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of Hexion or used to purchase Capital Stock (other than Disqualified Stock) of Hexion from it; provided, however, that (1) at least 50% of such aggregate principal amount of Notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption; and (2) each such redemption occurs within 180 days after the consummation of the related Equity Offering. Notwithstanding the foregoing, the Issuer may at any time and from time to time purchase Notes in the open market or otherwise.
If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described above, purchase all of the Notes validly tendered and not withdrawn by such holders, the Issuer or such third party will have the right upon not less than 30 nor more than 60 days prior written notice to the holders (with a copy to the Trustee), given not more than 30 days following such purchase pursuant to the Change of Control Offer, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment. Any such redemption shall be effected pursuant to paragraph 5 of this Note.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuers discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
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6. Notice of Redemption
Notice of redemption will be mailed by first-class mail, or sent electronically if held by the Depository, 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. Notes in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control the Issuer must (i)(A) make an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a Change of Control Offer) at a purchase price (the Change of Control Purchase Price) equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercise its right, within 30 days following such Change of Control, to redeem all the Notes as described under paragraph 5 of this Note.
8. Guarantee
The payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several basis by each of the Guarantors to the extent set forth in the Indenture.
9. Security
The Notes will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture, the Senior Intercreditor Agreements, the Junior Intercreditor Agreements and the Security Documents, such security interest to be pari passu in priority to security interests granted for the benefit of holders of other First Priority Lien Obligations. The First Lien Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders pursuant to, and subject to, the Security Documents and the Senior Intercreditor Agreements. Each Holder, by accepting this Note, consents and agrees to the terms of the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the First Lien Intercreditor Agreement, ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements in effect or as they may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the First Lien Collateral Agent to enter into a Collateral Agreement Supplement, the New Senior Secured Intercreditor Agreement, any other Security Documents and the joinders to the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the applicable Junior Priority Intercreditor Agreement, and to perform its obligations and exercise its rights thereunder in accordance therewith.
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10. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of $2,000 principal amount and whole multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the Issuer at any time shall be entitled to terminate some or all of their and the Guarantors obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money or, in certain cases, U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture and the First Lien Intercreditor Agreement, (a) the Indenture, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement, the Junior Priority Intercreditor Agreements and the related Security Documents may be amended with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes) and (b) any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes).
Subject to certain exceptions set forth in the Indenture, without the consent of any holder, the Issuer, the Guarantors, the Trustee and the Notes Collateral Agent may amend the Indenture, the Notes, any Security Document, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements to: (i) cure any ambiguity, omission, defect, mistake or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated notes are issued in registered form for purposes of
5
Section 163(f) of the Code); (iv) to add Guarantees with respect to the Notes; (v) to add additional secured creditors holding Junior Priority Obligations or other First Priority Lien Obligations or ABL Obligations, in each case so long as such obligations are not prohibited by the Indenture; (vi) to add to the covenants of Hexion or any Restricted Subsidiaries for the benefit of the holders or to surrender any right or power conferred upon the Issuer or any Guarantor; (vii) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA (if the Issuer elects to qualify the Indenture under the TIA); (viii) to make any change that does not adversely affect the rights of any holder; (ix) to conform the text of the Indenture, the notes, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements, to any provision of the Description of the Notes in the Offering Circular to the extent that such provision in such Description of the Notes was intended by the Issuer to be a verbatim recitation of a provision of the Indenture, the notes, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements, as stated in an Officers Certificate; (x) to make certain changes to the Indenture to provide for the issuance of additional notes; (xi) to make any amendment to the provisions of the Indenture relating to the transfer and legending of notes; provided, however, that (a) compliance with the Indenture as so amended would not result in notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of holders to transfer notes; (xii) to secure the notes or to add additional assets as Collateral; or (xiii) to release Collateral from the Lien pursuant to the Indenture, the Security Documents, the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement and the Junior Priority Intercreditor Agreements when permitted or required by the Indenture or the Security Documents or the First Lien Intercreditor Agreement, the ABL Intercreditor Agreement or the Junior Priority Intercreditor Agreements.
15. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Notes; (b) default in payment of principal on the Notes at maturity, upon redemption pursuant to paragraph 5 of the Notes, upon acceleration or otherwise, or the failure by the Issuer to redeem or purchase Notes when required; (c) failure by the Issuer or certain Subsidiaries to comply with other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Issuer if the amount accelerated (or so unpaid) exceeds $50.0 million or its foreign currency equivalent; (e) certain events of bankruptcy or insolvency with respect to the Issuer, the Guarantors and the Significant Subsidiaries; (f) certain judgments or decrees for the payment of money in excess of $50.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days; (g) certain defaults with respect to Guarantees; and (h) certain defaults relating to the Collateral under the Security Documents. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare all such Notes to be due and payable immediately, subject to certain conditions set forth in the Indenture. Certain events of bankruptcy or insolvency are Events of Default which will result in the Notes being due and payable immediately upon the occurrence of such Events of Default.
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Noteholders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the 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 the interest of the Holders.
16. Trustee Dealings with the Issuer
Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not have any liability for any obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation; provided, however, the foregoing will not affect or limit any liability of any Guarantor under the Indenture or its Guarantee. By accepting a Note, each Noteholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.
18. Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually 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), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
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21. Governing Law
This Note shall be governed by, and construed in accordance with, the laws of the state of New York.
The Issuer will furnish to any Noteholder upon written request and without charge to the Noteholder a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to:
Hexion Inc.
180 East Broad St.
Columbus, OH 43215
Attention: General Counsel
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. 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.
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the applicable holding period referred to in Rule 144(d) under the Securities Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
☐ | to the Issuer; or |
(1) | ☐ | pursuant to an effective registration statement under the Securities Act of 1933; or | ||
(2) | ☐ | inside the United States to a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or | ||
(3) | ☐ | outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or | ||
(4) | ☐ | pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933; or |
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(5) | ☐ | to an institutional accredited investor (as defined in Rule 501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements. |
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (3), (4) or (5) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.
Signature |
Signature Guarantee:
Signature must be guaranteed | Signature |
Signatures must be guaranteed by an eligible guarantor institution meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
10
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigneds foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: |
||||
Notice: To be executed by |
11
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in |
Amount of increase in |
Principal amount of this |
Signature of authorized |
12
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
☐
If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the amount in principal amount: $
Dated: | Your Signature: | |||
(Sign exactly as your name appears on the other side of this Note.) |
Signature Guarantee: | ||
(Signature must be guaranteed) |
Signatures must be guaranteed by an eligible guarantor institution meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
13
Exhibit 4.2
ISSUERS ASSUMPTION SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this Supplemental Indenture), dated as of February 8, 2017, among Hexion Inc., a New Jersey corporation (the New Issuer), the Subsidiary Guarantors listed on the signature pages hereto (the New Subsidiary Guarantors) and Wilmington Trust, National Association, as trustee under the indenture referred to below (the Trustee).
W I T N E S S E T H :
WHEREAS, Hexion 2 U.S. Finance Corp. (the Escrow Issuer) has heretofore executed and delivered to the Trustee an indenture (as amended, supplemented or otherwise modified, the Indenture) dated as of February 8, 2017, providing for the issuance of the Escrow Issuers 10.375% First-Priority Senior Secured Notes due 2022 (the Notes), initially in the aggregate principal amount of $485,000,000;
WHEREAS, Section 13.01 of the Indenture provides that the New Issuer and the New Subsidiary Guarantors shall execute and deliver to the Trustee a supplemental indenture pursuant to which the (i) New Issuer shall unconditionally assume all the Escrow Issuers obligations (including Obligations) with respect to the Notes and the Indenture, (ii) the New Subsidiary Guarantors shall Guarantee the obligations with respect to the Notes on the terms set forth in Article 10 thereof and (iii) the Escrow Issuers obligations with respect to the Notes shall be released on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the New Issuer, the New Subsidiary Guarantors and the Escrow Issuer are authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Issuer, the New Subsidiary Guarantors, the Escrow Issuer and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
SECTION 1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined. The words herein, hereof and hereby and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.
SECTION 2. Agreement to Assume Obligations. The New Issuer hereby agrees to unconditionally assume the Escrow Issuers obligations (including Obligations) with respect to the Notes and the Indenture on the terms and subject to the conditions set forth in Article 13 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the obligations and agreements of the Escrow Issuer under the Indenture.
SECTION 3. Agreement to Guarantee. The New Subsidiary Guarantors hereby agree to unconditionally guarantee the New Issuers obligations with respect to the Notes on the terms set forth in Article 10 of the Indenture and to be bound by all other provisions of the Indenture and the Notes applicable to Guarantors.
SECTION 4. Notices. All notices or other communications to the New Issuer shall be given as provided in Section 12.02 of the Indenture.
SECTION 5. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
SECTION 6. Release of Obligations of the Escrow Issuer. Upon execution of this Supplemental Indenture by the New Issuer, the New Subsidiary Guarantors and the Trustee, the Escrow Issuer is unconditionally and irrevocably released and discharged from all obligations and liabilities under the Indenture and the Notes.
SECTION 7. Governing Law. THIS SUPPLEMENTAL INDENTURE 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.
SECTION 8. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
SECTION 9. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 10. Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction thereof.
SECTION 11. Covenants. Following the Issuers Assumption, the provisions of Article 4 of the Indenture shall be deemed to have been applicable to the New Issuer and its Restricted Subsidiaries beginning on the Issue Date.
IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.
HEXION INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
HSC CAPITAL CORPORATION | ||
By: | /s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
LAWTER INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: | Lawter International Inc., as sole managing member | |
By: | /s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer |
[SIGNATURE PAGE TO ISSUERS ASSUMPTION SUPPLEMENTAL INDENTURE]
HEXION INTERNATIONAL INC. | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
HEXION INVESTMENTS INC. | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
NL COOP HOLDINGS LLC | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer |
[SIGNATURE PAGE TO ISSUERS ASSUMPTION SUPPLEMENTAL INDENTURE]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
By: | /s/ Jane Schweiger | |
Name: Jane Schweiger | ||
Title: Vice President |
[SIGNATURE PAGE TO ISSUERS ASSUMPTION SUPPLEMENTAL INDENTURE]
Acknowledged by: | ||
HEXION 2 U.S. FINANCE CORP. | ||
By: | /s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer |
[SIGNATURE PAGE TO ISSUERS ASSUMPTION SUPPLEMENTAL INDENTURE]
Exhibit 4.3
EXECUTION VERSION
HEXION INC.
as Issuer
the GUARANTORS named herein
$225,000,000 13.75% SENIOR SECURED NOTES DUE 2022
INDENTURE
Dated as of February 8, 2017
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
TABLE OF CONTENTS
Page | ||||||
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE | ||||||
SECTION 1.01. |
Definitions | 1 | ||||
SECTION 1.02. |
Other Definitions | 41 | ||||
SECTION 1.03. |
No Incorporation by Reference of Trust Indenture Act | 42 | ||||
SECTION 1.04. |
Rules of Construction | 42 | ||||
ARTICLE 2 THE NOTES |
||||||
SECTION 2.01. |
Amount of Notes | 42 | ||||
SECTION 2.02. |
Form and Dating | 43 | ||||
SECTION 2.03. |
Execution and Authentication | 44 | ||||
SECTION 2.04. |
Registrar and Paying Agent | 44 | ||||
SECTION 2.05. |
Paying Agent to Hold Money in Trust | 45 | ||||
SECTION 2.06. |
Holder Lists | 45 | ||||
SECTION 2.07. |
Transfer and Exchange | 45 | ||||
SECTION 2.08. |
Replacement Notes | 46 | ||||
SECTION 2.09. |
Outstanding Notes | 47 | ||||
SECTION 2.10. |
Temporary Notes | 47 | ||||
SECTION 2.11. |
Cancellation | 47 | ||||
SECTION 2.12. |
Defaulted Interest | 47 | ||||
SECTION 2.13. |
CUSIP Numbers, ISINs, etc. | 48 | ||||
SECTION 2.14. |
Calculation of Principal Amount of Notes | 48 | ||||
ARTICLE 3 REDEMPTION |
||||||
SECTION 3.01. |
Redemption | 48 | ||||
SECTION 3.02. |
Applicability of Article | 48 | ||||
SECTION 3.03. |
Notices to Trustee | 48 | ||||
SECTION 3.04. |
Selection of Notes to Be Redeemed | 49 | ||||
SECTION 3.05. |
Notice of Optional Redemption | 49 | ||||
SECTION 3.06. |
Effect of Notice of Redemption | 50 | ||||
SECTION 3.07. |
Deposit of Redemption Price | 51 | ||||
SECTION 3.08. |
Notes Redeemed in Part | 51 | ||||
ARTICLE 4 COVENANTS |
||||||
SECTION 4.01. |
Payment of Notes | 51 | ||||
SECTION 4.02. |
Reports and Other Information | 51 | ||||
SECTION 4.03. |
Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock | 53 | ||||
SECTION 4.04. |
Limitation on Restricted Payments | 60 | ||||
SECTION 4.05. |
Dividend and Other Payment Restrictions Affecting Subsidiaries | 69 | ||||
SECTION 4.06. |
Asset Sales | 71 | ||||
SECTION 4.07. |
Transactions with Affiliates | 74 |
-i-
TABLE OF CONTENTS
(continued)
Page
SECTION 4.08. |
Change of Control | 77 | ||||
SECTION 4.09. |
Compliance Certificate | 79 | ||||
SECTION 4.10. |
Further Instruments and Acts | 79 | ||||
SECTION 4.11. |
Future Guarantors | 79 | ||||
SECTION 4.12. |
Liens | 79 | ||||
SECTION 4.13. |
Maintenance of Office or Agency | 81 | ||||
SECTION 4.14. |
After-Acquired Property | 81 | ||||
SECTION 4.15. |
Limitation on Indenture Restricted Subsidiaries | 82 | ||||
SECTION 4.16. |
Limitation on Hexion Nova Scotia Finance, ULC | 82 | ||||
ARTICLE 5 MERGER, CONSOLIDATION OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS |
||||||
SECTION 5.01. |
Merger, Consolidation or Sale of All or Substantially All Assets | 82 | ||||
ARTICLE 6 DEFAULTS AND REMEDIES | ||||||
SECTION 6.01. |
Events of Default | 85 | ||||
SECTION 6.02. |
Acceleration | 87 | ||||
SECTION 6.03. |
Other Remedies | 87 | ||||
SECTION 6.04. |
Waiver of Past Defaults | 87 | ||||
SECTION 6.05. |
Control by Majority | 88 | ||||
SECTION 6.06. |
Limitation on Suits | 88 | ||||
SECTION 6.07. |
Rights of the Holders to Receive Payment | 88 | ||||
SECTION 6.08. |
Collection Suit by Trustee | 88 | ||||
SECTION 6.09. |
Trustee May File Proofs of Claim | 89 | ||||
SECTION 6.10. |
Priorities | 89 | ||||
SECTION 6.11. |
Undertaking for Costs | 89 | ||||
SECTION 6.12. |
Waiver of Stay or Extension Laws | 90 | ||||
ARTICLE 7 TRUSTEE | ||||||
SECTION 7.01. |
Duties of Trustee | 90 | ||||
SECTION 7.02. |
Rights of Trustee | 91 | ||||
SECTION 7.03. |
Individual Rights of Trustee | 93 | ||||
SECTION 7.04. |
Trustees Disclaimer | 93 | ||||
SECTION 7.05. |
Notice of Defaults | 93 | ||||
SECTION 7.06. |
[Intentionally Omitted] | 94 | ||||
SECTION 7.07. |
Compensation and Indemnity | 94 | ||||
SECTION 7.08. |
Replacement of Trustee | 95 | ||||
SECTION 7.09. |
Successor Trustee by Merger | 95 | ||||
SECTION 7.10. |
Eligibility; Disqualification | 96 | ||||
SECTION 7.11. |
Preferential Collection of Claims Against Issuer | 96 |
-ii-
TABLE OF CONTENTS
(continued)
Page | ||||||
SECTION 7.12. |
Limitation on Duty of Trustee in Respect of Collateral; Indemnification | 96 | ||||
ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE | ||||||
SECTION 8.01. |
Discharge of Liability on Notes; Defeasance | 97 | ||||
SECTION 8.02. |
Conditions to Defeasance | 98 | ||||
SECTION 8.03. |
Application of Trust Money | 100 | ||||
SECTION 8.04. |
Repayment to the Issuer | 100 | ||||
SECTION 8.05. |
Indemnity for Government Obligations | 100 | ||||
SECTION 8.06. |
Reinstatement | 100 | ||||
ARTICLE 9 AMENDMENTS AND WAIVERS | ||||||
SECTION 9.01. |
Without Consent of the Holders | 100 | ||||
SECTION 9.02. |
With Consent of the Holders | 102 | ||||
SECTION 9.03. |
[Intentionally Omitted] | 103 | ||||
SECTION 9.04. |
Revocation and Effect of Consents and Waivers | 103 | ||||
SECTION 9.05. |
Notation on or Exchange of Notes | 104 | ||||
SECTION 9.06. |
Trustee to Sign Amendments | 104 | ||||
SECTION 9.07. |
Additional Voting Terms; Calculation of Principal Amount | 104 | ||||
ARTICLE 10 GUARANTEES | ||||||
SECTION 10.01. |
Guarantees | 104 | ||||
SECTION 10.02. |
Limitation on Liability | 106 | ||||
SECTION 10.03. |
Successors and Assigns | 107 | ||||
SECTION 10.04. |
No Waiver | 107 | ||||
SECTION 10.05. |
Modification | 108 | ||||
SECTION 10.06. |
Execution of Supplemental Indenture for Future Guarantors | 108 | ||||
ARTICLE 11 SECURITY DOCUMENTS | ||||||
SECTION 11.01. |
Collateral and Security Documents | 108 | ||||
SECTION 11.02. |
Recordings and Opinions | 110 | ||||
SECTION 11.03. |
Release of Collateral | 110 | ||||
SECTION 11.04. |
Permitted Releases Not To Impair Lien | 113 | ||||
SECTION 11.05. |
Certificates of the Trustee | 113 | ||||
SECTION 11.06. |
Suits To Protect the Collateral | 113 | ||||
SECTION 11.07. |
Authorization of Receipt of Funds by the Trustee Under the Security Documents | 114 | ||||
SECTION 11.08. |
Purchaser Protected | 114 | ||||
SECTION 11.09. |
Powers Exercisable by Receiver or Trustee | 114 | ||||
SECTION 11.10. |
Release Upon Termination of the Issuers Obligations | 114 |
-iii-
TABLE OF CONTENTS
(continued)
Page | ||||||
SECTION 11.11. |
Collateral Agent | 114 | ||||
SECTION 11.12. |
Designations | 117 | ||||
ARTICLE 12 MISCELLANEOUS |
| |||||
SECTION 12.01. |
[Intentionally Omitted] | 117 | ||||
SECTION 12.02. |
Notices | 117 | ||||
SECTION 12.03. |
[Intentionally Omitted] | 118 | ||||
SECTION 12.04. |
Certificate and Opinion as to Conditions Precedent | 118 | ||||
SECTION 12.05. |
Statements Required in Certificate or Opinion | 118 | ||||
SECTION 12.06. |
When Notes Disregarded | 119 | ||||
SECTION 12.07. |
Rules by Trustee, Paying Agent and Registrar | 119 | ||||
SECTION 12.08. |
Legal Holidays | 119 | ||||
SECTION 12.09. |
Governing Law | 119 | ||||
SECTION 12.10. |
No Recourse Against Others | 119 | ||||
SECTION 12.11. |
Successors | 119 | ||||
SECTION 12.12. |
Multiple Originals | 119 | ||||
SECTION 12.13. |
Table of Contents; Headings | 120 | ||||
SECTION 12.14. |
Indenture Controls | 120 | ||||
SECTION 12.15. |
Severability | 120 | ||||
SECTION 12.16. |
U.S.A. Patriot Act | 120 |
EXHIBIT INDEX
Appendix A Provisions Relating to Initial Notes
Exhibit A Form of Initial Note
Exhibit B Form of Transferee Letter of Representation
Exhibit C Form of Supplemental Indenture
-iv-
INDENTURE dated as of February 8, 2017 among Hexion Inc., a New Jersey corporation (the Issuer or Hexion), the Guarantors party hereto and Wilmington Trust, National Association, as trustee (the Trustee).
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of Notes issued under this Indenture.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
6.625% First-Priority Senior Secured Notes means the Issuers 6.625% First-Priority Senior Secured Notes due 2020.
6.625% First Lien Notes Indenture means the indenture among the Issuer (as successor issuer via merger to Hexion U.S. Finance Corp.), Wilmington Trust, National Association, as trustee, and the other parties thereto dated March 14, 2012 with respect to the Issuers 6.625% First-Priority Senior Secured Notes due 2020, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
10.00% First-Priority Senior Secured Notes means the Issuers 10.00% First-Priority Senior Secured Notes due 2020.
10.00% First Lien Notes Indenture means the indenture among the Issuer, Wilmington Trust, National Association, as trustee, and the other parties thereto dated April 15, 2015 with respect to the Issuers 10.00% First-Priority Senior Secured Notes due 2020, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
ABL Facility means (i) the Amended and Restated Asset-Based Revolving Credit Agreement, dated as of December 21, 2016, among Hexion LLC (f/k/a Momentive Specialty Chemicals Holdings LLC), the Issuer, as U.S. borrower, Hexion Canada Inc., as Canadian borrower, Hexion B.V. (f/k/a Momentive Specialty Chemicals B.V.), as Dutch borrower, Hexion UK Limited (f/k/a Momentive Specialty Chemicals UK Limited) and Borden Chemical UK Limited, as U.K. borrowers, and Hexion GMBH, a company organized under the laws of Germany, as German borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, swingline lender and initial issuing bank, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time after the Issue Date, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (except to the extent any
such refinancing, replacement or restructuring is designated by Hexion to not be included in the definition of ABL Facility), and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by Hexion to be included in the definition of ABL Facility, one or more (A) asset-based debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, securitization or receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
ABL Facility Documents means the agreements and other instruments governing the ABL Facility, together with any guarantees thereof and any security documents, other collateral documents and other instruments relating thereto (including documents and instruments governing Hedging Obligations required by the ABL Facility or relating to ABL Obligations).
ABL Obligations means the Obligations of the borrowers and other obligors under the ABL Facility or any of the other ABL Facility Documents, to pay principal, premium, if any, and interest (including any interest accruing after the commencement of bankruptcy or insolvency proceedings) when due and payable, and all other amounts due or to become due under or in connection with the ABL Facility Documents and the performance of all other Obligations of the obligors thereunder to the lenders and agents under the ABL Facility Documents, according to the respective terms thereof.
Acquired Indebtedness means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person,
in each case, other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by such Person, or such asset was acquired by such Person, as applicable.
Additional First Priority Lien Obligations means any Obligations that are incurred prior to or after the Issue Date and secured by collateral on a basis senior to the Notes, in addition to the Obligations described in clauses (i) through (v) of the definition of First Priority Lien Obligations, and designated as such in writing pursuant to the First Lien Documents.
2
Additional Notes means the 13.75% Senior Secured Notes due 2022 issued under the terms of this Indenture subsequent to the Issue Date.
Adjusted EBITDA means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, to the extent the same was deducted in calculating Consolidated Net Income:
(1) Consolidated Taxes; plus
(2) Consolidated Interest Expense; provided, however, such amount will be included in Adjusted EBITDA notwithstanding that such amount was not deducted in calculating Consolidated Net Income; plus
(3) Consolidated Non-cash Charges; plus
(4) the amount of management, monitoring, consulting and advisory fees and related expenses paid to the Sponsor or its predecessor (or any accruals relating to such fees and related expenses) during such period; provided, however, that such amount shall not exceed in any four-quarter period commencing after September 30, 2006 the amount determined in accordance with clause (iii) of Section 4.07(b); plus
(5) plant closure and severance costs and charges; plus
(6) impairment charges, including the write-down of Investments; plus
(7) non-operating expenses; plus
(8) restructuring expenses and charges; plus
(9) the cost (or amortization of prior service cost) of subsidizing coverage for persons affected by amendments to medical benefit plans implemented prior to the Issue Date; provided, however, such amount will be included in Adjusted EBITDA notwithstanding that such amount was not deducted in calculating Consolidated Net Income;
less, without duplication,
(10) non-cash items increasing Consolidated Net Income for such period (excluding the recognition of deferred revenue or any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period and any items for which cash was received in a prior period, including the amortization of employee benefit plan prior service costs); minus
3
(11) non-operating income.
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
Applicable Premium means, with respect to any Note on any applicable redemption date as determined by the Issuer, the greater of:
(1) 1.0% of the then outstanding principal amount of such Note; and
(2) the excess of:
(A) the present value at such redemption date of the sum of (i) the redemption price of such Note at February 1, 2019 (such redemption price being set forth in paragraph 5 of such Note) plus (ii) all required interest payments due on such Note through February 1, 2019 (excluding accrued but unpaid interest), such present value to be computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(B) the then outstanding principal amount of such Note.
Asset Sale means:
(1) the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of assets (including by way of a Sale/Leaseback Transaction) of Hexion or any Restricted Subsidiary of Hexion other than in the ordinary course of business (each referred to in this definition as a disposition) or
(2) the issuance or sale of Equity Interests of any Restricted Subsidiary (other than to Hexion or another Restricted Subsidiary of Hexion other than directors or other legally required qualifying shares) (whether in a single transaction or a series of related transactions),
in each case other than:
(a) a disposition of Cash Equivalents or Investment Grade Securities;
(b) disposition of obsolete, damaged or worn out equipment or disposals of equipment in connection with reinvestment in or replacement of equipment, in each case, in the ordinary course of business;
(c) the disposition of all or substantially all of the assets of Hexion in a manner permitted pursuant to Section 5.01(a) or any disposition that constitutes a Change of Control;
4
(d) any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under Section 4.04;
(e) any disposition of assets of Hexion or any Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary, which disposition or issuance has an aggregate Fair Market Value (as determined in good faith by Hexion) of less than $12.5 million;
(f) any disposition of assets to Hexion or any Restricted Subsidiary of Hexion, including by way of merger;
(g) any exchange of assets for assets related to a Similar Business to the extent of comparable or better market value, as determined in good faith by Hexion;
(h) any disposition of assets received by Hexion or any of its Restricted Subsidiaries upon the foreclosure on a Lien;
(i) any disposition of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;
(j) any disposition of inventory in the ordinary course of business;
(k) the lease, assignment or sub-lease of any real or personal property in the ordinary course of business;
(l) any disposition of accounts receivable and related assets of the type specified in the definition of Receivables Financing to a Receivables Subsidiary in a Qualified Receivables Financing or in factoring or similar transactions;
(m) a transfer of accounts receivable and related assets of the type specified in the definition of Receivables Financing (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;
(n) any agreement or arrangement involving, relating to or otherwise facilitating, (i) requirements contracts, (ii) tolling arrangements or (iii) the reservation or presale of production capacity of Hexion or any of its Restricted Subsidiaries by one or more third parties;
(o) sales or grants of licenses or sublicenses to use Hexions or any of its Restricted Subsidiaries patents, trade secrets, know-how and technology to the extent that such license does not prohibit the licensor from using the patent, trade secret, know-how or technology;
5
(p) any Sale/Leaseback Transaction pursuant to which Hexion or any Restricted Subsidiaries receives with respect to such transaction aggregate consideration of less than $15 million; and
(q) to the extent constituting an Asset Sale, any termination, settlement or extinguishment of Hedging Obligations.
Bank Indebtedness means any and all amounts payable under or in respect of any Credit Agreement or the other Senior Credit Documents, as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Credit Agreement), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to Hexion whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.
Board of Directors means as to any Person, the board of directors or managers, as applicable, of such Person or any direct or indirect parent of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.
Business Day means each day which is not a Legal Holiday.
Capital Stock means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.
Capitalized Lease Obligation means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.
Cash Contribution Amount means the aggregate amount of cash contributions made to the capital of Hexion described in the definition of Contribution Indebtedness.
Cash Equivalents means:
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(1) U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;
(2) securities issued or directly and fully guaranteed or insured by the government of, or any agency or instrumentality thereof, the United States of America, Australia, Great Britain, Canada, the Netherlands or any other member state of the European Union, in each case with maturities not exceeding two years after the date of acquisition;
(3) in the case of any Foreign Subsidiary, securities issued or directly and fully guaranteed or insured by the government of the jurisdiction of such Foreign Subsidiary, or any agency or instrumentality thereof, in each case with maturities not exceeding 270 days after the date of acquisition and held by it from time to time in the ordinary course of business;
(4) certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers acceptances, in each case with maturities not exceeding one year and overnight bank deposits and demand deposits (in their respective local currencies), in each case with any commercial bank having capital and surplus in excess of $500 million or the foreign currency equivalent thereof and whose long-term debt is rated A or the equivalent thereof by Moodys or S&P (or, in the case of an obligor domiciled outside of the United States, reasonably equivalent ratings of another internationally recognized credit rating agency);
(5) repurchase obligations for underlying securities of the types described in clauses (2) and (4) above entered into with any financial institution meeting the qualifications specified in clause (4) above;
(6) commercial paper issued by a corporation (other than an Affiliate of Hexion) rated at least A-1 or the equivalent thereof by Moodys or S&P (or, in the case of an obligor domiciled outside of the United States, reasonably equivalent ratings of another internationally recognized credit rating agency) and in each case maturing within one year after the date of acquisition;
(7) readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moodys or S&P in each case with maturities not exceeding two years from the date of acquisition;
(8) Indebtedness issued by Persons (other than the Sponsor or any of their Affiliates) with a rating of A or higher from S&P or A-2 or higher from Moodys (or, in the case of an obligor domiciled outside of the United States, reasonably equivalent ratings of another internationally recognized credit rating agency) in each case with maturities not exceeding two years from the date of acquisition;
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(9) investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (8) above; and
(10) instruments equivalent to those referred to in clauses (1) through (8) above denominated in euros or any other foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.
Change of Control means the occurrence of any of the following events:
(1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of Hexion and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or
(2) Hexion becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Voting Stock of Hexion; or
(3) individuals who on the Issue Date constituted the Board of Directors of Hexion (together with any new directors whose election by such Board of Directors of Hexion or whose nomination for election by the shareholders of Hexion was approved by (a) a vote of a majority of the directors of Hexion then still in office who were either directors on the Issue Date or whose election or nomination for election was previously so approved or (b) the Permitted Holders) cease for any reason to constitute a majority of the Board of Directors of Hexion then in office.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means all the collateral described in the Security Documents.
Collateral Agent shall mean Wilmington Trust, National Association, in its capacity as collateral agent under the Collateral Agreement, together with its successors and permitted assigns under this Indenture and the Security Documents exercising substantially the same rights and powers.
Collateral Agreement means the Collateral Agreement, dated and effective as of the date hereof, among Hexion, the subsidiaries of Hexion party thereto from time to time, the Trustee as authorized representative with respect to the Notes, each other authorized representative party thereto from time to time and the Collateral Agent, as amended, modified or supplemented in accordance with its terms.
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consolidated means, with respect to any Person, such Person consolidated with its Restricted Subsidiaries and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary shall be accounted for as an Investment.
Consolidated Interest Expense means, with respect to any Person (the Specified Person) for any period, the sum, without duplication, of:
(1) consolidated interest expense of the Specified Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding amortization of deferred financing fees and expensing of any bridge or other financing fees);
(2) consolidated capitalized interest of the Specified Person and its Restricted Subsidiaries for such period, whether paid or accrued;
(3) commissions, discounts, yield and other fees and charges Incurred for such period in connection with any Receivables Financing of the Specified Person or any of its Restricted Subsidiaries which are payable to Persons other than Hexion and its Restricted Subsidiaries;
(4) dividends accrued for such period in respect of all Disqualified Stock of the Specified Person and any of its Restricted Subsidiaries and all Preferred Stock (including Designated Preferred Stock) of any such Restricted Subsidiaries, in each case held by Persons other than Hexion or a Wholly Owned Subsidiary (in each such case other than (x) dividends payable solely in Capital Stock (other than Disqualified Stock) of Hexion and (y) dividends that are payable only at such time as there are no Notes outstanding); and
(5) interest accruing for such period on any Indebtedness of any other Person to the extent such Indebtedness is guaranteed by (or secured by the assets of) the Specified Person or any of its Restricted Subsidiaries;
less
(6) interest income of the Specified Person and its Restricted Subsidiaries for such period.
Consolidated Net Income means, with respect to any Person for any period, the aggregate Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis; provided, however, that:
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(1) any net after-tax extraordinary nonrecurring or unusual gains or losses or income , expenses or charges (less all fees and expenses relating thereto), including any severance expenses, expenses related to any reconstruction, decommissioning or reconfiguration of fixed assets for alternate uses, fees, expenses or charges relating to new product lines, plant shutdown costs and acquisition integration cost and fees, expenses or charges related to any Equity Offering, Permitted Investment, acquisition or Indebtedness permitted to be Incurred by this Indenture (in each case, whether or not successful), including any such fees, expenses, charges or change in control payments related to the Hexion Recapitalization or otherwise, in each case, shall be excluded;
(2) any increase in amortization or depreciation or any one-time non-cash charges (such as purchased in-process research and development or capitalized manufacturing profit in inventory) resulting from purchase accounting in connection with any acquisition that is consummated after the Existing Second Lien Notes Issue Date shall be excluded;
(3) the Net Income for such period shall not include the cumulative effect of a change in accounting principles during such period;
(4) any net after-tax income or loss from discontinued operations and any net after-tax gains or losses on disposal of discontinued operations shall be excluded;
(5) any net after-tax gains or losses, or any subsequent charges or expenses (less all fees and expenses or charges relating thereto), attributable to business dispositions or asset dispositions having occurred at any time other than in the ordinary course of business (as determined in good faith by the Board of Directors of Hexion) shall be excluded;
(6) any net after-tax gains or losses attributable to the early extinguishment of Indebtedness, Hedging Obligations or other derivative instruments shall be excluded;
(7) the Net Income for such period of any Person that is not a Subsidiary of such Person, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent Person or a Restricted Subsidiary thereof in respect of such period;
(8) solely for the purpose of determining the amount available for Restricted Payments under Section 4.04(a)(3)(A), the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, unless such restrictions with respect to the payment of dividends or similar distributions
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have been legally waived; provided, however, that (without duplication) the Consolidated Net Income of such Person shall be increased by the amount of dividends or other distributions or other payments actually paid in cash (or converted into cash) by any such Restricted Subsidiary to such Person, to the extent not already included therein;
(9) an amount equal to the amount of Tax Distributions actually made to the holders of Capital Stock of such Person or any parent company of such Person in respect of such period in accordance with Section 4.04(b)(xii) shall be included, to the extent not otherwise deducted, as though such amounts had been paid as income taxes directly by such Person for such period;
(10) any impairment charges or asset write-offs and amortization of intangibles and other fair value adjustments in each case arising pursuant to the application of GAAP shall be excluded;
(11) any non-cash compensation expense realized from any deferred stock compensation plan or grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors and employees of such Person or any of its Restricted Subsidiaries shall be excluded;
(12) solely for purposes of calculating Adjusted EBITDA, (a) the Net Income of any Person and its Restricted Subsidiaries shall be calculated without deducting the income attributable to, or adding the losses attributable to, the minority equity interests of third parties in any non-wholly-owned Restricted Subsidiary except to the extent of dividends declared or paid in respect of such period or any prior period on the shares of Capital Stock of such Restricted Subsidiary held by such third parties and (b) any ordinary course dividend, distribution or other payment paid in cash and received from any Person in excess of amounts included in clause (7) above shall be included;
(13) (a)(i) the non-cash portion of straight-line rent expense shall be excluded and (ii) the cash portion of straight-line rent expense which exceeds the amount expensed in respect of such rent expense shall be included and (b) non-cash gains, losses, income and expenses resulting from fair value accounting required by Statement of Financial Accounting Standards No. 133 shall be excluded;
(14) accruals and reserves that are established within twelve months after the Issue Date and that are so required to be established in accordance with GAAP shall be excluded;
(15) non-cash charges for deferred tax asset valuation allowances shall be excluded;
(16) any (a) severance or relocation costs or expenses, (b) one-time non-cash compensation charges, (c) the costs and expenses after the Issue Date related to employment of terminated employees, (d) costs or expenses realized in connection with, resulting from or in anticipation of the Hexion Recapitalization or (e) costs or expenses
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realized in connection with or resulting from stock appreciation or similar rights, stock options or other rights existing on the Issue Date of officers, directors, managers and employees, in each case of such Person or any of its Restricted Subsidiaries, shall be excluded; and
(17) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain resulting from hedging transactions for currency exchange risk, shall be excluded.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries of Hexion or a Restricted Subsidiary of Hexion to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Sections 4.04(a)(3)(D) and (E).
Consolidated Non-cash Charges means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person for such period on a consolidated basis and otherwise determined in accordance with GAAP, but excluding any such charge which consists of or requires an accrual of, or cash reserve for, anticipated cash charges for any future period.
Consolidated Secured Debt Ratio means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness of Hexion and its Restricted Subsidiaries on the date of determination that constitutes First Priority Lien Obligations, the Notes or Other Pari Passu Lien Obligations to (b) the aggregate amount of Adjusted EBITDA for the then most recent four fiscal quarters for which internal financial statements of Hexion and its Restricted Subsidiaries are available in each case with such pro forma adjustments to Consolidated Total Indebtedness and Adjusted EBITDA as are consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio; provided, however, that solely for purposes of the calculation of the Consolidated Secured Debt Ratio, in connection with the Incurrence of any Lien pursuant to clause (8) of the definition of Permitted Liens, Hexion or its Restricted Subsidiaries may elect, pursuant to an Officers Certificate delivered to the Trustee, to treat all or any portion of the commitment under any Indebtedness (including any Bank Indebtedness) which is to be secured by such Lien as being Incurred at such time and any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.
Consolidated Taxes means provision for taxes based on income, profits or capital, including state, franchise and similar taxes and any Tax Distributions taken into account in calculating Consolidated Net Income.
Consolidated Total Indebtedness means, as of any date of determination, an amount equal to the sum (without duplication) of (1) the aggregate amount of all outstanding Indebtedness of Hexion and its Restricted Subsidiaries (excluding any undrawn letters of credit) consisting of Capitalized Lease Obligations, bankers acceptances, Indebtedness for borrowed
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money and Indebtedness in respect of the deferred purchase price of property or services, plus (2) the aggregate amount of all outstanding Disqualified Stock of Hexion and its Restricted Subsidiaries and all Preferred Stock of Restricted Subsidiaries of Hexion, with the amount of such Disqualified Stock and Preferred Stock equal to the greater of their respective voluntary or involuntary liquidation preferences, minus (3) the aggregate amount of all Unrestricted Cash on the consolidated balance sheet of Hexion and its Restricted Subsidiaries as of such date of determination, in each case determined on a consolidated basis in accordance with GAAP.
Contingent Obligations means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness (primary obligations) of any other Person (the primary obligor) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:
(1) to purchase any such primary obligation or any property constituting direct or indirect security therefor,
(2) to advance or supply funds:
(a) for the purchase or payment of any such primary obligation; or
(b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or
(3) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.
Contribution Indebtedness means Indebtedness of Hexion or any of its Restricted Subsidiaries that is a Guarantor in an aggregate principal amount not greater than twice the aggregate amount of cash contributions (other than Excluded Contributions) made to the capital of Hexion by any stockholder of Hexion (other than a Restricted Subsidiary) after the Issue Date; provided, however, that:
(1) if the aggregate principal amount of such Contribution Indebtedness is greater than one times such cash contributions to the capital of Hexion, the amount in excess shall be Indebtedness (other than Secured Indebtedness) with a Stated Maturity later than the Stated Maturity of any Notes then outstanding;
(2) such Contribution Indebtedness (a) is Incurred within 180 days after the making of such cash contributions and (b) is so designated as Contribution Indebtedness pursuant to an Officers Certificate on the Incurrence date thereof; and
(3) such cash contribution is not and has not been included in the calculation of permitted Restricted Payments under Section 4.04.
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Credit Agreement means (i) the ABL Facility and (ii) whether or not the credit agreement referred to in clause (i) remains outstanding, if designated by Hexion to be included in the definition of Credit Agreement, one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, securitization or receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time.
Default means any event which is, or after notice or passage of time or both would be, an Event of Default.
Designated Non-cash Consideration means the Fair Market Value (as determined in good faith by Hexion) of non-cash consideration received by Hexion or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officers Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.
Designated Preferred Stock means Preferred Stock of Hexion or any direct or indirect parent company of Hexion, as applicable (other than Disqualified Stock), that is issued for cash (other than to Hexion or any of its Subsidiaries or an employee stock ownership plan or trust established by Hexion or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officers Certificate, on the issuance date thereof, the cash proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).
Disqualified Stock means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:
(1) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided, however, that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the Notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the Notes (including the purchase of any Notes tendered pursuant thereto)),
(2) is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person or any of its Restricted Subsidiaries, or
(3) is redeemable at the option of the holder thereof, in whole or in part,
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in each case prior to 91 days after the maturity date of the Notes; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of Hexion or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by Hexion in order to satisfy applicable statutory or regulatory obligations or as a result of such employees termination, death or disability; provided further, however, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.
Domestic Subsidiary means a Restricted Subsidiary that is not a Foreign Subsidiary.
EBITDA means Adjusted EBITDA but without giving effect to clause (9) contained therein.
Equity Interests means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).
Equity Offering means any public or private sale after the Issue Date of common stock or Preferred Stock of Hexion or any direct or indirect parent company of Hexion, as applicable (other than Disqualified Stock), other than:
(1) public offerings with respect to Hexions or such direct or indirect parent companys common stock registered on Form S-8;
(2) any such public or private sale that constitutes an Excluded Contribution; and
(3) any Cash Contribution Amount.
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
Excluded Assets means the property and other assets of the Issuer and the Subsidiary Guarantors that is excluded from the grant of security interest in favor of the Collateral Agent, on behalf of the holders of the Notes, pursuant to the terms of this Indenture and the Security Documents.
Excluded Contributions means Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of Hexion) received by Hexion after the Issue Date from:
(1) contributions to its common equity capital, and
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(2) the sale (other than to a Subsidiary of Hexion or to any Hexion or Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of Hexion,
in each case designated as Excluded Contributions pursuant to an Officers Certificate executed by an Officer of Hexion, the cash proceeds of which are excluded from the calculation set forth in Section 4.04(a)(3).
Existing Debenture Payoff Date means the date on which the Existing Debentures are repaid in full, defeased or discharged.
Existing Debentures means (i) Hexions 77/8% Debentures due 2023 and (ii) Hexions 9.20% Debentures due 2021.
Existing Debentures Subsidiary means each corporation of which Hexion, or Hexion and one or more Existing Debentures Subsidiaries, or any one or more Existing Debentures Subsidiaries, directly or indirectly own securities entitling the holders thereof to elect a majority of the directors, either at all times or so long as there is no default or contingency which permits the holders of any other class or classes of securities to vote for the election of one or more directors.
Existing First Lien Notes means, collectively, the 6.625% First-Priority Senior Secured Notes and the 10.00% First-Priority Senior Secured Notes.
Existing First Lien Notes Indentures means (i) the 6.625% First Lien Notes Indenture and (ii) the 10.00% First Lien Notes Indenture.
Existing First Lien Notes Obligations means, collectively, the Notes Obligations as defined in each of the applicable Existing First Lien Notes Indentures.
Existing Second Lien Notes means the 9% Second Priority Senior Secured Notes due 2020 issued by the Issuer (as successor issuer by merger to Hexion U.S. Finance Corp.) and Hexion Nova Scotia Finance, ULC.
Existing Second Lien Notes Indenture means the indenture among the Issuer (as successor by merger to Hexion U.S. Finance Corp.), Hexion Nova Scotia Finance, ULC, Wilmington Trust Company, as trustee, and the other parties thereto dated November 5, 2010 with respect to the Existing Second Lien Notes due 2020, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
Existing Second Lien Notes Issue Date means November 3, 2006.
Existing Second Lien Notes Offering Circular means the Offering Circular dated October 27, 2006, with respect to the Second Priority Senior Secured Floating Rate Notes due 2014 issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC.
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Existing Senior Secured Notes means the 8.875% Senior Secured Notes due 2018 issued by Hexion Finance Escrow LLC and Hexion Escrow Corporation and assumed by the Issuer (as successor issuer by merger to Hexion U.S. Finance Corp.) and Hexion Nova Scotia Finance, ULC.
Existing Senior Secured Notes Indenture means the indenture among the Issuer (as successor by merger to Hexion U.S. Finance Corp.), Hexion Nova Scotia Finance, ULC, Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB) as trustee, and the other parties thereto dated January 29, 2010 with respect to the Existing Senior Secured Notes, as it may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
Fair Market Value means, with respect to any asset or property, the price which could be negotiated in an arms-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.
First Lien Documents means the credit, guarantee and security documents governing the First Priority Lien Obligations, including, without limitation, this Indenture, the Existing First Lien Notes Indentures, the New First Lien Notes Indenture and the First Lien Security Documents.
First Lien Security Documents means the Security Documents and any other agreement, document or instrument pursuant to which a Lien is granted or purported to be granted securing First Priority Lien Obligations or under which rights or remedies with respect to such Liens are governed.
First Priority After-Acquired Property means any property (other than the initial collateral as of the Issue Date) of Hexion or any Subsidiary Guarantor that secures any First Priority Lien Obligations, other than in each case any Excluded Assets.
First Priority Lien Obligations means (i) all Secured Bank Indebtedness, (ii) all Existing First Lien Notes Obligations and New First Lien Notes Obligations, (iii) all ABL Obligations, (iv) all other Obligations (not constituting Indebtedness) of the Issuer and its Subsidiaries under the agreements governing Secured Bank Indebtedness, (v) all other Obligations of the Issuer or any of its Subsidiaries in respect of Hedging Obligations or Obligations in respect of cash management services in each case that are secured by Liens granted pursuant to any Senior Credit Document and (vi) all Additional First Priority Lien Obligations.
Fixed Charge Coverage Ratio means, with respect to any Person for any period, the ratio of Adjusted EBITDA of such Person for such period to the Consolidated Interest Expense of such Person for such period. In the event that Hexion or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings or revolving advances under any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such
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Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the event for which the calculation of the Fixed Charge Coverage Ratio is made (the Calculation Date), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period (including in the case of any Incurrence or issuance a pro forma application of the net proceeds therefrom).
For purposes of making the computation referred to above, Investments, acquisitions or dispositions of operating units of a business, mergers, consolidations, discontinued operations (as determined in accordance with GAAP), and any operational changes, business realignment projects and initiatives, restructurings and reorganizations (each a pro forma event) that Hexion or any of its Restricted Subsidiaries has either determined to make or made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions or dispositions of an operating unit of a business, mergers, consolidations, discontinued operations and any operational changes, business realignment projects and initiatives, restructurings and reorganizations (and the change of any associated fixed charge obligations, consolidated interest expense and the change in Adjusted EBITDA resulting therefrom), had occurred on the first day of the four-quarter reference period. If, since the beginning of such period any Person that subsequently became a Restricted Subsidiary of Hexion or was merged with or into Hexion or any Restricted Subsidiary of Hexion since the beginning of such period shall have made any Investment, acquisition or disposition of an operating unit of a business, merger, consolidation, discontinued operation or operational change, business realignment project or initiative, restructuring or reorganization, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, consolidation, operational change, business realignment project or initiative, restructuring, or reorganization had occurred at the beginning of the applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Hexion. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of Hexion as set forth in an Officers Certificate, to reflect (i) operating expense reductions, other operating improvements or synergies reasonably expected to result from the applicable pro forma event (including, to the extent applicable, from the Hexion Recapitalization) and (ii) all adjustments used in connection with the calculation of Adjusted EBITDA to the extent such adjustments, without duplication, continue to be applicable to such four quarter period.
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Flow Through Entity means (i) an entity that is treated as a partnership not taxable as a corporation for U.S. federal income tax purposes or (ii) a disregarded entity for U.S. federal income tax purposes whose beneficial owner is a partnership for U.S. federal income tax purposes.
Foreign Subsidiary means a Restricted Subsidiary not organized or existing under the laws of the United States of America or any state or territory thereof or the District of Columbia and any direct or indirect subsidiary of such Restricted Subsidiary.
GAAP means generally accepted accounting principles set forth in (i) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements and pronouncements of the Financial Accounting Standards Board and (iii) in such other statements by such other entity as have been approved by a significant segment of the accounting profession, in each case which were in effect on the Existing Second Lien Notes Issue Date. For the purposes of this Indenture, the term consolidated with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.
Government Obligations means securities that are:
(1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or
(2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or a member of the European Union, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America,
which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligations or a specific payment of principal of or interest on any such Government Obligations held by such custodian for the account of the holder of such depository receipt; provided, however, 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 Government Obligations or the specific payment of principal of or interest on the Government Obligations evidenced by such depository receipt.
guarantee means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.
Guarantee means any guarantee of the obligations of the Issuer under this Indenture and the Notes by any Person in accordance with the provisions of this Indenture.
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Guarantor means any Person that Incurs a Guarantee with respect to the Notes; provided, however, that upon the release or discharge of such Person from its Guarantee in accordance with this Indenture, such Person ceases to be a Guarantor.
HAI means HA International, LLC, a Delaware limited liability company, and any successor in interest thereto.
Hedging Obligations means, with respect to any Person, the obligations of such Person under:
(1) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and
(2) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
Hexion means Hexion Inc. (formerly known as Momentive Specialty Chemicals Inc.), a New Jersey corporation, and any successor in interest thereto.
Hexion Canada means Hexion Canada Inc. (formerly known as Momentive Specialty Chemicals Canada Inc.), a Canadian corporation, and any successor in interest thereto.
Hexion Coop means Hexion International Holdings Coöperatief U.A. (formerly known as Momentive International Holdings Coöperatief U.A.) and any successor in interest thereto.
Hexion Recapitalization means the Hexion Recapitalization described in the Existing Second Lien Notes Offering Circular.
holder, Holder, noteholder or Noteholder means the Person in whose name a Note is registered on the Registrars books.
Incur means issue, assume, guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.
Indebtedness means, with respect to any Person:
(1) the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except (i) any such balance that constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out obligations until such obligation
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becomes a liability on the balance sheet of such Person in accordance with GAAP), which purchase price is due more than twelve months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;
(2) to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business);
(3) to the extent not otherwise included, Indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such Indebtedness is assumed by such Person); provided, however, that the amount of such Indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by Hexion) of such asset at such date of determination, and (b) the amount of such Indebtedness of such other Person; and
(4) to the extent not otherwise included, with respect to Hexion and its Restricted Subsidiaries, the amount then outstanding (including amounts advanced, and received by, and available for use by, Hexion or any of its Restricted Subsidiaries) under any Receivables Financing (as set forth in the books and records of Hexion or any Restricted Subsidiary and confirmed by the agent, trustee or other representative of the institution or group providing such Receivables Financing);
provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations incurred in the ordinary course of business; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; or (4) Obligations under or in respect of Qualified Receivables Financing.
Notwithstanding anything in this Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under this Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under this Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under this Indenture.
Indenture means this Indenture as amended or supplemented from time to time.
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Indenture Restricted Subsidiary means any Existing Debenture Subsidiary which owns, operates or leases one or more Principal Properties and shall not include any other Existing Debenture Subsidiary.
Independent Financial Advisor means an accounting, appraisal or investment banking firm or consultant to Persons engaged in a Similar Business, in each case of nationally recognized standing that is, in the good faith determination of Hexion, qualified to perform the task for which it has been engaged.
Initial Existing First Lien Notes means the $450.0 million aggregate principal amount of Existing First Lien Notes incurred on March 14, 2012, and any exchange notes in respect thereof.
Initial Notes means the $225,000,000 in aggregate principal amount of 13.75% Senior Secured Notes due 2022 issued by the Issuer on the Issue Date.
Investment Grade Securities means:
(1) securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents) and in each case with maturities not exceeding two years from the date of acquisition,
(2) securities that have a rating equal to or higher than Baa3 (or equivalent) by Moodys or BBB- (or equivalent) by S&P, or an equivalent rating by any other rating agency, but excluding any debt securities or loans or advances between and among Hexion and its Subsidiaries,
(3) investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment or distribution, and
(4) corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.
Investments means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees and consultants made in the ordinary course of business and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of Hexion in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of Unrestricted Subsidiary and Section 4.04:
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(1) Investments shall include the portion (proportionate to Hexions equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Hexion) of the net assets of a Subsidiary of Hexion at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, Hexion shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary equal to an amount (if positive) equal to:
(a) Hexions Investment in such Subsidiary at the time of such redesignation less
(b) the portion (proportionate to Hexions equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by Hexion) of the net assets of such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors of Hexion.
Issue Date means February 8, 2017.
Junior Priority Intercreditor Agreements means, collectively, (i) the Senior Secured Intercreditor Agreement and (ii) the Second Lien Intercreditor Agreement.
Junior Priority Obligations means the Existing Second Lien Notes and Obligations with respect to other Indebtedness permitted to be Incurred under the ABL Facility Documents, the Existing First Lien Notes Indentures, the New First Lien Notes Indenture and this Indenture, as applicable, which is by its terms intended to be secured equally and ratably with any series of the Existing Second Lien Notes or on a basis junior to the Liens securing any series of the Existing Second Lien Notes or the Notes; provided such Lien is permitted to be Incurred under the Existing Second Lien Notes Indenture, the ABL Facility Documents, the Existing First Lien Notes Indentures, the New First Lien Notes Indenture and this Indenture, to the extent applicable.
Legal Holiday means a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York or the place of payment.
Lien means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any other agreement to give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction); provided, however, that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.
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Management Group means all of the individuals consisting of the directors, managers, executive officers and other management personnel of Hexion or any direct or indirect parent company of Hexion, as the case may be, on the Issue Date together with (1) any new directors or managers whose election by such boards of directors or managers or whose nomination for election by the shareholders of Hexion or any direct or indirect parent company of Hexion, as the case may be, as applicable, was approved by (x) a vote of a majority of the directors or managers of Hexion or any direct or indirect parent of Hexion as applicable, then still in office who were either directors or managers on the Issue Date or whose election or nomination was previously so approved or (y) the Permitted Holders and (2) executive officers and other management personnel of Hexion or any direct or indirect parent company of Hexion, as the case may be, as applicable, hired at a time when the directors or managers on the Issue Date together with the directors or managers so approved constituted a majority of the directors or managers of Hexion or any direct or indirect parent company of Hexion, as the case may be, as applicable.
Moodys means Moodys Investors Service, Inc. or any successor to the rating agency business thereof.
Net Income means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.
Net Proceeds means the aggregate cash proceeds received by Hexion or any of its Restricted Subsidiaries in respect of any Asset Sale (including any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof, amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to Section 4.06(b)) to be paid as a result of such transaction (including to obtain any required consent therefor), and any deduction of appropriate amounts to be provided by Hexion as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by Hexion after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.
New First Lien Notes means the 10.375% First-Priority Senior Secured Notes due 2022 issued by the Issuer in connection with the Offering Transactions.
New First Lien Notes Indenture means the indenture governing the New First Lien Notes.
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New First Lien Notes Obligations means the Notes Obligations as defined in the New First Lien Notes Indenture.
Notes means the Initial Notes and Additional Notes issued pursuant to this Indenture, in each case, in the form set forth in Appendix A.
Notes Obligations means Obligations in respect of the Notes, this Indenture and the Security Documents, including, for the avoidance of doubt, Obligations in respect of Additional Notes (to the extent incurred in compliance with this Indenture) and guarantees thereof.
Obligations means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided, however, that Obligations with respect to the Notes shall not include fees or indemnifications in favor of third parties other than the Trustee, the Collateral Agent and the Holders of such Notes.
Offering Circular means the Offering Circular dated January 25, 2017, with respect to the Notes.
Offering Transactions means the Transactions described under SummaryTransactions in the Offering Circular.
Officer means the Chairman of the Board, Chief Executive Officer, President, Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of Hexion.
Officers Certificate means a certificate signed on behalf of Hexion by two Officers of Hexion, one of whom must be the Chief Executive Officer, the principal financial officer, the Treasurer or the principal accounting officer of Hexion that meets the requirements set forth in this Indenture.
Opinion of Counsel means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to Hexion.
Other Pari Passu Lien Obligations means Obligations with respect to other Indebtedness permitted to be incurred under this Indenture and any Credit Agreement, as applicable, which is by its terms intended to be secured equally and ratably with the Notes; provided such Lien is permitted to be incurred under this Indenture and the Credit Agreement, as applicable.
Pari Passu Indebtedness means:
(1) with respect to the Issuer, the Notes and any Indebtedness which ranks pari passu in right of payment to the Notes; and
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(2) with respect to any Guarantor, its Guarantee and any Indebtedness which ranks pari passu in right of payment to such Guarantors Guarantee.
Permitted Holders means, at any time, each of (i) the Sponsor, (ii) the Management Group, (iii) any Person that has no material assets other than the Capital Stock of Hexion or another Permitted Holder and, directly or indirectly, holds or acquires 100% of the total voting power of the Voting Stock of Hexion, and of which no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than any of the other Permitted Holders specified in clauses (i), (ii), (iii) and (iv) of this definition, holds more than 50% of the total voting power of the Voting Stock thereof and (iv) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) the members of which include any of the Permitted Holders specified in clauses (i), (ii) and (iii) above and that, directly or indirectly, hold or acquire beneficial ownership of the Voting Stock of Hexion (a Permitted Holder Group), so long as (1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by such member (or more favorable rights in the case of any Permitted Holder) and (2) no Person or other group (other than Permitted Holders specified in clauses (i), (ii) and (iii) above) beneficially owns more than 50% on a fully diluted basis of the Voting Stock held by the Permitted Holder Group. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of this Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.
Permitted Investments means:
(1) any Investment in Hexion or any Restricted Subsidiary of Hexion;
(2) any Investment in Cash Equivalents or Investment Grade Securities;
(3) any Investment by Hexion or any Restricted Subsidiary of Hexion in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of Hexion, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, Hexion or a Restricted Subsidiary of Hexion;
(4) any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of Section 4.06 or any other disposition of assets not constituting an Asset Sale;
(5) any Investment existing on the Issue Date;
(6) loans and advances to officers, directors, managers, employees or consultants of Hexion or any Restricted Subsidiary not in excess of $25 million outstanding at any one time in the aggregate;
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(7) any Investment acquired by Hexion or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable or claims held by Hexion or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by Hexion or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;
(8) Hedging Obligations permitted under Section 4.03(b)(x);
(9) any Investment by Hexion or any of its Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Investments made pursuant to this clause (9) that are at that time outstanding, not to exceed the greater of (a) $150 million and (b) 4.5% of Total Assets at the time of such Investment, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (9) (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (9) is made in any Person that is not a Restricted Subsidiary of Hexion at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of Hexion after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (9) for so long as such Person continues to be a Restricted Subsidiary;
(10) additional Investments by Hexion or any of its Restricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed the greater of (a) $150 million and (b) 4.5% of Total Assets at the time of such Investment, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (10) (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);
(11) loans and advances to officers, directors, managers or employees for business-related travel expenses, moving expenses, payroll payments expenses and other similar expenses, in each case Incurred in the ordinary course of business;
(12) Investments the payment for which consists of Equity Interests (other than Disqualified Stock) of Hexion or any direct or indirect parent company of Hexion, as applicable; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under Section 4.04(a)(3);
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(13) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of Section 4.07(b) (except transactions described in clauses (ii), (vi), (vii), (xi)(B), (xvii) and (xxi) of such Section);
(14) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;
(15) guarantees issued in accordance with Sections 4.03 and 4.11;
(16) any Investment by Restricted Subsidiaries of Hexion in other Restricted Subsidiaries of Hexion and Investments by Subsidiaries that are not Restricted Subsidiaries in other Subsidiaries that are not Restricted Subsidiaries of Hexion;
(17) Investments consisting of purchases and acquisitions of real estate, inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property, in each case in the ordinary course of business;
(18) any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness; provided, however, that any Investment in a Receivables Subsidiary is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest;
(19) Investments resulting from the receipt of non-cash consideration in an Asset Sale received in compliance with Section 4.06;
(20) additional Investments in joint ventures of Hexion or any of its Restricted Subsidiaries in an aggregate amount outstanding not to exceed $50 million, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (20);
(21) any Investment in an entity which is not a Restricted Subsidiary to which a Restricted Subsidiary sells accounts receivable pursuant to a Qualified Receivables Financing; and
(22) Investments of a Restricted Subsidiary of Hexion acquired after the Issue Date or of an entity merged into or consolidated with Hexion or a Restricted Subsidiary in a transaction that is not prohibited by Section 5.01 after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation.
Permitted Liens means, with respect to any Person:
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(1) pledges or deposits and other Liens granted by such Person under workmens compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;
(2) Liens imposed by law, such as carriers, warehousemens and mechanics Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review;
(3) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings;
(4) Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit (or deposits to secure letters of credit or surety bonds for the same purpose), bankers acceptances or similar obligations issued pursuant to the request of and for the account of such Person in the ordinary course of its business;
(5) minor survey exceptions, minor encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, servicing agreements, development agreements, site plan agreements and other similar encumbrances incurred in the ordinary course of business or zoning or other restrictions as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;
(6) Liens securing Indebtedness (including Capitalized Lease Obligations) Incurred to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or Capital Stock of any Person owning such assets) of such Person; provided, however, that the Lien may not extend to any other property owned by such Person or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets and property affixed or appurtenant thereto and except for customary cross collateral arrangements with respect to property or equipment financed by the same financing source pursuant to the same financing scheme), and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 270 days after the latest of the (i) acquisition of the property subject to the Lien, (ii) completion of construction, repair, improvement or addition of the property subject to the Lien and (iii) commencement of full operation of the property subject to the Lien;
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(7) Liens securing Indebtedness of a Foreign Subsidiary permitted to be Incurred pursuant to Section 4.03; provided, however, that such Liens do not extend to the property or assets of Hexion or any Domestic Subsidiary (other than a Domestic Subsidiary that is owned by one or more Foreign Subsidiaries);
(8) Liens incurred to secure (A) Indebtedness permitted to be incurred pursuant to Section 4.03(b)(ii); provided that such Indebtedness incurred pursuant to clause (b)(ii)(A) thereof shall not constitute First Priority Lien Obligations, (B) Indebtedness Incurred pursuant to Section 4.03(a), or clause (i) or (xii) (or (xiii) to the extent it guarantees any such Indebtedness) of Section 4.03(b), to the extent such Lien is incurred pursuant to this clause (8) as designated by Hexion; provided, however, that, other than with respect to Liens incurred to secure Indebtedness Incurred pursuant to clause (i) or (xii) (or (xiii) to the extent it guarantees such Indebtedness) of Section 4.03(b), at the time of incurrence and after giving pro forma effect thereto (including a pro forma application of the net proceeds therefrom), (i) in the case of Other Pari Passu Lien Obligations or in any other case not subject to clause (ii), the Consolidated Secured Debt Ratio would be no greater than 5.25 to 1.0 and (ii) in the case of First Priority Lien Obligations, the Consolidated Secured Debt Ratio (excluding the Notes and Other Pari Passu Lien Obligations from such calculation) would be no greater than 4.0 to 1.0; provided further, however, that the immediately preceding proviso shall not apply to any Lien which is deemed to be incurred under this clause (8) by reason of the second proviso to clause (20) of this definition of Permitted Liens (except to the extent such Lien also secures Indebtedness in addition to the Indebtedness permitted to be secured thereby under clause (20)) and (C) Junior Priority Obligations, including the Existing Second Lien Notes; provided that, in the case of clause (C), if the Liens are not on Collateral, a Lien on such asset is granted to secure the Notes or the applicable guarantee;
(9) Liens existing on the Issue Date (other than Liens described in clause (8) above);
(10) Liens on property or shares of stock of a Person at the time such Person becomes a Subsidiary (and such other assets, property or shares of stock subject to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition); provided, however, such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Liens may not extend to any other property owned by Hexion or any Restricted Subsidiary of Hexion (other than such Person becoming a Subsidiary and Subsidiaries of such Person);
(11) Liens on property at the time Hexion or a Restricted Subsidiary of Hexion acquired the property, including any acquisition by means of a merger or consolidation with or into Hexion or any Restricted Subsidiary of Hexion; provided, however, that such
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Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (xv) of Section 4.03(b)) are not created or Incurred in connection with, or in contemplation of, such acquisition; provided further, however, that the Liens (other than Liens to secure Indebtedness Incurred pursuant to clause (xv) of Section 4.03(b)) may not extend to any other property owned by Hexion or any Restricted Subsidiary of Hexion (other than pursuant to after acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);
(12) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to Hexion or a Restricted Subsidiary of Hexion permitted to be Incurred in accordance with Section 4.03;
(13) Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligations;
(14) Liens on specific items of inventory or other goods and proceeds of any Person securing such Persons obligations in respect of documentary letters of credit, bank guarantees or bankers acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;
(15) licenses, sublicenses, leases and subleases which do not materially interfere with the ordinary conduct of the business of Hexion or any of its Restricted Subsidiaries;
(16) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases or other obligations not constituting Indebtedness;
(17) Liens in favor of the Issuer or any Guarantor or Liens on assets of a Restricted Subsidiary of Hexion that is not a Guarantor in favor solely of another Restricted Subsidiary of Hexion that is not a Guarantor;
(18) Liens on equipment of Hexion or any Restricted Subsidiary granted in the ordinary course of business to Hexions or such Restricted Subsidiarys client at which such equipment is located;
(19) Liens on accounts receivable and related assets of the type specified in the definition of Receivables Financing Incurred in connection with a Qualified Receivables Financing;
(20) Liens to secure any refinancing, refunding, extension or renewal (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (7), (8), (9), (10) and (11); provided, however, that (x) such new Lien shall be limited to all or part of the same property (including any after acquired property to the extent it would have been subject to the original Lien) that was subject to the original Lien (plus
31
improvements on and accessions to such property, proceeds and products thereof, customary security deposits and any other assets pursuant to the after-acquired property clauses to the extent such assets secured (or would have secured) the Indebtedness being refinanced, refunded, extended, renewed or replaced), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount (or accreted value, if applicable) or, if greater, committed amount of the Indebtedness described under clauses (6), (7), (8), (9), (10) and (11) at the time the original Lien became a Permitted Lien under this Indenture, (B) unpaid accrued interest and premiums (including tender premiums) and (C) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement; provided further, however, that in the case of any Liens to secure any refinancing, refunding, extension, renewal or replacement of Indebtedness secured by a Lien referred to in clause (8), the principal amount of any Indebtedness Incurred for such refinancing, refunding, extension, renewal or replacement shall be deemed secured by a Lien under clause (8) and not this clause (20) for purposes of determining the principal amount of Indebtedness outstanding under clause (8) and for purposes of the definition of Secured Bank Indebtedness;
(21) judgment Liens not giving rise to an Event of Default, so long as such Lien is adequately bonded any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall have expired;
(22) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods;
(23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by Hexion or any of its Restricted Subsidiaries in the ordinary course of business;
(24) Liens securing insurance premium financing arrangements; provided that such Lien is limited to the applicable insurance carriers;
(25) Liens incurred to secure cash management services in the ordinary course of business;
(26) other Liens securing obligations in an aggregate principal amount not to exceed $30 million at any one time outstanding;
(27) pledges and deposits and other Liens made in the ordinary course of business to secure liability to insurance carriers;
(28) Liens on the Equity Interests of Unrestricted Subsidiaries;
(29) leases or subleases, and licenses or sublicenses (including with respect to intellectual property), granted to others in the ordinary course of business;
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(30) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;
(31) any amounts held by a trustee in the funds and accounts under an indenture securing any revenue bonds issued for the benefit of the Issuer or any Restricted Subsidiary; and
(32) Liens (i) arising by virtue of any statutory or common law provisions relating to bankers liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business or (iii) encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to brokerage accounts incurred in the ordinary course of business and not for speculative purposes.
Any provider of additional extensions of credit shall be entitled to rely on the determination of an Officer that Liens incurred satisfy clause (8) above if such determination is set forth in an Officers Certificate delivered to such provider; provided, however, that such determination will not affect whether such Lien actually was incurred as permitted by clause (8).
Permitted Transfer has the meaning set forth in Section 5.01(b).
Person means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.
Pledgors shall mean the Issuer and the Guarantors.
Preferred Stock means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution or winding up.
Presumed Tax Rate means the highest effective marginal statutory combined U.S. federal, state and local income tax rate prescribed for an individual residing in New York City (taking into account (i) the deductibility of state and local income taxes for U.S. federal income tax purposes, assuming the limitation of Section 68(a)(2) of the Code applies, and (ii) the character (long-term or short-term capital gain, dividend income or other ordinary income) of the applicable income).
Principal Property means any single manufacturing or processing plant or warehouse owned or leased by Hexion or any Existing Debentures Subsidiary of Hexion and located within the United States of America (excluding its territories and possessions and the Commonwealth of Puerto Rico) other than any such plant or warehouse or portion thereof which the Board of Directors of Hexion reasonably determines not to be a Principal Property after due consideration of the materiality of such property to the business of Hexion and its Subsidiaries as a whole. After the Existing Debenture Payoff Date, Principal Property means any single manufacturing or processing plant or warehouse owned or leased by Hexion or any Existing
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Debentures Subsidiary of Hexion and located within the United States (excluding its territories and possessions and the Commonwealth of Puerto Rico) other than any such plant or warehouse or portion thereof which has a Fair Market Value (as determined in good faith by the Issuer) of less than $10,000,000.
Purchase Money Note means a promissory note of a Receivables Subsidiary evidencing a line of credit, which may be irrevocable, from Hexion or any Subsidiary of Hexion to a Receivables Subsidiary in connection with a Qualified Receivables Financing, which note is intended to finance that portion of the purchase price that is not paid by cash or a contribution of equity.
Qualified Receivables Financing means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:
(1) the Board of Directors of Hexion shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to Hexion and the Receivables Subsidiary,
(2) all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by Hexion), and
(3) the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by Hexion) and may include Standard Securitization Undertakings.
The grant of a security interest in any accounts receivable of Hexion or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank Indebtedness, Indebtedness in respect of the Notes or any Indebtedness incurred to refinance the Notes shall not be deemed a Qualified Receivables Financing.
Receivables Financing means any transaction or series of transactions that may be entered into by Hexion or any of its Subsidiaries pursuant to which Hexion or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by Hexion or any of its Subsidiaries), and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of Hexion or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by Hexion or any such Subsidiary in connection with such accounts receivable.
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Receivables Repurchase Obligation means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.
Receivables Subsidiary means a Wholly Owned Restricted Subsidiary of Hexion (or another Person formed for the purposes of engaging in a Qualified Receivables Financing with Hexion in which Hexion or any Subsidiary of Hexion makes an Investment and to which Hexion or any Subsidiary of Hexion transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of Hexion and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of Hexion (as provided below) as a Receivables Subsidiary and:
(a) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (i) is guaranteed by Hexion or any other Subsidiary of Hexion (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates Hexion or any other Subsidiary of Hexion in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of Hexion or any other Subsidiary of Hexion, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings,
(b) with which neither Hexion nor any other Subsidiary of Hexion has any material contract, agreement, arrangement or understanding other than on terms which Hexion reasonably believes to be no less favorable to Hexion or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Hexion, and
(c) to which neither Hexion nor any other Subsidiary of Hexion has any obligation to maintain or preserve such entitys financial condition or cause such entity to achieve certain levels of operating results.
Any such designation by the Board of Directors of Hexion shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of Hexion giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing conditions.
Restricted Investment means an Investment other than a Permitted Investment.
Restricted Subsidiary means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person; provided, however, that, unless HAI would be a Subsidiary without giving effect to the specific 50% test for HAI as set forth in the definition of Subsidiary, HAI will not be treated as a Restricted Subsidiary that is subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11, 4.12 and 4.15. Unless otherwise indicated in this Indenture, all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of Hexion.
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S&P means S&P Global Ratings or any successor to the rating agency business thereof.
Sale/Leaseback Transaction means an arrangement relating to property now owned or hereafter acquired by Hexion or a Restricted Subsidiary whereby Hexion or a Restricted Subsidiary transfers such property to a Person and Hexion or such Restricted Subsidiary leases it from such Person, other than leases between Hexion and a Restricted Subsidiary of Hexion or between Restricted Subsidiaries of Hexion.
SEC means the Securities and Exchange Commission.
Second Lien Intercreditor Agent has the meaning given to the term Intercreditor Agent in the Second Lien Intercreditor Agreement.
Second Lien Intercreditor Agreement means (i) the Amended and Restated Intercreditor Agreement, dated as of January 31, 2013, among JPMorgan Chase Bank, N.A., as agent under the ABL Facility and intercreditor agent, Wilmington Trust, National Association, as senior-priority agent for the holders of Existing First Lien Notes, Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as senior-priority agent for the holders of the Existing Senior Secured Notes, Wilmington Trust Company, as second-priority agent for the holders of the Existing Second Lien Notes, the Issuer and each Subsidiary Guarantor party thereto from time to time, and each authorized representative party thereto from time to time, as amended, restated, supplemented or otherwise modified from time to time in accordance with this Indenture, or (ii) any other intercreditor agreement with terms not materially less favorable to the holders of the Notes than the terms of the intercreditor agreement referred to in clause (i) above.
Secured Bank Indebtedness means any Bank Indebtedness that is secured by a Permitted Lien incurred or deemed incurred pursuant to clause (8) of the definition of Permitted Lien, as designated by Hexion to be included in this definition.
Secured Indebtedness means any Indebtedness secured by a Lien.
Securities Act means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
Security Documents means the Collateral Agreement and the other security agreements, pledge agreements, collateral assignments and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security interests in the Collateral for the benefit of the Collateral Agent, the Trustee and the holders of the Notes as contemplated by this Indenture.
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Senior Credit Documents means the collective reference to the Credit Agreement, the notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time.
Senior Secured Intercreditor Agent has the meaning given to the term Intercreditor Agent in the Senior Secured Intercreditor Agreement.
Senior Secured Intercreditor Agreement means (i) the Amended and Restated Intercreditor Agreement, dated as of the Issue Date, among JPMorgan Chase Bank, N.A., as intercreditor agent and agent under the ABL Facility, Wilmington Trust, National Association, as senior-priority agent for the holders of Existing First Lien Notes and the New First Lien Notes, Wilmington Trust, National Association, as second-priority agent for the holders of the Notes, the Issuer and each Subsidiary Guarantor party thereto from time to time, and each other authorized representative party thereto from time to time, as amended, restated, supplemented or otherwise modified from time to time in accordance with this Indenture, or (ii) any other intercreditor agreement with terms not materially less favorable to the holders of the Notes than the terms of the intercreditor agreement referred to in clause (i) above.
Significant Subsidiary means any Restricted Subsidiary that would be a Significant Subsidiary of Hexion within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
Similar Business means any business, the majority of whose revenues are derived from (i) the business or activities of Hexion and its Subsidiaries anticipated to be conducted as of the Issue Date or (ii) any business that is a natural outgrowth or a reasonable extension, development or expansion of any such business or any business similar, reasonably related, incidental, complementary or ancillary to any of the foregoing.
Sponsor means (i) Apollo Management, L.P., one or more investment funds controlled by Apollo Management, L.P. and any of their respective Affiliates (collectively, the Apollo Sponsors) and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with any Apollo Sponsors, provided that any Apollo Sponsor (x) owns (directly or indirectly) a majority of the Voting Stock and (y) controls a majority of the Board of Directors of Hexion.
Standard Securitization Undertakings means representations, warranties, covenants, indemnities and guarantees of performance entered into by Hexion or any Subsidiary of Hexion which Hexion has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.
Stated Maturity means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).
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Subordinated Indebtedness means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the Notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee.
Subsidiary means, with respect to any Person (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% (or, in the case of HAI, 50% or more) of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% (or in the case of HAI, 50% or more) of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Restricted Subsidiary of such Person is a controlling general partner or otherwise controls such entity (or, in the case of HAI, such Person or any Restricted Subsidiary of such Person has the right to designate at least 50% of the members of the Board of Directors of such entity).
Subsidiary Guarantor means any Restricted Subsidiary that Incurs a Guarantee; provided, however, that upon the release or discharge of such Restricted Subsidiary from its Guarantee in accordance with this Indenture, such Restricted Subsidiary will cease to be a Subsidiary Guarantor.
Tax Distributions means any dividends and distributions described in Section 4.04(b)(xii).
TIA means the Trust Indenture Act of 1939 as in effect on the date of this Indenture.
Total Assets means the total consolidated assets of Hexion and its Restricted Subsidiaries, as shown on the most recent balance sheet of Hexion.
Treasury Rate means, as of the applicable redemption date as determined by the Issuer, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to February 1, 2019; provided, however, that if no published maturity exactly corresponds with
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such date, then the Treasury Rate shall be interpolated or extrapolated on a straight-line basis from the arithmetic mean of the yields for the next shortest and next longest published maturities; provided further, however, that if the period from such redemption date to February 1, 2019 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.
Trust Officer means:
(1) any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons knowledge of and familiarity with the particular subject, and
(2) who shall have direct responsibility for the administration of this Indenture.
Trustee means the respective party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.
Uniform Commercial Code means the New York Uniform Commercial Code as in effect from time to time.
Unrestricted Cash means cash or Cash Equivalents of Hexion or any of its Restricted Subsidiaries that would not appear as restricted on a consolidated balance sheet of Hexion or any of its Restricted Subsidiaries.
Unrestricted Subsidiary means:
(1) any Subsidiary of Hexion that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of Hexion in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of Hexion may designate any Subsidiary of Hexion (including any newly acquired or newly formed Subsidiary of Hexion but excluding the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, Hexion or any other Subsidiary of Hexion that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of Hexion or any of its Restricted Subsidiaries unless otherwise permitted as an Investment in such Unrestricted Subsidiary by Hexion or such Restricted Subsidiary under Section 4.04; provided, further, however, that either:
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(a) the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or
(b) if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under Section 4.04.
The Board of Directors of Hexion may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:
(x) (1) Hexion could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a) or (2) the Fixed Charge Coverage Ratio for Hexion and its Restricted Subsidiaries would be no less than such ratio for Hexion and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and
(y) no Event of Default shall have occurred and be continuing.
Any such designation by the Board of Directors of Hexion shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors of Hexion giving effect to such designation and an Officers Certificate certifying that such designation complied with the foregoing provisions.
Notwithstanding anything to the contrary herein, and without any further condition, qualification or action hereunder, subsidiaries designated as Unrestricted Subsidiaries as of the Issue Date under the 6.625% First Lien Notes Indenture will be Unrestricted Subsidiaries.
Voting Stock of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.
Weighted Average Life to Maturity means, when applied to any Indebtedness or Disqualified Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock multiplied by the amount of such payment, by (2) the sum of all such payments.
Wholly Owned Restricted Subsidiary is any Wholly Owned Subsidiary that is a Restricted Subsidiary.
Wholly Owned Subsidiary of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors qualifying shares or shares required to be held by Foreign Subsidiaries) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.
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SECTION 1.02. Other Definitions.
Term |
Defined in Section | |
Affiliate Transaction |
4.07 | |
Agent Members |
Appendix A | |
Asset Sale Offer |
4.06(b) | |
Bankruptcy Law |
6.01 | |
covenant defeasance option |
8.01(b) | |
Custodian |
6.01 | |
Definitive Note |
Appendix A | |
Depository |
Appendix A | |
Event of Default |
6.01 | |
Excess Proceeds |
4.06 | |
Global Notes |
Appendix A | |
Global Notes Legend |
Appendix A | |
Guaranteed Obligations |
10.01(a) | |
IAI |
Appendix A | |
incorporated provision |
12.01 | |
Initial Purchasers |
Appendix A | |
legal defeasance option |
8.01(b) | |
Notes Custodian |
Appendix A | |
Notice of Default |
6.01 | |
Offer Period |
4.06(d) | |
Paying Agent |
2.04 | |
Permanent Regulation S Global Note |
Appendix A | |
protected purchaser |
2.08 | |
Purchase Agreement |
Appendix A | |
QIB |
Appendix A | |
Refinancing Indebtedness |
4.03(b) | |
Refunding Capital Stock |
4.04(b) | |
Registrar |
2.04 | |
Regulation S |
Appendix A | |
Restricted Notes Legend |
Appendix A | |
Restricted Payment |
4.04(a) | |
Retired Capital Stock |
4.04(b) | |
Rule 144A |
Appendix A | |
Rule 144A Global Note |
Appendix A | |
Rule 144A Notes |
Appendix A | |
Rule 3-10 |
11.01(b) | |
Rule 3-16 |
11.01(b) | |
Securities Act |
Appendix A | |
Successor Issuer |
5.01(a) | |
Successor Guarantor |
5.01(b) | |
Temporary Regulation S Global Note |
Appendix A | |
Transfer Restricted Notes |
Appendix A |
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SECTION 1.03. No Incorporation by Reference of Trust Indenture Act. This Indenture is not qualified under the TIA, and the TIA shall not apply to or in any way govern the terms of this Indenture. As a result, no provisions of the TIA are incorporated into this Indenture unless expressly incorporated pursuant to this Indenture.
SECTION 1.04. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;
(c) or is not exclusive;
(d) including means including without limitation;
(e) words in the singular include the plural and words in the plural include the singular;
(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;
(g) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP; and
(h) 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.
ARTICLE 2
THE NOTES
SECTION 2.01. Amount of Notes. The aggregate principal amount of Notes which may be authenticated and delivered under this Indenture on the Issue Date is $225,000,000. The Initial Notes and any Additional Notes may, at our election, be treated as a single series or class of Notes for purposes of this Indenture.
The Issuer may from time to time after the Issue Date issue Additional Notes under this Indenture in an unlimited principal amount, so long as (i) the Incurrence of the Indebtedness represented by such Additional Notes is at such time permitted by Section 4.03 and Section 4.12 and (ii) such Additional Notes are issued in compliance with the other applicable provisions of this Indenture. Additional Notes shall have identical terms as the Initial Notes issued on the Issue Date, other than with respect to the date of issuance and issue price. With respect to any Additional Notes issued after the Issue Date (except for Notes authenticated and
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delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.07, 2.08, 2.09, 2.10, 3.06, 4.06(g), 4.08(c) or Appendix A), there shall be (a) established in or pursuant to a resolution of the Board of Directors of Hexion and (b) (i) set forth or determined in the manner provided in an Officers Certificate or (ii) established in one or more indentures supplemental hereto, prior to the issuance of such Additional Notes:
(1) | the aggregate principal amount of such Additional Notes which may be authenticated and delivered under this Indenture, |
(2) | the issue price and issuance date of such Additional Notes, including the date from which interest on such Additional Notes will accrue; and |
(3) | if applicable, that such Additional Notes shall be issuable in whole or in part in the form of one or more Global Notes and, in such case, the respective depositaries for such Global Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to or in lieu of those set forth in Appendix A hereto and any circumstances in addition to or in lieu of those set forth in Appendix A in which any such Global Note may be exchanged in whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or in part may be registered, in the name or names of Persons other than the depositary for such Global Note or a nominee thereof. |
If any of the terms of any Additional Notes are established by action taken pursuant to a resolution of the Board of Directors, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officers Certificate or the indenture supplemental hereto setting forth the terms of the Additional Notes. Any Additional Notes that are not fungible with the Initial Notes for U.S. federal income tax purposes shall have a separate CUSIP number.
SECTION 2.02. Form and Dating. Provisions relating to the Notes are set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Notes and the Trustees certificate of authentication and (ii) any Additional Notes (if issued as Transfer Restricted Notes) and the Trustees certificate of authentication shall each be substantially in the form set forth in Appendix A, which is hereby incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer or any Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of its authentication. The Notes shall be issuable only in fully registered form without interest coupons and only in minimum denominations of $2,000 and any integral multiples of $1,000 in excess thereof, provided that Notes may be issued in denominations of less than $2,000 solely to accommodate book-entry positions that have been created by participants of the Depository in denominations of less than $2,000.
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SECTION 2.03. Execution and Authentication. (a) The Trustee shall authenticate and make available for delivery upon a written order of the Issuer signed by one Officer (i) (x) Notes for original issue on the date hereof in an aggregate principal amount of $225,000,000 and (ii) subject to the terms of this Indenture, Additional Notes in an aggregate principal amount to be determined at the time of issuance and specified therein. Such order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes or Additional Notes. Notwithstanding anything to the contrary in this Indenture or Appendix A, any issuance of Additional Notes after the Issue Date shall be in a principal amount of at least $2,000 and any integral multiples of $1,000 in excess thereof.
(b) One Officer shall sign the Notes for the Issuer by manual or facsimile signature.
(c) If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
(d) A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
(e) The Trustee may appoint one or more authenticating agents reasonably acceptable to the Issuer to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
(f) The Trustee is hereby authorized to enter into a letter of representations with the Depository in the form provided by the Issuer and to act in accordance with such letter.
SECTION 2.04. Registrar and Paying Agent. (a) The Issuer shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (the Registrar), and (ii) an office or agency where Notes may be presented for payment (the Paying Agent). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Issuer may have one or more co-registrars and one or more additional paying agents. The term Registrar includes any co-registrars. The Issuer initially appoints the Trustee as (i) Registrar and Paying Agent in connection with the Notes and (ii) the Custodian with respect to the Global Notes.
(b) The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. Hexion or any of Hexions domestically organized Wholly Owned Subsidiaries may act as Paying Agent or Registrar.
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(c) The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) if applicable, acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to each due date of the principal of and interest on any Note, the Issuer shall deposit with each Paying Agent (or if Hexion or a Wholly Owned Subsidiary of Hexion is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that a Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by a Paying Agent for the payment of principal of and interest on the Notes, and shall notify the Trustee of any default by the Issuer in making any such payment. If Hexion or a Wholly Owned Subsidiary of Hexion acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it in trust for the benefit of the Persons entitled thereto. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. Upon complying with this Section 2.05, a Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder 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 Holders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.
SECTION 2.07. Transfer and Exchange. (a) The Notes shall be issued in fully registered form and shall be transferable only upon the surrender of a Note for registration of transfer and in compliance with Appendix A. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor are met. When Notes are presented to the Registrar with a request to exchange them for an equal principal amount of Notes of the same series of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Notes at the Registrars request. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.07. The Issuer shall not be required to make, and the Registrar need not register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or of any Notes for a period of 15 days before a selection of Notes to be redeemed.
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(b) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Guarantors, the Trustee, each Paying Agent and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, any Guarantor, the Trustee, a Paying Agent or the Registrar shall be affected by notice to the contrary.
(c) Any Holder of a beneficial interest in a Global Note shall, by acceptance of such beneficial interest, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.
(d) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
SECTION 2.08. Replacement Notes. (a) If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note of the same series if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (b) makes such request to the Issuer or the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a protected purchaser) and (c) satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Issuer, the Trustee, a Paying Agent and the Registrar from any loss that any of them may suffer if a Note is replaced. The Issuer and the Trustee may charge the Holder for their expenses in replacing a Note (including attorneys fees and disbursements in replacing such Note). In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuer in its discretion may pay such Note instead of issuing a new Note in replacement thereof.
(b) Every replacement Note is an additional obligation of the Issuer and the Guarantors.
(c) The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.
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SECTION 2.09. Outstanding Notes. (a) Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those redeemed pursuant to Article 3 and those described in this Section 2.09 as not outstanding. Subject to Section 12.06, a Note does not cease to be outstanding because the Issuer, a Guarantor or an Affiliate of the Issuer or a Guarantor holds the Note.
(b) If a Note is replaced pursuant to Section 2.08 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.08.
(c) If a Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Notes. In the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate Definitive Notes and make them available for delivery in exchange for temporary Notes upon surrender of such temporary Notes at the office or agency of the Issuer, without charge to the Holder. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as Definitive Notes.
SECTION 2.11. Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and each Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures or deliver canceled Notes to the Issuer pursuant to written direction by an Officer. The Issuer may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture.
SECTION 2.12. Defaulted Interest. If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay the defaulted interest then borne by the Notes, as the case may be (plus interest on such defaulted interest to the extent lawful), in any lawful manner. The Issuer may pay the defaulted interest to the Persons who are Holders on a subsequent special record date. The Issuer shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly send or cause to be sent to each affected Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
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SECTION 2.13. CUSIP Numbers, ISINs, etc. The Issuer in issuing the Notes may use CUSIP numbers, ISINs and Common Code numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers, ISINs and Common Code numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers, either as printed on the Notes or as contained in any notice of a redemption, that reliance may be placed only on the other identification numbers printed on the Notes and that any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer shall advise the Trustee of any change in the CUSIP numbers, ISINs and Common Code numbers.
SECTION 2.14. Calculation of Principal Amount of Notes. The aggregate principal amount of the Notes, at any date of determination, shall be the principal amount of the Notes outstanding at such date of determination. With respect to any matter requiring consent, waiver, approval or other action of the Holders of a specified percentage of the principal amount of all the Notes then outstanding, such percentage shall be calculated, on the relevant date of determination, by dividing (a) the principal amount, as of such date of determination, of Notes, the Holders of which have so consented, by (b) the aggregate principal amount, as of such date of determination, of the Notes then outstanding, in each case, as determined in accordance with the preceding sentence, Section 2.09 and Section 12.06 of this Indenture. Any such calculation made pursuant to this Section 2.14 shall be made by the Issuer and delivered to the Trustee pursuant to an Officers Certificate.
ARTICLE 3
REDEMPTION
SECTION 3.01. Redemption. The Notes may be redeemed, in whole, or from time to time in part, subject to the conditions and at the redemption prices set forth in paragraph 5 of the form of Notes set forth in Appendix A, which are hereby incorporated by reference and made a part of this Indenture, together with accrued and unpaid interest, if any, to the redemption date.
SECTION 3.02. Applicability of Article. Redemption of Notes at the election of the Issuer or otherwise, as permitted or required by the Notes or any provision of this Indenture, shall be made in accordance with the Notes, such provision and this Article 3.
SECTION 3.03. Notices to Trustee. If the Issuer elects to redeem the Notes pursuant to the optional redemption provisions of paragraph 5 of the applicable Note, it shall notify the Trustee in writing of (i) the Section of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of the Notes to be redeemed and (iv) the redemption price. The Issuer shall give notice to the Trustee provided for in this paragraph at least 30 days but not more than 60 days before a redemption date if the redemption is pursuant to paragraph 5 of the applicable Note, unless a shorter period is acceptable to the Trustee. Such notice shall be accompanied by an Officers Certificate and Opinion of Counsel from the Issuer to the effect that such redemption will comply with the conditions herein. If fewer than all of the Notes are to be redeemed, the record date relating to such redemption shall be selected by the Issuer and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being sent to any Holder and shall thereby be void and of no effect.
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SECTION 3.04. Selection of Notes to Be Redeemed. In the case of any partial redemption of the Notes, selection of the Notes for redemption will be made by the Trustee on a pro rata basis to the extent practicable or by lot or such other method as deemed appropriate by the Trustee (and, in such manner that complies with the requirements of the Depository, if applicable); provided, however, that no Notes of $2,000 or less shall be redeemed in part. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $2,000 and portions of them the Trustee selects shall be in amounts of $2,000 or a multiple of $1,000. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Issuer promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.05. Notice of Optional Redemption. (a) At least 30 days but not more than 60 days before a redemption date, the Issuer shall mail or cause to be mailed by first-class mail, or delivered electronically if held by the Depository, a notice of redemption to each Holder whose Notes are to be redeemed.
Any such notice shall identify the Notes to be redeemed and shall state:
(i) the redemption date;
(ii) the redemption price and the amount of accrued interest to the redemption date;
(iii) the name and address of a Paying Agent;
(iv) that Notes called for redemption must be surrendered to a Paying Agent to collect the redemption price, plus accrued interest;
(v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed, the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption;
(vi) that, unless the Issuer defaults in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date;
(vii) the CUSIP number, ISIN or Common Code number, if any, printed on the Notes being redeemed;
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(viii) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN or Common Code number, if any, listed in such notice or printed on the Notes;
(ix) the applicable provision in this Indenture or the Notes pursuant to which the Issuer is redeeming such Notes;
(x) if the redemption is subject to the satisfaction of one or more conditions precedent, the notice thereof shall describe each such condition and, if applicable, shall state that, in the Issuers discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed; and
(xi) at the Issuers option, that the payment of the redemption price and performance of the Issuers obligations with respect to such redemption may be performed by another Person.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption or notice thereof may, at Hexions discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event. For the avoidance of doubt, if any redemption date shall be delayed as contemplated by this Section 3.05 and the terms of the applicable notice of redemption, such redemption date as so delayed may occur at any time after the original redemption date set forth in the applicable notice of redemption and after the satisfaction of any applicable conditions precedent, including, without limitation, on a date that is less than 30 days after the original redemption date or more than 60 days after the date of the applicable notice of redemption. To the extent that the redemption date will occur on a date other than the original redemption date set forth in the applicable notice of redemption, the Issuer shall notify the holders and the Trustee of the final redemption date prior to such date; provided that the failure to give such notice, or any defect therein, shall not impair or affect the validity of any redemption under this Article 3.
(b) At the Issuers written request, the Trustee shall give the notice of redemption in the Issuers name and at the Issuers expense. In such event, the Issuer shall provide the Trustee with the information required by this Section 3.05.
SECTION 3.06. Effect of Notice of Redemption. Once notice of redemption is sent in accordance with Section 3.05, except as provided in the sixth paragraph under paragraph 5 of the Notes, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to any Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date; provided, however, that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
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SECTION 3.07. Deposit of Redemption Price. With respect to any Notes, prior to 10:00 a.m., New York City time, on the redemption date, the Issuer shall deposit with the Paying Agent (or, if Hexion or a Wholly Owned Subsidiary of Hexion is a Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Notes or portions thereof to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuer to the Trustee for cancellation. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Notes to be redeemed.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder (at the Issuers expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes. (a) The Issuer shall promptly pay the principal of (and premium, if any) and interest, on the Notes on the dates and in the manner provided in the Notes and in this Indenture. An installment of principal of or interest on the Notes shall be considered paid on the date it is due if on such date the Trustee or any Paying Agent (other than Hexion or any of its Affiliates) holds in accordance with this Indenture as of noon, New York City time, money sufficient to pay all principal and interest then due.
(b) The Issuer shall pay interest on overdue principal at the rate specified therefor in the Notes and shall pay interest on overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. Reports and Other Information.
(a) For so long as any Notes are outstanding, Hexion will provide to the Trustee a copy of all of the information and reports referred to below:
(i) within 15 days after the time period specified in the SECs rules and regulations for non- accelerated filers, annual reports of the Reporting Entity (as defined below) for such fiscal year containing the information that would have been required to be contained in an annual report on Form 10-K (or any successor or comparable form) if the Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC;
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(ii) within 15 days after the time period specified in the SECs rules and regulations for non- accelerated filers, quarterly reports of the Reporting Entity for such fiscal quarter containing the information that would have been required to be contained in a quarterly report on Form 10-Q (or any successor or comparable form) if the Reporting Entity had been a reporting company under the Exchange Act, except to the extent permitted to be excluded by the SEC; and
(iii) within 15 days after the time period specified in the SECs rules and regulations for filing current reports on Form 8-K, current reports containing substantially all of the information that would be required to be filed in a current report on Form 8-K under the Exchange Act on the Issue Date pursuant to Sections 1, 2 and 4, Items 5.01, 5.02 (other than compensation information), 5.03(b) and Item 9.01 (only to the extent relating to any of the foregoing) of Form 8-K if Hexion had been a reporting company under the Exchange Act; provided, however, that no such current reports (or Items thereof or all or a portion of the financial statements that would have otherwise been required thereby) will be required to be provided (or included) if Hexion determines in its good faith judgment that such event (or information) is not material to holders or the business, assets, operations, financial position or prospects of Hexion and its Restricted Subsidiaries, taken as a whole.
In addition to providing such information to the Trustee, Hexion shall make available to the holders, prospective investors, market makers affiliated with any initial purchaser of the Notes and securities analysts the information required to be provided pursuant to the foregoing clauses (i), (ii) or (iii), by posting such information to its website (or any of Hexions parent companies) or on IntraLinks or any comparable online data system or website.
Notwithstanding the foregoing, (A) Hexion will not be required to furnish any information, certificates or reports that would otherwise be required by (i) Section 302 or Section 404 of the Sarbanes Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K, or (ii) Item 10(e) of Regulation S-K promulgated by the SEC with respect to any non-generally accepted accounting principles financial measures contained therein, (B) such reports will not be required to contain the separate financial information for Subsidiary Guarantors contemplated by Rule 3-09, Rule 3-10 or Rule 3-16 of Regulation S-X, or include any exhibits or certifications required by Form 10-K, Form 10-Q or Form 8-K (or successor or comparable forms) or related rules under Regulation S-K and (C) such reports shall be subject to exceptions, exclusions and other differences consistent with the presentation of financial and other information in the Offering Circular and shall not be required to present compensation or beneficial ownership information.
(b) The financial statements, information and other documents required to be provided as described above, may be those of (i) Hexion or (ii) any direct or indirect parent of Hexion (any such entity, a Reporting Entity), so long as in the case of (ii) such direct or indirect parent of Hexion shall not conduct, transact or otherwise engage, or commit to conduct, transact or otherwise engage, in any business or operations other than its direct or indirect ownership of all of the Equity Interests in, and its management of Hexion; provided that, if the financial information so furnished relates to such direct or indirect parent of Hexion, the same is accompanied by a reasonably detailed description of the quantitative differences between the information relating to such parent, on the one hand, and the information relating to Hexion and its Restricted Subsidiaries on a standalone basis, on the other hand.
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(c) Hexion shall, for so long as any Notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, furnish to the Holders and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(d) Notwithstanding the foregoing, Hexion will be deemed to have delivered such reports and information referred to in this Section 4.02 to the Trustee and the holders if Hexion or another Reporting Entity has filed such reports with the SEC via the EDGAR filing system (or any successor system) and such reports are publicly available. In addition, the requirements of this Section 4.02 shall be deemed satisfied by the posting of reports that would be required to be provided to the Trustee and the holders on Hexions website (or that of any of Hexions parent companies). The Trustee shall have no obligation to monitor whether Hexion (or any of Hexions parent companies) posts such reports, information and documents on its website or the SECs EDGAR service, or collect any such information from Hexions (or any of Hexions parent companies) website or the SECs EDGAR service. The Trustee shall have no liability or responsibility for the content, filing or timeliness of any report delivered or filed under or in connection with this Indenture or the transactions contemplated hereunder.
SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. (a) (i) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock and (ii) Hexion shall not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any shares of Preferred Stock; provided, however, that Hexion and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of Hexion for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.
(b) The limitations set forth in Section 4.03(a) shall not apply to:
(i) the Incurrence by Hexion or its Restricted Subsidiaries of Indebtedness (including under any Credit Agreement including the ABL Facility and the issuance and creation of letters of credit and bankers acceptances thereunder (with letters of credit and bankers acceptances being deemed to have a principal amount equal to the face amount thereof) (including any Indebtedness Incurred and represented by the New First Lien
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Notes, the Existing First Lien Notes (other than the Initial Existing First Lien Notes) or any other First Priority Lien Obligations) up to an aggregate principal amount of (x) $2.175 billion plus (y) an aggregate additional principal amount of Consolidated Total Indebtedness constituting First Priority Lien Obligations outstanding at any one time that does not cause the Consolidated Secured Debt Ratio (excluding the Notes and Other Pari Passu Lien Obligations from such calculation) of Hexion to exceed 3.75 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom);
(ii) the Incurrence by the Issuer and the Guarantors of (A) Indebtedness, including in respect of the Notes and the related guarantees thereof, in an aggregate principal amount outstanding not to exceed $225 million and (B) Indebtedness, including in respect of the Initial Existing First Lien Notes and the related guarantees thereof, in an aggregate principal amount outstanding not to exceed $450 million;
(iii) Indebtedness existing on the Issue Date (after giving effect to the Offering Transactions) (other than Indebtedness described in clauses (i) and (ii) of this Section 4.03(b)), including the Existing Debentures, the Existing Senior Secured Notes, the Existing Second Lien Notes and the related guarantees thereof;
(iv) Indebtedness (including Capitalized Lease Obligations) Incurred by Hexion or any of its Restricted Subsidiaries to finance (whether prior to or within 270 days after) the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness then outstanding that was Incurred (or deemed Incurred pursuant to clause (xiv) below) pursuant to this clause (iv), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence;
(v) Indebtedness Incurred by Hexion or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(vi) Indebtedness arising from agreements of Hexion or any of its Restricted Subsidiaries providing for adjustment of purchase price or similar obligations, in each case, Incurred in connection with any Investments, the disposition of any business, assets or a Subsidiary of Hexion in accordance with the terms of this Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided, however, that, at the time of closing, the amount of such Indebtedness is not determinable and, to the extent such Indebtedness thereafter becomes fixed and determined, the Indebtedness is paid within 60 days thereafter;
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(vii) Indebtedness of Hexion to a Restricted Subsidiary; provided, however, that any such Indebtedness owed to a Restricted Subsidiary that is not the Issuer or a Guarantor is subordinated in right of payment to the obligations of Hexion under its Guarantee; provided further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(viii) shares of Preferred Stock of a Restricted Subsidiary issued to Hexion or another Restricted Subsidiary; provided, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to Hexion or another Restricted Subsidiary) shall be deemed, in each case, to be an issuance of shares of Preferred Stock;
(ix) Indebtedness of a Restricted Subsidiary to Hexion or another Restricted Subsidiary; provided, however, that if a Guarantor Subsidiary Incurs such Indebtedness to a Restricted Subsidiary that is not the Issuer or a Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided further, however, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to another Restricted Subsidiary) shall be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are not Incurred for speculative purposes: (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of this Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;
(xi) obligations (including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of performance, bid, appeal, surety bonds, completion guarantees and other similar obligations provided by Hexion or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;
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(xii) Indebtedness or Disqualified Stock of Hexion or any Restricted Subsidiary in an aggregate principal amount or liquidation preference, as applicable, which, when aggregated with the principal amount or liquidation preference of all other Indebtedness and Disqualified Stock then outstanding and Incurred pursuant to this clause (xii), does not exceed the greater of $150.0 million and 5.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (xii) shall cease to be deemed Incurred or outstanding for purposes of this clause (xii) but shall be deemed Incurred for purposes of Section 4.03(a) from and after the first date on which Hexion, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under Section 4.03(a) without reliance upon this clause (xii));
(xiii) any guarantee by Hexion or any of its Restricted Subsidiaries of Indebtedness or other obligations of Hexion or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by Hexion or such Restricted Subsidiary is permitted under the terms of this Indenture; provided, however, that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of any Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Guarantors Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Guarantor, as applicable;
(xiv) the Incurrence by Hexion or any of its Restricted Subsidiaries of Indebtedness which serves to refund, refinance or defease any Indebtedness Incurred as permitted under Section 4.03(a) and clauses (i)(y), (iii), (iv), (xiv), (xv) and/or (xix) of this Section 4.03(b) or any Indebtedness Incurred to so refund or refinance such Indebtedness, including, in each case, any Indebtedness Incurred to pay premiums (including tender premiums), expenses, defeasance costs and fees in connection therewith (subject to the following proviso, Refinancing Indebtedness); provided, however, that such Refinancing Indebtedness:
(1) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Indebtedness being refunded, refinanced or defeased and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Indebtedness being refunded or refinanced that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(2) has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) one year following the last maturity date of any Notes then outstanding;
(3) to the extent such Refinancing Indebtedness refinances Indebtedness junior to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is junior to the Notes or the Guarantee of such Restricted Subsidiary, as applicable;
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(4) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium, expenses, costs and fees Incurred in connection with such refinancing;
(5) shall not include (x) Indebtedness of a Restricted Subsidiary of Hexion that is not a Guarantor that refinances Indebtedness of Hexion or another Guarantor (unless such Restricted Subsidiary is an obligor with respect to such Indebtedness being refinanced), or (y) Indebtedness of Hexion or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary; and
(6) in the case of any Refinancing Indebtedness Incurred to refinance Indebtedness outstanding under clause (iv) or (xx) of this Section 4.03(b), shall be deemed to have been Incurred and to be outstanding under such clause (iv) or (xx) of this Section 4.03(b), as applicable, and not this clause (xiv) for purposes of determining amounts outstanding under such clauses (iv) and (xx) of this Section 4.03(b);
provided further, however, that subclauses (1), (2) and (3) of this clause (xiv) shall not apply to any refunding or refinancing of (A) the Notes, (B) any Secured Indebtedness constituting a First Priority Lien Obligation or (C) any Existing Debentures consisting of pollution control bonds;
(xv) Indebtedness or Disqualified Stock of (x) Hexion or any of its Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by Hexion or any of its Restricted Subsidiaries or merged with or into Hexion or a Restricted Subsidiary in accordance with the terms of this Indenture; provided, however, that after giving effect to such acquisition and the Incurrence of such Indebtedness either:
(1) Hexion would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(2) the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;
(xvi) Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to Hexion or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);
(xvii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of its Incurrence;
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(xviii) Indebtedness of Hexion or any Restricted Subsidiary supported by a letter of credit or bank guarantee issued pursuant to the Credit Agreement, in a principal amount not in excess of the stated amount of such letter of credit;
(xix) Contribution Indebtedness;
(xx) Indebtedness of Foreign Subsidiaries of Hexion for working capital purposes or any other purposes; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (xx) other than for working capital purposes, when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (xx), does not exceed the greater of $150 million and 5.0% of Total Assets at the time of Incurrence;
(xxi) Indebtedness of Hexion or any Restricted Subsidiary consisting of (x) the financing of insurance premiums or (y) take or pay obligations contained in supply arrangements, in each case, entered into in the ordinary course of business;
(xxii) Indebtedness Incurred on behalf of, or representing guarantees of Indebtedness of, joint ventures of Hexion or any Restricted Subsidiary not in excess, at any one time outstanding, of $7.5 million; and
(xxiii) Indebtedness issued by Hexion or a Restricted Subsidiary to current or former officers, directors, managers and employees thereof or any direct or indirect parent thereof, or their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of Hexion or any of its direct or indirect parent companies to the extent permitted under clause (iv) of Section 4.04(b).
(c) For purposes of determining compliance with this Section 4.03, (A) Indebtedness, Disqualified Stock or Preferred Stock need not be Incurred solely by reference to one category of permitted Indebtedness, Disqualified Stock or Preferred Stock described in clauses (i) through (xxiii) above or pursuant to Section 4.03(a) but is permitted to be Incurred in part under any combination thereof; (B) in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in clauses (i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a), Hexion shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 4.03 and will only be required to include the amount and type of such item of Indebtedness (or any portion thereof) in one of the above clauses and such item of Indebtedness will be treated as having been Incurred pursuant to only one of such clauses or pursuant to Section 4.03(a); provided, however, that all Indebtedness under the Existing First Lien Notes and the New First Lien Notes outstanding on the Issue Date (other than the Initial Existing First Lien Notes) shall be deemed at all times to have been incurred pursuant to Section 4.03(b)(i) and all Indebtedness under the Notes and the Initial Existing First Lien Notes outstanding on the Issue Date shall be deemed at all times to have been Incurred pursuant to Section 4.03(b)(ii), and none of such Indebtedness referred to in this proviso may later be reclassified; provided, further, however, that any other
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Indebtedness initially Incurred after the Issue Date pursuant to Section 4.03(b)(i) above may also not later be reclassified; (C) at the time of Incurrence, Hexion will be entitled to divide and classify an item of Indebtedness (or any portion thereof) in more than one of the types of Indebtedness described in clauses (b)(i) through (xxiii) above or is entitled to be Incurred pursuant to Section 4.03(a) without giving pro forma effect to the Indebtedness Incurred pursuant to any other clause or paragraph above (or any portion thereof) when calculating the amount of Indebtedness that may be Incurred pursuant to any such clause or paragraph (or any portion thereof); and (D) in connection with the Incurrence or issuance, as applicable, of any Indebtedness, Disqualified Stock or Preferred Stock, Hexion or the applicable Restricted Subsidiary may elect at any time prior to the actual Incurrence or issuance of such Indebtedness, Disqualified Stock or Preferred Stock, as applicable, to treat all or any portion of the commitments relating to such Indebtedness, Disqualified Stock or Preferred Stock as being Incurred or issued on the date of such election (such date, the Deemed Date), and any related subsequent actual Incurrence or issuance of such Indebtedness, Disqualified Stock or Preferred Stock will be deemed for all purposes under this Indenture to have been Incurred on such Deemed Date, including without limitation for purposes of calculating the Fixed Charge Coverage Ratio, usage of any baskets hereunder (if applicable), the Consolidated Secured Debt Ratio, EBITDA and Adjusted EBITDA (and all such calculations on the Deemed Date and thereafter shall be made on a pro forma basis after giving effect to the deemed Incurrence or issuance and related transactions in connection therewith). Accrual of interest, the accretion of accreted value, amortization of original issue discount, deferred financing costs, the payment of interest in the form of additional Indebtedness, Disqualified Stock or Preferred Stock with the same terms or in the form of common stock of Hexion, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, the accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of Indebtedness shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. Guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which are otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided, however, that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this Section 4.03.
(d) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.
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(e) Notwithstanding any other provision of this Section 4.03, the maximum amount of Indebtedness that the Issuer and its Restricted Subsidiaries may Incur pursuant to this covenant shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.
SECTION 4.04. Limitation on Restricted Payments. (a) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on account of Hexions or any of its Restricted Subsidiaries Equity Interests, including any payment with respect to such Equity Interests made in connection with any merger or consolidation (other than (A) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock) of Hexion; or (B) dividends or distributions by a Restricted Subsidiary; provided, however, that in the case of any dividend or distribution payable on or in respect of any Equity Interests issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, Hexion or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its ownership percentage of such Equity Interests);
(ii) purchase or otherwise acquire or retire for value any Equity Interests of Hexion or any direct or indirect parent company of Hexion;
(iii) make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of Hexion or any Subsidiary Guarantor (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, redemption, repurchase, defeasance, acquisition or retirement and (B) Indebtedness permitted under clauses (vii) and (ix) of Section 4.03(b)); or
(iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv) above being collectively referred to as Restricted Payments), unless, at the time of such Restricted Payment:
(1) no Default shall have occurred and be continuing or would occur as a consequence thereof;
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(2) immediately after giving effect to such transaction on a pro forma basis, Hexion could Incur $1.00 of additional Indebtedness under Section 4.03(a); and
(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Hexion and its Restricted Subsidiaries after the Existing Second Lien Notes Issue Date (including Restricted Payments permitted by clauses (i), (iv) (only to the extent of one-half of the amounts paid pursuant to such clause), (vi) and (viii) of Section 4.04(b), but excluding all other Restricted Payments permitted by Section 4.04(b)), is less than the sum of, without duplication,
(A) 50% of the Consolidated Net Income of Hexion for the period (taken as one accounting period) from June 30, 2006 to the end of Hexions most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus
(B) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by Hexion after the Existing Second Lien Notes Issue Date from the issue or sale of Equity Interests of Hexion (excluding Refunding Capital Stock, Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock), including Equity Interests issued upon conversion of Indebtedness or upon exercise of warrants or options (other than an issuance or sale to a Subsidiary of Hexion or an employee stock ownership plan or trust established by Hexion or any of its Subsidiaries), plus
(C) 100% of the aggregate amount of cash contributions to the capital of Hexion, and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received after the Existing Second Lien Notes Issue Date (other than Refunding Capital Stock, Designated Preferred Stock, contributions from the issuance of Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock), plus
(D) the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of Hexion or any Restricted Subsidiary issued after the Existing Second Lien Notes Issue Date (other than Indebtedness or Disqualified Stock issued to a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in Hexion (other than Disqualified Stock) or any direct or indirect parent of Hexion (provided that, in the case of any parent, such Indebtedness or Disqualified Stock is retired or extinguished), plus
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(E) 100% of the aggregate amount received by Hexion or any Restricted Subsidiary in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received by Hexion or any Restricted Subsidiary, in each case subsequent to the Existing Second Lien Notes Issue Date, from:
(I) the sale or other disposition (other than to Hexion or a Restricted Subsidiary of Hexion) of Restricted Investments made by Hexion and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from Hexion and its Restricted Subsidiaries by any Person (other than Hexion or any of its Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments (other than in each case to the extent that the Restricted Investment was made pursuant to clause (vii) or (x) of Section 4.04(b)),
(II) the sale (other than to Hexion or a Restricted Subsidiary of Hexion) of the Capital Stock of an Unrestricted Subsidiary, or
(III) a distribution or dividend from an Unrestricted Subsidiary, plus
(F) in the event any Unrestricted Subsidiary of Hexion has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Hexion or a Restricted Subsidiary of Hexion, in each case subsequent to the Existing Second Lien Notes Issue Date, the Fair Market Value (as determined in accordance with the next succeeding sentence) of the Investment of Hexion in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), after deducting any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed (other than in each case to the extent that the designation of such Subsidiary as an Unrestricted Subsidiary was made pursuant to clause (vii) or (x) of Section 4.04(b) or constituted a Permitted Investment).
The Fair Market Value of property other than cash covered by clauses (3)(B), (C), (D), (E) and (F) of this Section 4.04(a) shall be determined in good faith by Hexion and
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(x) in the event of property with a Fair Market Value in excess of $15 million, shall be set forth in an Officers Certificate,
(y) in the event of property with a Fair Market Value in excess of $25 million, shall be set forth in a resolution approved by at least a majority of the Board of Directors of Hexion, or
(z) in the event of property with a Fair Market Value in excess of $50 million, shall be set forth in writing by an Independent Financial Advisor.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend or distribution (i) within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture or (ii) declared on or prior to the Existing Second Lien Notes Issue Date;
(ii) (A) the repurchase, retirement or other acquisition of any Equity Interests (Retired Capital Stock) of Hexion or any direct or indirect parent company of Hexion or Subordinated Indebtedness of Hexion or any Subsidiary Guarantor in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of Hexion or any direct or indirect parent company of Hexion or contributions to the equity capital of Hexion (other than Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock or any Equity Interests sold to a Subsidiary of Hexion or to an employee stock ownership plan or any trust established by Hexion or any of its Subsidiaries) (collectively, including any such contributions, Refunding Capital Stock); and (B) the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of Hexion or to an employee stock ownership plan or any trust established by Hexion or any of its Subsidiaries) of Refunding Capital Stock;
(iii) the redemption, repurchase, defeasance or other acquisition or retirement of Subordinated Indebtedness of Hexion or any Subsidiary Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or such Subsidiary Guarantor, respectively, which is Incurred in accordance with Section 4.03 so long as:
(A) the principal amount of such new Indebtedness does not exceed the principal amount, plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired plus any tender premiums, defeasance costs or other fees and expenses incurred in connection therewith),
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(B) such Indebtedness is subordinated to the Notes or the related Guarantees, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,
(C) such Indebtedness has a Stated Maturity which is no earlier than the earlier of (x) the Stated Maturity of the Subordinated Indebtedness being redeemed, repurchased, acquired or retired or (y) one year following the last maturity date of any Notes then outstanding, and
(D) such Indebtedness has a Weighted Average Life to Maturity which is not less than the shorter of (x) the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased or acquired or retired and (y) the Weighted Average Life to Maturity that would result if all payments of principal on the Subordinated Indebtedness being redeemed, repurchased, acquired or retired that were due on or after the date one year following the last maturity date of any Notes then outstanding were instead due on such date one year following;
(iv) the redemption, repurchase, retirement or other acquisition (or dividends to any direct or indirect parent company of Hexion to finance any such repurchase, retirement or other acquisition) for value of Equity Interests of Hexion or any direct or indirect parent company of Hexion held by any future, present or former employee, director, officer, manager or consultant of Hexion or any direct or indirect parent company of Hexion or any Subsidiary of Hexion pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate amounts paid under this clause (iv) do not exceed $15.0 million in any calendar year (with unused amounts in any calendar year being permitted to be carried over for the two succeeding calendar years); provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed:
(A) the cash proceeds received by Hexion or any of its Restricted Subsidiaries from the sale of Equity Interests (excluding Refunding Capital Stock, Designated Preferred Stock, Cash Contribution Amounts, Excluded Contributions and Disqualified Stock) of Hexion or any direct or indirect parent company of Hexion (to the extent contributed to Hexion) to employees, directors, officers, managers or consultants of Hexion and its Restricted Subsidiaries or any direct or indirect parent company of Hexion that occurs after the Issue Date; provided, however, that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend shall not increase the amount available for Restricted Payments under Section 4.04(a)(3); plus
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(B) the cash proceeds of key man life insurance policies received by Hexion or any direct or indirect parent company of Hexion (to the extent contributed to Hexion) and its Restricted Subsidiaries after the Issue Date; (provided, however, that Hexion may elect to apply all or any portion of the aggregate increase contemplated by clause (A) above and this clause (B) in any calendar year and, to the extent any payment described under this clause (iv) is made by delivery of Indebtedness and not in cash, such payment shall be deemed to occur only when, and to the extent, the obligor on such Indebtedness makes payments with respect to such Indebtedness);
provided that cancellation of Indebtedness owing to Hexion or any Restricted Subsidiary from any present or former employees, directors, officers, managers or consultants of Hexion, any Restricted Subsidiary or the direct or indirect parents of Hexion in connection with a repurchase of Equity Interests of Hexion or any of its direct or indirect parents will not be deemed to constitute a Restricted Payment for purposes of this Section 4.04 or any other provision of this Indenture;
(v) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of Hexion or any of its Restricted Subsidiaries issued or incurred in accordance with Section 4.03;
(vi) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Existing Second Lien Notes Issue Date and the declaration and payment of dividends to any direct or indirect parent company of Hexion, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent company of Hexion issued after the Issue Date the proceeds of which were contributed to Hexion; provided, however, that (A) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis (including a pro forma application of the net proceeds therefrom), Hexion would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate amount of dividends declared and paid pursuant to this clause (vi) does not exceed the net cash proceeds actually received by Hexion from the issuance of Designated Preferred Stock (other than Disqualified Stock) issued after the Existing Second Lien Notes Issue Date;
(vii) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Investments made pursuant to this clause (vii) that are at that time outstanding, not to exceed the
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greater of $40 million and 1.0% of Total Assets at the time of such Investment, plus an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment made pursuant to this clause (vii) (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (vii) is made in any Person that is not a Restricted Subsidiary of Hexion at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of Hexion after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) of the definition of Permitted Investments and shall cease to have been made pursuant to this clause (vii) for so long as such Person continues to be a Restricted Subsidiary;
(viii) the payment of dividends on Hexions common stock (or the payment of dividends to any direct or indirect parent of Hexion to fund the payment by any direct or indirect parent of Hexion of dividends on such entitys common stock) of up to 6.0% per annum of the net proceeds received by Hexion from any public offering of common stock or contributed to Hexion by any direct or indirect parent of Hexion from any public offering of common stock;
(ix) Restricted Payments in an aggregate amount not to exceed the aggregate amount of Excluded Contributions;
(x) other Restricted Payments in an aggregate amount not to exceed the greater of $50 million and 1.0% of Total Assets at the time of such Restricted Payment;
(xi) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to Hexion or a Restricted Subsidiary of Hexion by, Unrestricted Subsidiaries;
(xii) (A) with respect to each tax year or portion thereof that Hexion qualifies as a Flow Through Entity, the distribution by Hexion to any direct or indirect parent of Hexion of an amount equal to the product of (i) the amount of aggregate net taxable income of Hexion allocated to the holders of Capital Stock of Hexion for such period and (ii) the Presumed Tax Rate for such period; and (B) with respect to any tax year or portion thereof that Hexion and any direct or indirect parent of Hexion does not qualify as a Flow Through Entity, the payment of dividends or other distributions to any direct or indirect parent company of Hexion that files a consolidated U.S. federal tax return that includes Hexion and its Subsidiaries in an amount not to exceed the amount that Hexion and its Restricted Subsidiaries would have been required to pay in respect of federal, state or local taxes (as the case may be) in respect of such year if Hexion and its Restricted Subsidiaries paid such taxes directly as a stand-alone taxpayer (or stand-alone group);
(xiii) the payment of any Restricted Payment, if applicable:
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(A) in amounts required for any direct or indirect parent of Hexion to pay fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnity provided on behalf of, officers and employees of any direct or indirect parent of Hexion and general corporate overhead expenses of any direct or indirect parent of Hexion, in each case to the extent such fees, expenses, salaries, bonuses, benefits and indemnities are attributable to the ownership or operation of Hexion and its respective Subsidiaries;
(B) in amounts required for any direct or indirect parent of Hexion to pay interest or principal on Indebtedness the proceeds of which have been contributed to Hexion or any of its Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, Hexion Incurred in accordance with Section 4.03; provided, however, that any such contribution shall not increase the amount available for Restricted Payments under Section 4.04(a)(3) or be used to Incur Contribution Indebtedness or to make a Restricted Payment pursuant to Section 4.04(b) (other than payments permitted by this clause (xiii); provided further, however, any such dividends, other distributions or other amounts used to pay interest are treated as interest payments of Hexion for purposes of this Indenture; and
(C) in amounts required for any direct or indirect parent of Hexion to pay fees and expenses, other than to Affiliates of Hexion, related to any equity or debt offering of such parent;
(xiv) cash dividends or other distributions on Hexions Capital Stock used to, or the making of loans to any direct or indirect parent of Hexion to, fund the payment of fees and expenses incurred in connection with the Hexion Recapitalization, the Offering Transactions or in respect of amounts owed by Hexion or any Restricted Subsidiary of Hexion to Affiliates, in each case to the extent permitted by Section 4.07;
(xv) repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;
(xvi) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing;
(xvii) in the event of a Change of Control, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness or Disqualified Stock of Hexion or Subordinated Indebtedness of any Guarantor or Disqualified Stock or Preferred Stock of any Restricted Subsidiary, in each case, at a
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purchase price not greater than 101% of the principal amount or liquidation preference, as applicable (or, if such Subordinated Indebtedness was issued with original issue discount, 101% of the accreted value), of such Subordinated Indebtedness, Disqualified Stock or Preferred Stock, plus any accrued and unpaid interest or dividends thereon; provided, however, that prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Issuer (or a third party to the extent permitted by this Indenture) has made a Change of Control Offer with respect to the Notes as a result of such Change of Control and has repurchased all Notes validly tendered and not withdrawn in connection with such Change of Control Offer;
(xviii) in the event of an Asset Sale that requires the Issuer to offer to purchase Notes pursuant to Section 4.06, the payment, purchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness or Disqualified Stock of Hexion or Subordinated Indebtedness of any Guarantor or Disqualified Stock or Preferred Stock of any Restricted Subsidiary, in each case, at a purchase price not greater than 100% of the principal amount or liquidation preference, as applicable (or, if such Subordinated Indebtedness was issued with original issue discount, 100% of the accreted value), of such Subordinated Indebtedness, Disqualified Stock or Preferred Stock, plus any accrued and unpaid interest or dividends thereon; provided, however, that (i) prior to such payment, purchase, redemption, defeasance or other acquisition or retirement, the Issuer (or a third party to the extent permitted by this Indenture) has made an Asset Sale Offer with respect to the Notes as a result of such Asset Sale and have repurchased all Notes validly tendered and not withdrawn in connection with such Asset Sale Offer and (ii) the aggregate amount of all such payments, purchases, redemptions, defeasances or other acquisitions or retirements of all such Subordinated Indebtedness, Disqualified Stock and Preferred Stock may not exceed the amount of the Excess Proceeds used to determine the aggregate purchase price of the Notes tendered for in such Asset Sale Offer, less the aggregate amount applied in connection with such Asset Sale Offer;
(xix) any Restricted Payments made in connection with the consummation of the Hexion Recapitalization, as set forth under the heading Use of Proceeds in the Existing Second Lien Notes Offering Circular, the payment of the dividend declared in May, 2005 but not yet paid, in the amount included in other long-term liabilities as of June 30, 2006, and the repayment or repurchase of the Parish of Ascension, Louisiana Industrial Revenue Bonds of Hexion; and
(xx) Restricted Payments by Hexion or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person;
provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (vi), (vii), (x), (xi), (xvii) and (xviii) of this Section 4.04(b), no Default shall have occurred and be continuing or would occur as a consequence thereof.
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(c) Hexion shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of Unrestricted Subsidiary. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by Hexion and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of Investments. Such designation shall only be permitted if a Restricted Payment or Permitted Investment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
(d) For the purposes of this Section 4.04, any payment made on or after the Existing Second Lien Notes Issue Date but prior to the Issue Date will be deemed to be a Restricted Payment to the extent that such payment would have been a Restricted Payment had this Indenture been in effect at the time of such payment (and, to the extent that such Restricted Payment was permitted by clauses (b)(i) through (xx) above or as a Permitted Investment, such Restricted Payment may be deemed by Hexion to have been made pursuant to such clause or as such a Permitted Investment).
SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries. Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to Hexion or any of its Restricted Subsidiaries (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or by, its profits; or (ii) pay any Indebtedness owed to Hexion or any of its Restricted Subsidiaries;
(b) make loans or advances to Hexion or any of its Restricted Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to Hexion or any of its Restricted Subsidiaries;
except in each case for such encumbrances or restrictions existing under or by reason of:
(1) | contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to each of the Existing First Lien Notes Indentures, the New First Lien Notes Indenture, the ABL Facility, the Senior Credit Documents, the Existing Debentures, the Existing Senior Secured Notes, the Existing Second Lien Notes and the guarantees thereof; |
(2) | this Indenture, the Notes (and any guarantees thereof), the Security Documents, the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement; |
(3) | applicable law or any applicable rule, regulation or order; |
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(4) | any agreement or other instrument of a Person acquired by Hexion or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or its Subsidiaries, or the property or assets of the Person or its Subsidiaries, so acquired; |
(5) | contracts or agreements for the sale of assets, including any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; |
(6) | Secured Indebtedness otherwise permitted to be Incurred pursuant to Sections 4.03 and 4.12 that limit the right of the debtor to dispose of the assets securing such Indebtedness; |
(7) | restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; |
(8) | customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business; |
(9) | purchase money obligations or Capitalized Lease Obligations, in each case for property so acquired or leased in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property so acquired; |
(10) | customary provisions contained in leases and other similar agreements entered into in the ordinary course of business that impose restrictions of the nature discussed in clause (c) above on the property subject to such lease; |
(11) | any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided, however, that such restrictions apply only to such Receivables Subsidiary; |
(12) | other Indebtedness |
(i) of (A) Hexion or (B) any Restricted Subsidiary of Hexion, in each case that (x) is Incurred subsequent to the Issue Date pursuant to Section 4.03 and (y) in the case of a Restricted Subsidiary that is not a Subsidiary Guarantor, an Officer determines reasonably in good faith that any such encumbrance or restriction will not materially adversely affect Hexions ability to honor its payment obligations on the Notes, or
(ii) that is Incurred by a Foreign Subsidiary of Hexion subsequent to the Issue Date pursuant to Section 4.03; provided, however, that such encumbrance or restriction applies only to Foreign Subsidiaries of Hexion; or
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(13) | any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (12) above; provided, however, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Hexion, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing. |
For purposes of determining compliance with this Section 4.05, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (ii) the subordination of loans or advances made to Hexion or a Restricted Subsidiary to other Indebtedness Incurred by Hexion or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.
SECTION 4.06. Asset Sales. (a) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) Hexion or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by Hexion) of the assets sold or otherwise disposed of and (y) at least 75% of the consideration therefor received by Hexion or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided, however, that the amount of:
(i) any liabilities (as shown on Hexions or such Restricted Subsidiarys most recent balance sheet or in the notes thereto) of Hexion or any Restricted Subsidiary of Hexion (other than liabilities that are by their terms subordinated to the Notes or the Guarantees of the Notes, as the case may be) that are assumed by the transferee of any such assets or that are otherwise cancelled,
(ii) any Notes or other obligations or other securities or assets received by Hexion or such Restricted Subsidiary from such transferee that are converted by Hexion or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received), and
(iii) any Designated Non-cash Consideration received by Hexion or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by Hexion), taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed the greater of 3% of Total Assets and $70 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value) shall be deemed to be Cash Equivalents for the purposes of this Section 4.06(a).
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(b) Within 365 days after Hexions or any Restricted Subsidiary of Hexions receipt of the Net Proceeds of any Asset Sale, Hexion or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale at its option to any one or more of the following:
(i) to permanently reduce (A) any Indebtedness constituting First Priority Lien Obligations or Indebtedness of a Restricted Subsidiary that is not a Guarantor (and, in the case of revolving Obligations, to correspondingly reduce commitments with respect thereto) or any Pari Passu Indebtedness; provided, however, that if the Issuer or any Guarantor shall so reduce any Pari Passu Indebtedness (other than any First Priority Lien Obligation), the Issuer will equally and ratably reduce Indebtedness under the Notes in any manner set forth in clause (C) below, (B) the Notes or (C) Indebtedness under the Notes as provided under Article 3 of this Indenture, through open market purchases (provided that such purchases are at or above 100% of the principal amount thereof) and/or by making an offer to all holders of Notes to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, the pro rata principal amount of the Notes (such offer to be conducted in accordance with the procedures set forth below for an Asset Sales Offer but without any further limitation in amount); or
(ii) to make an Investment in any one or more businesses or capital expenditures, in each case (a) used or useful in a Similar Business or (b) that replace the properties and assets that are the subject of such Asset Sale or to reimburse the cost of any of the foregoing incurred on or after the date on which the Asset Sale giving rise to such Net Proceeds was contractually committed; provided, however, that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Hexion or, if such Person is a Restricted Subsidiary of Hexion, in an increase in the percentage ownership of such Person by Hexion or any Restricted Subsidiary of Hexion; or
(iii) to make an Investment in any one or more businesses; provided, however, that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of Hexion or, if such Person is a Restricted Subsidiary of Hexion, in an increase in the percentage ownership of such Person by Hexion or any Restricted Subsidiary of Hexion.
Pending the final application of any such Net Proceeds, Hexion or such Restricted Subsidiary of Hexion may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not otherwise prohibited by this Indenture.
Any Net Proceeds from any Asset Sale that are not invested or applied as provided and within the time period set forth in the second preceding paragraph of this Section 4.06(b) (it being understood that any portion of such Net Proceeds used to make an offer to purchase Notes, as described in Section 4.06(b)(i), shall be deemed to have been applied whether
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or not such offer is accepted) shall be deemed to constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $20 million, the Issuer shall make an offer to all Holders of Notes (and, at the option of the Issuer, to holders of any Pari Passu Indebtedness) (an Asset Sale Offer) to purchase the maximum principal amount of Notes (and such Pari Passu Indebtedness) that is at least $2,000 and an integral multiple of $1,000 in excess thereof that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to, but excluding the date fixed for the closing of such offer, in accordance with the procedures set forth in this Section 4.06. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceeds $20 million by sending the notice required pursuant to the terms of Section 4.06(f), with a copy to the Trustee.
To the extent that the aggregate amount of Notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for any purpose that is not prohibited by this Indenture. If the aggregate principal amount of Notes (and such Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, the applicable issuers shall select the Notes (and such Pari Passu Indebtedness) to be purchased in the manner described in Section 4.06(e). Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds which served as the basis for such Asset Sale Offer shall be reset at zero.
(c) The Issuer shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached their obligations described in this Indenture by virtue thereof.
(d) Not later than the date upon which written notice of an Asset Sale Offer is delivered to the Trustee as provided above, the Issuer shall deliver to the Trustee an Officers Certificate as to (i) the amount of the Excess Proceeds, (ii) the allocation of the Net Proceeds from the Asset Sales pursuant to which such Asset Sale Offer is being made and (iii) the compliance of such allocation with the provisions of Section 4.06(b). On the Asset Sale Offer purchase date, the Issuer shall also irrevocably deposit with the Trustee or with a paying agent (or, if Hexion or a Wholly Owned Restricted Subsidiary of Hexion is acting as a Paying Agent, segregate and hold in trust) an amount equal to the Asset Sale Offer purchase price to be paid in accordance with the provisions of this Section 4.06. Upon the expiration of the period for which the Asset Sale Offer remains open (the Offer Period), the Issuer shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuer. The Trustee (or a Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the Asset Sale Offer purchase price delivered by the Issuer to the Trustee is greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuer immediately after the expiration of the Offer Period for application in accordance with Section 4.06.
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(e) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the Purchase Date, a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered by the Holder for purchase and a statement that such Holder is withdrawing his election to have such Note purchased. If at the end of the Offer Period more Notes (and Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuer is required to purchase, the principal amount of the Notes (and Pari Passu Indebtedness) to be purchased will be determined pro rata based on the principal amounts so tendered and the selection of the actual Notes of each series for purchase will be made by the Issuer in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed (and the Issuer shall notify the Trustee of any such listing), or if such Notes are not so listed, on a pro rata basis to the extent practicable, by lot or by such other method as the Issuer shall deem fair and appropriate (and in such manner as complies with the procedures of DTC, if applicable); provided, however, that no Notes (or Pari Passu Indebtedness) of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness will be made pursuant to the terms of such Pari Passu Indebtedness.
(f) Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid, or delivered electronically if held by the Depository, at least 30 but not more than 60 days before the purchase date to each Holder at such Holders registered address. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.
(g) A new Note in principal amount equal to the unpurchased portion of any Note purchased in part shall be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the purchase date, unless the Issuer defaults in payment of the purchase price, interest shall cease to accrue on Notes or portions thereof purchased.
SECTION 4.07. Transactions with Affiliates. (a) Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of Hexion (each of the foregoing, an Affiliate Transaction) involving aggregate consideration in excess of $7.5 million, unless:
(i) such Affiliate Transaction is on terms that are not materially less favorable to Hexion or the relevant Restricted Subsidiary than those that could reasonably have been obtained in a comparable transaction by Hexion or such Restricted Subsidiary with an unaffiliated Person; and
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(ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25 million, Hexion delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of Hexion, approving such Affiliate Transaction and set forth in an Officers Certificate certifying that such Affiliate Transaction complies with clause (i) above.
(b) The provisions of Section 4.07(a) shall not apply to the following:
(i) (A) transactions between or among Hexion or any of its Restricted Subsidiaries and (B) any merger of Hexion and any direct parent company of Hexion; provided; however, that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of Hexion and such merger is otherwise in compliance with the terms of this Indenture and effected for a bona fide business purpose;
(ii) Restricted Payments permitted by Section 4.04 and Permitted Investments;
(iii) (x) the entering into of any agreement to pay, and the payment of, management, consulting, monitoring, transaction, advisory or similar fees and expenses to the Sponsor in an aggregate amount in any fiscal year not to exceed the greater of (a) $6.0 million and (b) 2.0% of EBITDA of Hexion and its Restricted Subsidiaries for the immediately preceding fiscal year, and out-of-pocket expense reimbursement; provided, however, any payment not made in any fiscal year may be carried forward and paid in the following two fiscal years, and (y) the payment of the present value of all amounts payable pursuant to any agreement described in clause (x) above in connection with the termination of such agreement;
(iv) the payment of customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, managers, employees or consultants of Hexion or any Restricted Subsidiary or any direct or indirect parent company of Hexion;
(v) payments by Hexion or any of its Restricted Subsidiaries to the Sponsor made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are (x) approved by a majority of the Board of Directors of Hexion in good faith or (y) made pursuant to any agreement or arrangement described in the Offering Circular (or in the documents incorporated by reference therein);
(vi) transactions in which Hexion or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Hexion or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (i) of Section 4.07(a);
(vii) payments or loans (or cancellation of loans) to employees or consultants that are approved by a majority of the Board of Directors of Hexion in good faith;
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(viii) the existence of, or the performance by Hexion or any of its Restricted Subsidiaries under the terms of, any agreement or instrument as in effect as of the Issue Date or any amendment thereto or replacement (so long as any such agreement or instrument together with all amendments thereto or replacements, taken as a whole, are not more disadvantageous to the Holders of the Notes in any material respect than the original agreement or instrument as in effect on the Issue Date, in each case, as determined in good faith by Hexion) or any transaction contemplated thereby;
(ix) the existence of, or the performance by Hexion or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement or investor rights agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date, any agreement described in the Offering Circular (or in the documents incorporated by reference in the Offering Circular) and any amendment thereto or similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by Hexion or any of its Restricted Subsidiaries of its obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (ix) to the extent that the terms of any such existing agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the Holders of the Notes in any material respect than the original agreement as in effect on the Issue Date, as determined in good faith by Hexion;
(x) the execution of the Offering Transactions and the payment of all fees and expenses related to the Offering Transactions, including fees to the Sponsor, which are described in the Offering Circular;
(xi) (A) transactions with customers, clients, suppliers, toll manufacturers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, on terms at least as favorable as could reasonably have been obtained at such time from an unaffiliated party or (B) transactions with joint ventures or Unrestricted Subsidiaries for the purchase or sale of chemicals, equipment and services entered into in the ordinary course of business;
(xii) any transaction effected as part of a Qualified Receivables Financing;
(xiii) the issuance of Equity Interests (other than Disqualified Stock) of Hexion;
(xiv) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of Hexion or of a Restricted Subsidiary, as appropriate, in good faith;
(xv) the entering into of any tax sharing agreement or arrangement and any payments (whether or not pursuant to any such tax sharing agreement or arrangement) permitted by Section 4.04(b)(xii) and the performance under any such agreement or arrangement;
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(xvi) any contribution to the capital of Hexion;
(xvii) transactions permitted by, and complying with, the provisions of Section 5.01;
(xviii) pledges of Equity Interests of Unrestricted Subsidiaries;
(xix) any employment agreements entered into by Hexion or any of the Restricted Subsidiaries in the ordinary course of business;
(xx) intercompany transactions undertaken in good faith (as certified by a responsible financial or accounting officer of Hexion in an Officers Certificate) for the purpose of improving the consolidated tax efficiency of Hexion and its Subsidiaries and not for the purpose of circumventing any covenant set forth in this Indenture; and
(xxi) transactions between Hexion or any Restricted Subsidiary and any Person that is an Affiliate solely because a director or manager thereof is also a director or manager of Hexion or any direct or indirect parent of Hexion; provided, however, that such director or manager abstains from voting as a director or manager of Hexion or such direct or indirect parent, as the case may be, on any matter involving such other Person.
SECTION 4.08.Change of Control. (a) Upon the occurrence of a Change of Control, the Issuer shall (i)(A) make an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a Change of Control Offer) at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of repurchase (the Change of Control Payment) (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with the terms contemplated in this Section 4.08; and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercise its right, within 30 days following such Change of Control, to redeem all the Notes in accordance with Article 3 of this Indenture.
(b) (i) A Change of Control Offer means a notice sent to each Holder with a copy to the Trustee (or delivered pursuant to the procedures of DTC) stating:
(1) | that a Change of Control has occurred and that such Holder has the right to require the Issuer to purchase such Holders Notes at a purchase price in cash equal to the Change of Control Payment (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date); |
(2) | the circumstances regarding such Change of Control; |
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(3) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is sent); and
(4) the instructions determined by the Issuer, consistent with this Section, that a Holder must follow in order to have its Notes purchased.
(ii) A Change of Control Offer may be made in advance of a Change of Control, and conditioned upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
(c) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. The Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the purchase date a telegram, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered.
(d) On the purchase date, all Notes purchased by the Issuer under this Section shall be delivered to the Trustee for cancellation, and the Issuer shall pay the purchase price plus accrued and unpaid interest to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, the Issuer shall be deemed to have made a Change of Control Offer upon a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in Section 4.08(b) applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer; or (ii) a notice of redemption of all outstanding Notes has been given pursuant to Section 3.05, unless and until there is a default in payment of the applicable redemption price.
(f) At the time the Issuer delivers Notes to the Trustee which are to be accepted for purchase, the Issuer shall also deliver an Officers Certificate stating that such Notes are to be accepted by the Issuer pursuant to and in accordance with the terms of this Section 4.08. A Note shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering Holder.
(g) Prior to any Change of Control Offer, the Issuer shall deliver to the Trustee an Officers Certificate stating that all conditions precedent contained herein to the right of the Issuer to make such offer have been complied with.
(h) If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described above, purchase all of the Notes validly tendered and not withdrawn by such holders,
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the Issuer or such third party will have the right, upon not less than 30 nor more than 60 days prior written notice to the holders (with a copy to the Trustee), given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment. Any such redemption shall be effected pursuant to Article 3.
(i) The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have failed to make a Change of Control Offer or purchase the Notes pursuant thereto as described under this Section by virtue thereof.
SECTION 4.09. Compliance Certificate. The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer an Officers Certificate stating that in the course of the performance by the signers of their duties as Officers of the Issuer they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Issuer is taking or proposes to take with respect thereto.
SECTION 4.10. Further Instruments and Acts. Upon request of the Trustee, the Issuer shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 4.11. Future Guarantors. After the Issue Date, Hexion shall cause each of its Restricted Subsidiaries (other than (x) a Foreign Subsidiary, (y) a Receivables Subsidiary or (z) a Domestic Subsidiary that is wholly owned by one or more Foreign Subsidiaries) that guarantees any Indebtedness of Hexion or any Subsidiary Guarantor to execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit C pursuant to which such Subsidiary shall guarantee payment of the Notes. The parties hereto hereby acknowledge that the Subsidiary Guarantors party to this Indenture as of the date any supplemental indenture is to be executed need not be party to such supplemental indenture.
SECTION 4.12. Liens. Hexion shall not, and shall not permit any Subsidiary Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien on any asset or property of Hexion or any Subsidiary Guarantor (A) that secures any Indebtedness (other than Permitted Liens) unless the Notes are equally and ratably secured with such Indebtedness so long as such Indebtedness is so secured; provided that no such Indebtedness may be equally and ratably secured pursuant to this clause (A) (other than Permitted Liens) unless at the time of incurrence and after giving pro forma effect thereto (including a pro forma application of the net proceeds therefrom) the Consolidated Secured Debt Ratio would be no greater than 5.25 to 1.0 and (B) that secures any First Priority Lien Obligation of Hexion or any Subsidiary Guarantor without effectively providing that the Notes or the applicable Guarantee, as the case may be, shall be granted a security interest (subject to Permitted Liens) upon the assets or property (other than Excluded Assets) constituting the
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collateral for such First Priority Lien Obligations (on a basis that ranks junior to such liens on substantially the terms set forth in the Senior Secured Intercreditor Agreement); provided, however, that if granting such security interest requires the consent of a third party, Hexion will use commercially reasonable efforts to obtain such consent with respect to the security interest for the benefit of the Trustee on behalf of the holders of the Notes; provided further, however, that if such third party does not consent to the granting of such security interest after the use of commercially reasonable efforts, Hexion will not be required to provide such security interest.
Any Lien that is granted to secure the Notes pursuant to clause (A) of the preceding paragraph shall be automatically released and discharged at the same time as the release of the Lien that gave rise to the obligation to secure the Notes.
For purposes of determining compliance with this Section 4.12, (A) a Lien securing an item of Indebtedness need not be permitted solely by reference to one category of permitted Liens (or any portion thereof) described in clauses (1) through (32) of the definition of Permitted Liens under Section 1.01 or pursuant to the first paragraph of this Section 4.12 but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens (or any portion thereof) described in clauses (1) through (32) of the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.12, Hexion shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify (as if Incurred at such later time), such Lien securing such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and will be entitled to include the amount and type of such Lien or such item of Indebtedness secured by such Lien (or portion thereof) in one of the categories of permitted Liens (or any portion thereof) described in the definition of Permitted Liens or pursuant to the first paragraph of this Section 4.12 and, in such event, such Lien securing such item of Indebtedness (or any portion thereof) will be treated as being Incurred or existing pursuant to only such clause or clauses (or any portion thereof) or pursuant to the first paragraph hereof. Notwithstanding the foregoing, (i) Liens securing the Existing First Lien Notes (other than the Initial Existing First Lien Notes) and the New First Lien Notes shall at all times be deemed to have been incurred under clause (8)(B) under Permitted Liens and may not later be reclassified, (ii) Liens securing the Initial Existing First Lien Notes shall at all times be deemed to have been incurred under clause 8(A) under Permitted Liens and may not later be reclassified and (iii) Liens securing any Indebtedness initially Incurred after the Issue Date pursuant to Section 4.03(b)(i) shall at all times be deemed to have been incurred under clause (8)(B) under Permitted Liens and may not later be reclassified.
With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The Increased Amount of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount or deferred financing costs, the payment of interest in the form of additional Indebtedness with the same terms or in the form of common stock of Hexion, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or deferred financing costs or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness described in clause (3) of the definition of Indebtedness under Section 1.01.
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SECTION 4.13.Maintenance of Office or Agency.
(a) The Issuer shall maintain an office or agency (which may be an office of the Trustee or an affiliate of the Trustee or Registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer shall 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 Issuer 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 corporate trust office of the Trustee as set forth in Section 12.02.
(b) The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency for such purposes. The Issuer shall 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.
(c) The Issuer hereby designates the corporate trust office of the Trustee or its Agent as such office or agency of the Issuer in accordance with Section 2.04.
SECTION 4.14.After-Acquired Property. Upon the acquisition by Hexion or any Guarantor of any First Priority After-Acquired Property, Hexion or such Guarantor shall, as promptly as practicable after the acquisition of such property or such Subsidiary becoming a Guarantor, execute and deliver such mortgages, deeds of trust, security instruments, financing statements and certificates and opinions of counsel as shall be reasonably necessary to vest in the Collateral Agent a perfected security interest, subject only to Permitted Liens, in such First Priority After-Acquired Property and to have such First Priority After-Acquired Property (but subject to certain limitations, if applicable, including as described under Section 11.01(b)) added to the Collateral, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to include such First Priority After-Acquired Property to the same extent and with the same force and effect; provided, however, that if granting such security interest in such First Priority After-Acquired Property requires the consent of a third party, Hexion will use commercially reasonable efforts to obtain such consent with respect to the interest for the benefit of the Trustee on behalf of the Holders of the Notes; provided further, however, that if such third party does not consent to the granting of such security interest after the use of such commercially reasonable efforts, Hexion or such Guarantor, as the case may be, will not be required to provide such security interest. In addition, after the Existing Debenture Payoff Date, to the extent liens on such assets are granted to secure outstanding First Priority Lien Obligations, Hexion will, as promptly as practicable after such date, grant a perfected security interest in the assets constituting Principal Property on such date, to the same extent as if such assets were acquired
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on such date by Hexion or the applicable Subsidiary that owns such assets on such date, by executing and delivering customary mortgages or deeds of trust with respect to such real property, in each case subject to Permitted Liens and Excluded Assets (other than those described in clauses (j), (k), and (l) of the second paragraph of Section 4.01 of the Collateral Agreement as in effect on the date hereof).
SECTION 4.15. Limitation on Indenture Restricted Subsidiaries. Hexion shall not, and shall not permit any of its Restricted Subsidiaries to, take or knowingly or negligently omit to take any action which action or omission could reasonably be expected to or would have the result of any Existing Debentures Subsidiary being an Indenture Restricted Subsidiary at any time when the negative covenants contained in the Existing Debentures are applicable to an Indenture Restricted Subsidiary unless such Subsidiary concurrently becomes a Subsidiary Guarantor and, after giving effect thereto, there is no default under the Existing Debentures.
SECTION 4.16. Limitation on Hexion Nova Scotia Finance, ULC. So long as Hexion Nova Scotia Finance, ULC is an issuer under the Existing Senior Secured Notes or the Existing Second Lien Notes: (i) Hexion Nova Scotia Finance, ULC shall not own any material assets or other property, other than Indebtedness or other obligations owing to Hexion Nova Scotia Finance, ULC by Hexion and its Restricted Subsidiaries and Cash Equivalents, or engage in any trade or conduct any business other than treasury, cash management, hedging and cash pooling activities and activities incidental thereto; (ii) Hexion Nova Scotia Finance, ULC shall not Incur any material liabilities or obligations other than their obligations (if any) pursuant to the Notes, this Indenture, the Credit Agreement, the Security Documents and other Indebtedness outstanding on the Issue Date or permitted to be Incurred under Section 4.03 and liabilities and obligations pursuant to business activities permitted by this Section 4.16; and (iii) if Hexion Nova Scotia Finance, ULC at any time has assets in excess of $100 million, including intercompany Indebtedness, it shall guarantee the Notes by executing and delivering to the Trustee a supplemental indenture substantially in the form of Exhibit C pursuant to which such Subsidiary shall guarantee payment of the Notes (which such guarantee shall be automatically released if at any time such Subsidiary shall have assets of less than $100 million, including intercompany Indebtedness).
ARTICLE 5
MERGER, CONSOLIDATION OR SALE OF ALL
OR SUBSTANTIALLY ALL ASSETS
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets. (a) Hexion shall not consolidate or merge with or into or wind up into (whether or not Hexion is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
(i) Hexion is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than Hexion) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership, limited liability company or similar entity organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (Hexion or such Person, as the case may be, being herein called the Successor Issuer);
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(ii) the Successor Issuer (if other than Hexion) expressly assumes all the obligations of Hexion under this Indenture and the Notes pursuant to supplemental indentures;
(iii) immediately after giving effect to such transaction no Default shall have occurred and be continuing;
(iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Issuer or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Issuer or such Restricted Subsidiary at the time of such transaction), either
(A) the Successor Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a); or
(B) the Fixed Charge Coverage Ratio for the Successor Issuer and its Restricted Subsidiaries would be no less than the Fixed Charge Coverage Ratio for Hexion and its Restricted Subsidiaries immediately prior to such transaction; and
(v) Hexion shall have delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indentures (if any) comply with this Indenture.
The Successor Issuer shall be the successor to the Issuer and shall succeed to, and be substituted for, and may exercise every right and power of, Hexion under this Indenture and the Notes and Hexion and the Guarantors shall be released from the obligation to guarantee, or, to pay, if applicable, the principal of and interest on the Notes. Notwithstanding the foregoing clauses (iii) and (iv), (a) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to Hexion or to another Restricted Subsidiary, and (b) Hexion may merge with an Affiliate incorporated solely for the purpose of reincorporating or reorganizing Hexion in another state of the United States so long as the amount of Indebtedness of Hexion and its Restricted Subsidiaries is not increased thereby.
(b) Hexion shall not permit any Subsidiary Guarantor to consolidate or merge with or into or wind up into (whether or not such Subsidiary Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless:
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(i) such Subsidiary Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Subsidiary Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation, partnership, limited liability company or similar entity organized and existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Subsidiary Guarantor or such Person, as the case may be, being herein called the Successor Guarantor);
(ii) the Successor Guarantor (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under this Indenture and such Guarantors Guarantee of the Notes pursuant to a supplemental indenture;
(iii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any of its Subsidiaries as a result of such transaction as having been Incurred by the Successor Guarantor or such Subsidiary at the time of such transaction) no Default shall have occurred and be continuing; and
(iv) the Successor Guarantor (if other than such Subsidiary Guarantor) shall have delivered or caused to be delivered to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.
The Successor Guarantor shall succeed to, and be substituted for, such Guarantor under this Indenture and such Guarantors Guarantee of the Notes and such Guarantor shall be released from its obligation to guarantee or to pay, if applicable, the principal of, or interest on, the Notes. Notwithstanding the foregoing clause (iii), (1) a Guarantor may merge with an Affiliate incorporated solely for the purpose of reincorporating or reorganizing such Guarantor in another state of the United States, the District of Columbia or any territory thereof or may convert into a corporation, partnership, limited liability company or similar entity, so long as the amount of Indebtedness of the Guarantor is not increased thereby and (2) a Guarantor may merge with another Guarantor or the Issuer.
In addition, notwithstanding the foregoing, any Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (collectively, a Permitted Transfer) to (x) Hexion or any Guarantor or (y) any Restricted Subsidiary of Hexion that is not a Guarantor; provided that at the time of each such Permitted Transfer pursuant to clause (y) the aggregate amount of all such Permitted Transfers since the Issue Date shall not exceed 5.0% of the Total Assets as shown on the most recent available balance sheet of Hexion and the Restricted Subsidiaries after giving effect to each such Permitted Transfer and including all Permitted Transfers occurring from and after the Existing Second Lien Notes Issue Date (excluding Permitted Transfers in connection with the Hexion Recapitalization).
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. An Event of Default with respect to all of the Notes occurs if:
(a) Hexion defaults in any payment of interest on any Note when the same becomes due and payable, and such default continues for a period of 30 days,
(b) Hexion defaults in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,
(c) Hexion fails to comply with its obligations under Sections 4.08 or 5.01,
(d) Hexion or any of its Restricted Subsidiaries fails to comply with any of its obligations under the covenants set forth in Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.11, 4.12, 4.14, 4.15 or 4.16 (in each case, other than a failure to purchase Notes when required under Section 4.06) and such failure continues for 30 days after the notice specified below,
(e) Hexion or any of its Restricted Subsidiaries fails to comply with its other agreements contained in the Notes or this Indenture (other than those referred to in (a), (b), (c), or (d) above) and such failure continues for 60 days after the notice specified below,
(f) Hexion or any Significant Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to Hexion or a Restricted Subsidiary of Hexion) within any applicable grace period after final maturity or the acceleration of any such Indebtedness (or, with respect to the pollution control bonds constituting Existing Debentures, failure to pay under the guarantees of Hexion and its applicable Restricted Subsidiaries related thereto) by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $50 million or its foreign currency equivalent,
(g) Hexion or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors
or takes any comparable action under any foreign laws relating to insolvency,
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(h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against Hexion or any Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of Hexion or any Significant Subsidiary or for any substantial part of its property; or
(iii) orders the winding up or liquidation of Hexion or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days,
(i) Hexion or any Significant Subsidiary fails to pay final judgments aggregating in excess of $50 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days following the entry thereof,
(j) the Guarantee of the Notes by a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms thereof or by this Indenture) or any Guarantor denies or disaffirms its obligations under this Indenture or any Guarantee of the Notes (except as contemplated by the terms thereof or by this Indenture) and such Default continues for 10 days,
(k) unless such Liens have been released in accordance with the provisions of the Security Documents or this Indenture, Liens in favor of the Holders of the Notes with respect to all or substantially all of the Collateral cease to be valid or enforceable, or Hexion shall assert or any Subsidiary Guarantor shall assert, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable (except as contemplated by the terms thereof or by this Indenture) and, in the case of any such Subsidiary Guarantor, Hexion fails to cause such Subsidiary Guarantor to rescind such assertions within 30 days after Hexion has actual knowledge of such assertions, or
(l) the failure by Hexion or any Subsidiary Guarantor to comply for 60 days after notice with its other agreements contained in the Security Documents except for a failure that would not be material to the Holders and would not materially affect the value of the Collateral taken as a whole.
The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is 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.
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The term Bankruptcy Law means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term Custodian means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
A Default under clause (d), (e) or (l) above shall not constitute an Event of Default until the Trustee notifies the Issuer or the Holders of at least 25% in aggregate principal amount of the outstanding Notes notify the Issuer and the Trustee of the Default and the Issuer does not cure such Default within the time specified in clauses (d), (e) or (l) above after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a Notice of Default. Hexion shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers Certificate of any event which is, or with the giving of notice or the lapse of time or both would become, an Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(g) or (h) with respect to Hexion) occurs with respect to the Notes and is continuing, the Trustee by written notice to Hexion or the Holders of at least 25% in aggregate principal amount of outstanding Notes by written notice to the Issuer and the Trustee, may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(g) or (h) with respect to Hexion occurs, the principal of, premium, if any, and interest on all the Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. The Holders of a majority in principal amount of the outstanding Notes by notice to the Trustee may rescind any such acceleration with respect to the Notes and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy at law or in equity to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. When a Default is waived, it is deemed cured and the Issuer, the Trustee and the Holders will be restored to their former positions and rights under this Indenture, but no such waiver shall extend to any subsequent or other Default or impair any consequent right.
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SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders) or that would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action under this Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. (a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless:
(i) the Holder gives to the Trustee written notice stating that an Event of Default is continuing;
(ii) the Holders of at least 25% in aggregate principal amount of the outstanding Notes make a written request to the Trustee to pursue the remedy;
(iii) such Holder or Holders offer to the Trustee security or indemnity reasonably satisfactory to it against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and
(v) the Holders of a majority in principal amount of the outstanding Notes do not give the Trustee a direction inconsistent with the request during such 60-day period.
(b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.
SECTION 6.07. Rights of the Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the contractual right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 7.07.
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SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation, expenses disbursements and advances of the Trustee (including counsel, accountants, experts or such other professionals as the Trustee deems necessary, advisable or appropriate)) and the Holders allowed in any judicial proceedings relative to the Issuer or any Guarantor, their creditors or their property, shall be entitled to participate as a member, voting or otherwise, of any official committee of creditors appointed in such matters and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee or the Collateral Agent, as the case may be, collects any money or property pursuant to this Article 6 (including proceeds from the exercise of any remedies on the Collateral), they shall, subject to the terms of the Security Documents and each applicable Junior Priority Intercreditor Agreement, pay out the money or property in the following order:
FIRST: to the payment of all amounts due to the Trustee under Section 7.07;
SECOND: to Holders for payment of amounts due and unpaid on the Notes for principal, premium, if any, and interest, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, if any, respectively; and
THIRD: the balance, if any, to the Issuer or, to the extent the Trustee or the Collateral Agent, as the case may be, collects any amount for any Guarantor, to such Guarantor.
The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section. At least 15 days before such record date, the Trustee shall mail to each Holder and the Issuer a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Notes.
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SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Issuer nor any Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer and each Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such persons own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and
(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(c) 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:
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(i) this paragraph does not limit the effect of paragraph (b) of this Section;
(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 Section 6.05; and
(iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustees conduct does not constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel of its own selection and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes 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.
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(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Notes at the time outstanding and indemnified in accordance with Section 6.05, 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 to examine the books, records and premises of the Issuer, personally or by agent or attorney, at the expense of the Issuer and shall incur no liability of any kind by reason of making or not making such inquiry or investigation.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder, including the Collateral Agent.
(i) The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the Holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture.
(j) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the Holder of any Note shall be conclusive and binding upon future Holders of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.
(k) The Trustee shall not be deemed to have notice of any Default or Event of Default unless the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee from the Issuer, any Subsidiary Guarantor or any Holder, and such notice references the Notes and this Indenture.
(l) The Trustee may request that the Issuer deliver an Officers Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers Certificate may be signed by any Person authorized to sign an Officers Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.
(m) The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.
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(n) The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.
(o) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communication services; accidents; labor disputes; and acts of civil or military authorities and governmental action.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with Hexion or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent or Registrar may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustees Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, any Guarantee or the Notes, it shall not be accountable for the Issuers use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer or any Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustees certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e), (f), (i), (j), (k) or (l) or of the identity of any Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b) the Trustee shall have received notice thereof in accordance with Section 12.02 hereof from the Issuer, any Guarantor or any Holder. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the Holders of the Notes and the Issuer having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.
SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall mail to each Holder notice of the Default within the later of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, 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 interests of the Holders.
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SECTION 7.06. [Intentionally Omitted].
SECTION 7.07. Compensation and Indemnity. The Issuer and each Guarantor, jointly and severally, shall pay to the Trustee from time to time reasonable compensation for its services. The Trustees compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer and each Guarantor, jointly and severally, shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustees agents, counsel, accountants and experts. The Issuer and each Guarantor, jointly and severally shall indemnify the Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys fees and expenses) incurred by or in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of enforcing this Indenture or Guarantee against the Issuer or a Guarantor (including this Section 7.07) and defending itself against or investigating any claim (whether asserted by the Issuer, any Guarantor, any Holder or any other Person). The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuer shall not relieve the Issuer or any Guarantor of its indemnity obligations hereunder. The Issuer shall defend the claim and the indemnified party shall provide reasonable cooperation at the Issuers expense in the defense. Such indemnified parties may have separate counsel and the Issuer and the Guarantors, as applicable shall pay the fees and expenses of such counsel; provided, however, that the Issuer shall not be required to pay such fees and expenses if it assumes such indemnified parties defense and, in such indemnified parties reasonable judgment, there is no conflict of interest between the Issuer and the Guarantors, as applicable, and such parties in connection with such defense. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such partys own willful misconduct, negligence or bad faith.
To secure the Issuers and the Guarantors payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.
The Issuers and the Guarantors payment obligations pursuant to this Section shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(g) or (h) with respect to Hexion or the Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law.
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 repayment of such funds or adequate indemnity against such risk or liability is not assured to its satisfaction.
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SECTION 7.08. Replacement of Trustee. (a) The Trustee may resign at any time by so notifying the Issuer. The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuer shall remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or its property; or
(iv) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. 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 the Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07.
(d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Notes may petition at the expense of the Issuer any court of competent jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 7.10, unless the Trustees duty to resign is stayed as provided in Section 310(b) of the TIA, any Holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuers obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.
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In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 310(b) of the TIA, subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA any series of securities issued under this Indenture and any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.
SECTION 7.11. Preferential Collection of Claims Against Issuer. The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated.
SECTION 7.12. Limitation on Duty of Trustee in Respect of Collateral; Indemnification.
(a) Beyond the exercise of reasonable care in the custody thereof, the Trustee and the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Trustee and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. Each of the Trustee and the Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee or the Collateral Agent in good faith.
(b) The Trustee and the Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on their respective part hereunder or under any Security Document, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Issuer to the Collateral, for insuring the
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Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. Subject to Section 7.01 of this Indenture, the Trustee and the Collateral Agent shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the Junior Priority Intercreditor Agreements, the Collateral Agreement or any other Security Document by the Issuer or the Guarantors. The Trustee and the Collateral Agent may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser or other expert or adviser, whether retained or employed by the Issuer or by the Trustee or the Collateral Agent, in relation to any matter arising in the administration of this Indenture, the Junior Priority Intercreditor Agreements or the Security Documents.
ARTICLE 8
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights of registration of transfer or exchange of Notes, as expressly provided for in this Indenture) as to all outstanding Notes and their obligations under this Indenture with respect to the Holders of the Notes:
(i) when (1) all the Notes theretofore authenticated and delivered (other than Notes pursuant to Section 2.08 which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust) have been delivered to the Trustee for cancellation or (2) all of the Notes not delivered to the Trustee for cancellation (a) have become due and payable, (b) will become due and payable at their Stated Maturity within one year or (c) if redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee funds in respect of the Notes, cash in U.S. Dollars, U.S. Government Obligations or a combination thereof in an amount sufficient in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if Government Obligations have been so deposited) to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit (in the case of Notes that have become due and payable) or to the date of maturity or redemption, as applicable, together with irrevocable written instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; provided that upon any redemption that requires the payment of the Applicable Premium, the amount deposited shall be sufficient for purposes of this Indenture to the extent that an amount is deposited with the Trustee equal to the Applicable Premium calculated as of the date the notice of redemption is delivered, with any deficit as of the date of the redemption only required to be deposited with the Trustee on or prior to the date of the redemption;
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(ii) the Issuer or the Guarantors have paid all other sums payable under this Indenture; and
(iii) the Issuer has delivered to the Trustee an Officers Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.
(b) Subject to Sections 8.01(c) and 8.02, the Issuer at any time may terminate (i) all of its obligations under the Notes and this Indenture with respect to the Notes (legal defeasance option) or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.14, 4.15 and 4.16 for the benefit of the Notes and the operation of Section 5.01(a)(iv) and Sections 6.01(d), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries only), 6.01(h) (with respect to Significant Subsidiaries only), 6.01(i) (with respect to Significant Subsidiaries only), 6.01(j), 6.01(k) and 6.01(l) for the benefit of the Notes (covenant defeasance option). The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. In the event that the Issuer terminates all of its obligations under the Notes and this Indenture with respect to such Notes by exercising its legal defeasance option or their covenant defeasance option, the obligations of each Guarantor under its Guarantee of the Notes shall be terminated simultaneously with the termination of such obligations.
If the Issuer exercises its legal defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default. If the Issuer exercises its covenant defeasance option, payment of the Notes so defeased may not be accelerated because of an Event of Default specified in Sections 6.01(c), 6.01(d), 6.01(f), 6.01(g) (with respect to Significant Subsidiaries only), 6.01(h) (with respect to Significant Subsidiaries only), 6.01(i) (with respect to Significant Subsidiaries only), 6.01(j), 6.01(k) or 6.01(l) or because of the failure of Hexion to comply with Section 5.01(a)(iv).
Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminates.
(c) Notwithstanding clauses (a) and (b) above, the Issuers obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in this Article 8 shall survive until all the Notes have been paid in full. Thereafter, the Issuers obligations in Sections 7.07, 8.05 and 8.06 shall survive such satisfaction and discharge.
SECTION 8.02. Conditions to Defeasance. (a) The Issuer may exercise its legal defeasance option or its covenant defeasance option only if:
(i) the Issuer irrevocably deposits in trust with the Trustee in respect of cash in U.S. Dollars, U.S. Government Obligations or a combination thereof in an amount sufficient or Government Obligations, the principal of and the interest on which will be sufficient, or a combination thereof sufficient, to pay the principal of, and premium (if any) and interest on the applicable Notes when due at maturity or redemption, as the case may be, including interest thereon to maturity or such redemption date;
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(ii) the Issuer delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal, premium, if any, and interest when due on all the Notes to maturity or redemption, as the case may be;
(iii) 123 days pass after the deposit is made and during the 123-day period no Default specified in Section 6.01(g) or (h) with respect to the Issuer occurs which is continuing at the end of the period;
(iv) the deposit does not constitute a default under any other agreement binding on Hexion and its Restricted Subsidiaries;
(v) the Issuer delivers to the Trustee an Opinion of Counsel stating that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940;
(vi) in the case of the legal defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (1) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (2) since the date of this Indenture there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the beneficial owners will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred. Notwithstanding the foregoing, the Opinion of Counsel required with respect to a legal defeasance need not be delivered if all the Notes, not theretofore delivered to the Trustee for cancellation have become due and payable;
(vii) in the case of the covenant defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that the beneficial owners will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred; and
(viii) the Issuer delivers to the Trustee an Officers Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes to be so defeased and discharged as contemplated by this Article 8 have been complied with.
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(b) Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of such Notes at a future date in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or Government Obligations (including proceeds thereof) deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from Government Obligations through each Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes so discharged or defeased.
SECTION 8.04. Repayment to the Issuer. Each of the Trustee and each Paying Agent shall promptly turn over to the Issuer upon request any money or Government Obligations held by it as provided in this Article which, in the written opinion of nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article.
Subject to any applicable abandoned property law, the Trustee and each Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors, and the Trustee and each Paying Agent shall have no further liability with respect to such monies.
SECTION 8.05. Indemnity for Government Obligations. The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited Government Obligations or the principal and interest received on such Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or any Paying Agent is unable to apply any money or Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers and the Guarantors obligations under this Indenture and the Notes so discharged or defeased shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or any Paying Agent is permitted to apply all such money or Government Obligations in accordance with this Article 8; provided, however, that, if the Issuer has made any payment of principal of or interest on, any such Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or any Paying Agent.
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of the Holders. The Issuer, the Guarantors, the Trustee and, if applicable, the Collateral Agent may amend this Indenture, the Notes, any Security Document or the Junior Priority Intercreditor Agreements without notice to or consent of any Holder:
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(i) to cure any ambiguity, omission, defect, mistake or inconsistency;
(ii) to comply with Article 5;
(iii) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code);
(iv) to add additional Guarantees with respect to the Notes ;
(v) to add additional secured creditors holding Junior Priority Obligations, First Priority Lien Obligations or Other Pari Passu Lien Obligations, in each case so long as such obligations are not prohibited by this Indenture;
(vi) to add to the covenants of Hexion or any Restricted Subsidiaries for the benefit of the Holders or to surrender any right or power herein conferred upon the Issuer or any Guarantor;
(vii) to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA (if the Issuer elects to qualify this Indenture under the TIA);
(viii) to make any change that does not adversely affect the rights of any Holder;
(ix) to conform the text of this Indenture, the Notes, the Security Documents, or the Junior Priority Intercreditor Agreements, to any provision of the Description of the Notes in the Offering Circular to the extent that such provision in such Description of the Notes was intended by the Issuer to be a verbatim recitation of a provision of this Indenture, the Notes, the Security Documents or the Junior Priority Intercreditor Agreements, as stated in an Officers Certificate;
(x) to provide for the issuance of Additional Notes;
(xi) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes; provided, however, that (a) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of holders to transfer Notes;
(xii) to secure the Notes or to add additional assets as Collateral; or
(xiii) to release Collateral from the Lien pursuant to this Indenture, the Security Documents and the Junior Priority Intercreditor Agreements when permitted or required by this Indenture, the Security Documents or the Junior Priority Intercreditor Agreements.
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After an amendment under this Section 9.01 becomes effective, the Issuer shall send to the respective Holders a notice briefly describing such amendment. The failure to give such notice to all Holders entitled to received such notice, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01. In addition, to the extent permitted by Junior Priority Intercreditor Agreements, any amendment, waiver or consent to any of the collateral documents with respect to the First Priority Lien Obligations shall apply automatically to the comparable Security Documents with respect to the Notes in respect of such Collateral.
SECTION 9.02. With Consent of the Holders. (a) The Issuer, the Guarantors, the Trustee and, if applicable, the Collateral Agent may amend this Indenture, the Notes, any Security Document and the Junior Priority Intercreditor Agreements with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes) and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes). Notwithstanding the foregoing, without the consent of each Holder of an outstanding Note affected, no amendment may:
(i) reduce the amount of Notes whose Holders must consent to an amendment,
(ii) reduce the rate of or extend the time for payment of interest on any Note,
(iii) reduce the principal of or change the Stated Maturity of any Note,
(iv) reduce the amount payable upon the redemption of any Note or change the time when any Note may be redeemed in accordance with Article 3,
(v) make any Note payable in money other than that stated in such Note,
(vi) impair the contractual right of any holder to receive payment of principal of, premium, if any, and interest on such holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holders Notes,
(vii) make any change in Section 6.07 or the second sentence of this Section 9.02,
(viii) expressly subordinate the Notes or any Guarantee to any other Indebtedness of the Issuer or any Guarantor,
(ix) except as expressly permitted by this Indenture, modify the Guarantees in any manner adverse to the Holders, or
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(x) make any change to the provisions of the Junior Priority Intercreditor Agreements or the provisions of this Indenture with respect to the pro rata application of proceeds of Collateral in respect of the Notes required thereby in a manner that by its terms modifies the application of such proceeds in respect of the Notes required thereby to be on a less than pro rata basis to the Holder of such Note.
Without the consent of the holders of at least two-thirds in aggregate principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes), no amendment or waiver may release from the Lien of this Indenture and the Security Documents all or substantially all of the Collateral.
It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
(b) After an amendment under this Section 9.02 becomes effective, the Issuer shall send to the Holders a notice briefly describing such amendment. However, the failure to give such notice to all Holders entitled to receive such notice, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02.
SECTION 9.03. [Intentionally Omitted].
SECTION 9.04. Revocation and Effect of Consents and Waivers. (a) A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holders Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holders Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers Certificate from the Issuer certifying that the requisite principal amount of Notes have consented. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuer or the Trustee of consents by the Holders of the requisite principal amount of securities, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee.
(b) The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.
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SECTION 9.05. Notation on or Exchange of Notes. If an amendment, supplement or waiver changes the terms of a Note, the Issuer may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities, protections, privileges, indemnities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment, the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and shall be provided with, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Issuer and the Guarantors, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).
SECTION 9.07. Additional Voting Terms; Calculation of Principal Amount. Except as expressly provided in this Indenture, including under Section 9.02, all Notes issued under this Indenture shall vote and consent together on all matters (as to which any of such Notes may vote) as one class. Determinations as to whether Holders of the requisite aggregate principal amount of Notes have concurred in any direction, waiver or consent shall be made in accordance with this Article 9 and Section 2.14.
ARTICLE 10
GUARANTEES
SECTION 10.01. Guarantees. (a) On and after the Issue Date, each Guarantor hereby jointly and severally, irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety on a senior basis, to each Holder and to the Trustee and its successors and assigns (i) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Issuer under this Indenture (including obligations to the Trustee) and the Notes, whether for payment of principal of, premium, if any, or interest on in respect of the Notes and all other monetary obligations of the Issuer under this Indenture and the Notes and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Issuer whether for fees, expenses, indemnification or otherwise under this Indenture and the Notes (all the foregoing being hereinafter collectively called the Guaranteed Obligations). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article 10 notwithstanding any extension or renewal of any Guaranteed Obligation. The Guaranteed Obligations of a Guarantor will be secured by security interests in the Collateral owned by such Guarantor to the extent provided for in the Security Documents and as required pursuant to Sections 4.12 and 4.14.
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(b) Each Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (i) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuer or any other Person under this Indenture, the Notes, any Security Document, or any other agreement or otherwise; (ii) any extension or renewal of this Indenture, the Notes, any Security Document or any other agreement; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes, any Security Document or any other agreement; (iv) the release of any security held by the Collateral Agent for the benefit of Holders and the Trustee for the Guaranteed Obligations or any Guarantor; (v) the failure of any Holder or the Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (vi) any change in the ownership of such Guarantor, except as provided in Section 10.02(b).
(c) Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantors obligations would be less than the full amount claimed. Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Issuer or any other Guarantor first be used and depleted as payment of the Issuers or such Guarantors obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Issuer be sued prior to an action being initiated against such Guarantor.
(d) Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by the Collateral Agent on behalf of the Holders and the Trustee to any security held for payment of the Guaranteed Obligations.
(e) Except as expressly set forth in Sections 8.01(b), 10.02 and 10.06, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes, any Security Document or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity.
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(f) Each Guarantor agrees that, subject to Section 10.02, its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations. Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer or otherwise.
(g) In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuer to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by applicable law) and (iii) all other monetary obligations of the Issuer to the Holders and the Trustee.
(h) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 10.01.
(i) Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.
(j) Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
SECTION 10.02. Limitation on Liability. (a) Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Guarantor, voidable under applicable laws relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.
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(b) A Guarantee as to any Restricted Subsidiary shall terminate and be of no further force or effect and such Subsidiary Guarantor shall be deemed to be released from all obligations under this Article 10 upon one or more of the following circumstances:
(i) the sale, disposition or other transfer (including through merger or consolidation) of the Capital Stock (including any sale, disposition or other transfer following which the applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), of all or substantially all the assets, of the applicable Subsidiary Guarantor if such sale, disposition or other transfer is made in compliance with this Indenture, in each case other than to Hexion or a Subsidiary of Hexion; provided, however, that such Guarantor is released from its guarantees, if any, of, and all pledges and security, if any, granted in connection with, the ABL Facility and any other Indebtedness of Hexion or any Subsidiary Guarantor;
(ii) Hexion designating such Subsidiary Guarantor to be an Unrestricted Subsidiary in accordance with the provisions set forth under Section 4.04 and the definition of Unrestricted Subsidiary;
(iii) the release or discharge of all guarantees by such Restricted Subsidiary and the repayment of all Indebtedness and retirement of all Disqualified Stock of such Restricted Subsidiary which, if Incurred by such Restricted Subsidiary, would require such Restricted Subsidiary to guarantee the Notes under Section 4.11;
(iv) the Issuers exercise of its legal defeasance option or covenant defeasance option as described under Section 8.01 with respect to the Notes, or if the Issuers obligations under this Indenture are discharged in accordance with the terms of this Indenture; and
(v) such Restricted Subsidiary ceasing to be a Subsidiary as a result of any foreclosure of any pledge or security interest in favor of First Priority Lien Obligations, subject to, in each case, the application of the proceeds of such foreclosure in the manner described under Section 11.03.
SECTION 10.03. Successors and Assigns. This Article 10 shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article 10 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 10 at law, in equity, by statute or otherwise.
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SECTION 10.05. Modification. No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances.
SECTION 10.06. Execution of Supplemental Indenture for Future Guarantors. Each Person which is required to become a Guarantor after the Issue Date pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to which such Person shall become a Guarantor under this Article 10 and shall guarantee the Guaranteed Obligations. Concurrently with the execution and delivery of such supplemental indenture, the Issuer shall deliver to the Trustee an Opinion of Counsel and an Officers Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Person and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Guarantee of such Guarantor is a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms or to such other matters as the Trustee may reasonably request.
ARTICLE 11
SECURITY DOCUMENTS
SECTION 11.01. Collateral and Security Documents. (a) On and after the Issue Date, the due and punctual payment of the principal of and interest on the Notes when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of and interest on the Notes and performance of all other Notes Obligations of the Issuer and the Guarantors to the Holders, the Trustee or the Collateral Agent under this Indenture, the Notes and the Security Documents, according to the terms hereunder or thereunder, shall be secured as provided in the Security Documents, which define the terms of the Liens that secure such obligations, subject to the terms of the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement. The Trustee and the Issuer hereby acknowledge and agree that, subject to the terms of the Junior Priority Intercreditor Agreements, the Senior Secured Intercreditor Agent holds the Collateral in trust for the benefit of the Collateral Agent, the Trustee and the Holders, pursuant to the terms of the Security Documents, the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement. Each Holder, by accepting a Note, consents and agrees to the terms of the Security Documents (including the provisions providing for foreclosure and release of Collateral), the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and this Indenture, and authorizes and
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directs the Collateral Agent and, as applicable, the Trustee to enter into the Collateral Agreement, any other Security Documents, each Junior Priority Intercreditor Agreement and any amendments, supplements, joinders or other modifications of the foregoing, in each case in accordance with its terms, and to perform its obligations and exercise its rights thereunder in accordance therewith. The Issuer shall do or cause to be done all such acts and things as may be reasonably required by the next sentence of this Section 11.01, to assure and confirm to the Collateral Agent the security interest in the Collateral contemplated hereby, by the Security Documents or any part thereof, as from time to time constituted, so as to render the same available for the security and benefit of this Indenture and of the Notes secured hereby, according to the intent and purposes herein expressed. Hexion shall take, and shall cause its Subsidiaries to take, any and all actions reasonably required to cause the Security Documents to create and maintain, as security for the Notes Obligations of the Issuer and the Guarantors hereunder, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement), in favor of the Collateral Agent for the benefit of the Trustee and the Holders, junior in priority to any and all security interests (other than property and assets of Foreign Subsidiaries and on Excluded Assets) at any time granted in the Collateral to secure the First Priority Lien Obligations and senior in priority to any and all security interests at any time granted in the Collateral to secure the Junior Priority Obligations. Notwithstanding the foregoing, the Junior Priority Intercreditor Agreements and the Security Documents may be amended from time to time to add, as applicable, other parties holding other First Priority Lien Obligations, Other Pari Passu Lien Obligations and Junior Priority Obligations permitted to be incurred under Sections 4.03 and 4.12.
On the Issue Date, the Issuer and the Guarantors shall grant a security interest in all their assets constituting Collateral (other than Excluded Assets) that are pledged to secure the First Priority Lien Obligations on the Issue Date by executing the Collateral Agreement and such other security documents or joinders thereto that shall be reasonably necessary (as determined by the Issuer in good faith) to provide a security interest in the Collateral that is junior in priority to the security interest in the Collateral securing the First Priority Lien Obligations and senior in priority to the security interest in the Collateral securing the Junior Priority Obligations, in each case, in effect on the Issue Date. Notwithstanding the foregoing, to the extent that any instrument or deliverable that is required to be delivered pursuant to the preceding sentence is not delivered on or prior to the Issue Date, the Issuer shall use commercially reasonable efforts to deliver such instruments and deliverables within 30 days after the Issue Date.
(b) Notwithstanding the foregoing, the Capital Stock and securities of the Subsidiaries of Hexion (other than Hexion Coop) that are owned by Hexion or any Guarantor will constitute Collateral only to the extent that such Capital Stock and securities can secure the Notes without Rule 3-10 or Rule 3-16 of Regulation S-X under the Securities Act (Rule 3-10 and Rule 3-16, respectively) (or any other law, rule or regulation) requiring separate financial statements of such Subsidiary to be filed with the SEC (or any other governmental agency);
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(i) in the event that either Rule 3-10 or Rule 3-16 requires or is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary (other than Hexion Coop) due to the fact that such Subsidiarys Capital Stock or securities secure the Notes, the performance of Guaranteed Obligations of the Issuer or any Guarantee, then the Capital Stock and/or securities of such Subsidiary shall automatically be deemed not to be part of the Collateral, but only to the extent necessary to not be subject to such requirement (and, in such event, the Security Documents may be amended or modified, without the consent of the Trustee or any Holder of the Notes, to the extent necessary to release the security interests on the shares of Capital Stock and securities that are so deemed to no longer constitute part of the Collateral); and
(ii) in the event that either Rule 3-10 or Rule 3-16 is amended, modified or interpreted by the SEC to permit (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted, which would permit) such Subsidiarys Capital Stock or securities to secure the Notes in excess of the amount then pledged without the filing with the SEC (or any other governmental agency) of separate financial statements of such Subsidiary, then the Capital Stock and/or securities of such Subsidiary shall automatically be deemed to be a part of the Collateral but only to the extent that will not result in such Subsidiary being subject to any such financial statement requirement (and, in such event, the Security Documents may be amended or modified, without the consent of the Trustee or any Holder of the Notes, to the extent necessary to subject to the Liens under the Security Documents such additional Capital Stock and securities, on the terms contemplated herein).
SECTION 11.02. Recordings and Opinions. The Issuer and the Guarantors shall furnish to the Trustee, on or before the time when Hexion is required to provide annual reports pursuant to Section 4.02 with respect to the preceding fiscal year, an Opinion of Counsel:
(1) | stating substantially to the effect that, in the opinion of such counsel, such action has been taken with respect to the recordings, registerings, filings, re-recordings, re-registerings and re-filings of this Indenture, the Security Documents and all financing statements, continuation statements or other instruments of further assurance as is necessary to maintain the Lien of this Indenture or any Security Documents in the Collateral and reciting with respect to the security interests in such Collateral the details of such action or referencing to prior Opinions of Counsel in which such details are given; or |
(2) | to the effect that, in the opinion of such counsel, no such action is necessary to maintain such Lien under this Indenture and the Security Documents. |
SECTION 11.03. Release of Collateral. (a) Subject to subsections (b) and (c) of this Section 11.03, Collateral may be released from the Lien and security interest created by the Security Documents at any time or from time to time in accordance with the provisions of the Security Documents, the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement or as provided hereby. Upon the request of the Issuer pursuant to an
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Officers Certificate certifying that all conditions precedent hereunder have been met, the Issuer and the Guarantors will be entitled to a release of assets included in the Collateral from the Liens securing the Notes, and the Collateral Agent and the Trustee (if the Trustee is not then the Collateral Agent) shall release the same from such Liens at the Issuers sole cost and expense, under one or more of the following circumstances:
(1) | if all other Liens on such property or assets securing First Priority Lien Obligations (including all commitments and letters of credit thereunder) are released; provided, however, that if the Issuer incurs or any Guarantor subsequently incurs First Priority Lien Obligations that are secured by Liens on property or assets of the Issuer or any Guarantor (other than Excluded Assets) of the type constituting the Collateral and the related Liens are incurred in reliance on clause (8) of the definition of Permitted Liens, then the Issuer and the Guarantors will be required to reinstitute the security arrangements with respect to such property or assets to secure the Notes Obligations, which, in the case of any such subsequent First Priority Lien Obligations, will be junior-priority Liens on the Collateral securing such First Priority Lien Obligations to the same extent provided by the Security Documents and the Senior Secured Intercreditor Agreement and on the terms and conditions of the security documents relating to such First Priority Lien Obligations, with the Lien held either by the administrative agent, collateral agent or other representative for such First Priority Lien Obligations or by a collateral agent or other representative designated by the Issuer to hold the Liens for the benefit of the noteholders and subject to an intercreditor agreement that provides such collateral agent or other representative substantially the same rights and powers as afforded to the Senior Secured Intercreditor Agent under the Senior Secured Intercreditor Agreement; |
(2) | to enable the Issuer or any Restricted Subsidiary to consummate the disposition of such property or assets to the extent not prohibited under Section 4.06; |
(3) | in the case of a Guarantor that is released from its Guarantee with respect to the Notes, the release of the property and assets of such Guarantor; |
(4) | if the Notes have been discharged or defeased pursuant to Section 8.01; |
(5) | in the case of a Guarantor making a Permitted Transfer to any Restricted Subsidiary of Hexion; provided that such Permitted Transfer is permitted by clause (y) of the last paragraph of Article 5; |
(6) | in respect of the property and assets of a Restricted Subsidiary that is a Guarantor, upon the designation of such Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.04 and the definition of Unrestricted Subsidiary under Section 1.01; |
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(7) | [intentionally omitted]; |
(8) | pursuant to an amendment or waiver in accordance with Article 9 of this Indenture; or |
(9) | in respect of any property and assets of the Issuer or a Guarantor that would constitute Collateral but is at such time not subject to a Lien securing any First Priority Lien Obligations, other than any assets or property that cease to be subject to a Lien securing any First Priority Lien Obligations in connection with a release or discharge by or as a result of payment in full and termination of such First Priority Lien Obligations; provided that if such property and assets are subsequently subject to a Lien securing any First Priority Lien Obligations (other than Excluded Assets), such property and assets shall subsequently constitute Collateral hereunder. |
Notwithstanding the foregoing, if an Event of Default under the Indenture exists on the date on which the First Priority Lien Obligations are repaid in full and terminated (including all commitments and letters of credit thereunder), the Liens on the Collateral securing the Notes will not be released, except to the extent the Collateral or any portion thereof was disposed of in order to repay the First Priority Lien Obligations secured by the Collateral, and thereafter, subject to the terms of the Senior Secured Intercreditor Agreement, the Collateral Agent (acting at the direction of the holders of a majority of outstanding principal amount of the sum of Notes Obligations and Other Pari Passu Lien Obligations outstanding at such time) will have the right to direct the Senior Secured Intercreditor Agent to foreclose upon the Collateral (but in such event, the Liens on such Collateral securing the Notes will be released when such Event of Default and all other Events of Default under the Indenture or with respect to such Other Pari Passu Lien Obligations, as applicable, cease to exist).
Upon receipt of such Officers Certificate and any necessary or proper instruments of termination, satisfaction or release prepared by the Issuer, the Collateral Agent shall execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Security Documents or the Senior Secured Intercreditor Agreement.
(b) Except as otherwise provided in the Senior Secured Intercreditor Agreement, no Collateral may be released from the Lien and security interest created by the Security Documents unless an Officers Certificate and Opinion of Counsel, dated not more than five days prior to the date of the application for such release, have been delivered to the Collateral Agent and the Trustee (if the Trustee is not then the Collateral Agent) certifying that all conditions precedent, including, without limitation, this Section 11.03, have been met and stating under which of the circumstances set forth in Section 11.03(a) above the Collateral is being released.
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(c) At any time when a Default or Event of Default has occurred and is continuing and the maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee (if not then the Collateral Agent) has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents will be effective as against the Holders, except as otherwise provided in the Senior Secured Intercreditor Agreement.
SECTION 11.04. Permitted Releases Not To Impair Lien. The release of any Collateral from the terms hereof and of the Security Documents or the release of, in whole or in part, the Liens created by the Security Documents, will not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral or Liens are released pursuant to (x) the applicable Security Documents and the terms of this Article 11 or (y) the Senior Secured Intercreditor Agreement. The Trustee and each of the Holders acknowledge that a release of Collateral or a Lien strictly in accordance with the terms of the Security Documents, the Senior Secured Intercreditor Agreement and of this Article 11 will not be deemed for any purpose to be in contravention of the terms of this Indenture.
SECTION 11.05. Certificates of the Trustee. In the event that the Issuer wishes to release Collateral in accordance with this Indenture and the Security Documents and the Senior Secured Intercreditor Agreement at a time when the Trustee is not itself also the Collateral Agent and the Issuer has delivered the certificates and documents required by the Security Documents and Section 11.03 hereof, the Trustee will determine whether it has received all documentation required by this Indenture in connection with such release and, based on such determination, will deliver a certificate to the Collateral Agent setting forth such determination.
SECTION 11.06. Suits To Protect the Collateral. Subject to the provisions of Article 7 hereof, the Security Documents and the Junior Priority Intercreditor Agreements, the Trustee in its sole discretion and without the consent of the Holders, on behalf of the Holders, may or may direct the Collateral Agent to take all actions it deems necessary or appropriate in order to:
(a) enforce any of the terms of the Security Documents; and
(b) collect and receive any and all amounts payable in respect of the Guaranteed Obligations of the Issuer hereunder.
Subject to the provisions of the Security Documents and the Junior Priority Intercreditor Agreements, the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts which may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits and proceedings as the Trustee, in its sole discretion, may deem expedient to preserve or protect its interests and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the Lien on the Collateral or be prejudicial to the interests of the Holders or the Trustee).
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SECTION 11.07. Authorization of Receipt of Funds by the Trustee Under the Security Documents. Subject to the provisions of the Junior Priority Intercreditor Agreements, the Trustee is authorized to receive any funds for the benefit of the Holders distributed under the Security Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture.
SECTION 11.08. Purchaser Protected. In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Collateral Agent or the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article 11 to be sold be under any obligation to ascertain or inquire into the authority of the Issuer or the applicable Guarantor to make any such sale or other transfer.
SECTION 11.09. Powers Exercisable by Receiver or Trustee. In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 11 upon the Issuer or a Guarantor with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Issuer or a Guarantor or of any officer or officers thereof required by the provisions of this Article 11; and if the Trustee, the Collateral Agent or a nominee of the Trustee or Collateral Agent shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee, the Collateral Agent or a nominee of the Trustee or Collateral Agent.
SECTION 11.10. Release Upon Termination of the Issuers Obligations. In the event that the Issuer delivers to the Trustee an Officers Certificate certifying that all the obligations under this Indenture and the Notes (and, to the extent relating to the foregoing, the Security Documents), have been satisfied and discharged by complying with the provisions of Article 8 and Section 7.07 or by the payment in full of the Issuers obligations under the Notes and this Indenture (and, to the extent relating to the foregoing, the Security Documents), and all such obligations have been so satisfied, the Trustee shall deliver to the Issuer and, if the Trustee is not then the Collateral Agent, the Collateral Agent a notice stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral (other than with respect to funds held by the Trustee pursuant to Article 8), and any rights it has under the Security Documents, and upon receipt by the Collateral Agent of such notice (or, if the Trustee is then the Collateral Agent, upon receipt of such Officers Certificate and upon satisfaction of all such obligations), the Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee and shall do or cause to be done all acts reasonably necessary to release such Lien as soon as is reasonably practicable.
SECTION 11.11. Collateral Agent. (a) The Collateral Agent shall initially act as collateral agent and shall be authorized to appoint co-Collateral Agents as necessary in its sole discretion. Except as otherwise explicitly provided herein or in the Security Documents and the Junior Priority Intercreditor Agreements, neither the Collateral Agent nor any of its
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respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Collateral Agent nor any of its officers, directors, employees or agents shall be responsible for any act or failure to act hereunder, except for its own willful misconduct, gross negligence or bad faith.
(b) The Collateral Agent is authorized and directed to (i) enter into the Collateral Agreement and any other Security Documents as of the Issue Date, and thereafter, any amendments, supplements, joinders or modifications thereto in accordance with the terms hereof, (ii)(x) as of the Issue Date, enter into the Senior Secured Intercreditor Agreement and a joinder to the Second Lien Intercreditor Agreement and (y) after the Issue Date, enter into any amendments, supplements, joinders or other modifications to each applicable Junior Priority Intercreditor Agreement in accordance with the terms of such Junior Priority Intercreditor Agreement and the terms hereof, (iii) bind the Holders on the terms as set forth in the Security Documents, the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement and (iv) perform and observe its obligations under the Security Documents, the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement.
(c) If the Issuer (i) Incurs First Priority Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting First Priority Lien Obligations entitled to the benefit of the Senior Secured Intercreditor Agreement is concurrently retired, and (ii) delivers to the Collateral Agent an Officers Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the Senior Secured Intercreditor Agreement in effect on the Issue Date) in favor of a designated agent or representative for the holders of the First Priority Lien Obligations so Incurred, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement in order to bind the Holders on the terms set forth therein and perform and observe its obligations thereunder. If the Issuer (i) Incurs Other Pari Passu Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting Other Pari Passu Lien Obligations entitled to the benefit of the Senior Secured Intercreditor Agreement and/or the Second Lien Intercreditor Agreement is concurrently retired, and (ii) delivers to the Collateral Agent an Officers Certificate so stating and requesting the Collateral Agent to enter into one or more joinders to each applicable Junior Priority Intercreditor Agreement then extant, or one or more intercreditor agreements to effect the terms contemplated by such Other Pari Passu Lien Obligations and, as applicable, (x) the lien subordination of such Other Pari Passu Lien Obligations relative to any outstanding First Priority Lien Obligations on substantially the same terms as the Senior Secured Intercreditor Agreement as in effect on the Issue Date and (y) the lien subordination of any outstanding Junior Priority Obligations relative to such Other Pari Passu Lien Obligations on substantially the same terms as the Second Lien Intercreditor Agreement as in effect on the Issue Date, then, in each case of (x) and (y), the Collateral Agent shall (and is hereby authorized and directed to) enter into one or more such joinders or such new intercreditor agreements in order to bind the Holders on the terms set forth therein and perform and observe its obligations thereunder. If the Issuer (i) Incurs
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Junior Priority Obligations at any time when no junior lien intercreditor agreement is in effect or at any time when Indebtedness constituting Junior Priority Obligations entitled to the benefit of a Junior Lien Intercreditor Agreement is concurrently retired, and (ii) delivers to the Collateral Agent an Officers Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement (on substantially the same terms as the Second Lien Intercreditor Agreement in effect on the Issue Date) to effect the lien subordination and other terms contemplated by the terms of such Junior Priority Obligations, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement in order to bind the Holders on the terms set forth therein and perform and observe its obligations thereunder.
(d) Subject to Section 7.01, neither the Trustee nor the Collateral Agent nor any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Lien security the Notes Obligations, or for any defect or deficiency as to any such matters, or for any failure to demand, collect, foreclose or realize upon or otherwise enforce any of the Liens security the Notes Obligations or the Security Documents or any delay in doing so.
(e) The Collateral Agent will be subject to such directions as may be given it by the Trustee from time to time (as required or permitted by this Indenture); provided that in the event of conflict between directions received pursuant to the Security Documents and the Junior Priority Intercreditor Agreements and directions received hereunder, the Collateral Agent will be subject to directions received pursuant to the Security Documents and the Junior Priority Intercreditor Agreements. Except as directed by the Trustee as required or permitted by this Indenture and any other representatives pursuant to the Security Documents or the Junior Priority Intercreditor Agreements, the Collateral Agent will not be obligated:
(x) to act upon directions purported to be delivered to it by any other Person;
(y) to foreclose upon or otherwise enforce any Lien securing the Notes Obligations; or
(z) to take any other action whatsoever with regard to any or all of the Liens securing the Notes Obligations, Security Documents or Collateral.
(f) The Collateral Agent will be accountable only for amounts that it actually receives as a result of the enforcement of the Liens securing the Notes Obligations or the Security Documents.
(g) In acting as Collateral Agent or co-Collateral Agent, the Collateral Agent and each co-Collateral Agent may rely upon and enforce each and all of the rights, protections, privileges, powers, immunities, indemnities and benefits of the Trustee under Article 7 hereof.
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(h) The Holders of Notes agree that the Collateral Agent shall be entitled to the rights, privileges, protections, immunities, indemnities and benefits provided to the Collateral Agent by this Indenture and the Security Documents. Furthermore, each Holder of a Note, by accepting such Note, consents to the terms of and authorizes and directs the Trustee (in each of its capacities) and the Collateral Agent to enter into and perform each of the Junior Priority Intercreditor Agreements and Security Documents in each of its capacities thereunder.
(i) At all times when the Trustee is not itself the Collateral Agent, the Issuer will deliver to the Trustee copies of all Security Documents delivered to the Collateral Agent and copies of all documents delivered to the Collateral Agent pursuant to this Indenture and the Security Documents.
SECTION 11.12. Designations. Except as provided in the next sentence, for purposes of the provisions hereof and the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement requiring the Issuer to designate Indebtedness for the purposes of the terms First Priority Lien Obligations, Other Pari Passu Lien Obligations and Junior Priority Lien Obligations or any other such designations hereunder or under the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement, any such designation shall be sufficient if the relevant designation is set forth in writing, signed on behalf of the Issuer by an Officer and delivered to the Trustee, the Collateral Agent, the Senior Secured Intercreditor Agent and the Second Lien Intercreditor Agent. For all purposes hereof, the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement, the Issuer hereby designates the Obligations pursuant to the ABL Facility in effect on the Issue Date, the Existing First Lien Notes and the New First Lien Notes as First Priority Lien Obligations hereunder and Senior Lender Claims (as defined in each applicable Junior Priority Intercreditor Agreement).
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. [Intentionally Omitted].
SECTION 12.02. Notices. (a) Any notice or communication required or permitted hereunder shall be in writing and delivered in person, via facsimile or mailed by first-class mail addressed as follows:
if to the Issuer or a Guarantor: | ||
Hexion Inc. | ||
180 East Broad St. | ||
Columbus, OH 43215 | ||
Attention of: General Counsel | ||
Facsimile: (614) 225-3354 |
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if to the Trustee:
| ||
Wilmington Trust, National Association | ||
50 South Sixth Street, Suite 1290 | ||
Minneapolis, MN 55402-1544 | ||
Attention of: Hexion Notes Administrator | ||
Facsimile: (612) 217-5651 |
The Issuer or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.
(b) Any notice or communication mailed to a Holder shall be mailed, first class mail, to the Holder, or delivered electronically if held by the Depository, at the Holders address as it appears on the registration books of the Registrar and shall be sufficiently given if so sent within the time prescribed.
(c) Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee are effective only if received.
SECTION 12.03. [Intentionally Omitted].
SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee at the request of the Trustee:
(a) an Officers Certificate in form reasonably satisfactory to the Trustee 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
(b) an Opinion of Counsel in form reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 4.09) shall include:
(a) a statement that the individual making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
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(c) a statement that, in the opinion of such individual, 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
(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers Certificate or certificates of public officials.
SECTION 12.06. When Notes Disregarded. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, any Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.
SECTION 12.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of the Holders. The Registrar and a Paying Agent may make reasonable rules for their functions.
SECTION 12.08. Legal Holidays. If a payment date is not a Business Day, payment shall be made on the next succeeding day that is a Business Day, and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period. If a regular record date is not a Business Day, the record date shall not be affected.
SECTION 12.09. Governing Law. This Indenture and the Notes shall be governed by, and construed in accordance with, the laws of the state of New York.
SECTION 12.10. No Recourse Against Others. No affiliate, director, officer, employee, incorporator or holder of any Equity Interests in Hexion or of any Guarantor or any direct or indirect parent corporation of Hexion, as such, shall have any liability for any obligations of the Issuer or the Guarantors under the Notes, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation; provided, however, the foregoing will not affect or limit any liability of any Guarantor under this Indenture or its Guarantee. Each Holder of Notes by accepting a Note waives and releases all such liability.
SECTION 12.11. Successors. All agreements of the Issuer and each Guarantor in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture.
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SECTION 12.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.
SECTION 12.14. Indenture Controls. If and to the extent that any provision of the Notes limits, qualifies or conflicts with a provision of this Indenture, such provision of this Indenture shall control.
SECTION 12.15. Severability. In case any provision in this Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.
SECTION 12.16. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee and the Collateral Agent, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee and the Collateral Agent. The parties to this Indenture agree that they will provide the Trustee and the Collateral Agent with such information as it may request in order for the Trustee and the Collateral Agent to satisfy the requirements of the U.S.A. Patriot Act.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
HEXION INC. | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
HEXION INVESTMENTS INC. | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
HSC CAPITAL CORPORATION | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
LAWTER INTERNATIONAL INC. | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
HEXION INTERNATIONAL INC. | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer |
[SIGNATURE PAGE TO 1.5L NOTES INDENTURE]
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: |
Lawter International Inc., as sole managing member | |
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer | ||
NL COOP HOLDINGS LLC | ||
By: |
/s/ Mark D. Bidstrup | |
Name: Mark D. Bidstrup | ||
Title: Senior Vice President and Treasurer |
[SIGNATURE PAGE TO 1.5L NOTES INDENTURE]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
By: |
/s/ Jane Schweiger | |
Name: Jane Schweiger | ||
Title: Vice President |
[SIGNATURE PAGE TO 1.5L NOTES INDENTURE]
APPENDIX A
RULE 144A/REGULATION S/IAI APPENDIX
PROVISIONS RELATING TO INITIAL NOTES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the meanings indicated below:
Applicable Procedures means, with respect to any transfer or transaction involving a Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depository for such a Temporary Regulation S Global Note, to the extent applicable to such transaction and as in effect from time to time.
Definitive Note means a certificated Initial Note bearing, if required, the appropriate restricted notes legend set forth in Section 2.3(e).
Depository means The Depository Trust Company, its nominees and their respective successors.
Distribution Compliance Period, with respect to any Notes, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Notes are first offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the issue date with respect to such Notes.
Global Notes Legend means the legend set forth under that caption in the applicable Exhibit to this Indenture.
IAI means an institutional accredited investor, as defined in Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Securities Act.
Initial Notes means the initial $225,000,000 in aggregate principal amount of 13.75% Senior Secured Notes due 2022 issued on the Issue Date.
Initial Purchasers means (a) with respect to the Initial Notes issued on the Issue Date, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., Wells Fargo Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC and Citizens Capital Markets, Inc., and (b) with respect to each issuance of Additional Notes, the Persons purchasing or underwriting such Additional Notes under the related Purchase Agreement.
Notes means the Initial Notes.
Notes Custodian means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto, and shall initially be the Trustee.
Purchase Agreement means (a) with respect to the Initial Notes issued on the Issue Date, (i) the Purchase Agreement dated January 25, 2017, among the Issuer, the Guarantors and the Initial Purchasers and (b) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Issuer, the Guarantors and the Persons purchasing or underwriting such Additional Notes.
QIB means a qualified institutional buyer as defined in Rule 144A.
Restricted Notes Legend means the legend set forth under that caption in the applicable Exhibit to this Indenture.
Rule 144A Notes means all Notes offered and sold to QIBs in reliance on Rule 144A.
Securities Act means the Securities Act of 1933, as amended.
Transfer Restricted Notes means Notes that bear or are required to bear a legend relating to restrictions on transfer relating to the Securities Act set forth in Section 2.3(e).
Appendix-2
1.2 Other Definitions
Term |
Defined in Section: |
|||
Agent Members |
2.1 | (b) | ||
Global Notes |
2.1 | (a) | ||
IAI Global Note |
2.1 | (a) | ||
Permanent Regulation S Global Note |
2.1 | (a) | ||
Regulation S |
2.1 | (a) | ||
Rule 144A |
2.1 | (a) | ||
Rule 144A Global Note |
2.1 | (a) | ||
Temporary Regulation S Global Note |
2.1 | (a) |
2. The Notes
2.1 (a) Form and Dating. The Initial Notes will be offered and sold by the Issuer pursuant to the Purchase Agreement. The Initial Notes will be resold initially by the Initial Purchasers only to (i) QIBs in reliance on Rule 144A under the Securities Act (Rule 144A) and (ii) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act (Regulation S). Initial Notes may thereafter be transferred to, among others, QIBs, IAIs and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth herein. Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the Rule 144A Global Note); Initial Notes initially resold to IAIs shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form (collectively, the IAI Global Note); and Initial Notes initially resold pursuant to Regulation S shall be issued initially in the form of one or more temporary global notes in fully registered form (collectively, the Temporary Regulation S Global Note), in each case without interest coupons and with the global notes legend and the applicable restricted notes legend set forth in Exhibit 1 hereto, which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Notes Custodian and registered in the name of the Depository or a nominee of the Depository, duly executed by the Issuer and authenticated by the Trustee as provided in this Indenture. Except as set forth in this Section 2.1(a), beneficial ownership interests in the Temporary Regulation S Global Note will not be exchangeable for interests in the Rule 144A Global Note, the IAI Global Note, a permanent global note (the Permanent Regulation S Global Note, and together with the Temporary Regulation S Global Note, the Regulation S Global Note) or any other Note prior to the expiration of the Distribution Compliance Period and then, after the expiration of the Distribution Compliance Period, may be exchanged for interests in a Rule 144A Global Note, an IAI Global Note or the Permanent Regulation S Global Note only upon certification to the Trustee that (i) beneficial ownership interests in such Temporary Regulation S Global Note are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act and (ii) in the case of an exchange for an IAI Global Note, certification that the interest in the Temporary Regulation S Global Note is being transferred to an institutional accredited investor under the Securities Act that is an institutional accredited investor acquiring the notes for its own account or for the account of an institutional accredited investor.
Appendix-3
Beneficial interests in Temporary Regulation S Global Notes (after the expiration of the Distribution Compliance Period) or IAI Global Notes may be exchanged for interests in Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary Regulation S Global Note or the IAI Global Note, as applicable, first delivers to the Trustee a written certificate (in a form satisfactory to the Trustee) to the effect that the beneficial interest in the Temporary Regulation S Global Note or the IAI Global Note, as applicable, is being transferred to a Person (a) who the transferor reasonably believes to be a QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable notes laws of the States of the United States and other jurisdictions.
Beneficial interests in Temporary Regulation S Global Notes (after the expiration of the Distribution Compliance Period) and Rule 144A Global Notes may be exchanged for an interest in IAI Global Notes if (1) such exchange occurs in connection with a transfer of the notes in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Note or Rule 144A Global Note, as applicable, first delivers to the Trustee a written certificate (substantially in the form of Exhibit 2) to the effect that (A) the Regulation S Global Note or Rule 144A Global Note, as applicable, is being transferred (a) to an accredited investor within the meaning of 501(a)(1), (2), (3) and (7) under the Securities Act that is an institutional investor acquiring the notes for its own account or for the account of such an institutional accredited investor, in each case in a minimum principal amount of the notes of $250,000, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act and (B) in accordance with all applicable securities laws of the States of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Note or an IAI Global Note may be transferred to a Person who takes delivery in the form of an interest in a Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, only if the transferor first delivers to the Trustee a written certificate (in the form provided in this Indenture) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if applicable).
The Rule 144A Global Note, the IAI Global Note, the Temporary Regulation S Global Note and the Permanent Regulation S Global Note are collectively referred to herein as Global Notes. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.
The Issuer shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depositorys instructions or held by the Trustee as custodian for the Depository.
Appendix-4
Members of, or participants in, the Depository (Agent Members) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Note, and the Issuer, the Trustee and any agent of the Issuer, the Guarantors or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Guarantors, the Trustee or any agent of the Issuer, the Guarantors or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Note.
(c) Definitive Notes. Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Definitive Notes.
2.2 Authentication
The Trustee shall authenticate and deliver: (1) on the Issue Date, an aggregate principal amount of $225,000,000 Initial Notes and (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Issuer pursuant to Section 2.03 of this Indenture. Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance and Additional Notes pursuant to Section 2.01 of this Indenture, shall certify that such issuance is in compliance with Section 4.03 of this Indenture.
2.3 Transfer and Exchange
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Registrar with a request:
(x) | to register the transfer of such Definitive Notes; or |
(y) | to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations, |
the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or its attorney duly authorized in writing; and
(ii) if such Definitive Notes are required to bear a restricted notes legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:
Appendix-5
(A) if such Definitive Notes are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect; or
(B) if such Definitive Notes are being transferred to the Issuer, a certification to that effect; or
(C) if such Definitive Notes are being transferred (x) pursuant to an exemption from registration in accordance with Rule 144A, Regulation S or Rule 144 under the Securities Act; or (y) in reliance upon another exemption from the requirements of the Securities Act: (i) a certification to that effect (in the form set forth on the reverse of the Note) and (ii) if the Issuer so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Rule 144A Global Note, an IAI Global Note or a Permanent Regulation S Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the Note, that such Definitive Note is either (A) being transferred to a QIB in accordance with Rule 144A, (B) being transferred to an IAI or (C) being transferred after expiration of the Distribution Compliance Period by a Person who initially purchased such Note in reliance on Regulation S to a buyer who elects to hold its interest in such Note in the form of a beneficial interest in the Permanent Regulation S Global Note; and
(ii) written instructions directing the Trustee to make, or to direct the Notes Custodian to make, an adjustment on its books and records with respect to such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A)), IAI Global Note (in the case of a transfer pursuant to clause (b)(i)(B) or Permanent Regulation S Global Note (in the case of a transfer pursuant to clause (b)(i)(C)) to reflect an increase in the aggregate principal amount of the Notes represented by the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, such instructions to contain information regarding the Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Note and cause, or direct the Notes Custodian to cause, in accordance with the standing instructions and procedures existing between the Depository and the Notes Custodian, the aggregate principal amount of Notes represented by the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, equal to the principal amount of the Definitive Note so canceled. If no Rule 144A Global Notes, IAI Global Notes or Permanent Regulation S Global Notes, as
Appendix-6
applicable, are then outstanding, the Issuer shall issue and the Trustee shall authenticate, upon written order of the Issuer in the form of an Officers Certificate of the Issuer, a new Rule 144A Global Note, IAI Global Note or Permanent Regulation S Global Note, as applicable, in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes.
(i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depositorys procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Registrar shall, in accordance with such instructions, instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.
(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except 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 such nominee to a successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 of this Appendix, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A, Regulation S or another applicable exemption under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer.
(d) Restrictions on Transfer of Temporary Regulation S Global Notes. During the Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (i) to the Issuer, (ii) in an offshore transaction in accordance with Regulation S (other than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global Note), (iii) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any State of the United States.
Appendix-7
(e) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Global Notes (and all Notes issued in exchange therefor or in substitution thereof), in the case of Notes offered otherwise than in reliance on Regulation S, shall bear a legend in substantially the following form:
This note (or its predecessor) was originally issued in a transaction exempt from registration under the United States Securities Act of 1933, as amended (the Securities Act), and this note may not be offered, sold or otherwise transferred in the absence of such registration or an applicable exemption therefrom. Each purchaser of this note is hereby notified that the seller of this note may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A thereunder.
The holder of this note agrees for the benefit of the issuer that (a) this note may be offered, resold, pledged or otherwise transferred, only (i) to the issuer, (ii) in the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (iii) to an accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the issuer that such transfer is in compliance with the Securities Act, (iv) outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act, (v) pursuant to exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi), in accordance with any applicable securities laws of any state of the United States, and (b) the holder will, and each subsequent holder is required to, notify any purchaser of this note from it of the resale restrictions referred to in (a) above.
Each certificate evidencing a Note offered in reliance on Regulation S shall, in lieu of the foregoing, bear a legend in substantially the following form:
This note (or its predecessor) was originally issued in a transaction originally exempt from registration under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be transferred in the United States or to, or for the account or benefit of, any U.S. person except pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities laws. Terms used above have the meanings given to them in Regulation S under the Securities Act.
Appendix-8
Each Definitive Note shall also bear the following additional legend:
In connection with any transfer, the holder will deliver to the registrar and transfer agent such certificates and other information as such transfer agent may reasonably require to confirm that the transfer complies with the foregoing restrictions.
(ii) Upon any sale or transfer of a Transfer Restricted Note (including any Transfer Restricted Note represented by a Global Note) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Note for a certificated Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Note, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).
(f) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
Appendix-9
(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
2.4 Certificated Notes
(a) A Global Note deposited with the Depository or with the Trustee as Notes Custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 hereof and (i) the Depository notifies the Issuer that it is unwilling or unable to continue as Depository for such Global Note and the Depository fails to appoint a successor depositary or if at any time such Depository ceases to be a clearing agency registered under the Exchange Act and, in either case, a successor Depository is not appointed by the Issuer within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing and upon request by the Depository or any of its participants or (iii) the Issuer, in its sole discretion, notifies the Trustee and the Depository in writing that it elects to cause the issuance of Definitive Notes under this Indenture.
(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its corporate trust office, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in minimum denominations of $2,000 principal amount and any integral multiple of $1,000 in excess thereof and registered in such names as the Depository shall direct. Any Definitive Note delivered in exchange for an interest in the Transfer Restricted Note shall, except as otherwise provided by Section 2.3(e) hereof, bear the applicable restricted notes legend and definitive note legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.
(d) In the event of the occurrence of one of the events specified in Section 2.4(a) hereof, the Issuer shall promptly make available to the Trustee a reasonable supply of Definitive Notes in definitive, fully registered form without interest coupons. In the event that such Definitive Notes are not issued, the Issuer expressly acknowledges, with respect to the right of any Holder to pursue a remedy pursuant to Section 6.06 of this Indenture, the right of any beneficial owner of Notes to pursue such remedy with respect to the portion of the Global Note that represents such beneficial owners Notes as if such Definitive Notes had been issued.
Appendix-10
EXHIBIT A
[FORM OF FACE OF INITIAL NOTE]
[Global Notes Legend]
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (DTC), New York, New York, to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co., or to such other entity as is requested by an authorized representative of DTC) any transfer, pledge or other use hereof for value or otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
Transfers of this Global Note shall be limited to transfers in whole, but not in part, to nominees of DTC or to a successor thereof or such successors nominee and transfers of portions of this Global Note shall be limited to transfers made in accordance with the restrictions set forth in the indenture referred to on the reverse hereof.
[[For Regulation S Global Note only] Until 40 days after the later of commencement or completion of the offering, an offer or sale of notes within the United States by a dealer (as defined in the Securities Act) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A thereunder.]
[Restricted Notes Legend for Notes Offered Otherwise than in Reliance
on Regulation S]
This note (or its predecessor) was originally issued in a transaction exempt from registration under the United States Securities Act of 1933, as amended (the Securities Act), and this note may not be offered, sold or otherwise transferred in the absence of such registration or an applicable exemption therefrom. Each purchaser of this note is hereby notified that the seller of this note may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A thereunder.
The holder of this note agrees for the benefit of the issuer that (a) this note may be offered, resold, pledged or otherwise transferred, only (i) to the issuer, (ii) within the United States to a person whom the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A, (iii) to an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the issuer that such
transfer is in compliance with the Securities Act, (iv) outside the United States in an offshore transaction in accordance with Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) in accordance with any applicable securities laws of any state of the United States, and (b) the holder will, and each subsequent holder is required to, notify any purchaser of this note from it of the resale restrictions referred to in (a) above.
[Restricted Notes Legend for Notes Offered in Reliance on Regulation S.]
This note (or its predecessor) was originally issued in a transaction originally exempt from registration under the U.S. Securities Act of 1933, as amended (the Securities Act), and may not be transferred in the United States or to, or for the account or benefit of, any U.S. person except pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities laws. Terms used above have the meanings given to them in Regulation S under the Securities Act.
[Temporary Regulation S Global Note Legend]
Except as set forth below, beneficial ownership interests in this Temporary Regulation S Global Note will not be exchangeable for interests in the Permanent Regulation S Global Note or any other note representing an interest in the notes represented hereby which do not contain a legend containing restrictions on transfer, until the expiration of the 40-day distribution compliance period (within the meaning of Rule 903(b)(2) of Regulation S under the Securities Act) and then only upon certification to the trustee that such beneficial interests are owned either by non-U.S. persons or U.S. persons who purchased such interests in a transaction that did not require registration under the Securities Act. During such 40-day distribution compliance period, beneficial ownership interests in this Temporary Regulation S Global Note may only be sold, pledged or transferred (i) to the Issuer, (ii) outside the United States in a transaction in accordance with Rule 904 of Regulation S under the Securities Act, or (iii) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (iii) in accordance with any applicable securities laws of any state of the United States. Holders of interests in this Temporary Regulation S Global Note will notify any purchaser of this note of the resale restrictions referred to above, if then applicable.
After the expiration of the distribution compliance period, beneficial interests in this Temporary Regulation S Global Note may be exchanged for interests in a Rule 144A Global Note only if (1) such exchange occurs in connection with a transfer of the notes in compliance with Rule 144A and (2) the transferor of the Regulation S Global Note first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that the Regulation S Global Note is being transferred (a) to a person who the transferor reasonably believes to be a qualified institutional buyer within the meaning of Rule 144A, (b) to a person who is purchasing for its own account or the account of a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, and (c) in accordance with all applicable securities laws of the states of the United States and other jurisdictions.
2
After the expiration of the distribution compliance period, beneficial interests in this Temporary Regulation S Global Note may be exchanged for interests in an IAI Global Note only if (1) such exchange occurs in connection with a transfer of the notes in compliance with an exemption under the Securities Act and (2) the transferor of the Regulation S Global Note first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that the Regulation S Global Note is being transferred (a) to an institutional accredited investor within the meaning of Rule 501(a)(1),(2),(3) or (7) under the Securities Act that, prior to such transfer, furnishes the trustee a signed letter containing certain representations and agreements relating to the transfer of this note (the form of which can be obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of notes less than $250,000, an opinion of counsel acceptable to the Issuer that such transfer is in compliance with the Securities Act and (b) in accordance with all applicable securities laws of the states of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Note or an IAI Global Note may be transferred to a person who takes delivery in the form of an interest in the Regulation S Global Note, whether before or after the expiration of the 40-day distribution compliance period, only if the transferor first delivers to the trustee a written certificate (in the form attached to this certificate) to the effect that such transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available).
[Definitive Notes Legend]
In connection with any transfer, the holder will deliver to the registrar and transfer agent such certificates and other information as such transfer agent may reasonably require to confirm that the transfer complies with the foregoing restrictions.
3
HEXION INC.
13.75% Senior Secured Notes due 2022
144A CUSIP No. 42829L AE4
144A ISIN No. US42829LAE48
REG S CUSIP No. U4321L AC8
REG S ISIN No. USU4321LAC82
No. [ ] | $ [ ] |
HEXION INC., a New Jersey corporation promises to pay to [ ], or its registered assigns, the principal sum of [ ] Dollars ($[ ]), or such other amount as is listed on the Schedule of Increases or Decreases in Global Note attached hereto, on February 1, 2022.
Interest Payment Dates: February 1 and August 1, commencing August 1, 2017
Record Dates: January 15 and July 15
Additional provisions of this Note are set forth on the other side of this Note.
Dated:
[SIGNATURE PAGE FOLLOWS]
4
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.
HEXION INC. | ||||
by |
| |||
Name: | ||||
Title: |
Dated:
TRUSTEES CERTIFICATE OF
AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the Notes referred to in the Indenture. | ||
by |
| |
Authorized Signatory |
5
[FORM OF REVERSE SIDE OF INITIAL NOTE]
13.75% Senior Secured Notes Due 2022
1. Interest
Hexion Inc., a New Jersey corporation (such Person, and its successors and assigns under the Indenture hereinafter referred to, being herein called the Issuer or Hexion), promises to pay interest on the principal amount of this Note at a rate per annum of 13.75%. The Issuer will pay interest semiannually in arrears to the holders of record of the Notes on February 1 and August 1 of each year, commencing August 1, 2017. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Issuer will pay interest on overdue principal at the rate borne by this Note plus 1.00% per annum, and it will pay interest on overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Issuer 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 January 15 or July 15 next preceding the interest payment date even if Notes are canceled after the record date and on or before the interest payment date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Notes represented by a Global Note (including principal, premium and interest) will be made by wire transfer of immediately available funds to the accounts specified by the Depository. The Issuer will make all payments in respect of a certificated Note (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Note will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Wilmington Trust, National Association (the Trustee) will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice. Hexion or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Issuer issued the Notes under an Indenture dated as of February 8, 2017 (the Indenture), among the Issuer, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and holders of the Notes are referred to the Indenture for a statement of those terms.
The Notes are secured obligations of the Issuer and consist of 13.75% Senior Secured Notes due 2022, including any Additional Notes that may be issued after the Issue Date. The Indenture contains covenants that, among other things, limit the ability of Hexion and its Restricted Subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; engage in transactions with affiliates; create liens on assets to secure indebtedness; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications contained in the Indenture.
5. Optional Redemption
Except as set forth below, the Issuer shall not be entitled to redeem the Notes.
On and after February 1, 2019, the Issuer shall be entitled at its option on one or more occasions to redeem all or a portion of the Notes upon not less than 30 nor more than 60 days prior notice mailed by first-class mail to each holders registered address, or delivered electronically if held by the Depository, to each Holders registered address, at the following redemption prices (expressed as a percentage of principal amount on the redemption date), plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on February 1 of the years set forth below:
Period |
Redemption Price |
|||
2019 |
106.875 | % | ||
2020 |
103.438 | % | ||
2021 and thereafter |
100.000 | % |
In addition, prior to February 1, 2019, the Issuer may redeem Notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days prior notice mailed by first-class mail, or delivered electronically if held by the Depository, to each Holders registered address, at a redemption price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but excluding, the applicable redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).
Notwithstanding the foregoing, on or prior to February 1, 2019, the Issuer shall upon not less than 30 nor more than 60 days prior notice mailed by first-class mail, or delivered electronically if held by the Depository, to each Holders registered address, be entitled at their
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option on one or more occasions to redeem Notes (which includes Additional Notes, if any) in an aggregate principal amount not to exceed 35% of the original aggregate principal amount of the Notes (which includes Additional Notes, if any) in an aggregate amount equal to the net cash proceeds of one or more Equity Offerings (1) by Hexion or (2) by any direct or indirect parent of Hexion, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of Hexion or used to purchase Capital Stock (other than Disqualified Stock) of Hexion from it, at a redemption price of 113.75% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), with the net cash proceeds from one or more Equity Offerings (1) by Hexion or (2) by any direct or indirect parent of Hexion, in each case, to the extent the net cash proceeds thereof are contributed to the common equity capital of Hexion or used to purchase Capital Stock (other than Disqualified Stock) of Hexion from it; provided, however, that (1) at least 50% of such aggregate principal amount of Notes (which includes Additional Notes, if any) remains outstanding immediately after the occurrence of each such redemption; and (2) each such redemption occurs within 180 days after the consummation of the related Equity Offering. Notwithstanding the foregoing, the Issuer may at any time and from time to time purchase Notes in the open market or otherwise.
If holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described above, purchase all of the Notes validly tendered and not withdrawn by such holders, the Issuer or such third party will have the right, upon not less than 30 nor more than 60 days prior written notice to the holders (with a copy to the Trustee), given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to the Change of Control Payment. Any such redemption shall be effected pursuant to this paragraph 5.
Notice of any redemption upon any corporate transaction or other event (including any Equity Offering, incurrence of Indebtedness, Change of Control or other transaction) may be given prior to the completion thereof. In addition, any redemption described above or notice thereof may, at the Issuers discretion, be subject to one or more conditions precedent, including, but not limited to, completion of a corporate transaction or other event.
6. Notice of Redemption
Notice of redemption will be mailed by first-class mail, or sent electronically if held by the Depository, 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. Notes in denominations larger than $2,000 principal amount may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption.
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7. Put Provisions
Upon a Change of Control, the Issuer must (i)(A) make an offer within 30 days following such Change of Control to all holders of the Notes to purchase all the Notes properly tendered (a Change of Control Offer) at a purchase price (the Change of Control Purchase Price) equal to 101% of the principal amount thereof, plus accrued and unpaid interest (if any), to, but excluding, the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date); and (B) purchase all the Notes properly tendered in accordance with the Change of Control Offer or (ii) exercise its right, within 30 days following such Change of Control, to redeem all the Notes as described under paragraph 5 of this Note.
8. Guarantee
The payment by the Issuer of the principal of, and premium and interest on, the Notes is fully and unconditionally guaranteed on a joint and several basis by each of the Guarantors to the extent set forth in the Indenture.
9. Security
The Notes Obligations will be secured by the Collateral on the terms and subject to the conditions set forth in the Indenture, the Security Documents and the Junior Priority Intercreditor Agreements, such security interest to be secured by a Lien on the Collateral that is junior in priority to the Lien securing First Priority Lien Obligations and senior in priority to the Liens securing Junior Priority Obligations. Subject to the terms of the Junior Priority Intercreditor Agreements, the Senior Secured Intercreditor Agent holds the Collateral in trust for the benefit of the Collateral Agent, the Trustee and the Holders pursuant to the Security Documents and the Junior Priority Intercreditor Agreement. Each Holder, by accepting this Note, consents and agrees to the terms of the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the Senior Secured Intercreditor Agreement and the Second Lien Intercreditor Agreement in effect or as they may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Collateral Agent and, as applicable, the Trustee, to enter into the Collateral Agreement, any other Security Documents, each Junior Priority Intercreditor Agreement and any amendments, supplements, joinders or other modifications of the foregoing, in each case in accordance with its terms, and to perform its obligations and exercise its rights thereunder in accordance therewith.
10. Denominations; Transfer; Exchange
The Notes are in registered form without coupons in minimum denominations of $2,000 principal amount and whole multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed or 15 days before an interest payment date.
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11. Persons Deemed Owners
The registered Holder of this Note may be treated as the owner of it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions set forth in the Indenture, the Issuer at any time shall be entitled to terminate some or all of their and the Guarantors obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money or, in certain cases, U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture and the Junior Priority Intercreditor Agreements, (a) the Indenture, the Junior Priority Intercreditor Agreements and the related Security Documents may be amended with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes) and (b) any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the Notes then outstanding (which consents may be obtained in connection with a tender offer or exchange offer for the Notes).
Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Issuer, the Guarantors, the Trustee and the Collateral Agent may amend the Indenture, the Security Documents, the Junior Priority Intercreditor Agreements or the Notes to (i) cure any ambiguity, omission, defect, mistake or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes (provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code); (iv) to add additional Guarantees with respect to the Notes, (v) to add additional secured creditors holding Junior Priority Obligations, First Priority Lien Obligations or Other Pari Passu Lien Obligations, in each case, so long as such obligations are not prohibited by the Indenture; (vi) to add to the covenants of Hexion or any Restricted Subsidiaries for the benefit of the Holders or to surrender any right or power conferred upon the Issuer or any Guarantor; (vii) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA (if the Issuer elects to qualify the Indenture under the TIA); (viii) to make any change that does not adversely affect the rights of any Holder; (ix) to conform the text of the Indenture, the Notes, the Security Documents or the Junior Priority Intercreditor Agreements, to any provision of the Description of the Notes in the Offering Circular to the extent that such provision in such Description of the Notes was intended by the Issuer to be a verbatim recitation of a provision of the Indenture, the Notes, the Security
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Documents or the Junior Priority Intercreditor Agreements, as stated in an Officers Certificate; (x) to make certain changes to the Indenture to provide for the issuance of Additional Notes; (xi) to make any amendment to the provisions of the Indenture relating to the transfer and legending of the Notes, provided, however, that (a) compliance with the Indenture as so amended would not result in the Notes being transferred in violation of the Securities Act or any other applicable securities law and (b) such amendment does not materially and adversely affect the rights of Holders to transfer Notes; (xii) to secure the Notes or to add additional assets as Collateral; or (xiii) to release Collateral from the Lien pursuant to the Indenture, the Security Documents and the Junior Priority Intercreditor Agreements when permitted or required under the Indenture, the Security Documents or the Junior Priority Intercreditor Agreements.
15. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for 30 days in payment of interest on the Notes; (b) default in payment of principal on the Notes at maturity, upon redemption pursuant to paragraph 5 of the Notes, upon acceleration or otherwise, or the failure by the Issuer to redeem or purchase Notes when required; (c) failure by the Issuer or certain Subsidiaries to comply with other agreements in the Indenture or the Notes, in certain cases subject to notice and lapse of time; (d) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Issuer if the amount accelerated (or so unpaid) exceeds $50.0 million or its foreign currency equivalent; (e) certain events of bankruptcy or insolvency with respect to the Issuer, the Guarantors and the Significant Subsidiaries; (f) certain judgments or decrees for the payment of money in excess of $50.0 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed for a period of 60 days; (g) certain defaults with respect to Guarantees; and (h) certain defaults relating to the Collateral under the Security Documents. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare all such Notes to be due and payable immediately, subject to certain conditions set forth in the Indenture. Certain events of bankruptcy or insolvency are Events of Default which will result in the Notes being due and payable immediately upon the occurrence of such Events of Default.
Noteholders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of the 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 the interest of the Holders.
16. Trustee Dealings with the Issuer
Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee.
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17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not have any liability for any obligations of the Issuer under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation; provided, however, the foregoing will not affect or limit any liability of any Guarantor under the Indenture or its Guarantee. By accepting a Note, each Noteholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Notes.
18. Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually 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), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Issuer has caused CUSIP numbers to be printed on the Notes and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.
21. Governing Law
This Note shall be governed by, and construed in accordance with, the laws of the state of New York.
The Issuer will furnish to any Noteholder upon written request and without charge to the Noteholder a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to:
Hexion Inc.
180 East Broad St.
Columbus, OH 43215
Attention: General Counsel
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. 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.
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the applicable holding period referred to in Rule 144(d) under the Securities Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
☐ | to the Issuer; or | |||||
(1) | ☐ | pursuant to an effective registration statement under the Securities Act of 1933; or | ||||
(2) | ☐ | inside the United States to a qualified institutional buyer (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or | ||||
(3) | ☐ | outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or | ||||
(4) | ☐ | pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933; or |
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(5) | ☐ | to an institutional accredited investor (as defined in Rule 501(a)(1),(2),(3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements. |
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (3), (4) or (5) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.
Signature |
Signature Guarantee:
Signature must be guaranteed |
Signature |
Signatures must be guaranteed by an eligible guarantor institution meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigneds foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: |
|
| ||||
Notice: To be executed by an executive officer |
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[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in |
Amount of increase in |
Principal amount of this |
Signature of authorized |
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
☐
If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 4.06 or 4.08 of the Indenture, state the amount in principal amount: $
Dated: |
|
Your Signature: |
| |||||
(Sign exactly as your name appears on the other side of this Note.) |
Signature Guarantee: |
| |
(Signature must be guaranteed) |
Signatures must be guaranteed by an eligible guarantor institution meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
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EXHIBIT B
Form of
Transferee Letter of Representation
Hexion Inc.
In care of
[ ]
[ ]
[ ]
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal amount of the 13.75% Senior Secured Notes due 2022 (the Notes) of Hexion Inc., a New Jersey corporation (the Issuer).
Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:
Name:________________________
Address:______________________
Taxpayer ID Number:____________
The undersigned represents and warrants to you that:
1. We are an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the Securities Act)), purchasing for our own account or for the account of such an institutional accredited investor at least $250,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we invest in or purchase notes similar to the Notes in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the Resale Restriction Termination Date) only (i) to the Issuer, (ii) in the United States to a person whom the seller reasonably believes is a qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (iii) to an institutional accredited investor within the meaning of Rule 501(a)(1),
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(2), (3) or (7) under the Securities Act that is an institutional accredited investor purchasing for its own account or for the account of an institutional accredited investor, in each case in a minimum principal amount of the Notes of $250,000, (iv) outside the United States in a transaction complying with the provisions of Rule 904 under the Securities Act, (v) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to an effective registration statement under the Securities Act, in each of cases (i) through (vi) subject to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (iii) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Notes pursuant to clause (iii), (iv) or (v) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Issuer and the Trustee.
TRANSFEREE: , | ||||
by: |
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EXHIBIT C
[FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY ADDITIONAL SUBSIDIARY GUARANTORS]
SUPPLEMENTAL INDENTURE (this Supplemental Indenture), dated as of [ ] among Hexion Inc., a New Jersey corporation (the Issuer), [ ] (the Additional Subsidiary Guarantor), a [ ] corporation and a [direct][indirect] subsidiary of the Issuer (or its permitted successor), and Wilmington Trust, National Association, as trustee (the Trustee).
W I T N E S S E T H :
WHEREAS, the Issuer and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee an Indenture (the Indenture), dated as of February 8, 2017, providing for the issuance of the 13.75% Senior Secured Notes due 2022 (the Notes);
WHEREAS, Section 4.11 and Section 10.06 of the Indenture provide that under certain circumstances the Issuer will cause the Additional Subsidiary Guarantor to execute and deliver to the Trustee a guaranty agreement pursuant to which the Additional Subsidiary Guarantor will Guarantee payment of the Notes on the same terms and conditions as those set forth in Article 10 of the Indenture; and
WHEREAS, pursuant to Section 9.01(iv) of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, the Additional Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:
SECTION 1. Capitalized Terms. Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture.
SECTION 2. Guarantees. The Additional Subsidiary Guarantor hereby agrees, jointly and severally with all other Guarantors, to guarantee the Issuers obligations under the Notes on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture (including Article 11).
SECTION 3. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
SECTION 4. Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the state of New York.
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SECTION 5. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.
SECTION 6. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.
SECTION 7. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction of this Supplemental Indenture.
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IN WITNESS WHEREOF, the parties have caused this Supplemental Indenture to be duly executed as of the date first written above.
HEXION INC. | ||
by |
| |
Name: | ||
Title: | ||
[ADDITIONAL SUBSIDIARY GUARANTOR] | ||
by |
| |
Name: | ||
Title: | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
by |
| |
Name: | ||
Title: |
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Exhibit 10.1
Execution Version
ADDITIONAL SECURED PARTY CONSENT
February 8, 2017
Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: Hexion Administrator
The undersigned is the Authorized Representative for persons wishing to become Secured Parties (the New Secured Parties) under the Collateral Agreement, dated as of March 28, 2013 (as amended, supplemented or otherwise modified from time to time, the Collateral Agreement), among HEXION INC., a New Jersey corporation, as issuer, each Subsidiary Party (as defined therein) party thereto and WILMINGTON TRUST, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together with its successors and assigns in such capacity, the Collateral Agent). Capitalized terms in this Additional Secured Party Consent but not otherwise defined herein have the meanings set forth in the Collateral Agreement.
In consideration of the foregoing, the undersigned hereby:
(i) represents that it has been duly authorized by the New Secured Parties to (x) become a party to the Collateral Agreement and a party to the First Lien Intercreditor Agreement on behalf of the New Secured Parties under that certain Indenture, dated as of the date hereof (the New First Lien Indenture), by and among Wilmington Trust, National Association, as trustee, Hexion Inc., as issuer after giving effect to the Issuers Assumption (as defined in the New First Lien Indenture), and the guarantors party thereto from time to time (as amended, supplemented or otherwise modified from time to time, the New Agreement and the obligations under the New Agreement, the New Secured Obligations) and (y) act as the Authorized Representative for the New Secured Parties under each of the Collateral Agreement and the First Lien Intercreditor Agreement;
(ii) acknowledges that it has received a copy of the Collateral Agreement and the First Lien Intercreditor Agreement;
(iii) appoints and authorizes the Collateral Agent to take such action as agent on its behalf and on behalf of all other Secured Parties and to exercise such powers under the Collateral Agreement as are delegated to the Collateral Agent by the terms thereof, together with all such powers as are reasonably incidental thereto; and
(iv) accepts and acknowledges the terms of the Collateral Agreement applicable to it and the New Secured Parties and agrees to serve as Authorized Representative for the New Secured Parties with respect to the New Secured Obligations and agrees on its own behalf and on behalf of the New Secured Parties to be bound by the terms of the Collateral Agreement applicable to holders of Other First Priority Obligations, with all the rights and obligations of a Secured Party thereunder and bound by all the provisions thereof as fully as if it had been a Secured Party on the effective date of the Collateral Agreement.
Each of the parties hereto, being all the parties to the Collateral Agreement, hereby acknowledge and agree to amend the Collateral Agreement by deleting the definition of First Lien Intercreditor Agreement set forth therein and replacing such definition with the following:
First Lien Intercreditor Agreement means that certain First Lien Intercreditor Agreement, dated as of April 15, 2015, among the Collateral Agent, Wilmington Trust, National Association, as authorized representative under the Existing First Lien Agreement (as defined therein), Wilmington Trust, National Association, as the Initial Other Authorized Representative (as defined therein), and each additional authorized representative from time to time party thereto, Hexion LLC, Hexion Inc. (f/k/a Momentive Specialty Chemicals Inc.) and each other grantor party thereto from time to time, as amended, restated, supplemented, replaced or otherwise modified from time to time.
The Collateral Agent, by acknowledging and agreeing to this Additional Secured Party Consent, accepts the appointment set forth in clause (iii) above.
The name and address of the Authorized Representative for purposes of Section 6.01 of the Collateral Agreement are as follows:
Wilmington Trust, National Association
Global Capital Markets
50 South Sixth Street
Suite 1290
Minneapolis, Minnesota 55402
Telephone: 612-217-5632
Facsimile: 612-217-5651
Attention: Hexion Administrator
THIS ADDITIONAL SECURED PARTY CONSENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank; signature pages follow.]
IN WITNESS WHEREOF, the undersigned has caused this Additional Secured Party Consent to be duly executed by its authorized officer as of the date set forth above.
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Authorized Representative for the New Secured Parties | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President |
Acknowledged and Agreed: | ||
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Authorized Representative for the Notes Obligations | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, | ||
as Authorized Representative for the Initial Other First Priority Obligations | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President |
[Signature Page to Additional Secured Party Consent]
HEXION INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INVESTMENTS INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HSC CAPITAL CORPORATION | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Additional Secured Party Consent]
LAWTER INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
NL COOP HOLDINGS LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Additional Secured Party Consent]
Exhibit 10.2
Execution Version
THIRD JOINDER AND SUPPLEMENT
to
INTERCREDITOR AGREEMENT
Reference is made to (i) that certain Amended and Restated Intercreditor Agreement, dated as of January 31, 2013 (as supplemented by the First Joinder and the Second Joinder referred to below, and as the same may be further amended, restated, supplemented or otherwise modified from time to time, the Second Lien Intercreditor Agreement), among Wilmington Trust Company, as Trustee and as Collateral Agent (the Second Lien Trustee) (as Second-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the Notes), Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as trustee for the holders of the notes (the 1.5 Lien Notes) issued under the 1.5 Lien Indenture (the 1.5 Lien Trustee) (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 1.5 Lien Notes), Wilmington Trust, National Association, as trustee (the 6.625% First Lien Notes Trustee) for the holders of the notes (the 6.625% First Lien Notes) issued under the First Lien Indenture, and as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 6.625% First Lien Notes, Hexion LLC (Holdings), Hexion Inc. (the Company), and each subsidiary of the Company party thereto, as such intercreditor agreement was supplemented pursuant to (x) that certain Joinder and Supplement to Intercreditor Agreement, dated as of March 28, 2013 (the First Joinder), among JPMorgan Chase Bank, N.A. (the ABL Credit Agreement Agent), as Senior-Priority Agent for the ABL Secured Parties (as defined in the First Joinder), JPMorgan Chase Bank, N.A., as intercreditor agent (the Intercreditor Agent), and the other parties thereto, and (y) that certain Second Joinder and Supplement to Intercreditor Agreement, dated as of April 15, 2015 (the Second Joinder), among Wilmington Trust, National Association, as trustee (the 10.00% First Lien Notes Trustee) for the holders of the New First Lien Notes (as defined in the Second Joinder, the 10.00% First Lien Notes), and the other parties thereto; and (ii) the Second Secured Notes Indenture. Capitalized terms used but not defined herein shall have the meanings assigned in the Second Lien Intercreditor Agreement.
This Third Joinder and Supplement to the Second Lien Intercreditor Agreement (this Agreement), dated as of February 8, 2017 (the Effective Date), by and among (i) Wilmington Trust, National Association, as trustee (the New First Lien Notes Trustee) pursuant to that certain Indenture, dated as of the date hereof, among the Company, as issuer after giving effect to the Issuers Assumption (as defined in the New First Lien Indenture), the guarantors party thereto from time to time and the New First Lien Notes Trustee (as the same may be amended, restated, supplemented or otherwise modified from time to time, the New First Lien Indenture), (ii) the Intercreditor Agent, (iii) the ABL Credit Agreement Agent (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the ABL Secured Parties), (iv) the Second Lien Trustee (as Second-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the Notes), (v) the 6.625% First Lien Notes Trustee (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 6.625% First Lien Notes), (vi) the 10.00% First Lien Notes Trustee (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 10.00% First Lien Notes), (vii)
Wilmington Trust, National Association, as trustee (the New 1.5 Lien Trustee) and Senior-Priority Agent under the Second Lien Intercreditor Agreement on behalf of the holders of the notes (the New 1.5 Lien Notes) issued under the Notes Indenture, dated as of the date hereof, among the New 1.5 Lien Trustee, Holdings, the Company and each subsidiary of the Company party thereto, (viii) Holdings, (ix) the Company and (x) each Subsidiary of the Company listed on Schedule I hereto, has been entered into (A) to record the accession of the New First Lien Notes Trustee as an additional Senior-Priority Agent under the Second Lien Intercreditor Agreement on behalf of the holders of the 10.375% first-priority senior secured notes due 2022 (the New First Lien Notes) issued under the New First Lien Indenture, (B) with respect to the Liens securing certain Obligations as set forth below, to confirm and evidence that such Liens shall, for purposes of the Second Lien Intercreditor Agreement, be equal and ratable with all Liens on the Common Collateral securing any other Senior Lender Claims and (C) for certain related purposes.
The parties to this Agreement hereby agree as follows:
A. The New First Lien Notes Trustee, as trustee for the holders of the New First Lien Notes, agrees to become, with immediate effect, a party to and agrees to be bound by the terms of the Second Lien Intercreditor Agreement as Senior-Priority Agent for the holders of the New First Lien Notes, as if it had originally been party to the Second Lien Intercreditor Agreement as Senior-Priority Agent for the holders of the New First Lien Notes.
B. The New First Lien Indenture has been designated by the Company as being included in the definition of Credit Agreement set forth in the Second Secured Notes Indenture. The New First Lien Indenture, the New First Lien Notes, the Security Documents (as defined in the New First Lien Indenture) (the Security Documents) and any related document or instrument executed and delivered pursuant to any of the foregoing shall constitute Senior Credit Documents as defined in the Second Secured Notes Indenture.
C. The Liens securing the Obligations under the New First Lien Notes, the New First Lien Indenture and any other document or agreement entered into pursuant thereto granted pursuant to the Security Documents have been designated by the Company as having been incurred pursuant to clause (8) of the definition of Permitted Liens set forth in the Second Secured Notes Indenture. The Obligations under the New First Lien Notes, the New First Lien Indenture and any other document or agreement entered into pursuant thereto constitute First-Lien Indebtedness (which First-Lien Indebtedness, for the avoidance of doubt, also constitutes Future First-Lien Indebtedness) and Senior Lender Claims.
D. The Liens on the Common Collateral securing such Senior Lender Claims shall have priority over and be senior in all respects to all Liens on the Common Collateral securing any Second-Priority Claims on the terms set forth in the Second Lien Intercreditor Agreement and, subject to the terms of any other applicable intercreditor agreement then in effect, shall be equal and ratable with all Liens on the Common Collateral securing any other Senior Lender Claims.
2
E. So long as the Discharge of Senior Lender Claims has not occurred and subject to the terms of any other applicable intercreditor agreement then in effect, the Common Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, the Common Collateral upon the exercise of remedies shall be applied by the Intercreditor Agent ratably to the Senior Lender Claims and, with respect to each class of Senior Lender Claims, in such order as is specified in the relevant Senior Lender Documents until the Discharge of Senior Lender Claims has occurred.
F. The New First Lien Notes Trustee confirms that its address for notices pursuant to the Second Lien Intercreditor Agreement is as follows:
Wilmington Trust, National Association
Global Capital Markets
50 South Sixth Street
Suite 1290
Minneapolis, Minnesota 55402
Telephone: 612-217-5632
Facsimile: 612-217-5651
Attention: Hexion Administrator
G. Each party to this Agreement confirms the acceptance of the New First Lien Notes Trustee, acting for the benefit of the holders of the New First Lien Notes, as a Senior-Priority Agent for purposes of the Second Lien Intercreditor Agreement.
H. Except as expressly provided herein, in the Second Lien Intercreditor Agreement or in any Senior Lender Documents, the New First Lien Notes Trustee is acting in the capacity of Senior-Priority Agent solely with respect to the Senior Lender Claims owed to the New First Lien Notes Trustee and the holders of the New First Lien Notes issued pursuant to the New First Lien Indenture. For the avoidance of doubt, the provisions of Article 7 of the New First Lien Indenture applicable to the New First Lien Notes Trustee thereunder shall also apply to the New First Lien Notes Trustee acting under or in connection with the Second Lien Intercreditor Agreement.
I. This Agreement and any claim, controversy or dispute arising under or related to such Agreement shall be construed in accordance with and governed by the laws of the State of New York.
J. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
3
[SIGNATURE PAGES FOLLOW]
4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
JPMORGAN CHASE BANK, N.A., | ||
as Intercreditor Agent | ||
By: | /s/ Peter S. Predun | |
Name: | Peter S. Predun | |
Title: | Executive Director | |
JPMORGAN CHASE BANK, N.A., as Senior-Priority Agent for the ABL Secured Parties | ||
By: | /s/ Peter S. Predun | |
Name: | Peter S. Predun | |
Title: | Executive Director |
[Signature Page to Third Joinder and Supplement to Second Lien Intercreditor Agreement]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as New First Lien Notes Trustee, as Senior-Priority Agent for holders of the New First Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for holders of the 6.625% First Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for holders of the 10.00% First Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST COMPANY, as Second Lien Trustee, as Second-Priority Agent for holders of the Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as New 1.5 Lien Trustee, as Senior-Priority Agent for holders of the New 1.5 Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President |
[Signature Page to Third Joinder and Supplement to Second Lien Intercreditor Agreement]
HEXION LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INVESTMENTS INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HSC CAPITAL CORPORATION | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Third Joinder and Supplement to Second Lien Intercreditor Agreement]
LAWTER INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
NL COOP HOLDINGS LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Third Joinder and Supplement to Second Lien Intercreditor Agreement]
SCHEDULE I
Subsidiary Parties
Hexion Investments Inc.
Hexion International Inc.
Hexion CI Holding Company (China) LLC
HSC Capital Corporation
Lawter International Inc.
Oilfield Technology Group, Inc.
NL COOP Holdings LLC
Exhibit 10.3
Execution Version
SECOND JOINDER AGREEMENT
(Other First-Priority Lien Obligations)
This SECOND JOINDER AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this Agreement), dated as of February 8, 2017, is among WILMINGTON TRUST, NATIONAL ASSOCIATION (the New Representative), as an Other First-Priority Lien Obligations Representative, JPMORGAN CHASE BANK, N.A., as ABL Facility Collateral Agent, WILMINGTON TRUST, NATIONAL ASSOCIATION, as Applicable First-Lien Agent, WILMINGTON TRUST, NATIONAL ASSOCIATION, as First-Lien Collateral Agent, and HEXION INC. (on behalf of itself and its Subsidiaries).
This Agreement is supplemental to that certain ABL Intercreditor Agreement, dated as of March 28, 2013 (as supplemented on April 15, 2015, and as the same may be amended, restated, supplemented or otherwise modified from time to time, the Intercreditor Agreement), by and among the parties (other than the New Representative) referred to above. This Agreement has been entered into to record the accession of the New Representative as Other First-Priority Lien Obligations Representative under the Intercreditor Agreement and to evidence the authority granted by the New Representative to the Applicable First-Lien Agent and the First-Lien Collateral Agent to act on behalf of the New Representative under the Intercreditor Agreement.
ARTICLE I
Definitions
SECTION 1.01 Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Intercreditor Agreement.
ARTICLE II
Accession
SECTION 2.01 The New Representative agrees to become, with immediate effect, a party to and agrees to be bound by the terms of, the Intercreditor Agreement as an Other First-Priority Lien Obligations Representative as if it had originally been party to the Intercreditor Agreement as an Other First-Priority Lien Obligations Representative.
SECTION 2.02 The New Representative agrees that the Applicable First-Lien Agent and the First-Lien Collateral Agent shall have the authority to act on behalf of the New Representative under the Intercreditor Agreement, and each of the Applicable First-Lien Agent and the First-Lien Collateral Agent accepts such authority.
SECTION 2.03 The New Representative confirms that its address details for notices pursuant to the Intercreditor Agreement are as follows:
Wilmington Trust, National Association
Global Capital Markets
50 South Sixth Street
Suite 1290
Minneapolis, Minnesota 55402
Telephone: 612-217-5632
Facsimile: 612-217-5651
Attention: Hexion Administrator
SECTION 2.04 Each party to this Agreement (other than the New Representative) confirms the acceptance of the New Representative as an Other First-Priority Lien Obligations Representative for purposes of the Intercreditor Agreement.
SECTION 2.05 Wilmington Trust, National Association is acting in its capacity as Other First-Priority Lien Obligations Representative solely for the Secured Parties under that certain Indenture, dated as of the date hereof, among the Company, as issuer after giving effect to the Issuers Assumption (as defined in such Indenture), the guarantors party thereto from time to time and Wilmington Trust, National Association, as trustee, as the same may be amended, restated, supplemented or otherwise modified from time to time.
ARTICLE III
Miscellaneous
SECTION 3.01 This Agreement and any claim, controversy or dispute arising under or related to such Agreement shall be governed by, and construed in accordance with, the law of the State of New York.
SECTION 3.02 This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission or any other electronic means shall be as effective as delivery of a manually signed counterpart of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
[Remainder of this page intentionally left blank; signatures follow.]
2
JPMORGAN CHASE BANK, N.A., | ||
as ABL Facility Collateral Agent | ||
By: | /s/ Peter S. Predun | |
Name: | Peter S. Predun | |
Title: | Executive Director |
[Signature Page to the Second Joinder Agreement to the ABL Intercreditor Agreement]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as New Representative | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Applicable First-Lien Agent | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as First-Lien Collateral Agent | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President |
[Signature Page to the Second Joinder Agreement to the ABL Intercreditor Agreement]
HEXION INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to the Second Joinder Agreement to the ABL Intercreditor Agreement]
Exhibit 10.4
Execution Version
COLLATERAL AGREEMENT
dated and effective as of
February 8, 2017,
among
HEXION INC.,
as Issuer,
each Subsidiary of the Issuer identified herein,
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Authorized Representative under the Indenture
each additional Authorized Representative from time to time party hereto
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Collateral Agent
Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Collateral Agent pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted to (a) JPMorgan Chase Bank, N.A. (JPMCB), as administrative agent and collateral agent (and its permitted successors) pursuant to the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time), by and among Hexion Inc. (the Issuer), each Pledgor (as defined therein) party thereto and JPMCB, as collateral agent, and the other parties party thereto, (b) Wilmington Trust, National Association, as collateral agent (and its permitted successors) pursuant to the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time), by and among the Issuer, each Pledgor (as defined therein) party thereto and Wilmington Trust, National Association, as trustee and collateral agent, and the other parties party thereto, and (c) any agent or trustee for any other Senior Lenders (as defined in the Senior Secured Intercreditor Agreement referred to below), and (ii) the exercise of any right or remedy by the Collateral Agent hereunder is subject to the limitations and provisions of the Amended and Restated Intercreditor Agreement, dated as of February 8, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Senior Secured Intercreditor Agreement), by and among JPMCB, as intercreditor agent, Wilmington Trust, National Association, as trustee and as collateral agent, JPMCB, as senior-priority agent for the secured parties under the ABL Facility referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the 6.625% First Lien Notes Indenture referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the 10.00% First Lien Notes Indenture referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the New First Lien Notes Indenture referred to therein, Hexion LLC, the Issuer and each other party from time to time party thereto. In the event of any conflict between the terms of the Senior Secured Intercreditor Agreement and the terms of this Agreement, the terms of the Senior Secured Intercreditor Agreement shall govern.
TABLE OF CONTENTS
Page | ||||||
ARTICLE I. |
Definitions |
1 | ||||
SECTION 1.01 |
Indenture |
1 | ||||
SECTION 1.02 |
Other Defined Terms |
2 | ||||
ARTICLE II. |
[Intentionally Omitted] |
8 | ||||
ARTICLE III. |
Pledge of Securities |
8 | ||||
SECTION 3.01 |
Pledge |
8 | ||||
SECTION 3.02 |
Delivery of the Pledged Collateral |
9 | ||||
SECTION 3.03 |
Representations, Warranties and Covenants |
10 | ||||
SECTION 3.04 |
Certification of Limited Liability Company and Limited Partnership Interests |
11 | ||||
SECTION 3.05 |
Registration in Nominee Name; Denominations |
11 | ||||
SECTION 3.06 |
Voting Rights; Dividends and Interest, etc. |
12 | ||||
ARTICLE IV. |
Security Interests in Personal Property |
14 | ||||
SECTION 4.01 |
Security Interest |
14 | ||||
SECTION 4.02 |
Representations and Warranties |
16 | ||||
SECTION 4.03 |
Covenants |
18 | ||||
SECTION 4.04 |
Other Actions |
20 | ||||
SECTION 4.05 |
Covenants Regarding Patent, Trademark and Copyright Collateral |
21 | ||||
ARTICLE V. |
Remedies |
22 | ||||
SECTION 5.01 |
Remedies Upon Default |
22 | ||||
SECTION 5.02 |
Application of Proceeds |
24 | ||||
SECTION 5.03 |
Grant of License to Use Intellectual Property |
25 | ||||
SECTION 5.04 |
Securities Act, etc. |
25 | ||||
SECTION 5.05 |
Registration, etc. |
26 | ||||
ARTICLE VI. |
27 | |||||
SECTION 6.01 |
Other Pari Passu Lien Obligations |
27 | ||||
ARTICLE VII. |
Miscellaneous |
27 | ||||
SECTION 7.01 |
Notices |
27 | ||||
SECTION 7.02 |
Security Interest Absolute |
28 | ||||
SECTION 7.03 |
Limitation By Law |
28 |
i
SECTION 7.04 |
Binding Effect; Several Agreements |
28 | ||||
SECTION 7.05 |
Successors and Assigns |
28 | ||||
SECTION 7.06 |
Collateral Agents Fees and Expenses; Indemnification |
29 | ||||
SECTION 7.07 |
Collateral Agent Appointed Attorney-in-Fact |
29 | ||||
SECTION 7.08 |
GOVERNING LAW |
31 | ||||
SECTION 7.09 |
Waivers; Amendment |
31 | ||||
SECTION 7.10 |
WAIVER OF JURY TRIAL |
32 | ||||
SECTION 7.11 |
Severability |
32 | ||||
SECTION 7.12 |
Counterparts |
32 | ||||
SECTION 7.13 |
Headings |
33 | ||||
SECTION 7.14 |
Jurisdiction; Consent to Service of Process |
33 | ||||
SECTION 7.15 |
Termination or Release |
33 | ||||
SECTION 7.16 |
Additional Subsidiaries |
35 | ||||
SECTION 7.17 |
General Authority of the Collateral Agent |
35 | ||||
SECTION 7.18 |
Subject to Intercreditor Agreements |
35 | ||||
SECTION 7.19 |
Senior Collateral Documents |
36 | ||||
SECTION 7.20 |
Parallel Debt |
36 | ||||
SECTION 7.21 |
ULC Shares |
37 |
Schedules | ||
Schedule I |
Subsidiary Parties | |
Schedule II |
Commercial Tort Claims | |
Schedule III |
Pledged Stock; Pledged Debt Securities | |
Schedule IV |
Intellectual Property | |
Exhibits | ||
Exhibit I |
Form of Supplement to the Collateral Agreement | |
Exhibit II |
Form of Additional Secured Party Consent |
ii
COLLATERAL AGREEMENT, dated and effective as of February 8, 2017 (this Agreement), among HEXION INC., a New Jersey corporation (the Issuer), each Subsidiary of the Issuer listed on Schedule I and each Subsidiary of the Issuer that becomes a party hereto (each, a Subsidiary Party), WILMINGTON TRUST, NATIONAL ASSOCIATION, as trustee under the Indenture refered to herein (in such capacity, together with its successors and assigns in such capacity, the Trustee) and as Authorized Representative under the Indenture, each other Authorized Representative Party hereto from time to time with respect to any applicable Other Pari Passu Lien Obligations, and WILMINGTON TRUST, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together with its successors and assigns in such capacity, the Collateral Agent) for the Secured Parties (as defined below).
Reference is made to (a) the Indenture, dated as of February 8, 2017 (as amended, restated, amended and restated, supplemented, waived or otherwise modified from time to time, the Indenture), among the Issuer, certain Subsidiaries of the Issuer party thereto and Wilmington Trust, National Association, as Trustee, and (b) the Amended and Restated Intercreditor Agreement, dated as of February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the Senior Secured Intercreditor Agreement), among the Intercreditor Agent, Wilmington Trust, National Association, as trustee and as collateral agent, JPMCB, as senior-priority agent for the secured parties under the ABL Facility referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the 6.625% First Lien Notes Indenture referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the 10.00% First Lien Notes Indenture referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the New First Lien Notes Indenture referred to therein, Hexion LLC, the Issuer, each Subsidiary of the Issuer identified therein, and each other party from time to time party thereto.
Pursuant to the terms of the Indenture, the Issuer has issued 13.75% senior secured notes due 2022 (the Notes), and the Issuers obligations under the Indenture and the Notes are guaranteed by the Issuer and the Subsidiary Parties. The Issuer and the Subsidiary Parties have derived and will continue to derive substantial benefits from the transactions contemplated by the Indenture. Pursuant to the Indenture, the Pledgors have agreed to grant a security interest in the Collateral for the benefit of the Collateral Agent (for the ratable benefit of the Trustee and the Holders) to secure the payment and performance of the Obligations, subject to the terms of the Intercreditor Agreement, including with respect to the relative rights and priorities in respect of the Collateral.
Accordingly, the parties hereto agree as follows:
ARTICLE I.
Definitions
SECTION 1.01 Indenture.
(a) Capitalized terms used in this Agreement and not otherwise defined herein have the respective meanings assigned thereto in the Indenture. All terms defined in the
New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein. The term instrument shall have the meaning specified in Article 9 of the New York UCC.
(b) The rules of construction specified in Section 1.04 of the Indenture also apply to this Agreement.
SECTION 1.02 Other Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
ABL Facility has the meaning assigned to such term in the Senior Secured Intercreditor Agreement.
Account Debtor means any person who is or who may become obligated to any Pledgor under, with respect to or on account of an Account.
Additional Secured Party Consent means a completed additional secured party consent substantially in the form of Exhibit II hereto.
Agreement has the meaning assigned to such term in the introductory paragraph of this Collateral Agreement.
Applicable Agent means, (i) prior to the Discharge of Senior Lenders Claims, the Intercreditor Agent and (ii) thereafter, the Collateral Agent.
Article 9 Collateral has the meaning assigned to such term in Section 4.01.
Authorized Representative means (a) the Trustee, with respect to the Notes Obligations, and (b) any duly authorized representative of holders of Other Pari Passu Lien Obligations designated as an Authorized Representative pursuant to Section 6.01 with respect to such Other Pari Passu Lien Obligations.
Collateral means Article 9 Collateral and Pledged Collateral.
Collateral Agent has the meaning assigned to such term in the introductory paragraph of this Agreement.
Commodity Exchange Act means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
Control Agreement means a securities account control agreement or a commodity account control agreement, as applicable, enabling the Applicable Agent to obtain control (within the meaning of the New York UCC) of any such accounts, in form and substance reasonably satisfactory to the Applicable Agent.
Copyright License means any written agreement, now or hereafter in effect, granting any right to any Pledgor under any Copyright now or hereafter owned by any third party, and all rights of any Pledgor under any such agreement (including any such rights that such Pledgor has the right to license).
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Copyrights means all of the following now owned or hereafter acquired by any Pledgor (or, as required in the context of the definition of Copyright License, any third party licensor): (A) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise; and (B) all registrations and applications for registration of any such Copyright in the United States or any other country, including registrations, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule IV.
Corresponding Obligations has the meaning assigned to such term in Section 7.20.
Deductible Amount has the meaning assigned to such term in Section 7.20.
Designated Securities means any securities the granting of a security interest in which would require separate financial statements of a Subsidiary of the Issuer to be filed with the SEC (or any other government agency) pursuant to Rule 3-16 of Regulation S-X under the Securities Act and the Exchange Act (or any successor regulation or any other law, rule or regulation), but only for so long as, and only to the extent that, such securities are subject to such requirement (provided that no securities of a Subsidiary of the Issuer for which separate financial statements are actually filed with the SEC pursuant to such Rule 3-16 shall be Designated Securities).
Discharge of Senior Lender Claims has the meaning set forth in the Senior Secured Intercreditor Agreement.
Equity Interests of any Person means any and all shares, interests, rights to purchase or otherwise acquire, warrants, options, participations or other equivalents of or interests in (however designated) equity or ownership of such person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest, and any securities or other rights or interests convertible into or exchangeable for any of the foregoing.
Event of Default means an Event of Default under and as defined in the Indenture or any Other Pari Passu Lien Agreement, as applicable.
Excluded Swap Obligations means (as such definition may be modified from time to time as agreed by the Issuer and the Applicable Agent), with respect to any guarantor guaranteeing any of the Obligations, any obligation to pay or perform under any agreement, contract or transaction that constitutes a swap within the meaning of the Commodity Exchange Act or any rule, regulation or order thereunder (or the application or official interpretation of any thereof) (a CEA Swap Obligation), if, and to the extent that, all or a portion of the guarantee of such guarantor of, or the grant by such guarantor of a security interest to secure, as applicable, such CEA Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order thereunder (or the application or official interpretation of any thereof) by virtue of such guarantors failure for any reason to
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constitute an eligible contract participant as defined in the Commodity Exchange Act and the regulations thereunder, at the time the guarantee of (or grant of such security interest by, as applicable) such guarantor becomes or would become effective with respect to such CEA Swap Obligation. If a CEA Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such CEA Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.
Existing Second Lien Notes means the 9% Second Priority Senior Secured Notes due 2020 issued by the Issuer (as successor issuer by merger to Hexion U.S. Finance Corp.) and Hexion Nova Scotia Finance, ULC.
Federal Securities Laws has the meaning assigned to such term in Section 5.04.
General Intangibles means all General Intangibles as defined in the New York UCC, including all choses in action and causes of action and all other intangible personal property of any Pledgor of every kind and nature (other than Accounts) now owned or hereafter acquired by any Pledgor, including corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, swap agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Pledgor to secure payment by an Account Debtor of any of the Accounts.
Governmental Authority means any federal, state, provincial, territorial, municipal, local or foreign court or governmental agency, authority, instrumentality or regulatory or legislative body.
Indemnitee has the meaning assigned to such term in Section 7.06.
Indenture has the meaning assigned to such term in the preliminary statement of this Agreement.
Indenture Documents means (a) the Indenture, the Notes, this Agreement and each Security Document which by its terms is for the benefit of holders of Notes Obligations and (b) any other related documents or instruments executed and delivered pursuant to the Indenture or any such Security Document, in each case, as such agreements may be amended, restated, supplemented or otherwise modified from time to time.
Intellectual Property means all intellectual and similar property of every kind and nature now owned or hereafter acquired by any Pledgor, including inventions, designs, Patents, Copyrights, Trademarks, Patent Licenses, Copyright Licenses, Trademark Licenses, trade secrets, domain names, confidential or proprietary technical and business information, know-how, show-how or other data or information and all related documentation.
Intercreditor Agent has the meaning set forth in the Senior Secured Intercreditor Agreement.
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Intercreditor Agreement means the Senior Secured Intercreditor Agreement and any other intercreditor agreement entered into in compliance with the Indenture and each Other Pari Passu Lien Agreement.
Issue Date means February 8, 2017.
Issuer has the meaning assigned to such term in the introductory paragraph of this Agreement.
Junior Lender Claims means (a) the obligations of the Pledgors in respect of the Existing Second Lien Notes outstanding on the date hereof and (b) any other Indebtedness or other obligation incurred by the Pledgors after the date hereof that is secured by a Lien on the Collateral that is intended to rank junior in priority with the Liens securing the Notes Obligations granted under this Agreement, to the extent (x) the incurrence of such Indebtedness or obligation and such Lien is permitted under the Indenture and any Other Pari Passu Lien Agreement and (y) such Liens are subject to an applicable Intercreditor Agreement.
Junior Lender Documents means each agreement, document and instrument providing for, evidencing or securing any Indebtedness constituting Junior Lender Claims.
New York UCC means the Uniform Commercial Code as from time to time in effect in the State of New York.
Notes has the meaning assigned to such term in the preliminary statements of this Agreement.
Notes Obligations means the due and punctual payment of (a) all principal of and interest (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding) and premium (if any) on all indebtedness under the Indenture, and (b) all other monetary obligations, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding), of the Pledgors or any of their subsidiaries to the Secured Parties under the Indenture Documents, and other amounts payable from time to time pursuant to the Indenture Documents, in each case whether or not allowed or allowable in an Insolvency or Liquidation Proceeding.
Obligations means (a) the Notes Obligations and (b) if any Other Pari Passu Lien Obligations are incurred and designated by the Issuer as Obligations pursuant to Section 6.01, the due and punctual payment of (i) the unpaid principal of and interest (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding) owing to any holder of Other Pari Passu Lien Obligations under any Other Pari Passu Lien Agreement, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (ii) all other monetary obligations of any Pledgor to any holder of Other Pari Passu Lien Obligations under any Other Pari Passu Lien Agreement, including obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary
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obligations incurred during the pendency of any Insolvency or Liquidation Proceeding, in each case whether or not allowed or allowable in such Insolvency or Liquidation Proceeding); provided, however, that the Obligations shall not include any Excluded Swap Obligations.
Other Pari Passu Lien Agreement shall mean any indenture, credit agreement or other agreement, document or instrument pursuant to which any Pledgor has or will incur Other Pari Passu Lien Obligations; provided that, in each case, the Indebtedness thereunder has been designated as Other Pari Passu Lien Obligations pursuant to and in accordance with Section 6.01.
Other Pari Passu Lien Obligations means other Indebtedness of the Pledgors that is equally and ratably secured with the Notes as permitted by the Indenture and is designated by the Issuer as an Other Pari Passu Lien Obligation pursuant to and in accordance with Section 6.01.
Parallel Debt has the meaning assigned to such term in Section 7.20.
Patent License means any written agreement, now or hereafter in effect, granting to any Pledgor any right to make, use or sell any invention covered by a Patent, now or hereafter owned by any third party (including any such rights that such Pledgor has the right to license).
Patents means all of the following now owned or hereafter acquired by any Pledgor (or, as required in the context of the definition of Patent License, any third party licensor): (a) all letters patent of the United States or the equivalent thereof in any other country, and all applications for letters patent of the United States or the equivalent thereof in any other country, including those listed on Schedule IV, and (b) all reissues, continuations, divisions, continuations-in-part or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein.
Permitted Liens means (a) any Lien not prohibited by Section 4.12 of the Indenture and (b) not prohibited by any Other Pari Passu Lien Agreement.
Pledged Collateral has the meaning assigned to such term in Section 3.01.
Pledged Debt Securities has the meaning assigned to such term in Section 3.01.
Pledged Securities means any promissory notes, stock certificates or other certificated securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.
Pledged Stock has the meaning assigned to such term in Section 3.01.
Pledged ULC Shares means Pledged Stock which are shares of a ULC.
Pledgor means the Issuer and each Subsidiary Party.
Qualified CFC Holding Company has the meaning assigned to such term in the ABL Facility.
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Received Amount has the meaning assigned to such term in Section 7.20.
Secured Parties means (a) the Collateral Agent, (b) the Trustee and each Holder and (c) subject to compliance with Section 6.01, each holder of Other Pari Passu Lien Obligations and its Authorized Representative.
Security Documents means this Agreement and each other agreement entered into in favor of the Collateral Agent for purposes of securing any of the Obligations, in each case as amended, restated, supplemented or otherwise modified from time to time.
Security Interest has the meaning assigned to such term in Section 4.01.
Senior Lender Claims has the meaning set forth in the Senior Secured Intercreditor Agreement.
Senior Lender Documents has the meaning set forth in the Senior Secured Intercreditor Agreement.
Subsidiary Party has the meaning assigned to such term in the preliminary statement of this Agreement.
Trademark License means any written agreement, now or hereafter in effect, granting to any Pledgor any right to use any Trademark now or hereafter owned by any third party (including any such rights that such Pledgor has the right to license).
Trademarks means all of the following now owned or hereafter acquired by any Pledgor (or, as required in the context of the definition of Trademark License, any third party licensor): (a) all trademarks, service marks, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations thereof (if any), and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all renewals thereof, including those listed on Schedule IV and (b) all goodwill associated therewith or symbolized thereby.
Trustee has the meaning assigned to such term in the introductory paragraph of this Agreement.
ULC means an unlimited liability company existing under the laws of the Province of Nova Scotia, Canada.
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ARTICLE II.
[Intentionally Omitted]
ARTICLE III.
Pledge of Securities
SECTION 3.01 Pledge. As security for the payment or performance, as the case may be, in full of the Obligations, each Pledgor hereby (except in the case of Pledged ULC Shares) assigns and (in all cases) pledges to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Secured Parties, a security interest in all of such Pledgors right, title and interest in, to and under: (a) the Equity Interests directly owned by it (which such Equity Interests constituting Pledged Stock shall be listed on Schedule III) and any other Equity Interests obtained in the future by such Pledgor and any certificates representing all such Equity Interests; provided that the Pledged Stock shall not include: (i) any Equity Interests in excess of 65% of the outstanding voting Equity Interests of any first tier Foreign Subsidiary or any first tier Qualified CFC Holding Company owned by such Pledgor or any of the outstanding Equity Interests of a Foreign Subsidiary or a Qualified CFC Holding Company that is not a first tier Foreign Subsidiary or a first tier Qualified CFC Holding Company, respectively, owned by such Pledgor, (ii) any Equity Interests that constitute Excluded Assets or that are not required to be pledged as security for Senior Lender Claims, (iii) any Equity Interests if, and to the extent that, and for so long as (A) doing so would violate applicable law or a contractual obligation binding on such Equity Interests and (B) with respect to contractual obligations, such Equity Interests are not in a Wholly Owned Subsidiary and such obligation existed on the Issue Date or at the time of the acquisition of such Equity Interests and was not created or made binding on such Equity Interests in contemplation of or in connection with the acquisition of such Equity Interests, (iv) any Equity Interests of any Indenture Restricted Subsidiary owned by the Issuer or any Indenture Restricted Subsidiary, (v) any Equity Interests of a Person that is not directly or indirectly a Subsidiary or (vi) to the extent applicable with regard to any Obligations, any Designated Securities (the Equity Interests pledged pursuant to this clause (a), the Pledged Stock); (b)(i) the debt securities currently issued to any Pledgor (which such debt securities constituting Pledged Debt Securities shall be listed on Schedule III), (ii) any debt securities in the future issued to such Pledgor and (iii) the promissory notes and any other instruments, if any, evidencing such debt securities; provided that the Pledged Debt Securities shall not include (A) debt securities issued by any Indenture Restricted Subsidiary to the Issuer or any Indenture Restricted Subsidiary, (B) debt securities issued to the Issuer or any Subsidiary Party for so long as a pledge of such Indebtedness would be deemed an incurrence of Indebtedness under any of the Indenture Documents, the Senior Lender Documents or the Junior Lender Documents, (C) any debt securities that constitute Excluded Assets or that are not required to be pledged as security for Senior Lender Claims and (D) to the extent applicable with regard to any Obligations, any Designated Securities (the debt securities pledged pursuant to this clause (b), the Pledged Debt Securities); (c) subject to Section 3.06, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other proceeds received in respect of, the securities referred to in clauses (a) and (b) above;
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(d) subject to Section 3.06, all rights and privileges of such Pledgor with respect to the securities and other property referred to in clauses (a), (b) and (c) above; and (e) all proceeds of any of the foregoing (the items referred to in clauses (a) through (e) above being collectively referred to as the Pledged Collateral).
TO HAVE AND TO HOLD the Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth.
SECTION 3.02 Delivery of the Pledged Collateral.
(a) Each Pledgor agrees promptly to deliver or cause to be delivered to the Applicable Agent, for the ratable benefit of the Secured Parties, any and all Pledged Securities to the extent such Pledged Securities, in the case of promissory notes or other instruments evidencing Indebtedness, are required to be delivered pursuant to paragraph (b) of this Section 3.02.
(b) Each Pledgor will cause any Pledged Debt Security (i) having an aggregate principal amount in excess of $15,000,000 or (ii) payable by the Issuer or any Subsidiary of the Issuer (other than, in the case of this clause (ii), any such Indebtedness referred to in the proviso to Section 3.01(b) and intercompany Indebtedness incurred in the ordinary course of business in connection with the cash management operations and intercompany sales of the Issuer and each Subsidiary of the Issuer) owed to such Pledgor by any person to be evidenced by a duly executed promissory note that is pledged and delivered to the Applicable Agent for the ratable benefit of the Secured Parties, pursuant to the terms hereof. Following the Discharge of Senior Lender Claims, to the extent any such promissory note is a demand note, each Pledgor party thereto agrees, if requested by the Collateral Agent, to immediately demand payment thereunder upon an Event of Default specified under Section 6.01(a), (b), (g) or (h) of the Indenture or any equivalent provision under any Other Pari Passu Lien Agreement.
(c) Upon delivery to the Applicable Agent, (i) any Pledged Securities required to be delivered pursuant to the foregoing paragraphs (a) and (b) of this Section 3.02 shall be accompanied by stock powers or note powers, as applicable, duly executed in blank or other instruments of transfer reasonably satisfactory to the Applicable Agent, and by such other instruments and documents as the Applicable Agent, may reasonably request and (ii) all other property comprising part of the Pledged Collateral delivered pursuant to the terms of this Agreement shall be accompanied to the extent necessary to perfect the security interest in or allow realization on the Pledged Collateral by proper instruments of assignment duly executed by the applicable Pledgor and such other instruments or documents (including issuer acknowledgments in respect of uncertificated securities) as the Applicable Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be attached hereto as Schedule III and made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.
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SECTION 3.03 Representations, Warranties and Covenants. The Pledgors, jointly and severally, represent, warrant and covenant to and with the Collateral Agent, for the ratable benefit of the Secured Parties, that:
(a) Schedule III correctly sets forth, as of the date hereof, the percentage of the issued and outstanding shares of each class of the Equity Interests of the issuer thereof represented by such Pledged Stock and includes (i) all Equity Interests constituting Pledged Stock and (ii) all debt securities and promissory notes or instruments constituting Pledged Debt Securities;
(b) the Pledged Stock, to the best of each Pledgors knowledge, has been duly and validly authorized and issued by the issuers thereof and is fully paid and nonassessable, subject to the assessability of the Pledged ULC Shares under the Companies Act (Nova Scotia);
(c) except for the security interests granted hereunder (or otherwise permitted under the Indenture Documents and not prohibited by the Other Pari Passu Lien Agreements and those securing any Senior Lender Claims), each Pledgor (i) is and, subject to any transfers made in compliance with the Indenture and any Other Pari Passu Lien Agreement, will continue to be the direct owner, beneficially and of record, of the Pledged Collateral indicated on Schedule III as owned by such Pledgor, (ii) holds the same free and clear of all Liens, other than Permitted Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Pledged Collateral, other than pursuant to a transaction permitted by the Indenture and any Other Pari Passu Lien Agreement and other than Permitted Liens and (iv) subject to the rights of such Pledgor under the Indenture Documents and any Other Pari Passu Lien Agreement to dispose of Pledged Collateral, will use commercially reasonable efforts to defend its title or interest thereto or therein against any and all Liens (other than Permitted Liens), however arising, of all persons;
(d) other than as set forth in the Indenture or in any Other Pari Passu Lien Agreement, and except for restrictions and limitations imposed by the Indenture Documents, any Other Pari Passu Lien Agreement, the Senior Lender Documents, the Junior Lender Documents or securities laws generally, the Pledged Collateral is and will continue to be freely transferable and assignable, and none of the Pledged Collateral is or will be subject to any option, right of first refusal, shareholders agreement, charter, by-law, memorandum of association or articles of association provisions or contractual restriction of any nature, other than restrictions on transfer in the articles of association of a ULC, that might prohibit, impair, delay or otherwise affect the pledge of such Pledged Collateral hereunder, the sale or disposition thereof pursuant hereto or the exercise by the Collateral Agent of rights and remedies hereunder;
(e) each Pledgor has the power and authority to pledge the Pledged Collateral pledged by it hereunder in the manner hereby done or contemplated;
(f) other than as set forth in the Indenture, any Other Pari Passu Lien Agreement or in the Senior Lender Documents or the schedules thereto, no consent or approval of any Governmental Authority, any securities exchange or any other person was or is necessary to the validity of the pledge effected hereby (other than such as have been obtained and are in full force and effect);
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(g) by virtue of the execution and delivery by the Pledgors of this Agreement, the Intercreditor Agreement and the Foreign Pledge Agreements, when any Pledged Securities (excluding any foreign stock not covered by a Foreign Pledge Agreement) are delivered to the Applicable Agent for the ratable benefit of the Secured Parties, in accordance with this Agreement and the Intercreditor Agreements, and a financing statement naming the Collateral Agent as the secured party and covering the Pledged Collateral to which such Pledged Securities relate is filed in the appropriate filing office, the Collateral Agent will obtain, for the ratable benefit of the Secured Parties, a legal, valid and perfected lien upon and security interest in such Pledged Collateral, subject only to Permitted Liens or Liens arising by operation of law, as security for the payment and performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the Collateral Agent, for the ratable benefit of the Secured Parties, the rights of the Collateral Agent in the Pledged Collateral as set forth herein.
SECTION 3.04 Certification of Limited Liability Company and Limited Partnership Interests.
(a) Each interest in any limited liability company or limited partnership controlled by any Pledgor pledged hereunder and represented by a certificate shall be a security within the meaning of Article 8 of the New York UCC and shall be governed by Article 8 of the New York UCC, and each such interest shall at all times hereafter be represented by a certificate.
(b) Each interest in any limited liability company or limited partnership controlled by a Pledgor pledged hereunder and not represented by a certificate shall not be a security within the meaning of Article 8 of the New York UCC and shall not be governed by Article 8 of the New York UCC, and the Pledgors shall at no time elect to treat any such interest as a security within the meaning of Article 8 of the New York UCC or issue any certificate representing such interest, unless the applicable Pledgor provides prior written notification to the Applicable Agent of such election and immediately delivers any such certificate to the Applicable Agent pursuant to the terms hereof.
SECTION 3.05 Registration in Nominee Name; Denominations. The Applicable Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in the name of the applicable Pledgor, endorsed or assigned in blank or, except in the case of the Pledged ULC Shares, in favor of the Applicable Agent or, except in the case of Pledged ULC Shares, if an Event of Default shall have occurred and be continuing, following written instruction from the Applicable Agent, in its own name as pledgee or the name of its nominee (as pledgee or as sub-agent). Upon the occurrence and during the continuance of an Event of Default, each Pledgor will promptly give to the Applicable Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Pledgor. If an Event of Default shall have occurred and be continuing, the Applicable Agent shall have the right, following written instruction from the Applicable Agent, to exchange the certificates representing Pledged Securities held by it for certificates of smaller or larger denominations for any purpose consistent with this Agreement. Each Pledgor shall use its commercially reasonable efforts to cause any of its Subsidiaries that is
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not a party to this Agreement to comply with a request by the Applicable Agent pursuant to this Section 3.05, to exchange certificates representing Pledged Securities of such Subsidiary for certificates of smaller or larger denominations.
SECTION 3.06 Voting Rights; Dividends and Interest, etc.
(a) Unless and until an Event of Default shall have occurred and be continuing and the Applicable Agent shall have given notice to the relevant Pledgors of the Applicable Agents intention to exercise its rights hereunder:
(i) Each Pledgor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any part thereof for any purpose consistent with the terms of this Agreement, the Indenture, the other Indenture Documents and any Other Pari Passu Lien Agreement; provided, that, except as permitted under the Indenture and any Other Pari Passu Lien Agreement, such rights and powers shall not be exercised in any manner that could materially and adversely affect the rights and remedies of any of the Collateral Agent or the other Secured Parties under this Agreement, the Indenture, any other Indenture Document or any Other Pari Passu Lien Agreement or the ability of the Secured Parties to exercise the same.
(ii) The Collateral Agent shall promptly execute and deliver to each Pledgor, or cause to be executed and delivered to such Pledgor, all such proxies, powers of attorney and other instruments as such Pledgor may reasonably request in writing for the purpose of enabling such Pledgor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above.
(iii) Each Pledgor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Collateral to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Indenture, the other Indenture Documents, any Other Pari Passu Lien Agreement and applicable laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Pledgor, shall not be commingled by such Pledgor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Applicable Agent, for the ratable benefit of the Secured Parties, and shall be forthwith delivered to the Applicable Agent, for the ratable benefit of the Secured Parties, in the same form as so received (endorsed in a manner reasonably satisfactory to the Applicable Agent).
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(b) Except in the case of Pledged ULC Shares (in which case the Pledgors shall maintain all membership rights described herein until they cease to be registered as members of the applicable ULC), upon the occurrence and during the continuance of an Event of Default and after notice by the Applicable Agent to the relevant Pledgors of the Applicable Agents intention to exercise its rights hereunder, all rights of any Pledgor to dividends, interest, principal or other distributions that such Pledgor is authorized to receive pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all such rights shall thereupon become vested, for the ratable benefit of the Secured Parties, in the Applicable Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions. All dividends, interest, principal or other distributions received by any Pledgor contrary to the provisions of this Section 3.06 shall not be commingled by such Pledgor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Applicable Agent, for the ratable benefit of the Secured Parties, and shall be forthwith delivered to the Applicable Agent, for the ratable benefit of the Secured Parties, in the same form as so received (endorsed in a manner reasonably satisfactory to the Applicable Agent). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 5.02. After all Events of Default have been cured or waived and the Issuer has delivered to the Collateral Agent a certificate to that effect, the Collateral Agent shall promptly repay to each Pledgor (without interest) all dividends, interest, principal or other distributions that such Pledgor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06 and that remain in such account.
(c) Except in the case of Pledged ULC Shares (in which case the Pledgors shall maintain all membership rights described herein until they cease to be registered as members of the applicable ULC), upon the occurrence and during the continuance of an Event of Default and after notice by the Applicable Agent to the relevant Pledgors of the Applicable Agents intention to exercise its rights hereunder, all rights of any Pledgor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and the obligations of the Applicable Agent under paragraph (a)(ii) of this Section 3.06, shall cease, and all such rights shall thereupon become vested in the Applicable Agent, for the ratable benefit of the Secured Parties, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that the Applicable Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Pledgors to exercise such rights. After all Events of Default have been cured or waived and an Officer of the Issuer has delivered to the Applicable Agent a certificate to that effect, each Pledgor shall have the right to exercise the voting and/or consensual rights and powers that such Pledgor would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above and the obligations of the Applicable Agent under paragraph (a)(ii) shall be in effect.
(d) Any notice given by the Applicable Agent to the Pledgors suspending their rights under paragraph (a) of this Section 3.06 (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the Pledgors at the same or different times and (iii) may suspend the rights of the Pledgors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Applicable Agent in its sole
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and absolute discretion) and without waiving or otherwise affecting the Collateral Agents rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.
ARTICLE IV.
Security Interests in Personal Property
SECTION 4.01 Security Interest.
(a) As security for the payment or performance when due, as the case may be, in full of the Obligations, each Pledgor hereby assigns and pledges to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable benefit of the Secured Parties, a security interest (the Security Interest) in all right, title and interest in or to any and all of the following assets and properties now owned or at any time hereafter acquired by such Pledgor or in which such Pledgor now has or at any time in the future may acquire any right, title or interest (collectively, the Article 9 Collateral):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all cash and Deposit Accounts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Intellectual Property;
(ix) all Inventory;
(x) all Investment Property;
(xi) all Letter of Credit Rights;
(xii) all Commercial Tort Claims as described in Schedule II;
(xiii) all books and records pertaining to the Article 9 Collateral; and
(xiv) to the extent not otherwise included, all proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any person with respect to any of the foregoing.
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Notwithstanding anything to the contrary in this Agreement, the other Indenture Documents or any Other Pari Passu Lien Agreement, this Agreement shall not constitute a grant of a security interest in (and the Article 9 Collateral shall not include): (a) any vehicle, (b) any Excluded Assets, (c) any assets owned on or acquired after the Issue Date, to the extent that, and for long as, granting a security interest in such assets would violate applicable law or a contractual obligation binding on such assets that existed at the time of the acquisition thereof and was not created or made binding on such assets in contemplation of or in connection with the acquisition of such assets (except in the cash or assets owned on the Issue Date or acquired with Indebtedness of the type incurred pursuant to Section 4.03(iv) of the Indenture), (d) any Letter of Credit Rights to the extent any Pledgor is required by applicable law to apply the proceeds of a drawing of such Letter of Credit for a specified purpose, (e) any Equity Interests or debt securities excluded from the pledge made pursuant to Section 3.01 hereof, (f) any Pledgors right, title or interest in any license, contract or agreement to which such Pledgor is a party or any of its right, title or interest thereunder to the extent, but only to the extent, that such a grant would, under the terms of such license, contract or agreement, result in a breach of the terms of, or constitute a default under, or result in the abandonment, invalidation or unenforceability of, that license, contract or agreement to which such Pledgor is a party (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law (including, without limitation, Title 11 of the United States Code) or principles of equity); provided that immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral shall include, and such Pledgor shall be deemed to have granted a security interest in, all such rights and interests as if such provision had never been in effect, (g) any Equipment or other asset owned by any Pledgor that is subject to a purchase money lien or a Capitalized Lease Obligation if the contract or other agreement in which such Lien is granted (or the documentation providing for such Capitalized Lease Obligation) prohibits or requires the consent of any person other than the Pledgors as a condition to the creation of any other security interest on such Equipment or assets (h) any intent-to-use United States trademark applications for which an amendment to alleged use or statement of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or, if filed, has not been deemed in conformance with 15 U.S.C. § 1051(a) or examined and accepted by the United States Patent and Trademark Office, (i) any assets that are not required to be pledged to secure Senior Lender Claims, (j) any real estate held by any Pledgor, (k) any Principal Property; provided that after the Existing Debenture Payoff Date, to the extent Liens on such assets are granted to secure outstanding First Priority Lien Obligations, the Collateral shall include, and such Pledgor shall be deemed to have granted a security interest in, all such rights and interests in such Principal Property as for so long as such assets continue to secure outstanding First Priority Lien Obligations, (l) any assets which, if included in the Collateral, would require the Existing Debentures to be ratably secured with the Obligations pursuant to the terms of the indentures for the Existing Debentures or (m) solely with respect to any series of Other Pari Passu Lien Obligations, any asset that is not intended to be collateral with respect to such series pursuant to the terms of the Other Pari Passu Lien Agreement governing such series. In addition, notwithstanding anything to the contrary, the requirements of this Agreement are subject to the terms of Section 4.14 of the Indenture.
(b) Each Pledgor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral or any part thereof and
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amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (i) whether such Pledgor is an organization, the type of organization and any organizational identification number issued to such Pledgor, (ii) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates and (iii) a description of collateral that describes such property in any other manner as is necessary or advisable to ensure the perfection of the security interest in the Article 9 Collateral granted under this Agreement, including describing such property as all assets or all property. Each Pledgor agrees to provide such information to the Collateral Agent promptly upon request.
The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Pledgor, without the signature of any Pledgor, and naming any Pledgor or the Pledgors as debtors and the Collateral Agent as secured party.
(c) The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Pledgor with respect to or arising out of the Article 9 Collateral.
(d) Notwithstanding anything to the contrary in this Agreement, the other Indenture Documents or any Other Pari Passu Lien Agreement, the Collateral Agent shall not be obligated to prepare or file statements or documents necessary for perfection of a security interest, or to maintain the perfection of the security interest granted hereunder, and each Pledgor is hereby obligated and directed to prepare, record and file, at its own expense, such statements or documents, including continuation statements when applicable, on the Collateral Agents behalf, and to deliver a file-stamped copy of each such statement or other evidence of filing to the Collateral Agent.
SECTION 4.02 Representations and Warranties. The Pledgors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that:
(a) Each Pledgor has good and valid rights in and title to the Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Article 9 Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained and is in full force and effect or has otherwise been disclosed herein, in the Indenture, in any Other Pari Passu Lien Agreement or in any offering circular related thereto.
(b) Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Article 9 Collateral have been prepared for filing in each governmental, municipal or other office specified in writing by the Issuer to the Collateral Agent, and constitute all the filings, recordings and registrations (other than additional filings required to be made in the United States Patent
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and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Article 9 Collateral consisting of United States Patents, United States registered Trademarks and United States registered Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all Article 9 Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements or amendments. Each Pledgor represents and warrants that a fully executed agreement in the form hereof (or a short form hereof) containing a description of all Article 9 Collateral consisting of Intellectual Property with respect to issued Patents (and Patents for which registration applications are pending), registered Trademarks (and Trademarks for which registration applications are pending) and registered Copyrights (and Copyrights for which registration applications are pending) has been delivered to the Collateral Agent for recording with, in the case of United States Patents, Trademarks, Copyrights and applications, the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, to protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, in respect of all Article 9 Collateral consisting of such Intellectual Property in which a security interest may be perfected by recording with the United States Patent and Trademark Office and the United States Copyright Office, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration with respect to the Security Interest in the Intellectual Property is necessary (other than the Uniform Commercial Code financing statements referred to above and other than such actions as are necessary to perfect the Security Interest with respect to any Article 9 Collateral consisting of Patents, Trademarks and Copyrights acquired or developed after the date hereof).
(c) The Security Interest constitutes (i) a legal and valid security interest in all the Article 9 Collateral securing the payment and performance of the Obligations, (ii) subject to the filings described in Section 4.02(b), a perfected security interest in all Article 9 Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the Uniform Commercial Code or other applicable law in such jurisdictions and (iii) subject to Section 4.02(b) a security interest that shall be perfected in all Article 9 Collateral in which a security interest may be perfected upon the receipt and recording of this Agreement (or a short form hereof) with the United States Patent and Trademark Office and the United States Copyright Office, as applicable. Subject to the Intercreditor Agreements, the Security Interest is and shall be prior to any other Lien on any of the Article 9 Collateral other than Permitted Liens or Liens arising by operation of law.
(d) The Article 9 Collateral is owned by the Pledgors free and clear of any Lien, other than Permitted Liens or Liens arising by operation of law. Subject to the Intercreditor Agreements, none of the Pledgors has filed or consented to the filing of (i) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Article 9 Collateral, (ii) any assignment in which any Pledgor assigns any
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Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (iii) any assignment in which any Pledgor assigns any Article 9 Collateral or any security agreement or similar instrument covering any Article 9 Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Permitted Liens.
(e) None of the Pledgors holds any Commercial Tort Claim individually in excess of $5,000,000 as of the Issue Date.
(f) As of the Issue Date, all Accounts owned by the Pledgors have been originated by the Pledgors and all Inventory owned by the Pledgors has been acquired by the Pledgors in the ordinary course of business.
SECTION 4.03 Covenants.
(a) Each Pledgor agrees to notify the Collateral Agent promptly in writing of any change (i) in its corporate name, (ii) in its identity or type of organization or corporate structure, (iii) in its federal taxpayer identification number or organizational identification number or (iv) in its jurisdiction of organization. Each Pledgor agrees to provide the Collateral Agent promptly with certified organizational documents reflecting any of the changes described in the immediately preceding sentence. Each Pledgor agrees not to effect or permit any change referred to in the first sentence of this paragraph (a) unless all filings have been made, or will have been made within any applicable statutory period, under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Article 9 Collateral in which a security interest may be perfected by filing, for the ratable benefit of the Secured Parties. Each Pledgor agrees to promptly notify the Collateral Agent if any material portion of the Article 9 Collateral owned or held by such Pledgor is damaged or destroyed.
(b) Subject to the rights of such Pledgor under the Indenture Documents or any Other Pari Passu Lien Agreement to dispose of Collateral, each Pledgor shall, at its own expense, use commercially reasonable efforts to defend title to the Article 9 Collateral against all persons and to defend the Security Interest of the Collateral Agent, for the ratable benefit of the Secured Parties, in the Article 9 Collateral and the priority thereof against any Lien that is not a Permitted Lien.
(c) Each Pledgor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement and the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Article 9 Collateral that is in excess of $15,000,000 shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be promptly pledged and delivered to the Applicable Agent for the ratable benefit of the Secured Parties, duly endorsed in a manner reasonably satisfactory to the Applicable Agent.
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(d) After the occurrence of an Event of Default and during the continuance thereof, the Applicable Agent shall have the right to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, in the case of Accounts or Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification. The Applicable Agent shall have the right to share any information it gains from such inspection or verification with any Secured Party.
(e) The Applicable Agent may discharge any past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and that is not a Permitted Lien, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Pledgor fails to do so as required by the Indenture, this Agreement or any Other Pari Passu Lien Agreement, and each Pledgor jointly and severally agrees to reimburse the Applicable Agent on demand for any reasonable payment made or any reasonable expense incurred by the Applicable Agent pursuant to the foregoing authorization; provided, however, that nothing in this Section 4.03(e) shall be interpreted as excusing any Pledgor from the performance of, or imposing any obligation on the Applicable Agent or any Secured Party to cure or perform, any covenants or other promises of any Pledgor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Indenture Documents or in any Other Pari Passu Lien Agreement.
(f) Each Pledgor (rather than the Collateral Agent or any Secured Party) shall remain liable for the observance and performance of all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Article 9 Collateral and each Pledgor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.
(g) None of the Pledgors shall make or permit to be made an assignment, pledge or hypothecation of the Article 9 Collateral or shall grant any other Lien in respect of the Article 9 Collateral, except as permitted by the Indenture and not prohibited by any Other Pari Passu Lien Agreement. None of the Pledgors shall make or permit to be made any transfer of the Article 9 Collateral and each Pledgor shall remain at all times in possession of the Article 9 Collateral owned by it, except as permitted by the Indenture, the Intercreditor Agreements or any Other Pari Passu Lien Agreement.
(h) Each Pledgor irrevocably makes, constitutes and appoints the Applicable Agent (and all officers, employees or agents designated by the Applicable Agent) as such Pledgors true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such Pledgor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all
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determinations and decisions with respect thereto. In the event that any Pledgor at any time or times shall fail to obtain or maintain any of the policies of insurance required by the Indenture, the other Indenture Documents or any Other Pari Passu Lien Agreement or to pay any premium in whole or part relating thereto, the Applicable Agent may, without waiving or releasing any obligation or liability of the Pledgors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Applicable Agent reasonably deems advisable. All sums disbursed by the Applicable Agent in connection with this Section 4.03(h), including reasonable attorneys fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Pledgors to the Applicable Agent and shall be additional Obligations secured hereby.
SECTION 4.04 Other Actions. In order to further ensure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, for the ratable benefit of the Secured Parties, the Collateral Agents security interest in the Article 9 Collateral, each Pledgor agrees, in each case at such Pledgors own expense, to take the following actions with, respect to the following Article 9 Collateral:
(a) Instruments and Tangible Chattel Paper. If any Pledgor shall at any time own or acquire any Instruments or Tangible Chattel Paper evidencing an amount in excess of $10,000,000, such Pledgor shall forthwith endorse, assign and deliver the same to the Applicable Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Applicable Agent may from time to time reasonably request.
(b) Investment Property. Except to the extent otherwise provided in Article III, if any Pledgor shall at any time hold or acquire any Certificated Security, such Pledgor shall forthwith endorse, assign and deliver the same to the Applicable Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Applicable Agent may from time to time reasonably specify. If any security of a domestic issuer now owned or hereafter acquired by any Pledgor is uncertificated and is issued to such Pledgor or its nominee directly by the issuer thereof, upon the Applicable Agents reasonable request or upon and during the continuance of an Event of Default, such Pledgor shall promptly notify the Applicable Agent of such uncertificated securities and pursuant to an agreement in form and substance reasonably satisfactory to the Applicable Agent, (i) cause the issuer to agree to comply with instructions from the Applicable Agent as to such security, without further consent of any Pledgor or such nominee, or (ii) cause the issuer to register the Applicable Agent as the registered owner of such security. If any security or other Investment Property, whether certificated or uncertificated, representing an Equity Interest in a third party and having a fair market value in excess of $10,000,000 now owned or hereafter acquired by any Pledgor is held by such Pledgor or its nominee through a securities intermediary or commodity intermediary, such Pledgor shall promptly notify the Applicable Agent thereof and, at the Applicable Agents request and option, pursuant to a Control Agreement in form and substance reasonably satisfactory to the Applicable Agent, either (a) cause such securities intermediary or commodity intermediary, as applicable, to agree, in the case of a securities intermediary, to comply with entitlement orders or other instructions from the Applicable Agent to such securities intermediary as to such securities or other Investment Property or, in the case of a commodity intermediary, to apply any value distributed on account of any commodity contract as directed by the Applicable Agent to such commodity intermediary, in each case without further consent of any Pledgor or such nominee,
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or (b) in the case of Financial Assets or other Investment Property held through a securities intermediary, arrange for the Applicable Agent to become the entitlement holder with respect to such Financial Assets or Investment Property, for the ratable benefit of the Secured Parties, with such Pledgor being permitted, only with the consent of the Applicable Agent, to exercise rights to withdraw or otherwise deal with such Financial Assets or Investment Property. The Applicable Agent agrees with each of the Pledgors that the Applicable Agent shall not give any such entitlement orders or instructions or directions to any such issuer, securities intermediary or commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by any Pledgor, unless an Event of Default has occurred and is continuing or, after giving effect to any such withdrawal or dealing rights, would occur. The provisions of this paragraph (b) shall not apply to any Financial Assets credited to a securities account for which the Applicable Agent is the securities intermediary.
(c) Commercial Tort Claims. If any Pledgor shall at any time hold or acquire a Commercial Tort Claim in an amount reasonably estimated to exceed $5,000,000, such Pledgor shall promptly notify the Collateral Agent thereof in a writing signed by such Pledgor, including a summary description of such claim, and grant to the Collateral Agent in writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.
SECTION 4.05 Covenants Regarding Patent, Trademark and Copyright Collateral. Except as not prohibited by the Indenture or any Other Pari Passu Lien Agreement:
(a) Each Pledgor agrees that it will not knowingly do any act or omit to do any act (and will exercise commercially reasonable efforts to prevent its licensees from doing any act or omitting to do any act) whereby any Patent material to the normal conduct of such Pledgors business may become prematurely invalidated or dedicated to the public, and agrees that it shall take commercially reasonable steps with respect to any material products covered by any such Patent as necessary and sufficient to establish and preserve its rights under applicable patent laws.
(b) Each Pledgor will, and will use its commercially reasonable efforts to cause its licensees or its sublicensees to, for each Trademark material to the normal conduct of such Pledgors business, (i) maintain such Trademark in full force free from any adjudication of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of federal or foreign registration or claim of trademark or service mark as required under applicable law and (iv) not knowingly use or knowingly permit its licensees use of such Trademark in violation of any third-party rights.
(c) Each Pledgor will, and will use its commercially reasonable efforts to cause its licensees or its sublicensees to, for each work covered by a material Copyright necessary to the normal conduct of such Pledgors business that it publishes, displays and distributes, use copyright notice as required under applicable copyright laws.
(d) Each Pledgor shall notify the Collateral Agent promptly if it knows that any Patent, Trademark or Copyright material to the normal conduct of such Pledgors business may imminently become abandoned, lost or dedicated to the public, or of any materially adverse
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determination or development, excluding office actions and similar determinations or developments, in the United States Patent and Trademark Office, United States Copyright Office or any court regarding such Pledgors ownership of any such material Patent, Trademark or Copyright or its right to register or to maintain the same.
(e) Each Pledgor, either itself or through any agent, employee, licensee or designee, shall (i) inform the Collateral Agent on an annual basis of each application by itself, or through any agent, employee, licensee or designee, for any Patent with the United States Patent and Trademark Office and each registration of any Trademark or Copyright with the United States Patent and Trademark Office or the United States Copyright Office filed during the preceding twelve-month period, and (ii) upon the reasonable request of the Collateral Agent, execute and deliver any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agents security interest in such Patent, Trademark or Copyright.
(f) Each Pledgor shall exercise its reasonable business judgment consistent with the practice in any proceeding before the United States Patent and Trademark Office or the United States Copyright Office with respect to maintaining and pursuing each material application relating to any Patent, Trademark and/or Copyright (and obtaining the relevant grant or registration) material to the normal conduct of such Pledgors business and to maintain (i) each issued Patent and (ii) the registrations of each Trademark and each Copyright that is material to the normal conduct of such Pledgors business, including, when applicable and necessary in such Pledgors reasonable business judgment, timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if any Pledgor believes necessary in its reasonable business judgment, to initiate opposition, interference and cancellation proceedings against third parties.
(g) In the event that any Pledgor knows or has reason to know that any Article 9 Collateral consisting of a Patent, Trademark or Copyright material to the normal conduct of its business has been or is about to be materially infringed, misappropriated or diluted by a third party, such Pledgor shall promptly notify the Collateral Agent and shall, if such Pledgor deems it necessary in its reasonable business judgment, promptly sue and recover any and all damages, and take such other actions as are reasonable or appropriate under the circumstances.
(h) Upon the occurrence and during the continuance of an Event of Default, each Pledgor shall use commercially reasonable efforts to obtain all requisite consents or approvals from the licensor under each Copyright License, Patent License or Trademark License to effect the assignment of all such Pledgors right, title and interest thereunder to (in the Applicable Agents sole discretion) the designee of the Applicable Agent or the Applicable Agent.
ARTICLE V.
Remedies
SECTION 5.01 Remedies Upon Default. In accordance with, and to the extent consistent with, the terms of Section 7.18 and the Intercreditor Agreements, the Collateral Agent may, but shall not be obligated to, take any action specified in this Section 5.01. Upon the
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occurrence and during the continuance of an Event of Default, each Pledgor agrees to deliver each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right to take any of or all the following actions at the same or different times: (a) with respect to any Article 9 Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Article 9 Collateral by the applicable Pledgors to the Collateral Agent or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or a nonexclusive basis, any such Article 9 Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers thereunder cannot be obtained with the use of commercially reasonable efforts) and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Article 9 Collateral and without liability for trespass to the applicable Pledgor to enter any premises where the Article 9 Collateral may be located for the purpose of taking possession of or removing the Article 9 Collateral and, generally, to exercise any and all rights afforded to a secured party under the applicable Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Pledgor agrees that the Collateral Agent shall have the right, subject to the requirements of applicable law and in accordance with, and to the extent consistent with, the terms of the Intercreditor Agreements, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any brokers board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized in connection with any sale of a security (if it deems it advisable to do so) pursuant to the foregoing to restrict the prospective bidders or purchasers to persons who represent and agree that they are purchasing such security for their own account, for investment, and not with a view to the distribution or sale thereof. Upon consummation of any such sale of Collateral pursuant to this Section 5.01 the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives and releases (to the extent permitted by law) all rights of redemption, stay, valuation and appraisal that such Pledgor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the applicable Pledgors ten (10) Business Days written notice (which each Pledgor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agents intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a brokers board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or the portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or
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private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In the case of any sale of all or any part of the Collateral made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in the event that any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in the case of any such failure, such Collateral may be sold again upon notice given in accordance with provisions above. At any public (or, to the extent permitted by law, private) sale made pursuant to this Section 5.01, any Secured Party may bid for or purchase for cash, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Pledgor (all such rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property in accordance with Section 5.02 hereof without further accountability to any Pledgor therefor. For purposes hereof, a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Pledgor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 5.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions.
SECTION 5.02 Application of Proceeds. The Collateral Agent shall, subject to Section 7.18 and the Intercreditor Agreements, promptly apply the proceeds, moneys or balances of any collection or sale of Collateral, as follows:
FIRST, to the payment of all reasonable costs and expenses incurred by the Collateral Agent in connection with such collection or sale or otherwise in connection with this Agreement, any other Indenture Document, any Other Pari Passu Lien Agreement or any of the Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Indenture Document or any Other Pari Passu Lien Agreement on behalf of any Pledgor and any other reasonable costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Indenture Document or any Other Pari Passu Lien Agreement;
SECOND, to the payment in full of the Obligations secured by such Collateral (the amounts so applied to be distributed among the Secured Parties in accordance with the order of priority set forth in Section 6.10 of the Indenture or the equivalent provision of any Other Pari Passu Lien Agreement, as applicable, based on respective amounts of such Obligations owed to them on the date of any such distribution); and
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THIRD, to the Pledgors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.
Notwithstanding the foregoing, no amount received from any guarantor, or from the proceeds of Collateral pledged by such guarantor, shall be applied to any Excluded Swap Obligations of such guarantor.
Subject to the terms of the Intercreditor Agreements, the Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the purchase money by the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.
SECTION 5.03 Grant of License to Use Intellectual Property. For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement, in each case in accordance with, and to the extent consistent with, the terms of Section 7.18 and the Intercreditor Agreements, at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Pledgor hereby grants to (in the Collateral Agents sole discretion) a designee of the Collateral Agent or the Collateral Agent, for the ratable benefit of the Secured Parties, a non-exclusive license (exercisable without payment of royalty or other compensation to any Pledgor) to use, license or sublicense any of the Article 9 Collateral consisting of Intellectual Property now owned or hereafter acquired by such Pledgor, wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof, the right to prosecute and maintain all Intellectual Property and the right to sue for past infringement of the Intellectual Property. The use of such license by the Collateral Agent may be exercised, at the option of the Collateral Agent, upon the occurrence and during the continuation of an Event of Default, subject to the terms of the Intercreditor Agreements; provided, however, that such license (i) shall be subject to those exclusive Patent Licenses, Trademark Licenses and Copyright Licenses granted by the Pledgors in effect on the date hereof and those granted by any Pledgor hereafter, as permitted under the Indenture Documents and any Other Pari Passu Lien Agreement, to the extent conflicting, (ii) may be exercised, at the option of the Collateral Agent, only upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Pledgors notwithstanding any subsequent cure of an Event of Default, and (iii) apply to the use of the Trademarks in connection with goods and services of similar type and quality to those therefore sold by such Pledgor under such Trademark.
SECTION 5.04 Securities Act, etc. In view of the position of the Pledgors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar federal statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the Federal Securities Laws) with respect to any
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disposition of the Pledged Collateral permitted hereunder. Each Pledgor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Pledgor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, subject to the terms of the Intercreditor Agreements, in its sole and absolute discretion, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws or, to the extent applicable, Blue Sky or other state securities laws and (b) may approach and negotiate with a single potential purchaser to effect such sale. Each Pledgor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, subject to the terms of the Intercreditor Agreements, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section 5.04 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells.
SECTION 5.05 Registration, etc. Subject to the terms of Section 7.18 and the Intercreditor Agreements, each Pledgor agrees that, upon the occurrence and during the continuance of an Event of Default, if for any reason the Collateral Agent desires to sell any of the Pledged Collateral at a public sale, it will, at any time and from time to time, upon the written request of the Collateral Agent, use its commercially reasonable efforts to take or to cause the issuer of such Pledged Collateral to take such action and prepare, distribute and/or file such documents, as are required or advisable in the reasonable opinion of counsel for the Collateral Agent to permit the public sale of such Pledged Collateral. Each Pledgor further agrees to indemnify, defend and hold harmless the Collateral Agent, each other Secured Party, any underwriter and their respective officers, directors, affiliates and controlling persons from and against all loss, liability, expenses, costs of counsel (including reasonable fees and expenses to the Collateral Agent of legal counsel), and claims (including the costs of investigation) that they may incur insofar as such loss, liability, expense or claim arises out of or is based upon any alleged untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) or in any notification or offering circular, or arises out of or is based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements in any thereof not misleading, except insofar as the same may have been caused by any untrue statement or omission based upon information furnished in writing to such Pledgor or the issuer of such Pledged Collateral by the Collateral Agent or any other Secured Party expressly for use therein. Each Pledgor further agrees, upon such written request referred to above, to use its commercially reasonable efforts to qualify, file or register, or cause the issuer of such Pledged Collateral to qualify, file or register, any of the Pledged Collateral under the Blue
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Sky or other securities laws of such states as may be reasonably requested by the Collateral Agent and keep effective, or cause to be kept effective, all such qualifications, filings or registrations. Each Pledgor will bear all costs and expenses of carrying out its obligations under this Section 5.05. Each Pledgor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 5.05 only and that such failure would not be adequately compensable in damages and, therefore, agrees that its agreements contained in this Section 5.05 may be specifically enforced.
ARTICLE VI.
SECTION 6.01 Other Pari Passu Lien Obligations. The Issuer may from time to time designate Other Pari Passu Lien Obligations permitted by the Indenture and not prohibited by any Other Pari Passu Lien Agreement to be secured by a Lien on the Collateral as Obligations hereunder by delivering to the Collateral Agent (a) a certificate signed by an Officer of the Issuer (i) identifying the Other Pari Passu Lien Obligations so designated and the aggregate principal amount or face amount thereof, (ii) stating that such Other Pari Passu Lien Obligations are designated as Obligations for purposes hereof, (iii) representing that such designation complies with the terms of the Indenture Documents and any Other Pari Passu Lien Agreements and (iv) specifying the name and address of the Authorized Representative for the holders of such Other Pari Passu Lien Obligations and (b) a fully executed Additional Secured Party Consent. The Collateral Agent agrees that, upon the satisfaction of all conditions set forth in the preceding sentence, the Collateral Agent shall act as collateral agent under and subject to the terms of this Agreement for the benefit of all Secured Parties, including without limitation, any Secured Parties that hold any such Other Pari Passu Lien Obligations. Each Authorized Representative that executes any Additional Secured Party Consent agrees to the appointment, and acceptance of the appointment, of the Collateral Agent as collateral agent for the holders of such Other Pari Passu Lien Obligations and agrees, on behalf of itself and each Secured Party it represents, to be bound by the terms of this Agreement and the applicable Intercreditor Agreements and, with respect to the rights, duties, privileges, protections, indemnities and immunities of the Collateral Agent, by the Indenture. Upon the satisfaction of the conditions set forth in this Section 6.01, such Other Pari Passu Lien Obligations shall become Obligations hereunder with the same force and effect as if originally included in the Obligations hereunder. The rights and obligations of each party to this Agreement shall remain in full force and effect notwithstanding the addition of any new Obligations to this Agreement.
ARTICLE VII.
Miscellaneous
SECTION 7.01 Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 13.02 of the Indenture or the equivalent provision of any Other Pari Passu Lien Agreement; provided that notices to the Collateral Agent shall be effective only upon receipt and shall be made to the Collateral Agent. All communications and notices hereunder to any Subsidiary Party shall be given to it in care of the Issuer, with such notice to be given as provided in Section 13.02 of the Indenture.
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Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: Hexion Administrator
Facsimile: (612) 217-5651
SECTION 7.02 Security Interest Absolute. To the extent permitted by law, all rights of the Collateral Agent hereunder, the Security Interest, the security interest in the Pledged Collateral and all obligations of each Pledgor hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Indenture, any other Indenture Document, any Other Pari Passu Lien Agreement, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Indenture, any other Indenture Document, any Other Pari Passu Lien Agreement, the Intercreditor Agreements or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Pledgor in respect of the Obligations or this Agreement (other than a defense of payment or performance).
SECTION 7.03 Limitation By Law. All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable, in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law.
SECTION 7.04 Binding Effect; Several Agreements. This Agreement shall become effective as to any party to this Agreement when a counterpart hereof executed on behalf of such party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such party and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such party, the Collateral Agent and the other Secured Parties and their respective permitted successors and assigns, except that no party shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement, the Indenture or any Other Pari Passu Lien Agreement. This Agreement shall be construed as a separate agreement with respect to each party and may be amended, modified, supplemented, waived or released with respect to any party without the approval of any other party and without affecting the obligations of any other party hereunder.
SECTION 7.05 Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Pledgor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective permitted successors and assigns.
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SECTION 7.06 Collateral Agents Fees and Expenses; Indemnification.
(a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in Section 7.07 of the Indenture and the equivalent provision of any Other Pari Passu Lien Agreement.
(b) Without limitation of its indemnification obligations under the other Indenture Documents or any Other Pari Passu Lien Agreement, each Pledgor jointly and severally agrees to indemnify the Collateral Agent and its Affiliates, and each of their respective directors, trustees, officers, employees, agents and advisors (each such person being called an Indemnitee) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of, (i) the execution or delivery of this Agreement, any other Indenture Document or any Other Pari Passu Lien Agreement or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto and thereto of their respective obligations thereunder or the consummation of the transactions contemplated hereby or (ii) any claim, litigation, investigation or proceeding relating to any of the foregoing, or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 7.06 shall remain operative and in full force and effect regardless of the termination of this Agreement, any other Indenture Document or any Other Pari Passu Lien Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement, any other Indenture Document or any Other Pari Passu Lien Agreement, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 7.06 shall be payable on written demand therefor.
(d) For the avoidance of doubt, the provisions of Article VII of the Indenture applicable to the Trustee thereunder shall also apply to the Collateral Agent acting under or in connection with this Agreement. No provision of this Agreement shall require the Collateral Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers.
SECTION 7.07 Collateral Agent Appointed Attorney-in-Fact. (i) Each Pledgor hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. The actions of
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the Collateral Agent hereunder are subject to the provisions of the Indenture (including the rights, protections, privileges, immunities and indemnities of the Trustee, which are incorporated herein mutatis mutandis, as a part hereof). Without limiting the generality of the foregoing, subject to the terms of each applicable Intercreditor Agreement, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agents name or in the name of such Pledgor, (a) to receive, endorse, assign or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof, (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to ask for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due under and by virtue of any Collateral; (d) to sign the name of any Pledgor on any invoice or bill of lading relating to any of the Collateral; (e) to send verifications of Accounts to any Account Debtor; (f) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (g) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (h) to notify, or to require any Pledgor to notify, Account Debtors to make payment directly to the Collateral Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided, that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Pledgor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.
(ii) Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially equivalent to that which the Collateral Agent, in its individual capacity, accords its own property consisting of similar instruments or interests, it being understood that neither the Collateral Agent nor any of the Secured Parties shall have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Pledged Collateral, whether or not the Collateral Agent or any other Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any Person with respect to any Collateral.
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(iii) The Collateral Agent shall be entitled to rely upon any written notice, statement, certificate, order or other document or any telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper person, and, with respect to all matters pertaining to this Agreement and its duties hereunder, upon advice of counsel selected by it.
(iv) Notwithstanding anything in this Agreement to the contrary and unless otherwise provided in the Intercreditor Agreement, the Collateral Agent shall act or refrain from acting with respect to any Collateral or request for consent only on the written instructions and at the written direction of the holders of a majority of the aggregate principal amount of the Secured Obligations then outstanding; provided that the Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Collateral Agent to liability or that is contrary to the Security Documents or applicable laws.
SECTION 7.08 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09 Waivers; Amendment.
(a) No failure or delay by the Collateral Agent or any other Secured Party in exercising any right, power or remedy hereunder, under any other Indenture Document or under any Other Pari Passu Lien Agreement, as applicable, shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy, or any abandonment or discontinuance of steps to enforce such a right, power or remedy, preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights, powers and remedies of the Collateral Agent and the other Secured Parties hereunder, under the other Indenture Documents and under any Other Pari Passu Lien Agreement are cumulative and are not exclusive of any rights, powers or remedies that they would otherwise have. No waiver of any provision of this Agreement or any Other Pari Passu Lien Agreement or consent to any departure by any Pledgor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section 7.09, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Pledgor in any case shall entitle any Pledgor to any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Pledgor or Pledgors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Article 9 of the Indenture or the equivalent provision of any Other Pari Passu Lien Agreement.
(c) For the purpose of Section 7.09(b) above, the Collateral Agent shall be entitled to rely upon (i) written confirmation from the agent managing the solicitation of consents and/or a certificate signed by two Officers of the Issuer as to the receipt of valid consents from the relevant Secured Parties to amend this Agreement, in accordance with the requirements as to
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such amendment contained in the Indenture and any Other Pari Passu Lien Agreement, and (ii) any document believed by it to be genuine and to have been signed or presented by the proper Person and the Collateral Agent need not investigate any fact or matter stated in the document. At any time that the Issuer desires that this Agreement be amended as provided in Section 7.09(b) above, the Issuer shall deliver to the Collateral Agent a certificate signed by two Officers of the Issuer stating that the amendment of this Agreement is permitted pursuant to Section 7.09(b) above. If requested by the Collateral Agent (although the Collateral Agent shall have no obligation to make any such request), the Issuer shall furnish appropriate legal opinions to the effect set forth in the immediately preceding sentence. Such officers certificate and legal opinion will contain the statements required by Section 13.05 of the Indenture or, if applicable, the equivalent provision of any Other Pari Passu Lien Agreement. If requested by the Collateral Agent (although the Collateral Agent shall have no obligation to make any such request), the Issuer shall furnish to the Collateral Agent copies of officers certificates and legal opinions delivered to the Trustee or the Authorized Representative under any Other Pari Passu Lien Agreement in connection with any amendment to the Indenture or any Other Pari Passu Lien Agreement, respectively, affecting the operation of this Section 7.09. The Collateral Agent shall not be liable for any action it takes or omits to take in good faith in reliance on such certificates or opinions.
SECTION 7.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER INDENTURE DOCUMENTS OR ANY OTHER PARI PASSU LIEN AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.
SECTION 7.11 Severability. In the event any one or more of the provisions contained in this Agreement, in any other Indenture Document or in any Other Pari Passu Lien Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 7.12 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract, and shall become effective as provided in Section 7.04. Delivery of an executed counterpart to this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed original.
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SECTION 7.13 Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.
SECTION 7.14 Jurisdiction; Consent to Service of Process.
(a) Each party to this Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, any other Indenture Documents or any Other Pari Passu Lien Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any Other Pari Passu Lien Agreement shall affect any right that the Collateral Agent or any Secured Party may otherwise have to bring any action or proceeding relating to this Agreement, any other Indenture Document or any Other Pari Passu Lien Agreement against any Pledgor, or its properties, in the courts of any jurisdiction.
(b) Each party to this Agreement hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement, any other Indenture Document or any Other Pari Passu Lien Agreement in any New York State or federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement, any other Indenture Document or any Other Pari Passu Lien Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 7.15 Termination or Release.
(a) Subject to any applicable terms of each applicable Intercreditor Agreement, this Agreement, the pledges made herein, the Security Interest and all other security interests granted hereby shall terminate upon the Collateral Agents receipt of a notice from (i) the Trustee pursuant to Section 11.10 of the Indenture, stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral (as defined in the Indenture), and any rights it has under the Security Documents and (ii) each Authorized Representative, stating that such Authorized Representative, on behalf of the holders of the applicable Other Pari Passu Lien Obligations, disclaims and gives up any and all rights it has in or to the Collateral (as defined in the applicable indenture or agreement governing such Other Pari Passu Lien Obligations) and any right it has under the Security Documents. In connection with such termination, the Collateral Agent shall do or cause to be done all acts reasonably necessary to release all such security interests as soon as is reasonably practicable.
33
(b) Subject to any applicable terms of each applicable Intercreditor Agreement, a Subsidiary Party shall automatically be released from its obligations hereunder and the security interests in the Collateral of such Subsidiary Party shall be automatically released upon the consummation of any transaction permitted by the Indenture and not prohibited by any Other Pari Passu Lien Agreement as a result of which such Subsidiary Party ceases to be a Subsidiary of the Issuer or otherwise ceases to be a Pledgor; provided that the requisite Holders and/or lenders shall have consented to such transaction (to the extent such consent is required by the Indenture or any Other Pari Passu Lien Agreement) and the terms of such consent did not provide otherwise.
(c) Subject to any applicable terms of each applicable Intercreditor Agreement, the Security Interest in any Collateral shall automatically be released (i) upon any sale or other transfer by any Pledgor of any Collateral that is permitted under the Indenture and not prohibited by any Other Pari Passu Lien Agreement to any person that is not a Pledgor or (ii) upon the effectiveness of any written consent to the release of the security interest granted hereby in such Collateral pursuant to the Indenture and any Other Pari Passu Lien Agreement.
(d) In the case of a Pledgor making a Permitted Transfer that is permitted by clause (y) of the last paragraph of Article 5 of the Indenture and not prohibited by any Other Pari Passu Lien Agreement and such Permitted Transfer is to a Restricted Subsidiary that is not a Pledgor, the security interest in the Collateral of such Pledgor shall be automatically released.
(e) If any Collateral shall become subject to the release provisions set forth in Section 5.1 of the Senior Secured Intercreditor Agreement, Section 11.03 of the Indenture or the equivalent provision of any Other Pari Passu Lien Agreement, the Lien created hereunder on such Collateral shall be automatically released to the extent provided therein.
(f) There shall be an automatic release of the Lien hereunder on any property and assets of any Pledgor that would constitute Senior Lender Collateral (as defined in the Senior Secured Intercreditor Agreement) but is at such time not subject to a Lien securing Senior Lender Claims, other than any assets or property that cease to be subject to a Lien securing Senior Lender Claims in connection with a release or discharge by or as a result of payment in full and termination of the Senior Lender Claims; provided that, if such property and assets are subsequently subject to a Lien securing Senior Lender Claims (other than Excluded Assets), such property and assets shall subsequently constitute Collateral hereunder.
(g) In connection with any termination or release pursuant to this Section 7.15, the Collateral Agent shall execute and deliver to any Pledgor, at such Pledgors expense, all documents that such Pledgor shall reasonably request in writing to evidence such termination or release (including Uniform Commercial Code termination statements), and will duly assign and transfer to such Pledgor, such of the Pledged Collateral that may be in the possession of the Collateral Agent and has not theretofore been sold or otherwise applied or released pursuant to this Agreement, subject to the Collateral Agents receipt of an officers certificate from the Company and legal opinion stating that such termination or release is in compliance with the
34
Indenture and each Other Pari Passu Lien Agreement and all conditions precedent have been met. Any execution and delivery of documents pursuant to this Section 7.15 shall be without recourse to or warranty by the Collateral Agent.
SECTION 7.16 Additional Subsidiaries. Upon execution and delivery by the Collateral Agent and any Subsidiary of the Issuer that is required to become a party hereto by Section 4.11 of the Indenture and the equivalent provision of any Other Pari Passu Lien Agreement of an instrument in the form of Exhibit I hereto, such subsidiary shall become a Subsidiary Party hereunder with the same force and effect as if originally named as a Subsidiary Party herein. The execution and delivery of any such instrument shall not require the consent of any other party to this Agreement. The rights and obligations of each party to this Agreement shall remain in full force and effect notwithstanding the addition of any new party to this Agreement.
SECTION 7.17 General Authority of the Collateral Agent. By acceptance of the benefits of this Agreement and any other Security Documents, each Secured Party (whether or not a signatory hereto) shall be deemed irrevocably (a) to consent to the appointment of the Collateral Agent as its agent hereunder and under such other Security Documents, (b) to confirm that the Collateral Agent shall have the authority to act as the exclusive agent of such Secured Party for the enforcement of any provision of this Agreement and such other Security Documents against any Pledgor, the exercise of remedies hereunder or thereunder and the giving or withholding of any consent or approval hereunder or thereunder relating to any Collateral or any Pledgors obligations with respect thereto, (c) to agree that it shall not individually take any action to enforce any provisions of this Agreement or any other Security Document against any Pledgor, to exercise any remedy hereunder or thereunder or to give any consents or approvals hereunder or thereunder except as expressly provided in this Agreement, the Intercreditor Agreements or any other Security Document and (d) to agree to be bound by the terms of this Agreement, the Intercreditor Agreements and any other Security Documents.
SECTION 7.18 Subject to Intercreditor Agreements. Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Collateral Agent pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted to (a) JPMCB, as administrative agent and collateral agent (and its permitted successors), pursuant to the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, supplemented or otherwise modified from time to time), among Holdings, the Issuer, certain Subsidiaries of the Issuer party thereto from time to time and JPMorgan Chase Bank, N.A., as collateral agent, (b) Wilmington Trust, National Association, as collateral agent, pursuant to the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, supplemented or otherwise modified from time to time), among the Issuer, certain Subsidiaries of the Issuer party thereto from time to time and Wilmington Trust, National Association, as collateral agent, or (c) any agent or trustee for any other Senior Lender Claims, and (ii) the exercise of any right or remedy by the Collateral Agent hereunder is subject to the limitations and provisions of the Senior Secured Intercreditor Agreement and any other applicable Intercreditor Agreement, including the Existing Second Lien Intercreditor Agreement. In the event of any conflict between the terms of the Senior Secured Intercreditor Agreement or such other Intercreditor Agreement, including the Existing Second Lien Intercreditor Agreement, on the one hand, and the terms of this Agreement, on the other hand, then the terms of the Senior
35
Secured Intercreditor Agreement or such other Intercreditor Agreement, including the Existing Second Lien Intercreditor Agreement, as applicable, shall govern. Nothing herein is intended, or shall be construed, to give any Pledgor any additional right, remedy or claim under, to or in respect of this Agreement or any Collateral.
SECTION 7.19 Senior Collateral Documents. The Collateral Agent acknowledges and agrees, on behalf of itself and any Secured Party, that, any provision of this Agreement to the contrary notwithstanding, until the Discharge of Senior Lender Claims, the Pledgors shall not be required to act or refrain from acting pursuant to this Agreement or with respect to any Collateral on which the Intercreditor Agent has a Lien superior in priority to the Collateral Agents Lien thereon in any manner that would result in a default under the terms and provisions of the Senior Lender Documents.
SECTION 7.20 Parallel Debt.
(a) For the purposes of creating security rights governed by Dutch law, the Issuer hereby irrevocably and unconditionally undertakes to pay to the Collateral Agent an amount equal to the aggregate amount payable (verschuldigd) in respect of the Obligations as they may exist from time to time. The payment undertaking of the Issuer under this Section 7.20(a) is hereinafter referred to as its Parallel Debt. The Obligations other than the Parallel Debt are referred to as the Corresponding Obligations.
(b) The Parallel Debt will be payable in the currency or currencies of the Corresponding Obligations and will become due and payable as and when and to the extent one or more of the Corresponding Obligations become due and payable. An Event of Default in respect of the Corresponding Obligations shall constitute a default (verzuim) within the meaning of section 3:248 of the Netherlands Civil Code with respect to the Parallel Debt without any notice being required.
(c) Each of the Collateral Agent and the Issuer hereby acknowledges that:
(i) the Parallel Debt constitutes an undertaking, obligation and liability to the Collateral Agent which is separate and independent from, and without prejudice to, the Corresponding Obligations; and
(ii) the Parallel Debt represents the Collateral Agents own separate and independent claim to receive payment of the Parallel Debt,
it being understood, in each case, that, pursuant to this Section 7.20(c), the amount which may become payable by the Issuer as its Parallel Debt shall never exceed the total of the amounts which are payable under or in connection with its Corresponding Obligations.
(d) The Collateral Agent hereby confirms and accepts that, to the extent the Collateral Agent irrevocably receives any amount in payment of the Parallel Debt, the Collateral Agent shall distribute that amount among the Secured Parties that are creditors of the Corresponding Obligations in accordance with the Intercreditor Agreements. The Collateral Agent, not only in its own name but also on behalf of the other Secured Parties, hereby agrees and confirms that, upon irrevocable receipt by the Collateral Agent of any amount in payment of
36
the Parallel Debt (a Received Amount), the Corresponding Obligations shall be reduced by amounts totaling an amount (a Deductible Amount) equal to the Received Amount in the manner as if the Deductible Amount were received by the Collateral Agent as a payment of the Corresponding Obligations on the date of receipt by the Collateral Agent of the Received Amount.
(e) For the purpose of this Section 7.20, but subject to clause (d) above, the Collateral Agent acts in its own name and on behalf of itself and not as agent or representative of any other Secured Party.
SECTION 7.21 ULC Shares. Notwithstanding any provisions to the contrary contained in this Agreement or any other document or agreement among all or some of the parties hereto, the applicable Pledgor is the sole registered and beneficial owner of Pledged ULC Shares pledged by such Pledgor and will remain so until such time as such Pledged ULC Shares are effectively transferred into the name of the Collateral Agent or another person on the books and records of the issuer of such ULC Shares. Accordingly the Pledgor shall be entitled to receive and retain for its own account any dividend on or other distribution, if any, in respect of such Pledged ULC Shares (except insofar as the Pledgor has granted a security interest in such dividend on or other distribution, and any shares that are collateral shall be delivered to the Collateral Agent to hold as collateral hereunder) and shall have the right to vote such collateral and to control the direction, management and policies of the issuer of such Pledged ULC Shares to the same extent as the Pledgor would if such collateral were not pledged to the Collateral Agent pursuant hereto. Nothing in this Agreement or any other document or agreement among all or some of the parties hereto is intended to, and nothing in this Agreement or any other document or agreement among all or some of the parties hereto shall, constitute the Collateral Agent or any person other than the relevant Pledgor, a member of the issuer of such Pledged ULC Shares or any other ULC for the purposes of the Companies Act (Nova Scotia) until such time as notice is given to the Pledgor (and not revoked) as provided herein and further steps are taken thereunder so as to register the Collateral Agent or other person as holder of such Pledged ULC Shares. To the extent any provision hereof would have the effect of constituting the Collateral Agent as a member of the issuer of Pledged ULC Shares prior to such time, such provision shall be severed therefrom and ineffective with respect to collateral that are Pledged ULC Shares without otherwise invalidating or rendering unenforceable this Agreement or invalidating or rendering unenforceable such provision insofar as it relates to property that is not Pledged ULC Shares. Except upon the exercise of rights to sell or otherwise dispose of the Pledged ULC Shares following the occurrence of an Event of Default the Pledgor shall not cause or permit, or enable the issuer of Pledged ULC Shares to cause or permit, the Collateral Agent to: (a) be registered as a shareholder or member of the issuer of Pledged ULC Shares; (b) have any notation entered in its favor in the share register of the issuer of Pledged ULC Shares; (c) be held out as shareholder or member of the issuer of Pledged ULC Shares; (d) receive, directly or indirectly, any dividends, property or other distributions from the issuer of Pledged ULC Shares by reason of the Collateral Agent holding a security interest in the Pledged ULC Shares; or (e) act as a shareholder or member of the issuer of Pledged ULC Shares, or exercise any rights of a shareholder or member including the right to attend a meeting of the issuer of Pledged ULC Shares or vote the Pledged ULC Shares.
[Signature Page Follows]
37
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
HEXION INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INVESTMENTS INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HSC CAPITAL CORPORATION | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
LAWTER INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to 1.5 Lien Collateral Agreement]
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
NL COOP HOLDINGS LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to 1.5 Lien Collateral Agreement]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Authorized Representative under the Indenture | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President |
[Signature Page to 1.5 Lien Collateral Agreement]
Exhibit I
to Collateral Agreement
SUPPLEMENT NO. dated as of (this Supplement), to the Collateral Agreement dated as of February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the Collateral Agreement), among HEXION INC., a New Jersey corporation, each Subsidiary Party (as defined therein) party thereto and WILMINGTON TRUST, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together with its successors and assigns in such capacity, the Collateral Agent) for the Secured Parties (as defined therein).
A. Reference is made to that certain Indenture, dated as of February 8, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the Indenture), among the Issuer, certain Subsidiaries of the Issuer party thereto and Wilmington Trust, National Association, as trustee.
B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture and the Collateral Agreement, as applicable.
C. The Pledgors have entered into the Collateral Agreement pursuant to the requirements set forth in the Indenture. Section 7.16 of the Collateral Agreement provides that additional Subsidiaries of the Issuer may become Subsidiary Parties under the Collateral Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary of the Issuer (the New Subsidiary) is executing this Supplement in accordance with the requirements of the Indenture and any Other Pari Passu Lien Agreement to become a Subsidiary Party under the Collateral Agreement.
Accordingly, the Collateral Agent and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 7.16 of the Collateral Agreement, the New Subsidiary by its signature below becomes a Subsidiary Party and a Pledgor under the Collateral Agreement with the same force and effect as if originally named therein as a Subsidiary Party and a Pledgor, and the New Subsidiary hereby (a) agrees to all the terms and provisions of the Collateral Agreement applicable to it as a Subsidiary Party and Pledgor thereunder and (b) represents and warrants that the representations and warranties made by it as a Pledgor thereunder are true and correct in all material respects on and as of the date hereof. In furtherance of the foregoing, the New Subsidiary, as security for the payment and performance in full of the Obligations (as defined in the Collateral Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, their successors and assigns, a security interest in and Lien on all of the New Subsidiarys right, title and interest in and to the Collateral (as defined in the Collateral Agreement) of the New Subsidiary. Each reference to a Subsidiary Party or a Pledgor in the Collateral Agreement shall be deemed to include the New Subsidiary. The Collateral Agreement is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other similar laws affecting creditors rights generally, (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.
SECTION 3. This Supplement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. This Supplement shall become effective when (a) the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary and (b) the Collateral Agent has executed a counterpart hereof. Delivery of an executed signature page to this Supplement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 4. The New Subsidiary hereby represents and warrants that (a) Schedule I correctly sets forth the percentage of the issued and outstanding shares of each class of the Equity Interests of the issuer thereof represented by such Pledged Stock and includes all Equity Interests, debt securities and promissory notes or instruments constituting Pledged Stock and Pledged Debt Securities; (b) set forth on Schedule II attached hereto is a true and correct schedule of any and all material Intellectual Property now owned by the New Subsidiary; and (c) set forth under its signature hereto, is the true and correct legal name of the New Subsidiary, its jurisdiction of organization and the location of its chief executive office.
SECTION 5. Except as expressly supplemented hereby, the Collateral Agreement shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In the event any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Collateral Agreement shall not in any way be affected or impaired thereby. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall (except as otherwise expressly permitted by the Collateral Agreement) be in writing and given as provided in Section 6.01 of the Collateral Agreement.
SECTION 9. The New Subsidiary agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable documented fees, disbursements and other charges of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Subsidiary and the Collateral Agent have duly executed this Supplement to the Collateral Agreement as of the day and year first above written.
[Name of New Subsidiary] | ||
By: |
| |
Name: | ||
Title: | ||
Legal name: Jurisdiction of organization: Location of chief executive office: |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent | ||
By: |
| |
Name: | ||
Title: |
Schedule I
to Supplement No.
to the Collateral Agreement
Pledged Stock; Pledged Debt Securities
Pledged Stock
Number of Issuer Certificate |
Registered Owner | Number and Class of Equity Interest |
Percentage of Equity Interests |
|||||||||
Pledged Debt Securities
Securities |
Issuer | Lender | Initial Principal Amount |
|||||||||
Schedule II
to Supplement No.
to the Collateral Agreement
Intellectual Property
Exhibit II
to Collateral Agreement
[Form of]
ADDITIONAL SECURED PARTY CONSENT
[Name of Authorized Representative]
[Address of Authorized Representative]
[Date]
Wilmington Trust, National Association
[ADDRESS]
Attention:
The undersigned is the Authorized Representative for persons wishing to become Secured Parties (the New Secured Parties) under the Collateral Agreement, dated as of February 8, 2017 (as amended, supplemented or otherwise modified from time to time, the Collateral Agreement), among HEXION INC., a New Jersey corporation, each Subsidiary Party (as defined therein) party thereto and WILMINGTON TRUST, NATIONAL ASSOCIATION, as collateral agent (in such capacity, together with its successors and assigns in such capacity, the Collateral Agent). Capitalized terms in this Additional Secured Party Consent but not otherwise defined herein have the meanings set forth in the Collateral Agreement.
In consideration of the foregoing, the undersigned hereby:
(i) represents that it has been duly authorized by the New Secured Parties to become a party to the Collateral Agreement on behalf of the New Secured Parties under that [describe applicable Other Pari Passu Lien Agreement] (the New Agreement and the obligations under the New Agreement, the New Secured Obligations) and to act as the Authorized Representative for the New Secured Parties;
(ii) acknowledges that the New Secured Parties have received a copy of the Collateral Agreement and each Intercreditor Agreement;
(iii) appoints and authorizes the Collateral Agent to take such action as agent on its behalf and on behalf of all other Secured Parties and to exercise such powers under the Collateral Agreement as are delegated to the Collateral Agent by the terms thereof, together with all such powers as are reasonably incidental thereto; and
(iv) accepts and acknowledges the terms of the Collateral Agreement applicable to it and the New Secured Parties and agrees to serve as Authorized Representative for the New Secured Parties with respect to the New Secured Obligations and agrees on its own behalf and on behalf of the New Secured Parties to be bound by the terms of the Collateral Agreement applicable to holders of Other Pari Passu Lien Obligations, with all the rights and obligations of a Secured Party thereunder and bound by all the provisions thereof as fully as if it had been a Secured Party on the effective date of the Collateral Agreement.
Exhibit II
to Collateral Agreement
The Collateral Agent, by acknowledging and agreeing to this Additional Secured Party Consent, accepts the appointment set forth in clause (iii) above.
The name and address of the Authorized Representative for purposes of Section 7.01 of the Collateral Agreement are as follows:
[INSERT NAME AND ADDRESS OF AUTHORIZED REPRESENTATIVE]
THIS ADDITIONAL SECURED PARTY CONSENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank; signature pages follow.]
IN WITNESS WHEREOF, the undersigned has caused this Additional Secured Party Consent to be duly executed by its authorized officer as of the date first written above.
[AUTHORIZED REPRESENTATIVE] | ||
By: | ||
Name: | ||
Title: |
Acknowledged and Agreed:
WILMINGTON TRUST,
NATIONAL ASSOCIATION,
as Collateral Agent
By: | ||
Name: | ||
Title: |
HEXION INC. | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Additional Secured Party Consent]
Exhibit 10.5
Execution Version
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
This AMENDED AND RESTATED INTERCREDITOR AGREEMENT, dated as of February 8, 2017, is among JPMORGAN CHASE BANK, N.A. (JPMCB), as Intercreditor Agent, WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee and as Collateral Agent for the holders of the notes issued under the New 1.5 Lien Notes Indenture (as defined below), JPMCB, as Senior-Priority Agent for the secured parties under the ABL Facility (as defined below), WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for the holders of the notes issued under the New First Lien Notes Indenture (as defined below), WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for the holders of the notes issued under the 6.625% First Lien Notes Indenture (as defined below), WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for the holders of the notes issued under the 10.00% First Lien Notes Indenture (as defined below), HEXION LLC, a Delaware limited liability company (Holdings), HEXION INC., a New Jersey corporation (the Company), and each Subsidiary of the Company listed on Schedule I hereto.
A. This Agreement is an amendment and restatement of the Intercreditor Agreement, dated as of January 29, 2010, among the Intercreditor Agent, Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as Trustee and as Collateral Agent, Holdings, the Company and each Subsidiary of the Company party thereto, as amended, supplemented, joined to and/or otherwise modified prior to the date hereof.
B. The Company is party to the Amended and Restated Asset-Based Revolving Credit Agreement, dated as of December 21, 2016, among Holdings, the Company, as U.S. borrower, certain Subsidiaries of the Company from time to time party thereto, as co-borrowers, the lenders party thereto from time to time, JPMCB, as administrative agent for such lenders and the other parties party thereto (as amended by that certain Additional Extending Lender Joinder Agreement and Amendment dated as of January 18, 2017, and as further amended, restated, amended and restated, supplemented, waived and/or otherwise modified from time to time, the ABL Facility).
C. The Company is party to the Indenture, dated as of March 14, 2012 (as amended, restated, amended and restated, supplemented, waived and/or otherwise modified from time to time, the 6.625% First Lien Notes Indenture), among the Company (as successor by merger to Hexion U.S. Finance Corp.), as issuer, certain of the Companys Subsidiaries and Wilmington Trust, National Association, as trustee.
D. The Company is party to the Indenture, dated as of April 1, 2015 (as amended, restated, amended and restated, supplemented, waived and/or otherwise modified from time to time, the 10.00% First Lien Notes Indenture), among the Company, as issuer, certain of the Companys Subsidiaries and Wilmington Trust, National Association, as trustee.
E. The Company is party to the Indenture for the Companys 10.375% First-Priority Senior Secured Notes due 2022, dated as of the date hereof (as amended, restated,
amended and restated, supplemented, waived and/or otherwise modified from time to time, the New First Lien Notes Indentureand, together with the 6.625% First Lien Notes Indenture and the 10.00% First Lien Notes Indenture, collectively, the First Lien Notes Indentures), among the Company, as issuer after giving effect to the Issuers Assumption (as defined therein), certain of the Companys Subsidiaries and Wilmington Trust, National Association, as trustee.
F. The Company is party to the Indenture for the Companys 13.75% Senior Secured Notes due 2022, dated as of the date hereof (as amended, restated, amended and restated, supplemented, waived and/or otherwise modified from time to time, the New 1.5 Lien Notes Indenture), among the Company, as issuer, certain of the Companys Subsidiaries and the Trustee, pursuant to which the Notes are governed.
G. The Obligations of the Company and the other Grantors under the New 1.5 Lien Notes Indenture, the Notes and the other Noteholder Documents constitute Noteholder Claims and Second-Priority Claims hereunder. Each of the ABL Facility and the First Lien Notes Indentures is a Senior Lender Document hereunder, and the Obligations of the Company and the other Grantors under the ABL Facility and each of the First Lien Notes Indentures and the other Senior Lender Documents executed or delivered pursuant thereto constitute Senior Lender Claims hereunder.
Accordingly, in consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. Definitions.
1.1. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
6.625% First Lien Notes Indenture shall have the meaning set forth in the recitals.
10.00% First Lien Notes Indenture shall have the meaning set forth in the recitals.
ABL Agent means JPMCB, in its capacity as administrative agent and collateral agent under the ABL Facility, together with its successors and assigns in such capacity.
ABL Facility shall have the meaning set forth in the recitals.
Agreement shall mean this Amended and Restated Intercreditor Agreement, as amended, restated, amended and restated, renewed, extended, supplemented or otherwise modified from time to time in accordance with the terms hereof.
Bankruptcy Code shall mean Title 11 of the United States Code, as amended.
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Bankruptcy Law shall mean the Bankruptcy Code and any similar Federal, state or foreign law for the relief of debtors.
Business Day shall mean any day other than a Saturday, a Sunday or a day that is a legal holiday under the laws of the State of New York or on which banking institutions in the State of New York are required or authorized by law or other governmental action to close.
Cash Management Obligations shall mean, with respect to any Person, all obligations, whether now owing or hereafter arising, of such Person in respect of overdrafts and related liabilities owed to any other Person that arise from treasury, depositary or cash management services, including any automated clearing house transfers of funds or any similar transactions.
Collateral Agent shall mean Wilmington Trust, National Association, in its capacity as collateral agent under the Noteholder Collateral Agreement for the holders of Second-Priority Claims and its successors in such capacity.
Common Collateral shall mean all of the assets of any Grantor, whether real, personal or mixed, constituting both Senior Lender Collateral and Second-Priority Collateral.
Company shall have the meaning set forth in the preamble.
Comparable Second-Priority Collateral Document shall mean, in relation to any Common Collateral subject to any Lien created under any Senior Collateral Document, those Second-Priority Collateral Documents that create a Lien on such Common Collateral, granted by the same Grantor.
Deposit Account shall have the meaning set forth in the Uniform Commercial Code.
Deposit Account Collateral shall mean that part of the Common Collateral comprised of or contained in Deposit Accounts or Securities Accounts.
DIP Financing shall have the meaning set forth in Section 6.1.
Discharge of Senior Lender Claims shall mean, except to the extent otherwise provided in Section 5.7 below, payment in full in cash (except for contingent indemnities and cost and reimbursement obligations to the extent no claim has been made) of (a) all Obligations in respect of all outstanding Senior Lender Claims and, with respect to letters of credit or letter of credit guaranties outstanding thereunder, delivery of cash collateral or backstop letters of credit in respect thereof in compliance with each applicable Senior Credit Agreement, in each case after or concurrently with the termination of all commitments to extend credit thereunder and (b) any other Senior Lender Claims that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid. In the event the Senior Lender Claims are modified and the Obligations in respect thereof are paid over time or otherwise modified pursuant to Section 1129 of the Bankruptcy Code, the Senior Lender Claims shall be deemed to be discharged when the final payment is made in cash, in the manner provided for in the applicable plan of reorganization, in respect of such Obligations.
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Existing Second Lien Intercreditor Agreement shall mean (i) the Amended and Restated Intercreditor Agreement, dated as of January 31, 2013, among JPMorgan Chase Bank, N.A., as senior-priority agent under the ABL Facility and intercreditor agent, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the First Lien Indenture (as defined therein), Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as senior-priority agent for the holders of the notes issued under the 1.5 Lien Indenture (as defined therein), Wilmington Trust Company, as second-priority agent for the holders of the notes issued under the Second Secured Notes Indenture (as defined therein), the Company and each other Grantor party thereto, as amended, restated, amended and restated, supplemented or otherwise modified from time to time, or (ii) any other intercreditor agreement with terms not materially less favorable to the Collateral Agent, holders of outstanding Senior Lender Claims as defined in the Existing Second Lien Intercreditor Agreement, and the holders of the Notes than the terms of the intercreditor agreement referred to in clause (i) above, in each case, as determined by the Company in good faith, so long as the Company has delivered to the Intercreditor Agent, each Senior-Priority Agent and each Second-Priority Agent an Officers Certificate designating such intercreditor agreement as the Existing Second Lien Intercreditor Agreement hereunder and certifying that all requirements of this clause (ii) have been satisfied with respect thereto.
First Lien Notes Indentures shall have the meaning set forth in the recitals.
Future Second-Lien Indebtedness shall mean Indebtedness or Obligations (other than Noteholder Claims) of the Company or any of its Subsidiaries that are to be equally and ratably secured with the Noteholder Claims and are so designated by the Company as Future Second-Lien Indebtedness in accordance with Section 8.21 hereof; provided, however, that such Future Second-Lien Indebtedness is permitted to be so incurred in accordance with each Senior Lender Document and each Second-Priority Document, as applicable.
Grantors shall mean the Company and each of its Subsidiaries that has executed and delivered a Second-Priority Collateral Document or a Senior Collateral Document.
Hedging Obligations shall mean, with respect to any Person, all obligations and liabilities, whether now owing or hereafter arising, of such Person in respect of (a) currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements, and currency exchange, interest rate or commodity collar agreements and (b) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.
Holdings shall have the meaning set forth in the preamble.
Indebtedness shall mean and include all obligations that constitute Indebtedness as defined in the New 1.5 Lien Notes Indenture or any Senior Credit Agreement.
Indenture Secured Parties shall mean the Persons holding Noteholder Claims, including the Trustee.
Insolvency or Liquidation Proceeding shall mean (a) any voluntary or involuntary case or proceeding under any Bankruptcy Law with respect to any Grantor, (b) any
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other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to any of its assets, (c) any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy or (d) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor.
Intellectual Property shall have the meaning set forth in the Noteholder Collateral Agreement.
Intercreditor Agent shall mean JPMCB, in its capacity as agent for the Senior Lenders under the Senior Credit Agreement and the other Senior Lender Documents entered into pursuant to the Senior Credit Agreement, together with its successors (or such other agent or trustee as is designated Intercreditor Agent hereunder by Senior Lenders pursuant to the Senior Lender Documents) and permitted assigns under the Senior Credit Agreement exercising substantially the same rights and powers.
JPMCB shall have the meaning set forth in the preamble.
Lien shall mean, with respect to any asset, any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset.
New First Lien Notes Indenture shall have the meaning set forth in the recitals.
Noteholder Claims shall mean all Obligations in respect of the Notes or arising under the Noteholder Documents or any of them, including all fees and expenses of the Trustee thereunder.
Noteholder Collateral shall mean all of the assets of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any Noteholder Claim.
Noteholder Collateral Agreement shall mean the Collateral Agreement, dated as of the date hereof, among the Company, certain other domestic Grantors party thereto from time to time, the Trustee, each other authorized representative party thereto from time to time and the Collateral Agent, in respect of the New 1.5 Lien Notes Indenture, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof and of the Noteholder Documents and any Future Second-Lien Indebtedness subject thereto from time to time.
Noteholder Collateral Documents shall mean the Noteholder Collateral Agreement and any other document or instrument pursuant to which a Lien is granted by any Grantor to secure any Noteholder Claims or under which rights or remedies with respect to any such Lien are governed.
Noteholder Documents shall mean (a) the New 1.5 Lien Notes Indenture, the Notes, the Noteholder Collateral Documents and (b) any other related document or instrument executed and delivered pursuant to any Noteholder Document described in clause (a) above evidencing or governing any Obligations thereunder.
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Notes shall mean (a) the initial $225,000,000 in aggregate principal amount of 13.75% senior secured notes due 2022 issued by the Company pursuant to the New 1.5 Lien Notes Indenture and (b) any additional notes issued under the New 1.5 Lien Notes Indenture by the Company, to the extent permitted by the New 1.5 Lien Notes Indenture, each Senior Credit Agreement, any other Senior Lender Documents and any Second-Priority Document, as applicable.
Obligations shall mean, with respect to any Indebtedness, any and all obligations, whether now owing or hereafter arising, with respect to the payment of (a) any principal of or interest (including interest accrued on or accruing after the commencement of any Insolvency or Liquidation Proceeding, whether or not a claim for post-filing interest is allowed in such proceeding) or premium on any Indebtedness, including any reimbursement obligation in respect of any letter of credit or letter of credit guaranty, (b) any fees, indemnification obligations, expense reimbursement obligations or other liabilities payable under the documentation governing such Indebtedness, (c) any obligation to post cash collateral in respect of letters of credit or letter of credit guaranties and any other obligations and (d) with respect to any Indebtedness constituting Senior Lender Claims, any Cash Management Obligations or Hedging Obligations owing to any of the Senior Lenders holding such Senior Lender Claims or any affiliates thereof.
Officers Certificate shall have the meaning set forth in the New 1.5 Lien Notes Indenture.
Other First Priority Lien Obligations shall mean all Obligations owing under any Other First Priority Lien Obligations Document.
Other First Priority Lien Obligations Agent shall mean, with respect to any Other First Priority Lien Obligations Credit Document, the Person elected, designated or appointed as the administrative agent, trustee, collateral agent or similar representative with respect to such Other First Priority Lien Obligations Credit Document by or on behalf of the holders of such Other First Priority Lien Obligations, and its respective successors in such capacity.
Other First Priority Lien Obligations Credit Document shall mean any (a) instruments, agreements or documents evidencing debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (b) debt securities, indentures and/or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers acceptances), or (c) instruments or agreements evidencing any other indebtedness, in each case in respect of which a Senior-Priority Agent has become a party hereto in accordance with Section 8.21 hereof.
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Other First Priority Lien Obligations Documents shall mean each Other First Priority Lien Obligations Credit Document and each Other First Priority Lien Obligations Security Document related thereto.
Other First Priority Lien Obligations Security Documents shall mean any security agreement or any other document now existing or entered into after the date hereof that create Liens on any assets or properties of any Grantor to secure any Other First Priority Lien Obligations.
Person shall mean any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, entity or other party, including any government and any political subdivision, agency or instrumentality thereof.
Pledged Collateral shall mean the Common Collateral in the possession of the Possessory Collateral Agent (or its agents or bailees), to the extent that possession or control thereof perfects a Lien thereon under the Uniform Commercial Code of any jurisdiction.
Possessory Collateral Agent shall mean, with respect to any Pledged Collateral, the Intercreditor Agent or other Senior-Priority Agent having possession or control (including through its agents or bailees) of the same.
Recovery shall have the meaning set forth in Section 6.4.
Refinance shall mean, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. Refinanced and Refinancing have correlative meanings.
Required Lenders shall mean, with respect to any Senior Credit Agreement, those Senior Lenders the approval of which is required to approve an amendment or modification of, termination or waiver of any provision of or consent to any departure from such Senior Credit Agreement (or would be required to effect such consent under this Agreement if such consent were treated as an amendment of such Senior Credit Agreement).
Second-Priority Agents shall mean (a) the Trustee as agent for the Indenture Secured Parties and (b) the collateral agent for any Future Second-Lien Indebtedness.
Second-Priority Claims shall mean (a) the Noteholder Claims and all other Obligations in respect of, or arising under, the Second-Priority Documents, including all fees and expenses of the collateral agent for any Future Second-Lien Indebtedness and (b) Obligations under any agreement that is a Refinancing of any of the foregoing Second-Priority Claims so long as such Obligations are designated as such, and the applicable trustee, agent or other authorized representative joined hereto, in accordance with Section 8.21 hereof . Second-Priority Claims shall include (i) all Obligations, as defined in the Noteholder Collateral Agreement and
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(ii) all interest, expenses, fees and other amounts accrued or accruing (or that would, absent the commencement of an Insolvency or Liquidation Proceeding, accrue) after the commencement of an Insolvency or Liquidation Proceeding in accordance with and at the rate specified in the relevant Second-Priority Documents whether or not the claim for such interest or expenses is allowed or allowable as a claim in such Insolvency or Liquidation Proceeding.
Second-Priority Collateral shall mean the Noteholder Collateral and all of the assets of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any Second-Priority Claims.
Second-Priority Collateral Agreements shall mean the Noteholder Collateral Agreement and any comparable agreement(s) with respect to any Future Second-Lien Indebtedness.
Second-Priority Collateral Documents shall mean the Noteholder Collateral Documents and any other agreement, document or instrument pursuant to which a Lien is now or hereafter granted securing any Second-Priority Claims or under which rights or remedies with respect to such Liens are at any time governed.
Second-Priority Designated Agent shall mean such agent or trustee as is designated Second-Priority Designated Agent by Second-Priority Secured Parties holding a majority in principal amount of the Second-Priority Claims then outstanding or by their Second-Priority Agent; it being understood that as of the date of this Agreement and for so long as any Obligations under the New 1.5 Lien Notes Indenture remain outstanding, the Trustee shall be so designated Second-Priority Designated Agent.
Second-Priority Documents shall mean the Noteholder Documents and any other document or instrument evidencing or governing any Future Second-Lien Indebtedness.
Second-Priority Lien shall mean any Lien on any assets of the Company or any other Grantor securing any Second-Priority Claims.
Second-Priority Secured Parties shall mean the Indenture Secured Parties and all other Persons holding any Second-Priority Claims, including the collateral agent for any Future Second-Lien Indebtedness.
Securities Account shall have the meaning set forth in the Uniform Commercial Code.
Senior Collateral Agreement shall mean the collective reference to (i) the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time), by and among the Company, each Subsidiary Party (as defined therein) party thereto and JPMCB, as collateral agent, and the other parties party thereto and (ii) the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time), by and among the Company, each Pledgor (as defined therein) party thereto and Wilmington Trust, National Association, as collateral agent, and the other parties party thereto.
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Senior Collateral Documents shall mean the Senior Collateral Agreement, the Other First Priority Lien Obligations Security Documents and any security agreement, mortgage or other agreement, document or instrument pursuant to which a Lien is now or hereafter granted securing any Senior Lender Claims or under which rights or remedies with respect to such Liens are at any time governed.
Senior Credit Agreement shall mean the collective reference to the ABL Facility, the First Lien Notes Indentures and any other agreement governing any Other First-Priority Lien Obligations (including any Other First Priority Lien Obligations Credit Document) (or, if the context requires, each of the foregoing).
Senior Lender Cash Management Obligations shall mean any Cash Management Obligations secured by any Common Collateral under the Senior Collateral Documents.
Senior Lender Claims shall mean (a) all Obligations incurred by the Grantors pursuant to the ABL Facility, each of the First Lien Notes Indentures, the Other First-Priority Lien Obligations Credit Documents and the other Senior Lender Documents, (b) Senior Lender Hedging Obligations and Senior Lender Cash Management Obligations and (c) Obligations under any agreement that is a Refinancing of any of the foregoing Senior Lender Claims so long as such Obligations are designated as such, and the applicable trustee, agent or other authorized representative joined hereto, in accordance with Section 8.21 hereof. Senior Lender Claims shall include (i) all Secured Obligations, as defined in the Senior Collateral Agreement and (ii) all interest, expenses, fees and other amounts accrued or accruing (or that would, absent the commencement of an Insolvency or Liquidation Proceeding, accrue) after the commencement of an Insolvency or Liquidation Proceeding in accordance with and at the rate specified in the relevant Senior Lender Documents whether or not the claim for such interest or expenses is allowed or allowable as a claim in such Insolvency or Liquidation Proceeding.
Senior Lender Collateral shall mean all of the assets of any Grantor, whether real, personal or mixed, with respect to which a Lien is granted as security for any Senior Lender Claim.
Senior Lender Documents shall mean each Senior Credit Agreement, the Senior Collateral Documents and each of the other agreements, documents and instruments (including each agreement, document or instrument providing for or evidencing a Senior Lender Hedging Obligation or Senior Lender Cash Management Obligation) providing for, evidencing or securing any Obligation under any Senior Credit Agreement and any other related document or instrument executed or delivered pursuant to any Senior Lender Document at any time or otherwise evidencing or securing any Indebtedness arising under any Senior Lender Document.
Senior Lender Hedging Obligations shall mean any Hedging Obligations secured by any Common Collateral under the Senior Collateral Documents.
Senior Lenders shall mean the Persons holding Senior Lender Claims, including Other First Priority Lien Obligations, and including the Senior-Priority Agents.
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Senior-Priority Agents shall mean (a) the ABL Agent and each trustee under each First Lien Notes Indenture and (b) each agent or trustee for any other Senior Lender Claims, including Other First Priority Lien Obligations.
Subsidiary shall mean any Subsidiary of the Company as defined in the New 1.5 Lien Notes Indenture.
Trustee shall mean Wilmington Trust, National Association, in its capacity as trustee under the New 1.5 Lien Notes Indenture and its successors in such capacity.
Uniform Commercial Code or UCC shall mean the Uniform Commercial Code as from time to time in effect in the State of New York.
1.2. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified in accordance with this Agreement, the Second-Priority Documents and the Senior Lender Documents, (b) any reference herein to any Person shall be construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections shall be construed to refer to Sections of this Agreement and (e) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
Section 2. Lien Priorities.
2.1. Subordination of Liens. Notwithstanding the date, time, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection of any Liens granted to the Second-Priority Secured Parties on the Common Collateral or of any Liens granted to the Intercreditor Agent or the Senior Lenders on the Common Collateral and notwithstanding any provision of the UCC, or any applicable law or the Second-Priority Documents or the Senior Lender Documents or any other circumstance whatsoever, each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, hereby agrees that: (a) any Lien on the Common Collateral securing any Senior Lender Claims now or hereafter held by or on behalf of the Intercreditor Agent or any Senior Lenders or any agent or trustee therefor regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall have priority over and be senior in all respects and prior to any Lien on the Common Collateral securing any Second-Priority Claims, (b) any Lien on the Common Collateral securing any Second-Priority Claims now or hereafter held by or on behalf of the Trustee, the Collateral Agent or any Second-Priority Secured Parties or any agent or trustee therefor regardless of how acquired, whether by grant, statute, operation of law,
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subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any Senior Lender Claims and (c) subject to the terms of Section 8.22, with respect to any Second-Priority Claims (and as between the Second-Priority Agents and the Second-Priority Secured Parties), the Liens on the Common Collateral securing any Second-Priority Claims now or hereafter held by or on behalf of the Trustee, the Collateral Agent or any Second-Priority Secured Party or any agent or trustee therefor regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall rank equally and ratably in all respects. All Liens on the Common Collateral securing any Senior Lender Claims shall be and remain senior in all respects and prior to all Liens on the Common Collateral securing any Second-Priority Claims for all purposes, whether or not such Liens securing any Senior Lender Claims are subordinated to any Lien securing any other obligation of the Company, any other Grantor or any other Person.
2.2. Prohibition on Contesting Liens. Each Second-Priority Agent, for itself and on behalf of each applicable Second-Priority Secured Party, and each Senior-Priority Agent, for itself and on behalf of each applicable Senior Lender, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, perfection, priority, validity or enforceability of (a) a Lien securing any Senior Lender Claims held (or purported to be held) by or on behalf of the Intercreditor Agent or any of the Senior Lenders or any agent or trustee therefor in any Senior Lender Collateral or (b) a Lien securing any Second-Priority Claims held (or purported to be held) by or on behalf of any Second-Priority Secured Party in the Common Collateral, as the case may be; provided, however, that nothing in this Agreement shall be construed to prevent or impair the rights of the Intercreditor Agent or any Senior Lender to enforce this Agreement (including the priority of the Liens securing the Senior Lender Claims as provided in Section 2.1) or any of the Senior Lender Documents.
2.3. No New Liens. Subject to Section 11.03 of the New 1.5 Lien Notes Indenture and the corresponding provision of any Second-Priority Document relating to Future Second-Lien Indebtedness, so long as the Discharge of Senior Lender Claims has not occurred, the parties hereto agree that, after the date hereof, if any Second-Priority Agent shall hold any Lien on any assets of the Company or any other Grantor securing any Second-Priority Claims that are not also subject to the first-priority Lien in respect of the Senior Lender Claims under the Senior Lender Documents, such Second-Priority Agent shall notify the Intercreditor Agent promptly upon becoming aware thereof and, upon demand by the Intercreditor Agent or the Company, will assign or release such Lien to the Intercreditor Agent (and/or its designee) as security for the applicable Senior Lender Claims (in the case of an assignment, each Second-Priority Agent may retain a junior lien on such assets subject to the terms hereof). Subject to Section 11.03 of the New 1.5 Lien Notes Indenture and the corresponding provision of any Second-Priority Document relating to Future Second-Lien Indebtedness, each Second-Priority Agent agrees that, after the date hereof, if it shall hold any Lien on any assets of the Company or any other Grantor securing any Second-Priority Claims that are not also subject to the Lien in favor of the other Second-Priority Agent, such Second-Priority Agent shall notify any other Second-Priority Agent promptly upon becoming aware thereof.
2.4. Perfection of Liens. Neither the Intercreditor Agent nor the Senior Lenders shall be responsible for perfecting and maintaining the perfection of Liens with respect to the
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Common Collateral for the benefit of the Second-Priority Agents and the Second-Priority Secured Parties. The provisions of this Intercreditor Agreement are intended solely to govern the respective Lien priorities as between the Senior Lenders and the Second-Priority Secured Parties and shall not impose on the Intercreditor Agent, the Second-Priority Agents, the Second-Priority Secured Parties or the Senior Lenders or any agent or trustee therefor any obligations in respect of the disposition of proceeds of any Common Collateral which would conflict with prior perfected claims therein in favor of any other Person or any order or decree of any court or governmental authority or any applicable law.
2.5. Nature Of Senior Lender Claims. Each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, acknowledges that (a) a portion of the Senior Lender Claims is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, (b) the terms of the Senior Lender Documents and the Senior Lender Claims may be amended, restated, amended and restated, supplemented or otherwise modified, and the Senior Lender Claims, or a portion thereof, may be Refinanced from time to time and (c) the aggregate amount of the Senior Lender Claims may be increased, in each case, without notice to or consent by the Second-Priority Agents or the Second-Priority Secured Parties and without affecting the provisions hereof, except as otherwise expressly set forth herein. The Lien priorities provided for in Section 2.1 shall not be altered or otherwise affected by any amendment, restatement, amendment and restatement, supplement or other modification, or any Refinancing, of either the Senior Lender Claims or the Second-Priority Claims, or any portion thereof, that, in each case, complies with the terms of the applicable Senior Lender Documents and Second-Priority Documents. As between the Company, the other Grantors and the Second-Priority Secured Parties, the foregoing provisions will not limit or otherwise affect the obligations of the Company and the other Grantors contained in any Second-Priority Document with respect to the incurrence of additional Senior Lender Claims.
Section 3. Enforcement.
3.1. Exercise of Remedies.
(a) So long as the Discharge of Senior Lender Claims has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, (i) no Second-Priority Agent or any Second-Priority Secured Party will (x) exercise or seek to exercise any rights or remedies (including setoff) with respect to any Common Collateral in respect of any applicable Second-Priority Claims, institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), (y) contest, protest or object to any foreclosure proceeding or action brought with respect to the Common Collateral by the Intercreditor Agent or any Senior Lender in respect of the Senior Lender Claims, the exercise of any right by the Intercreditor Agent or any Senior Lender (or any agent or sub-agent on their behalf) in respect of the Senior Lender Claims under any lockbox agreement, control agreement, landlord waiver or bailees letter or similar agreement or arrangement to which any Second-Priority
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Agent or any Second-Priority Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party, of any rights and remedies relating to the Common Collateral under the Senior Lender Documents or otherwise in respect of Senior Lender Claims, or (z) object to the forbearance by the Senior Lenders from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Common Collateral in respect of Senior Lender Claims and (ii) except as otherwise provided herein, the Intercreditor Agent and the Senior Lenders shall have the exclusive right to enforce rights, exercise remedies (including setoff and the right to credit bid their debt) and make determinations regarding the release, disposition or restrictions with respect to the Common Collateral without any consultation with or the consent of any Second-Priority Agent or any Second-Priority Secured Party; provided, however, that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Company or any other Grantor, each Second-Priority Agent may file a claim or statement of interest with respect to the applicable Second-Priority Claims and (B) each Second-Priority Agent may take any action (not adverse to the prior Liens on the Common Collateral securing the Senior Lender Claims, or the rights of the Intercreditor Agent or the Senior Lenders to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its rights in, and perfection and priority of its Lien on, the Common Collateral. In exercising rights and remedies with respect to the Senior Lender Collateral, the Intercreditor Agent and the Senior Lenders may enforce the provisions of the Senior Lender Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Common Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.
(b) So long as the Discharge of Senior Lender Claims has not occurred, each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, agrees that it will not, in the context of its role as secured creditor, take or receive any Common Collateral or any proceeds of Common Collateral in connection with the exercise of any right or remedy (including setoff) with respect to any Common Collateral in respect of the applicable Second-Priority Claims. Without limiting the generality of the foregoing, unless and until the Discharge of Senior Lender Claims has occurred, except as expressly provided in the proviso in clause (ii) of Section 3.1(a), the sole right of the Second-Priority Agents and the Second-Priority Secured Parties with respect to the Common Collateral is to hold a Lien on the Common
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Collateral in respect of the applicable Second-Priority Claims pursuant to the Second-Priority Documents, as applicable, for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of Senior Lender Claims has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.1(a), (i) each Second-Priority Agent, for itself and on behalf of each applicable Second-Priority Secured Party, agrees that no Second-Priority Agent or any Second-Priority Secured Party will take any action that would hinder any exercise of remedies undertaken by the Intercreditor Agent or the Senior Lenders with respect to the Common Collateral under the Senior Loan Documents, including any sale, lease, exchange, transfer or other disposition of the Common Collateral, whether by foreclosure or otherwise, and (ii) each Second-Priority Agent, for itself and on behalf of each applicable Second-Priority Secured Party, hereby waives any and all rights it or any Second-Priority Secured Party may have as a junior lien creditor or otherwise to object to the manner in which the Intercreditor Agent or the Senior Lenders seek to enforce or collect the Senior Lender Claims or the Liens granted in any of the Senior Lender Collateral, regardless of whether any action or failure to act by or on behalf of the Intercreditor Agent or Senior Lenders is adverse to the interests of the Second-Priority Secured Parties.
(d) Each Second-Priority Agent hereby acknowledges and agrees that no covenant, agreement or restriction contained in any applicable Second-Priority Document shall be deemed to restrict in any way the rights and remedies of the Intercreditor Agent or the Senior Lenders with respect to the Senior Lender Collateral as set forth in this Agreement and the Senior Lender Documents.
3.2. Cooperation. Subject to the proviso in clause (ii) of Section 3.1(a), each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, agrees that, unless and until the Discharge of Senior Lender Claims has occurred, it will not commence, or join with any Person (other than the Senior Lenders and the Intercreditor Agent upon the request thereof) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Common Collateral under any of the applicable Second-Priority Documents or otherwise in respect of the applicable Second-Priority Claims.
Section 4. Payments.
4.1. Application of Proceeds. After an event of default under any Senior Credit Agreement has occurred with respect to which the Intercreditor Agent has provided written notice to each Second-Priority Agent, and until such event of default is cured or waived, so long as the Discharge of Senior Lender Claims has not occurred, the Common Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, such Common Collateral upon the exercise of remedies, shall be applied by the Intercreditor Agent to
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the Senior Lender Claims in such order as specified in the relevant Senior Lender Documents until the Discharge of Senior Lender Claims has occurred. Upon the Discharge of Senior Lender Claims, the Intercreditor Agent shall deliver promptly to the Second-Priority Designated Agent any Common Collateral or proceeds thereof held by it in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Second-Priority Designated Agent ratably to the Second-Priority Claims and, with respect to each class of Second-Priority Claims, in such order as specified in the relevant Second-Priority Documents.
4.2. Payments Over. Any Common Collateral or proceeds thereof received by any Second-Priority Agent or any Second-Priority Secured Party in connection with the exercise of any right or remedy (including setoff) relating to the Common Collateral in contravention of this Agreement shall be segregated and held in trust for the benefit of and forthwith paid over to the Intercreditor Agent (and/or its designees) for the benefit of the applicable Senior Lenders in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Intercreditor Agent is hereby authorized to make any such endorsements as agent for any Second-Priority Agent or any such Second-Priority Secured Party. This authorization is coupled with an interest and is irrevocable.
Section 5. Other Agreements.
5.1. Releases.
(a) If, at any time any Grantor or the holder of any Senior Lender Claim delivers written notice to each Second-Priority Agent that any specified Common Collateral (including all or substantially all of the equity interests of a Grantor or any of its Subsidiaries) is sold, transferred or otherwise disposed of:
(i) by the owner of such Common Collateral in a transaction permitted under each Senior Credit Agreement, the New 1.5 Lien Notes Indenture and each other Second-Priority Document (if any); or
(ii) during the existence of any Event of Default under (and as defined in) any Senior Credit Agreement to the extent the Intercreditor Agent has consented to such sale, transfer or disposition:
then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of the Second-Priority Secured Parties upon such Collateral will automatically be released and discharged as and when, but only to the extent, such Liens on such Collateral securing Senior Lender Claims are released and discharged. Upon delivery to each Second-Priority Agent of a written notice from the Intercreditor Agent stating that any release of Liens securing or supporting the Senior Lender Claims has become effective (or shall become effective upon each Second-Priority Agents release), each Second-Priority Agent will promptly execute and deliver such instruments, releases, termination statements or other documents confirming such release on customary terms. In the case of the sale of all or substantially all of the equity interests of a Grantor or any of its Subsidiaries, the guarantee in favor of the Second-Priority
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Secured Parties, if any, made by such Grantor or Subsidiary will automatically be released and discharged as and when, but only to the extent, the guarantee by such Grantor or Subsidiary of Senior Lender Claims is released and discharged.
(b) Each Second-Priority Agent, for itself and on behalf of each applicable Second-Priority Secured Party, hereby irrevocably constitutes and appoints the Intercreditor Agent and any officer or agent of the Intercreditor Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of each Second-Priority Agent or such holder or in the Intercreditor Agents own name, from time to time in the Intercreditor Agents discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Section 5.1, including any termination statements, endorsements or other instruments of transfer or release.
(c) Unless and until the Discharge of Senior Lender Claims has occurred, each Second-Priority Agent, for itself and on behalf of each applicable Second-Priority Secured Party, hereby consents to the application, whether prior to or after a default, of Deposit Account Collateral or proceeds of Common Collateral to the repayment of Senior Lender Claims pursuant to the Senior Credit Agreement; provided that nothing in this Section 5.1(c) shall be construed to prevent or impair the rights of the Second-Priority Agents or the Second-Priority Secured Parties to receive proceeds in connection with the Second-Priority Claims not otherwise in contravention of this agreement.
5.2. Insurance. Unless and until the Discharge of Senior Lender Claims has occurred, the Intercreditor Agent and the Senior Lenders shall have the sole and exclusive right, subject to the rights of the Grantors under the Senior Lender Documents, to adjust settlement for any insurance policy covering the Common Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting the Common Collateral. Unless and until the Discharge of Senior Lender Claims has occurred, all proceeds of any such policy and any such award if in respect of the Common Collateral shall be paid (a) first, prior to the occurrence of the Discharge of Senior Lender Claims, to the Intercreditor Agent for the benefit of Senior Lenders pursuant to the terms of the Senior Lender Documents, (b) second, after the occurrence of the Discharge of Senior Lender Claims, to the Second-Priority Agents for the benefit of the Second-Priority Secured Parties pursuant to the terms of the applicable Second-Priority Documents and (c) third, if no Second-Priority Obligations are outstanding, to the owner of the subject property, such other person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If any Second-Priority Agent or any Second-Priority Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such proceeds over to the Intercreditor Agent in accordance with the terms of Section 4.2.
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5.3. Amendments to Second-Priority Collateral Documents.
(a) Without the prior written consent of the Intercreditor Agent and the Required Lenders, no Second-Priority Collateral Document may be amended, supplemented or otherwise modified or entered into to the extent such amendment, supplement or modification, or the terms of any new Second-Priority Collateral Document, would be prohibited by or inconsistent with any of the terms of this Agreement. Each Second-Priority Agent agrees that each applicable Second-Priority Collateral Document shall include the following language (or language to similar effect approved by the Intercreditor Agent):
Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the [applicable Second-Priority Agent] pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted to (a) JPMorgan Chase Bank, N.A. (JPMCB), as administrative agent and collateral agent (and its permitted successors) pursuant to the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time), by and among Hexion Inc. (the Company), each Subsidiary Party (as defined therein) party thereto and JPMCB, as collateral agent, and the other parties party thereto, (b) Wilmington Trust, National Association, as collateral agent (and its permitted successors) pursuant to the Collateral Agreement, dated as of March 28, 2013 (as amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time), by and among the Company, each Pledgor (as defined therein) party thereto and Wilmington Trust, National Association, as trustee and collateral agent, and the other parties party thereto, or (c) any agent or trustee for any other Senior Lenders (as defined in the Intercreditor Agreement referred to below), and (ii) the exercise of any right or remedy by the [applicable Second-Priority Agent] hereunder is subject to the limitations and provisions of the Amended and Restated Intercreditor Agreement, dated as of February 8, 2017 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the Intercreditor Agreement), by and among JPMCB, as intercreditor agent, Wilmington Trust, National Association, as trustee and as collateral agent, JPMCB, as senior-priority agent for the secured parties under the ABL Facility referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the 6.625% First Lien Notes Indenture referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the 10.00% First Lien Notes Indenture referred to therein, Wilmington Trust, National Association, as senior-priority agent for the holders of the notes issued under the New First Lien Notes Indenture referred to therein, Hexion LLC, the Company and each other party from time to time party thereto. In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement, the terms of the Intercreditor Agreement shall govern.
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(b) In the event that the Intercreditor Agent or the Senior Lenders enter into any amendment, waiver or consent in respect of or replace any of the Senior Collateral Documents for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Collateral Document or changing in any manner the rights of the Intercreditor Agent, the Senior Lenders, the Company or any other Grantor thereunder (including the release of any Liens in Senior Lender Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of each Comparable Second-Priority Collateral Document without the consent of any Second-Priority Agent or any Second-Priority Secured Party and without any action by any Second-Priority Agent, Second-Priority Secured Party, the Company or any other Grantor; provided, however, that (A) such amendment, waiver or consent does not affect the rights, duties, privileges, protections, indemnities, immunities or obligations of the Second-Priority Agent and does not materially adversely affect the rights of the Second-Priority Secured Parties or the interests of the Second-Priority Secured Parties in the Second-Priority Collateral and not the Intercreditor Agent or the Senior Lenders, as the case may be, that have a security interest in the affected collateral in a like or similar manner, and (B) written notice of such amendment, waiver or consent shall have been given to each Second-Priority Agent.
5.4. Rights As Unsecured Creditors. Notwithstanding anything to the contrary in this Agreement, the Second-Priority Agents and the Second-Priority Secured Parties may exercise rights and remedies as an unsecured creditor against the Company or any Subsidiary that has guaranteed the Second-Priority Claims in accordance with the terms of the applicable Second-Priority Documents and applicable law. Nothing in this Agreement shall prohibit the receipt by any Second-Priority Agent or any Second-Priority Secured Party of the required payments of interest and principal so long as such receipt is not the direct or indirect result of the exercise by any Second-Priority Agent or any Second-Priority Secured Party of rights or remedies as a secured creditor in respect of Common Collateral or enforcement in contravention of this Agreement of any Lien in respect of Second-Priority Claims held by any of them. In the event any Second-Priority Agent or any Second-Priority Secured Party becomes a judgment lien creditor in respect of Common Collateral as a result of its enforcement of its rights as an unsecured creditor in respect of Second-Priority Claims, such judgment lien shall be subordinated to the Liens securing Senior Lender Claims on the same basis as the other Liens securing the Second-Priority Claims are so subordinated to such Liens securing Senior Lender Claims under this Agreement. Nothing in this Agreement impairs or otherwise adversely affects any rights or remedies the Intercreditor Agent or the Senior Lenders may have with respect to the Senior Lender Collateral.
5.5. Possessory Collateral Agent as Gratuitous Bailee for Perfection.
(a) Each Possessory Collateral Agent agrees to hold the Pledged Collateral that is part of the Common Collateral in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee for each Second-Priority Agent and any assignee solely for the purpose of perfecting the security interest granted in such Pledged Collateral pursuant to the Second-Priority Collateral Agreements, subject to the terms and conditions of this Section 5.5.
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(b) Each Possessory Collateral Agent agrees to hold the Deposit Account Collateral that is part of the Common Collateral and controlled by such Possessory Collateral Agent as gratuitous bailee for each Second-Priority Agent and any assignee solely for the purpose of perfecting the security interest granted in such Deposit Account Collateral pursuant to the Second-Priority Collateral Agreements, subject to the terms and conditions of this Section 5.5.
(c) In the event that any Possessory Collateral Agent (or its agent or bailees) has Lien filings against Intellectual Property that is part of the Common Collateral that are necessary for the perfection of Liens in such Common Collateral, such Possessory Collateral Agent agrees to hold such Liens as gratuitous bailee for each Second-Priority Agent and any assignee solely for the purpose of perfecting the security interest granted in such Liens pursuant to the Second-Priority Collateral Agreements, subject to the terms and conditions of this Section 5.5.
(d) Except as otherwise specifically provided herein (including Sections 3.1 and 4.1), until the Discharge of Senior Lender Claims has occurred, each Possessory Collateral Agent shall be entitled to deal with the Pledged Collateral in accordance with the terms of the Senior Lender Documents as if the Liens under the Second-Priority Collateral Documents did not exist. The rights of the Second-Priority Agents and the Second-Priority Secured Parties with respect to such Pledged Collateral shall at all times be subject to the terms of this Agreement.
(e) No Possessory Collateral Agent shall have any obligation whatsoever to any Second-Priority Agent or any Second-Priority Secured Party to assure that the Pledged Collateral is genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the Common Collateral except as expressly set forth in this Section 5.5. The duties or responsibilities of each Possessory Collateral Agent under this Section 5.5 shall be limited solely to holding the Pledged Collateral as gratuitous bailee for each Second-Priority Agent for purposes of perfecting the Lien held by the Second-Priority Secured Parties.
(f) No Possessory Collateral Agent shall have, by reason of the Second-Priority Collateral Documents or this Agreement or any other document, a fiduciary relationship in respect of any Second-Priority Agent or any Second-Priority Secured Party and the Second-Priority Agents and the Second-Priority Secured Parties hereby waive and release each Possessory Collateral Agent from all claims and liabilities arising pursuant to any Possessory Collateral Agents role under this Section 5.5, as agent and gratuitous bailee with respect to the Common Collateral.
(g) Upon the Discharge of Senior Lender Claims, each Possessory Collateral Agent shall deliver to the Second-Priority Designated Agent, to the extent that it is legally permitted to do so, the remaining Pledged Collateral (if any) and the Deposit Account Collateral (if any) together with any necessary endorsements (or otherwise allow the Second-Priority Designated Agent to obtain control of such Pledged Collateral and Deposit Account Collateral) or as a court of competent jurisdiction may otherwise direct. The Company shall take such further action as is required to effectuate the transfer contemplated hereby and shall indemnify
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each Possessory Collateral Agent for loss or damage suffered by such Possessory Collateral Agent as a result of such transfer except for loss or damage suffered by such Possessory Collateral Agent as a result of its own willful misconduct, gross negligence or bad faith. No Possessory Collateral Agent has any obligation to follow instructions from any Second-Priority Agent in contravention of this Agreement.
(h) Neither the Possessory Collateral Agents nor the Senior Lenders shall be required to marshal any present or future collateral security for the Companys or its Subsidiaries obligations to the Possessory Collateral Agents or the Senior Lenders under the Senior Credit Agreement or the Senior Collateral Documents or any assurance of payment in respect thereof or to resort to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.
5.6. Second-Priority Designated Agent as Gratuitous Bailee for Perfection.
(a) Upon the Discharge of Senior Lender Claims, the Second-Priority Designated Agent agrees to hold the Pledged Collateral that is part of the Common Collateral in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee for the other Second-Priority Agents and any assignee solely for the purpose of perfecting the security interest granted in such Pledged Collateral pursuant to the applicable Second-Priority Collateral Agreement, subject to the terms and conditions of this Section 5.6.
(b) Upon the Discharge of Senior Lender Claims, the Second-Priority Designated Agent agrees to hold the Deposit Account Collateral that is part of the Common Collateral and controlled by the Second-Priority Designated Agent as gratuitous bailee for the other Second-Priority Agents and any assignee solely for the purpose of perfecting the security interest granted in such Deposit Account Collateral pursuant to the applicable Second-Priority Collateral Agreement, subject to the terms and conditions of this Section 5.6.
(c) In the event that the Second-Priority Designated Agent (or its agent or bailees) has Lien filings against Intellectual Property that is part of the Common Collateral that are necessary for the perfection of Liens in such Common Collateral, upon the Discharge of Senior Lender Claims, the Second-Priority Designated Agent agrees to hold such Liens as gratuitous bailee for the other Second-Priority Agents and any assignee solely for the purpose of perfecting the security interest granted in such Liens pursuant to the applicable Second-Priority Collateral Agreement, subject to the terms and conditions of this Section 5.6.
(d) The Second-Priority Designated Agent, in its capacity as gratuitous bailee, shall have no obligation whatsoever to the other
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Second-Priority Agents to assure that the Pledged Collateral is genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the Common Collateral except as expressly set forth in this Section 5.6. The duties or responsibilities of the Second-Priority Designated Agent under this Section 5.6 upon the Discharge of Senior Lender Claims shall be limited solely to holding the Pledged Collateral as gratuitous bailee for the other Second-Priority Agents for purposes of perfecting the Lien held by the applicable Second-Priority Secured Parties.
(e) The Second-Priority Designated Agent shall not have by reason of the Second-Priority Collateral Documents or this Agreement or any other document a fiduciary relationship in respect of the other Second-Priority Agents (or the Second-Priority Secured Parties for which such other Second-Priority Agents is agent) and the other Second-Priority Agents hereby waive and release the Second-Priority Designated Agent from all claims and liabilities arising pursuant to the Second-Priority Designated Agents role under this Section 5.6, as agent and gratuitous bailee with respect to the Common Collateral.
(f) In the event that the Second-Priority Designated Agent shall cease to be so designated the Second-Priority Designated Agent pursuant to the definition of such term, the then Second-Priority Designated Agent shall deliver to the successor Second-Priority Designated Agent, to the extent that it is legally permitted to do so, the remaining Pledged Collateral (if any) and the Deposit Account Collateral (if any) together with any necessary endorsements (or otherwise allow the successor Second-Priority Designated Agent to obtain control of such Pledged Collateral and Deposit Account Collateral) or as a court of competent jurisdiction may otherwise direct, and such successor Second-Priority Designated Agent shall perform all duties of the Second-Priority Designated Agent as set forth herein. The Company shall take such further action as is required to effectuate the transfer contemplated hereto and shall indemnify the Second-Priority Designated Agent for loss or damage suffered by the Second-Priority Designated Agent as a result of such transfer except for loss or damage suffered by the Second-Priority Designated Agent as a result of its own willful misconduct or gross negligence. The Second-Priority Designated Agent has no obligation to follow instructions from the successor Second-Priority Designated Agent in contravention of this Agreement.
5.7. When Discharge of Senior Lender Claims Deemed to Not Have Occurred. If, at any time after the Discharge of Senior Lender Claims has occurred, the Company incurs any Indebtedness in connection with a Refinancing, or incurs any Indebtedness that has been designated in an Officers Certificate to the Intercreditor Agent and the Second-Priority Designated Agent as Senior Lender Claims hereunder, then, in each case, such Discharge of Senior Lender Claims shall automatically be deemed not to have occurred for all purposes of this
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Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Discharge of Senior Lender Claims), and the applicable agreement governing such Senior Lender Claims shall automatically be treated as a Senior Credit Agreement for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Common Collateral set forth herein and the granting by the Intercreditor Agent of amendments, waivers and consents hereunder, provided the agent, representative or trustee in respect of such Indebtedness executes and delivers a joinder to this Agreement in accordance with Section 8.21. Upon receipt of such designation (including the identity of the new Intercreditor Agent), each Second-Priority Agent shall promptly (i) enter into such documents and agreements (at the expense of the Company), including amendments or supplements to this Agreement, in accordance with Section 8.21 hereof, as the Company or such new Intercreditor Agent shall reasonably request in writing in order to provide the new Intercreditor Agent the rights of the Intercreditor Agent contemplated hereby and (ii) to the extent then held by any Second-Priority Agent, deliver to the Intercreditor Agent the Pledged Collateral that is Common Collateral together with any necessary endorsements (or otherwise allow such Intercreditor Agent to obtain possession or control of such Pledged Collateral).
5.8. No Release If Event of Default. Notwithstanding any other provisions contained in this Agreement, if an Event of Default (as defined in the New 1.5 Lien Notes Indenture or any other Second-Priority Document, as applicable) exists on the date on which all Senior Lender Claims are repaid in full and terminated (including all commitments and letters of credit thereunder), the second-priority Liens on the Second-Priority Collateral securing the Second-Priority Claims relating to such Event of Default will not be released, except to the extent such Collateral or any portion thereof was disposed of in order to repay the Senior Lender Claims secured by such Collateral, and thereafter the Second-Priority Designated Agent will have the right to direct the Intercreditor Agent to foreclose upon such Collateral (but in any such event, the Liens on such Collateral securing the applicable Second-Priority Claims will be released when such Event of Default and all other Events of Default under the New 1.5 Lien Notes Indenture or any other Second-Priority Document, as applicable, cease to exist).
Section 6. Insolvency or Liquidation Proceedings.
6.1. Financing Issues. If the Company or any other Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Intercreditor Agent shall desire to permit the use of cash collateral or to permit the Company or any other Grantor to obtain financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision in any Bankruptcy Law (DIP Financing), then each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, agrees that it will raise no (a) objection to (and will not otherwise contest) such use of cash collateral or DIP Financing and will not request adequate protection or any other relief in connection therewith (except to the extent permitted by the proviso in clause (ii) of Section 3.1(a) and Section 6.3) and, to the extent the Liens securing the Senior Lender Claims under the Senior Credit Agreement or under any other Senior Lender Documents are subordinated or pari passu with such DIP Financing, will subordinate its Liens in the Common Collateral to such DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the Second-Priority Claims are so subordinated to Liens securing Senior Lender Claims under this Agreement, (b) objection to (and will not otherwise contest) any motion for relief from the automatic stay or from any injunction against foreclosure
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or enforcement in respect of Senior Lender Claims made by the Intercreditor Agent or any holder of Senior Lender Claims, (c) objection to (and will not otherwise contest) any lawful exercise by any holder of Senior Lender Claims of the right to credit bid Senior Lender Claims at any sale in foreclosure of Senior Lender Collateral, (d) objection to (and will not otherwise contest) any other request for judicial relief made in any court by any holder of Senior Lender Claims relating to the lawful enforcement of any Lien on Senior Lender Collateral or (e) objection to (and will not otherwise contest) any order relating to a sale of assets of any Grantor for which the Intercreditor Agent has consented that provides, to the extent the sale is to be free and clear of Liens, that the Liens securing the Senior Lender Claims and the Second-Priority Claims will attach to the proceeds of the sale on the same basis of priority as the Liens securing the Senior Lender Collateral rank to the Liens securing the Second-Priority Collateral in accordance with this Agreement.
6.2. Relief from the Automatic Stay. Until the Discharge of Senior Lender Claims has occurred, each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, agrees that none of them shall seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Common Collateral, without the prior written consent of the Intercreditor Agent and the Required Lenders.
6.3. Adequate Protection. Each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, agrees that none of them shall contest (or support any other Person contesting) (a) any request by the Intercreditor Agent or the Senior Lenders for adequate protection or (b) any objection by the Intercreditor Agent or the Senior Lenders to any motion, relief, action or proceeding based on the Intercreditor Agents or the Senior Lenders claiming a lack of adequate protection. Notwithstanding the foregoing, in any Insolvency or Liquidation Proceeding, (i) if the Senior Lenders (or any subset thereof) are granted adequate protection in the form of additional collateral in connection with any DIP Financing or use of cash collateral under Section 363 or Section 364 of the Bankruptcy Code or any similar Bankruptcy Law, then each Second-Priority Agent, on behalf of itself and any applicable Second-Priority Secured Party, may seek or request adequate protection in the form of a replacement Lien on such additional collateral, which Lien is subordinated to the Liens securing the Senior Lender Claims and such DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the Second-Priority Claims are so subordinated to the Liens securing Senior Lender Claims under this Agreement and (ii) in the event any Second-Priority Agent, on behalf of itself or any applicable Second-Priority Secured Party, seeks or requests adequate protection and such adequate protection is granted in the form of additional collateral, then such Second-Priority Agent, on behalf of itself or each such Second-Priority Secured Party, agrees that the Senior-Priority Agents shall also be granted a senior Lien on such additional collateral as security for the applicable Senior Lender Claims and any such DIP Financing and that any Lien on such additional collateral securing the Second-Priority Claims shall be subordinated to the Liens on such collateral securing the Senior Lender Claims and any such DIP Financing (and all Obligations relating thereto) and any other Liens granted to the Senior Lenders as adequate protection on the same basis as the other Liens securing the Second-Priority Claims are so subordinated to such Liens securing Senior Lender Claims under this Agreement.
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6.4. Preference Issues. If any Senior Lender is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Company or any other Grantor (or any trustee, receiver or similar person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason, any amount (a Recovery), whether received as proceeds of security, enforcement of any right of setoff or otherwise, then the Senior Lender Claims shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred and the Senior Lenders shall be entitled to a Discharge of Senior Lender Claims with respect to all such recovered amounts. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto.
6.5. Application. This Agreement shall be applicable prior to and after the commencement of any Insolvency or Liquidation Proceeding. All references herein to any Grantor shall apply to any trustee for such Person and such Person as debtor in possession. The relative rights as to the Collateral and proceeds thereof shall continue after the filing thereof on the same basis as prior to the date of the petition, subject to any court order approving the financing of, or use of cash collateral by, any Grantor.
6.6. 506(c) Claims. Until the Discharge of Senior Lender Claims has occurred, each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, will not assert or enforce any claim under Section 506(c) of the United States Bankruptcy Code senior to or on a parity with the Liens securing the Senior Lender Claims for costs or expenses of preserving or disposing of any Common Collateral.
Section 7. Reliance; Waivers; etc.
7.1. Reliance. The consent by the Senior Lenders to the execution and delivery of the Second-Priority Documents to which the Senior Lenders have consented and all loans and other extensions of credit made or deemed made on and after the date hereof by the Senior Lenders to the Company or any Subsidiary shall be deemed to have been given and made in reliance upon this Agreement. Each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, acknowledges that it and the applicable Second-Priority Secured Parties have, independently and without reliance on the Intercreditor Agent or any Senior Lender, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the applicable Second-Priority Document, this Agreement and the transactions contemplated hereby and thereby and they will continue to make their own credit decision in taking or not taking any action under the applicable Second-Priority Document or this Agreement.
7.2. No Warranties or Liability. Each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, acknowledges and agrees that neither the Intercreditor Agent nor any Senior Lender has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Senior Lender Documents, the ownership of any Common Collateral or the perfection or priority of any Liens thereon. The Senior Lenders will be entitled to manage and supervise their respective loans and extensions of credit under the Senior Lender
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Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Senior Lenders may manage their loans and extensions of credit without regard to any rights or interests that any Second-Priority Agent or any of the Second-Priority Secured Parties have in the Common Collateral or otherwise, except as otherwise provided in this Agreement. Neither the Intercreditor Agent nor any Senior Lender shall have any duty to any Second-Priority Agent or any Second-Priority Secured Party to act or refrain from acting in a manner that allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Company or any Subsidiary thereof (including the Second-Priority Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Intercreditor Agreement, the Intercreditor Agent, the Senior Lenders, the Second-Priority Agents and the Second-Priority Secured Parties have not otherwise made to each other, nor do they hereby make to each other, any warranties, express or implied, nor do they assume any liability to each other with respect to (a) the enforceability, validity, value or collectibility of any of the Second-Priority Claims, the Senior Lender Claims or any guarantee or security which may have been granted to any of them in connection therewith, (b) the Companys or any other Grantors title to or right to transfer any of the Common Collateral or (c) any other matter except as expressly set forth in this Intercreditor Agreement.
7.3. Obligations Unconditional. All rights, interests, agreements and obligations of the Intercreditor Agent and the Senior Lenders, and the Second-Priority Agents and the Second-Priority Secured Parties, respectively, hereunder shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Senior Lender Documents or any Second-Priority Documents;
(b) any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Lender Claims or Second-Priority Claims, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Credit Agreement or any other Senior Lender Document or of the terms of the New 1.5 Lien Notes Indenture or any other Second-Priority Document;
(c) any exchange of any security interest in any Common Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Lender Claims or Second-Priority Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in respect of the Company or any other Grantor; or
(e) any other circumstances that otherwise might constitute a defense available to, or a discharge of, the Company or any other Grantor in respect of the Senior Lender Claims, or of any Second-Priority Agent or any Second-Priority Secured Party in respect of this Agreement.
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Section 8. Miscellaneous.
8.1. Conflicts. Subject to Section 8.19:
(a) in the event of any conflict between the provisions of this Agreement and the provisions of any Senior Lender Document or any Second-Priority Document, the provisions of this Agreement shall govern;
(b) in the event of any conflict between the terms of this Agreement and the terms of the Existing Second Lien Intercreditor Agreement relating to the relative priorities, rights or obligations of the parties holding the Senior Lender Claims and the holders of the Second-Priority Claims (as that term is defined in the Existing Second Lien Intercreditor Agreement), the terms of the Existing Second Lien Intercreditor Agreement shall govern.
8.2. Continuing Nature of this Agreement; Severability. Subject to Section 5.7 and Section 6.4, this Agreement shall continue to be effective until the Discharge of Senior Lender Claims shall have occurred or such later time as all the Obligations in respect of the Second-Priority Claims shall have been paid in full. This is a continuing agreement of lien subordination and the Senior Lenders may continue, at any time and without notice to each Second-Priority Agent or any Second-Priority Secured Party, to extend credit and other financial accommodations and lend monies to or for the benefit of the Company or any other Grantor constituting Senior Lender Claims in reliance hereon. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
8.3. Amendments; Waivers. Subject to Section 8.21 hereof, no amendment, modification or waiver of any of the provisions of this Agreement shall be deemed to be made unless the same shall be in writing signed on behalf of each Second-Priority Agent (or its authorized agent) and each Senior-Priority Agent (or its authorized agent) and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. The Company and the other Grantors shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent their rights are affected.
8.4. Information Concerning Financial Condition of the Company and the Subsidiaries. The Intercreditor Agent, the Senior Lenders, each Second-Priority Agent and the Second-Priority Secured Parties shall each be responsible for keeping themselves informed of (a) the financial condition of the Company and the Subsidiaries and all endorsers and/or guarantors of the Second-Priority Claims or the Senior Lender Claims and (b) all other circumstances bearing upon the risk of nonpayment of the Second-Priority Claims or the Senior Lender Claims. The Intercreditor Agent, the Senior Lenders, each Second-Priority Agent and the Second-Priority
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Secured Parties shall have no duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that the Intercreditor Agent, any Senior Lender, any Second-Priority Agent or any Second-Priority Secured Party, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it or they shall be under no obligation (w) to make, and the Intercreditor Agent, the Senior Lenders, the Second-Priority Agents and the Second-Priority Secured Parties shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (x) to provide any additional information or to provide any such information on any subsequent occasion, (y) to undertake any investigation or (z) to disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.
8.5. Subrogation. Each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, hereby waives any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Senior Lender Claims has occurred.
8.6. Application of Payments. Except as otherwise provided herein, all payments received by the Senior Lenders may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Lender Claims as the Senior Lenders, in their sole discretion, deem appropriate, consistent with the terms of the Senior Lender Documents. Except as otherwise provided herein, each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, assents to any such extension or postponement of the time of payment of the Senior Lender Claims or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the Senior Lender Claims and to the addition or release of any other Person primarily or secondarily liable therefor.
8.7. Consent to Jurisdiction; Waivers. The parties hereto consent to the jurisdiction of any state or federal court located in New York, New York, and consent that all service of process may be made by registered mail directed to such party as provided in Section 8.8 for such party. Service so made shall be deemed to be completed three days after the same shall be posted as aforesaid. The parties hereto waive any objection to any action instituted hereunder in any such court based on forum non conveniens, and any objection to the venue of any action instituted hereunder in any such court. Each of the parties hereto waives any right it may have to trial by jury in respect of any litigation based on, or arising out of, under or in connection with this Agreement, or any course of conduct, course of dealing, verbal or written statement or action of any party hereto in connection with the subject matter hereof.
8.8. Notices. All notices to the Second-Priority Secured Parties and the Senior Lenders permitted or required under this Agreement may be sent to the Trustee, the Intercreditor Agent or any Second-Priority Agent as provided in the New 1.5 Lien Notes Indenture, the applicable Senior Credit Agreement, the other relevant Senior Lender Document or the relevant Second-Priority Document, as applicable. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, electronically mailed or sent by courier service or U.S.
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mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or electronic mail or upon receipt via U.S. mail (registered or certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set forth below each partys name on the signature pages hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties. The Senior-Priority Agents hereby agree to promptly notify each Second-Priority Agent upon payment in full in cash of all Indebtedness under the applicable Senior Lender Documents (except for contingent indemnities and cost and reimbursement obligations to the extent no claim therefor has been made).
8.9. Further Assurances. Each of the Second-Priority Agents, on behalf of itself and each applicable Second-Priority Secured Party, and the Intercreditor Agent, on behalf of itself and each Senior Lender, agrees that each of them shall take such further action and shall execute and deliver to the Intercreditor Agent and the Senior Lenders such additional documents and instruments (in recordable form, if requested) as the Intercreditor Agent or the Senior Lenders may reasonably request to effectuate the terms of and the lien priorities contemplated by this Agreement. The Company agrees to pay all reasonable and documented out-of-pocket expenses incurred by any such Second-Priority Agent or the Intercreditor Agent in connection with the execution and delivery of such additional documents and instruments.
8.10. Governing Law. This Agreement has been delivered and accepted at and shall be deemed to have been made at New York, New York and shall be interpreted, and the rights and liabilities of the parties bound hereby determined, in accordance with the laws of the State of New York.
8.11. Binding on Successors and Assigns. This Agreement shall be binding upon the Intercreditor Agent, the Senior Lenders, the Second-Priority Agents, the Second-Priority Secured Parties, the Company, the Companys Subsidiaries party hereto and their respective permitted successors and assigns.
8.12. Specific Performance. The Intercreditor Agent may demand specific performance of this Agreement. Each Second-Priority Agent, on behalf of itself and each applicable Second-Priority Secured Party, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by the Intercreditor Agent.
8.13. Section Titles. The section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of this Agreement.
8.14. Counterparts. This Agreement may be executed in one or more counterparts, including by means of facsimile or other electronic transmission, each of which shall be an original and all of which shall together constitute one and the same document.
8.15. Authorization. By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The Intercreditor Agent represents and warrants that this Agreement is binding upon the Senior Lenders. The Trustee represents and warrants that this Agreement is binding upon the Indenture Secured Parties.
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8.16. No Third Party Beneficiaries; Successors and Assigns. This Agreement and the rights and benefits hereof shall inure to the benefit of, and be binding upon, each of the parties hereto and their respective successors and assigns and shall inure to the benefit of each of, and be binding upon, the holders of Senior Lender Claims and Second-Priority Claims. No other Person shall have or be entitled to assert rights or benefits hereunder.
8.17. Effectiveness. This Agreement shall become effective when executed and delivered by the parties hereto on the date hereof. This Agreement shall be effective both before and after the commencement of any Insolvency or Liquidation Proceeding. All references to the Company or any other Grantor shall include the Company or any other Grantor as debtor and debtor-in-possession and any receiver or trustee for the Company or any other Grantor (as the case may be) in any Insolvency or Liquidation Proceeding.
8.18. Intercreditor Agent; Trustee and Collateral Agent; Senior-Priority Agents. It is understood and agreed that (a) JPMCB is entering into this Agreement in its capacity as administrative agent under the ABL Facility and the provisions of Article VIII of the ABL Facility applicable to JPMCB as administrative agent thereunder shall also apply to JPMCB as Intercreditor Agent hereunder, (b) Wilmington Trust, National Association is entering into this Agreement in its capacity as Trustee and as Collateral Agent, and the provisions of Article 7 of the New 1.5 Lien Notes Indenture applicable to the trustee thereunder shall also apply to the Trustee hereunder, (c) Wilmington Trust, National Association is entering into this Agreement in its capacity as Senior-Priority Agent for the holders of the notes issued under the 6.625% First Lien Notes Indenture, and the provisions of Article 7 of the 6.625% First Lien Notes Indenture applicable to the trustee thereunder shall also apply to such Senior-Priority Agent, (d) Wilmington Trust, National Association is entering into this Agreement in its capacity as Senior-Priority Agent for the holders of the notes issued under the 10.00% First Lien Notes Indenture, and the provisions of Article 7 of the 10.00% First Lien Notes Indenture applicable to the trustee thereunder shall also apply to such Senior-Priority Agent, and (e) Wilmington Trust, National Association is entering into this Agreement in its capacity as Senior-Priority Agent for the holders of the notes issued under the New First Lien Notes Indenture, and the provisions of Article 7 of the New First Lien Notes Indenture applicable to the trustee thereunder shall also apply to such Senior-Priority Agent.
8.19. Relative Rights. Notwithstanding anything in this Agreement to the contrary (except to the extent contemplated by Section 5.3(b)), nothing in this Agreement is intended to or will (a) amend, waive or otherwise modify the provisions of any Senior Credit Agreement, the New 1.5 Lien Notes Indenture or any other Senior Lender Documents or Second-Priority Documents entered into in connection with such Senior Credit Agreement, the New 1.5 Lien Notes Indenture or any other Senior Lender Document or Second-Priority Document or permit the Company or any Subsidiary to take any action, or fail to take any action, to the extent such action or failure would otherwise constitute a breach of, or default under, any Senior Credit Agreement or any other Senior Lender Documents entered into in connection with such Senior Credit Agreement, the New 1.5 Lien Notes Indenture or any other Second-Priority Documents, (b) change the relative priorities of the Senior Lender Claims or the Liens granted under the
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Senior Lender Documents on the Common Collateral (or any other assets) as among the Senior Lenders, (c) otherwise change the relative rights of the Senior Lenders in respect of the Common Collateral as among such Senior Lenders or (d) obligate the Company or any Subsidiary to take any action, or fail to take any action, that would otherwise constitute a breach of, or default under, any Senior Credit Agreement or any other Senior Lender Document entered into in connection with such Senior Credit Agreement, the New 1.5 Lien Notes Indenture or any other Second-Priority Documents.
8.20. References. Notwithstanding anything to the contrary in this Agreement, any references contained herein to any Section, clause, paragraph, definition or other provision of the New 1.5 Lien Notes Indenture (including any definition contained therein) shall be deemed to be a reference to such Section, clause, paragraph, definition or other provision as in effect on the date of this Agreement; provided that any reference to any such Section, clause, paragraph or other provision shall refer to such Section, clause, paragraph or other provision of the New 1.5 Lien Notes Indenture, as applicable (including any definition contained therein), as amended or modified from time to time if such amendment or modification has been (1) made in accordance with the New 1.5 Lien Notes Indenture, and (2) approved in writing by, or on behalf of, the requisite Senior Lenders as are needed under the terms of any Senior Credit Agreement to approve such amendment or modification.
8.21. Joinder Requirements. At the request of the Company, and at the Companys expense, this Agreement may be amended, supplemented or otherwise modified, without the consent of any Senior-Priority Agent or Second-Priority Agent, any Senior Lender or any Second-Priority Secured Party, in order for the Company to designate additional obligations as Other First Priority Lien Obligations or Future Second-Lien Indebtedness if the incurrence of such obligations is permitted under each Senior Lender Document, each Second-Priority Document and this Agreement. If so permitted, as a condition precedent to the effectiveness of such designation (x) the applicable Other First Priority Lien Obligations Agent, or the administrative agent, trustee or other agent for such Future Second-Lien Indebtedness, as applicable, shall execute and deliver to each Senior-Priority Agent and Second-Priority Agent, a joinder agreement to this Agreement in form and substance reasonably satisfactory to the Intercreditor Agent and (y) the Company shall have delivered to the Intercreditor Agent, each Senior-Priority Agent and each Second-Priority Agent, an Officers Certificate (i) stating that the conditions set forth in this Section 8.21 are satisfied with respect to such Other First Priority Lien Obligations or Future Second-Lien Indebtedness, as applicable and (ii) designating such additional obligations as Other First Priority Lien Obligations or Future Second-Lien Indebtedness, as applicable, hereunder. Notwithstanding anything to the contrary set forth in this Section 8.21 or in Section 8.3 hereof, any Senior-Priority Agent and/or any Second-Priority Agent may, and, at the request and expense of the Company, shall, in each case, without the consent of any Senior-Priority Agent or Second-Priority Agent, any Senior Lender or any Second-Priority Secured Party, enter into a supplemental agreement (which may take the form of an amendment, an amendment and restatement or a supplement of this Agreement) to: (i) add other parties holding Future Second-Lien Indebtedness (or any agent or trustee therefor) to the extent such Indebtedness is not prohibited by the Senior Lender Documents or any Second-Priority Document, (ii) add other parties holding Obligations arising under the Other First Priority Lien Obligations Credit Documents (or any agent or trustee thereof) to the extent such Obligations are not prohibited by the Senior Lender Documents, or any Second-Priority
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Document, (iii) in the case of Future Second-Lien Indebtedness, (a) establish that the Lien on the Common Collateral securing such Future Second-Lien Indebtedness shall be junior and subordinate in all respects to all Liens on the Common Collateral securing any Senior Lender Claims and shall share in the benefits of the Common Collateral equally and ratably with all Liens on the Common Collateral securing any other Second-Priority Claims, in each case, subject to the terms of any other applicable intercreditor arrangements made in accordance with Section 8.22 below, and (b) provide to the holders of such Future Second-Lien Indebtedness (or any agent or trustee thereof) the comparable rights and benefits (including any improved rights and benefits that have been consented to by the Senior-Priority Agents) as are provided to the holders of Second-Priority Claims under this Agreement prior to the incurrence of such Future Second-Lien Indebtedness, and (iv) in the case of Other First Priority Lien Obligations, (a) establish that the Lien on the Common Collateral securing such Other First Priority Lien Obligations shall be superior in all respects to all Liens on the Common Collateral securing any Second-Priority Claims and shall share in the benefits of the Common Collateral equally and ratably with all Liens on the Common Collateral securing any other Senior Lender Claims, in each case, subject to the terms of any other applicable intercreditor arrangements made in accordance with Section 8.22 below, and (b) provide to the holders of such Other First Priority Lien Obligations (or any agent or trustee thereof) the comparable rights and benefits as are provided to the holders of Senior Lender Claims under this Agreement prior to the incurrence of such Other First Priority Lien Obligations. Any such additional party, each Senior-Priority Agent and each Second-Priority Agent shall be entitled to rely on the determination of officers of the Company that such modifications do not violate any Senior Lender Documents or any Second-Priority Document if such determination is set forth in an Officers Certificate delivered to such party in accordance with this Section 8.21; provided, however, that such determination will not affect whether or not the Company has complied with its undertakings in the Senior Credit Agreement, the Other First Priority Lien Obligations Credit Documents, the Senior Collateral Documents, the New 1.5 Lien Notes Indenture, any other Second-Priority Document governing Future Second-Lien Indebtedness, the Second-Priority Collateral Documents or this Agreement.
8.22. Intercreditor Agreements. Each party hereto agrees that the Senior Lenders (as among themselves) and the Second-Priority Secured Parties (as among themselves) may each enter into intercreditor agreements (or similar arrangements) with the applicable Intercreditor Agent or the Second-Priority Agent governing the rights, benefits and privileges as among the Senior Lenders or the Second-Priority Secured Parties, as the case may be, in respect of the Common Collateral, this Agreement and the other Senior Collateral Documents or Second-Priority Collateral Documents, as the case may be, including as to application of proceeds of the Common Collateral, voting rights, control of the Common Collateral and waivers with respect to the Common Collateral, in each case so long as (A) the terms thereof do not violate or conflict with the provisions of this Agreement or the other Senior Collateral Documents or Second-Priority Collateral Documents, as the case may be, (B) in the case of any such intercreditor agreement (or similar arrangement) affecting any Senior Lenders, each Senior-Priority Agent acting on behalf of the applicable Senior Lenders agrees in its sole discretion, or is otherwise obligated pursuant to the terms of the applicable Senior Lender Documents, to enter into any such intercreditor agreement (or similar arrangement) and (C) in the case of any such intercreditor agreement (or similar arrangement) affecting the Second-Priority Secured Parties, each Second-Priority Agent acting on behalf of the applicable Second-Priority Secured Parties
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agrees in its sole discretion, or is otherwise obligated pursuant to the terms of the applicable Second-Priority Document, to enter into any such intercreditor agreement (or similar arrangement). Notwithstanding the preceding clauses (B) and (C), to the extent that (x) the applicable Senior-Priority Agent is not authorized by the Required Lenders to enter into any such intercreditor agreement (or similar arrangement) or does not agree to enter into such intercreditor agreement (or similar arrangement), such intercreditor agreement (or similar arrangement) shall not be binding upon such Senior-Priority Agent but, subject to the immediately succeeding sentence, may still bind the other parties party thereto and the applicable Senior Lenders for which such Senior-Priority Agent is acting as representative or (y) the applicable Second-Priority Agent is not authorized by the applicable Second-Priority Secured Parties to enter into any such intercreditor agreement (or similar arrangement) or does not agree to enter into such intercreditor agreement (or similar arrangement), such intercreditor agreement (or similar arrangement) shall not be binding upon the such Second-Priority Agent but, subject to the immediately succeeding sentence, may still bind the other parties party thereto and such Second-Priority Secure Parties. In any event, if a respective intercreditor agreement (or similar arrangement) exists, the provisions thereof shall not be (or be construed to be) an amendment, modification or other change to this Agreement or any other Senior Collateral Document or Second-Priority Collateral Document, and the provisions of this Agreement and the other Senior Collateral Documents and Second-Priority Collateral Documents shall remain in full force and effect in accordance with the terms hereof and thereof (as such provisions may be amended, modified or otherwise supplemented from time to time in accordance with the terms thereof, including to give effect to any intercreditor agreement (or similar arrangement)).
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Intercreditor Agreement as of the date first written above.
JPMORGAN CHASE BANK, N.A., as Intercreditor Agent | ||
By: | /s/ Peter S. Predun | |
Name: | Peter S. Predun | |
Title: | Executive Director | |
JPMORGAN CHASE BANK, N.A., as Senior-Priority Agent for secured parties under the ABL Facility | ||
By: | /s/ Peter S. Predun | |
Name: | Peter S. Predun | |
Title: | Executive Director |
[Signature Page to Amended and Restated 1.5 Lien Intercreditor Agreement]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee, as Second-Priority Agent for the holders of Notes and as and Collateral Agent | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for the holders of the notes issued under the 6.625% First Lien Notes Indenture | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for the holders of the notes issued under the 10.00% First Lien Notes Indenture | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for the holders of the notes issued under the New First Lien Notes Indenture | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President |
[Signature Page to Amended and Restated 1.5 Lien Intercreditor Agreement]
HEXION LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INVESTMENTS INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Amended and Restated 1.5 Lien Intercreditor Agreement]
HSC CAPITAL CORPORATION | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
LAWTER INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
NL COOP HOLDINGS LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Amended and Restated 1.5 Lien Intercreditor Agreement]
SCHEDULE I
Subsidiary Parties
Hexion International Inc.
Hexion Investments Inc.
Hexion CI Holding Company (China) LLC
HSC Capital Corporation
Lawter International Inc.
Oilfield Technology Group, Inc.
NL Coop Holdings LLC
Exhibit 10.6
Execution Version
FOURTH JOINDER AND SUPPLEMENT
to
INTERCREDITOR AGREEMENT
Reference is made to (i) that certain Amended and Restated Intercreditor Agreement, dated as of January 31, 2013 (as supplemented by the First Joinder, the Second Joinder and the Third Joinder referred to below, and as the same may be further amended, restated, supplemented or otherwise modified from time to time, the Second Lien Intercreditor Agreement), among Wilmington Trust Company, as Trustee and as Collateral Agent (the Second Lien Trustee) (as Second-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the Notes), Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as trustee for the holders of the notes (the 1.5 Lien Notes) issued under the 1.5 Lien Indenture (the 1.5 Lien Trustee) (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 1.5 Lien Notes), Wilmington Trust, National Association, as trustee (the 6.625% First Lien Notes Trustee) for the holders of the notes (the 6.625% First Lien Notes) issued under the First Lien Indenture and as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 6.625% First Lien Notes, Hexion LLC (Holdings), Hexion Inc. (the Company) and each subsidiary of the Company party thereto, as such intercreditor agreement was supplemented pursuant to (x) that certain Joinder and Supplement to Intercreditor Agreement, dated as of March 28, 2013 (the First Joinder), among JPMorgan Chase Bank, N.A. (the ABL Credit Agreement Agent), as Senior-Priority Agent for the ABL Secured Parties (as defined in the First Joinder), JPMorgan Chase Bank, N.A., as intercreditor agent (the Intercreditor Agent), and the other parties thereto, (y) that certain Second Joinder and Supplement to Intercreditor Agreement, dated as of April 15, 2015 (the Second Joinder), among Wilmington Trust, National Association, as trustee (the 10.00% First Lien Notes Trustee) for the holders of the New First Lien Notes (as defined in the Second Joinder, the 10.00% First Lien Notes), and the other parties thereto, and (z) that certain Third Joinder and Supplement to Intercreditor Agreement, dated as of the date hereof (the Third Joinder), among Wilmington Trust, National Association, as trustee (the New First Lien Notes Trustee) for the holders of the New First Lien Notes (as defined in the Third Joinder, the New First Lien Notes), and the other parties thereto, and (ii) the Second Secured Notes Indenture. Capitalized terms used but not defined herein shall have the meanings assigned in the Second Lien Intercreditor Agreement.
This Fourth Joinder and Supplement to the Second Lien Intercreditor Agreement (this Agreement), dated as of February 8, 2017 (the Effective Date), by and among (i) Wilmington Trust, National Association, as trustee (the New 1.5 Lien Notes Trustee) pursuant to that certain Indenture, dated as of the date hereof, among the Company, as issuer, the guarantors party thereto from time to time and the New 1.5 Lien Notes Trustee (as the same may be amended, restated, supplemented or otherwise modified from time to time, the New 1.5 Lien Indenture), (ii) the Intercreditor Agent, (iii) the ABL Credit Agreement Agent (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the ABL Secured Parties), (iv) the Second Lien Trustee (as Second-Priority Agent under the Second Lien Intercreditor Agreement for the holders of
the Notes), (v) the 6.625% First Lien Notes Trustee (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 6.625% First Lien Notes), (vi) the 10.00% First Lien Notes Trustee (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the 10.00% First Lien Notes), (vii) the New First Lien Notes Trustee (as Senior-Priority Agent under the Second Lien Intercreditor Agreement for the holders of the New First Lien Notes), (viii) Holdings, (ix) the Company and (x) each Subsidiary of the Company listed on Schedule I hereto, has been entered into (A) to record the accession of the New 1.5 Lien Notes Trustee as an additional Senior-Priority Agent under the Second Lien Intercreditor Agreement on behalf of the holders of the 13.75% senior secured notes due 2022 (the New 1.5 Lien Notes) issued under the New 1.5 Lien Indenture, (B) with respect to the Liens securing certain Obligations as set forth below, to confirm and evidence that such Liens shall, for purposes of the Second Lien Intercreditor Agreement, be equal and ratable with all Liens on the Common Collateral securing any other Senior Lender Claims and (C) for certain related purposes.
The parties to this Agreement hereby agree as follows:
A. The New 1.5 Lien Notes Trustee, as trustee for the holders of the New 1.5 Lien Notes, agrees to become, with immediate effect, a party to and agrees to be bound by the terms of the Second Lien Intercreditor Agreement as Senior-Priority Agent for the holders of the New 1.5 Lien Notes, as if it had originally been party to the Second Lien Intercreditor Agreement as Senior-Priority Agent for the holders of the New 1.5 Lien Notes.
B. The New 1.5 Lien Indenture has been designated by the Company as being included in the definition of Credit Agreement set forth in the Second Secured Notes Indenture. The New 1.5 Lien Indenture, the New 1.5 Lien Notes, the Security Documents (as defined in the New 1.5 Lien Indenture) (the Security Documents) and any related document or instrument executed and delivered pursuant to any of the foregoing shall constitute Senior Credit Documents as defined in the Second Secured Notes Indenture.
C. The Liens securing the Obligations under the New 1.5 Lien Notes, the New 1.5 Lien Indenture and any other document or agreement entered into pursuant thereto granted pursuant to the Security Documents have been designated by the Company as having been incurred pursuant to clause (8) of the definition of Permitted Liens set forth in the Second Secured Notes Indenture. The Obligations under the New 1.5 Lien Notes, the New 1.5 Lien Indenture and any other document or agreement entered into pursuant thereto constitute First-Lien Indebtedness (which First-Lien Indebtedness, for the avoidance of doubt, also constitutes Future First-Lien Indebtedness) and Senior Lender Claims.
D. The Liens on the Common Collateral securing such Senior Lender Claims shall have priority over and be senior in all respects to all Liens on the Common Collateral securing any Second-Priority Claims on the terms set forth in the Second Lien
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Intercreditor Agreement and, subject to the terms of any other applicable intercreditor agreement then in effect, shall be equal and ratable with all Liens on the Common Collateral securing any other Senior Lender Claims.
E. So long as the Discharge of Senior Lender Claims has not occurred and subject to the terms of any other applicable intercreditor agreement then in effect, the Common Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, the Common Collateral upon the exercise of remedies shall be applied by the Intercreditor Agent ratably to the Senior Lender Claims and, with respect to each class of Senior Lender Claims, in such order as is specified in the relevant Senior Lender Documents until the Discharge of Senior Lender Claims has occurred.
F. The New 1.5 Lien Notes Trustee confirms that its address for notices pursuant to the Second Lien Intercreditor Agreement is as follows:
Wilmington Trust, National Association
Global Capital Markets
50 South Sixth Street
Suite 1290
Minneapolis, Minnesota 55402
Telephone: 612-217-5632
Facsimile: 612-217-5651
Attention: Hexion Administrator
G. Each party to this Agreement confirms the acceptance of the New 1.5 Lien Notes Trustee, acting for the benefit of the holders of the New 1.5 Lien Notes, as a Senior-Priority Agent for purposes of the Second Lien Intercreditor Agreement.
H. Except as expressly provided herein, in the Second Lien Intercreditor Agreement or in any Senior Lender Documents, the New 1.5 Lien Notes Trustee is acting in the capacity of Senior-Priority Agent solely with respect to the Senior Lender Claims owed to the New 1.5 Lien Notes Trustee and the holders of the New 1.5 Lien Notes issued pursuant to the New 1.5 Lien Indenture. For the avoidance of doubt, the provisions of Article 7 of the New 1.5 Lien Indenture applicable to the New 1.5 Lien Notes Trustee thereunder shall also apply to the New 1.5 Lien Notes Trustee acting under or in connection with the Second Lien Intercreditor Agreement.
I. This Agreement and any claim, controversy or dispute arising under or related to such Agreement shall be construed in accordance with and governed by the laws of the State of New York.
J. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.
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[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.
JPMORGAN CHASE BANK, N.A., | ||
as Intercreditor Agent | ||
By: | /s/ Peter S. Predun | |
Name: | Peter S. Predun | |
Title: | Executive Director | |
JPMORGAN CHASE BANK, N.A., as Senior-Priority Agent for the ABL Secured Parties | ||
By: | /s/ Peter S. Predun | |
Name: | Peter S. Predun | |
Title: | Executive Director |
[Signature Page to Fourth Joinder and Supplement to Second Lien Intercreditor Agreement]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as New 1.5 Lien Notes Trustee, as Senior-Priority Agent for holders of the New 1.5 Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for holders of the 6.625% First Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for holders of the 10.00% First Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Senior-Priority Agent for holders of the New First Lien Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President | |
WILMINGTON TRUST COMPANY, as Second Lien Trustee, as Second-Priority Agent for holders of the Notes | ||
By: | /s/ Jane Schweiger | |
Name: | Jane Schweiger | |
Title: | Vice President |
[Signature Page to Fourth Joinder and Supplement to Second Lien Intercreditor Agreement]
HEXION LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INVESTMENTS INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HEXION CI HOLDING COMPANY (CHINA) LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
HSC CAPITAL CORPORATION | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Fourth Joinder and Supplement to Second Lien Intercreditor Agreement]
LAWTER INTERNATIONAL INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
OILFIELD TECHNOLOGY GROUP, INC. | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer | |
NL COOP HOLDINGS LLC | ||
By: | /s/ Mark D. Bidstrup | |
Name: | Mark D. Bidstrup | |
Title: | Senior Vice President and Treasurer |
[Signature Page to Fourth Joinder and Supplement to Second Lien Intercreditor Agreement]
SCHEDULE I
Subsidiary Parties
Hexion Investments Inc.
Hexion International Inc.
Hexion CI Holding Company (China) LLC
HSC Capital Corporation
Lawter International Inc.
Oilfield Technology Group, Inc.
NL COOP Holdings LLC