EXHIBIT 4.1
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TUESDAY MORNING CORPORATION
Company
TMI HOLDINGS, INC.
TUESDAY MORNING, INC.
FRIDAY MORNING, INC.
TMIL CORPORATION
Subsidiary Guarantors
and
XXXXXX TRUST AND SAVINGS BANK
Trustee
-------------------------
INDENTURE
Dated as of December 29, 1997
-------------------------
$100,000,000
11% Senior Subordinated Notes due 2007
11% Series B Senior Subordinated Notes due 2007
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TUESDAY MORNING CORPORATION
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of December 29, 1997
-----------------------------------------------------
Trust Indenture Indenture
Act Section Section
--------------- ---------
(S) 310(a)(1)......................... 607
(a)(2)............................ 607
(b)............................... 608
(S) 312(c)............................ 701
(S) 314(a)............................ 703
(a)(4)............................ 1004
(c)(1)............................ 102
(c)(2)............................ 102
(e)............................... 102
(S) 315(b)............................ 601
(S) 316(a)(last sentence)............. 101 ("Outstanding")
(a)(1)(A)......................... 502, 512
(a)(1)(B)......................... 513
(b)............................... 508
(c)............................... 104(d)
(S) 317(a)(1)......................... 503
(a)(2)............................ 504
(b)............................... 1003
(S) 318(a)............................ 111
____________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
PARTIES....................................................................... 1
RECITALS OF THE COMPANY....................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions...................................................... 2
Acquired Indebtedness.......................................... 2
Act............................................................ 2
Affiliate...................................................... 2
Agent Bank..................................................... 3
Agent Members.................................................. 3
Asset Sale..................................................... 3
Authenticating Agent........................................... 3
Average Life................................................... 3
Bankruptcy Law................................................. 3
Board of Directors............................................. 4
Board Resolution............................................... 4
Business Day................................................... 4
Capital Stock.................................................. 4
Capitalized Lease Obligation................................... 4
Cash Equivalents............................................... 4
Certificate of Designation..................................... 5
Change in Control.............................................. 5
Commission..................................................... 6
Common Stock................................................... 6
Company........................................................ 6
Company Request" or "Company Order............................. 6
Consolidated Adjusted Net Income............................... 6
Consolidated Fixed Charge Coverage Ratio....................... 7
Consolidated Income Tax Expense................................ 7
Consolidated Interest Expense.................................. 7
Consolidated Non-Cash Charges.................................. 8
Corporate Trust Office......................................... 8
corporation.................................................... 8
Currency Agreements............................................ 8
Custodian...................................................... 8
Default........................................................ 8
Defaulted Interest............................................. 8
Depositary..................................................... 8
ii
Designated Senior Indebtedness................................. 8
Disinterested Director......................................... 8
Dollar" or "$.................................................. 9
Event of Default............................................... 9
Exchange Act................................................... 9
Exchange Debentures............................................ 9
Exchange Notes................................................. 9
Exchange Offer................................................. 9
Exchange Offer Registration Statement.......................... 9
Fair Market Value.............................................. 9
Generally Accepted Accounting Principles....................... 9
Global Notes................................................... 9
guarantee...................................................... 10
Guarantor Senior Indebtedness.................................. 10
Headquarters Facility.......................................... 10
Holder......................................................... 10
Indebtedness................................................... 10
Indenture...................................................... 11
Initial Notes.................................................. 11
Institutional Accredited Investor.............................. 11
Interest Payment Date.......................................... 11
Interest Rate Agreements....................................... 11
Investment..................................................... 12
Issuance Date.................................................. 12
Lien........................................................... 12
Management Stock............................................... 12
Maturity....................................................... 12
Xxxxx'x........................................................ 12
Net Cash Proceeds.............................................. 12
Non-Payment Default............................................ 13
Non-U.S. Person................................................ 13
Note Guarantee................................................. 13
Note Register" and "Note Registrar............................. 13
Notes.......................................................... 13
Officers' Certificate.......................................... 13
Offshore Global Note........................................... 13
Offshore Note Exchange Date.................................... 13
Offshore Physical Note......................................... 13
Opinion of Counsel............................................. 14
Outstanding.................................................... 14
Pari Passu Indebtedness........................................ 15
Paying Agent................................................... 15
Payment Blockage Period........................................ 15
Payment Default................................................ 15
Permitted Holders.............................................. 15
iii
Permitted Indebtedness......................................... 15
Permitted Investments.......................................... 18
Permitted Junior Securities.................................... 18
Person......................................................... 18
Physical Notes................................................. 18
Place of Payment............................................... 19
Predecessor Note............................................... 19
Preferred Stock................................................ 19
Private Placement Legend....................................... 19
Public Equity Offering......................................... 19
Purchase Money Obligations..................................... 19
QIB............................................................ 19
Qualified Capital Stock........................................ 19
Redeemable Capital Stock....................................... 19
Redemption Date................................................ 20
Redemption Price............................................... 20
Registration Rights Agreement.................................. 20
Registration Statement......................................... 20
Regular Record Date............................................ 20
Regulation S................................................... 20
Representative................................................. 20
Responsible Officer............................................ 20
Restricted Subsidiary.......................................... 20
Rule 144A...................................................... 20
S&P............................................................ 20
Sale and Leaseback Transaction................................. 20
Securities Act................................................. 21
Senior Credit Agreement........................................ 21
Senior Exchangeable Preferred Stock............................ 21
Senior Indebtedness............................................ 21
Shelf Registration Statement................................... 22
Significant Subsidiary......................................... 22
Special Record Date............................................ 22
Stated Maturity................................................ 22
Subordinated Indebtedness...................................... 22
Subsidiary..................................................... 22
Subsidiary Guarantor........................................... 22
Trust Indenture Act" or "TIA................................... 22
Trustee........................................................ 22
United States.................................................. 23
Unrestricted Subsidiary........................................ 23
U.S. Global Note............................................... 23
U.S. Government Obligations.................................... 23
U.S. Physical Note............................................. 24
Vice President................................................. 24
iv
Voting Stock................................................... 24
SECTION 102. Compliance Certificates and Opinions............................. 24
SECTION 103. Form of Documents Delivered to Trustee........................... 25
SECTION 104. Acts of Holders.................................................. 25
SECTION 105. Notices, Etc., to Trustee, Company, any Subsidiary Guarantor
and Agent Bank................................................ 27
SECTION 106. Notice to Holders; Waiver........................................ 27
SECTION 107. Effect of Headings and Table of Contents......................... 28
SECTION 108. Successors and Assigns........................................... 28
SECTION 109. Separability Clause.............................................. 28
SECTION 110. Benefits of Indenture............................................ 28
SECTION 111. Governing Law.................................................... 28
SECTION 112. Legal Holidays................................................... 29
SECTION 113. Trust Indenture Act Controls..................................... 29
SECTION 114. No Recourse Against Others....................................... 29
SECTION 115. Counterparts..................................................... 29
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally.................................................. 30
SECTION 202. Form of Trustee's Certificate of Authentication.................. 31
SECTION 203. Restrictive Legends.............................................. 31
SECTION 204. Form of Certificate to be Delivered After the Offshore Note
Exchange Date................................................. 34
ARTICLE THREE
THE NOTES
SECTION 301. Amount........................................................... 35
SECTION 302. Denominations.................................................... 36
SECTION 303. Execution, Authentication, Delivery and Dating................... 36
SECTION 304. Temporary Notes.................................................. 37
SECTION 305. Registration, Registration of Transfer and Exchange.............. 38
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes...................... 39
SECTION 307. Payment of Interest; Interest Rights Preserved................... 40
SECTION 308. Persons Deemed Owners............................................ 41
SECTION 309. Cancellation..................................................... 41
SECTION 310. Computation of Interest.......................................... 42
SECTION 311. Book-Entry Provisions for Global Notes........................... 42
SECTION 312. Transfer Provisions.............................................. 43
SECTION 313. Form of Accredited Investor Certificate.......................... 52
SECTION 314. Form of Regulation S Certificate................................. 55
v
SECTION 315. Form of Rule 144A Certificate.................................... 56
SECTION 316. CUSIP Numbers.................................................... 58
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.......................... 58
SECTION 402. Application of Trust Money....................................... 60
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default................................................ 60
SECTION 502. Acceleration of Maturity; Rescission and Annulment............... 62
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee....................................................... 63
SECTION 504. Trustee May File Proofs of Claim................................. 64
SECTION 505. Trustee May Enforce Claims Without Possession of Notes........... 65
SECTION 506. Application of Money Collected................................... 65
SECTION 507. Limitation on Suits.............................................. 66
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.......................................... 66
SECTION 509. Restoration of Rights and Remedies............................... 67
SECTION 510. Rights and Remedies Cumulative................................... 67
SECTION 511. Delay or Omission Not Waiver..................................... 67
SECTION 512. Control by Holders............................................... 67
SECTION 513. Waiver of Past Defaults.......................................... 68
SECTION 514. Waiver of Stay or Extension Laws................................. 68
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities............................. 69
SECTION 602. Notice of Defaults.............................................. 70
SECTION 603. Certain Rights of Trustee....................................... 70
SECTION 604. Trustee Not Responsible for Recitals or Issuance of Notes....... 72
SECTION 605. May Hold Notes.................................................. 72
SECTION 606. Money Held in Trust............................................. 73
SECTION 607. Compensation and Reimbursement.................................. 73
SECTION 608. Corporate Trustee Required; Eligibility......................... 74
SECTION 609. Resignation and Removal; Appointment of Successor............... 74
SECTION 610. Acceptance of Appointment by Successor.......................... 76
SECTION 611. Merger, Conversion, Consolidation or Succession to Business..... 76
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SECTION 612. Appointment of Authenticating Agent............................. 77
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses.................. 78
SECTION 702. Disclosure of Names and Addresses of Holders.................... 79
SECTION 703. Reports by Trustee.............................................. 79
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms............ 79
SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on Certain
Terms......................................................... 81
SECTION 803. Successor Substituted........................................... 81
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.............. 82
SECTION 902. Supplemental Indentures with Consent of Holders................. 83
SECTION 903. Execution of Supplemental Indentures............................ 84
SECTION 904. Effect of Supplemental Indentures............................... 84
SECTION 905. Conformity with Trust Indenture Act............................. 84
SECTION 906. Reference in Notes to Supplemental Indentures................... 85
SECTION 907. Notice of Supplemental Indentures............................... 85
SECTION 908. Effect on Senior Indebtedness................................... 85
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and Interest............ 85
SECTION 1002. Maintenance of Office or Agency................................ 85
SECTION 1003. Money for Notes Payments to Be Held in Trust................... 86
SECTION 1004. Corporate Existence............................................ 87
SECTION 1005. Payment of Taxes and Other Claims.............................. 88
SECTION 1006. Maintenance of Properties...................................... 88
SECTION 1007. Statement by Officers as to Default............................ 88
SECTION 1008. Limitation on Indebtedness..................................... 89
SECTION 1009. Limitation on Restricted Payments.............................. 90
vii
SECTION 1010. Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries....................................... 94
SECTION 1011. Limitation on Transactions with Affiliates..................... 94
SECTION 1012. Limitation on Liens............................................ 95
SECTION 1013. Purchase of Notes upon Change in Control....................... 95
SECTION 1014. Limitation on Sale of Assets................................... 97
SECTION 1015. Limitations on Guarantees of Indebtedness by Restricted
Subsidiaries.................................................. 99
SECTION 1016. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries............................. 100
SECTION 1017. Limitation on Sale and Leaseback Transactions.................. 100
SECTION 1018. Limitation on Other Senior Subordinated Indebtedness........... 101
SECTION 1019. Limitation on Unrestricted Subsidiaries........................ 101
SECTION 1020. Reports........................................................ 101
SECTION 1021. Waiver of Certain Covenants.................................... 102
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Redemption..................................................... 102
SECTION 1102. Applicability of Article....................................... 102
SECTION 1103. Election to Redeem; Notice to Trustee.......................... 103
SECTION 1104. Selection by Trustee of Notes to Be Redeemed................... 103
SECTION 1105. Notice of Redemption........................................... 103
SECTION 1106. Deposit of Redemption Price.................................... 105
SECTION 1107. Notes Payable on Redemption Date............................... 105
SECTION 1108. Notes Redeemed in Part......................................... 105
ARTICLE TWELVE
SUBORDINATION OF NOTES
SECTION 1201. Notes Subordinate to Senior Indebtedness....................... 106
SECTION 1202. Payment over of Proceeds upon Dissolution, etc................. 106
SECTION 1203. Suspension of Payment When Designated Senior Indebtedness
in Default.................................................... 107
SECTION 1204. Payment Permitted If No Default................................ 108
SECTION 1205. Subrogation to Rights of Holders of Senior Indebtedness........ 109
SECTION 1206. Provisions Solely to Define Relative Rights.................... 109
SECTION 1207. Trustee to Effectuate Subordination............................ 109
SECTION 1208. No Waiver of Subordination Provisions.......................... 110
SECTION 1209. Distribution or Notice to Representative....................... 110
SECTION 1210. Notice to Trustee.............................................. 110
SECTION 1211. Reliance on Judicial Order or Certificate of Liquidating
Agent......................................................... 111
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SECTION 1212. Rights of Trustee As a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.............................. 112
SECTION 1213. Article Applicable to Paying Agents............................ 112
SECTION 1214. No Suspension of Remedies...................................... 112
SECTION 1215. Trust Moneys Not Subordinated.................................. 112
SECTION 1216. Trustee Not Fiduciary for Holders of Senior Indebtedness....... 112
ARTICLE THIRTEEN
GUARANTEES
SECTION 1301. Note Guarantees................................................ 113
SECTION 1302. Severability................................................... 115
SECTION 1303. Restricted Subsidiaries........................................ 115
SECTION 1304. Subordination of Note Guarantees............................... 115
SECTION 1305. Limitation of Subsidiary Guarantors' Liability................. 115
SECTION 1306. Contribution................................................... 116
SECTION 1307. Subrogation.................................................... 116
SECTION 1308. Reinstatement.................................................. 117
SECTION 1309. Release of a Subsidiary Guarantor.............................. 117
SECTION 1310. Benefits Acknowledged.......................................... 117
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant
Defeasance.................................................... 117
SECTION 1402. Defeasance and Discharge....................................... 118
SECTION 1403. Covenant Defeasance............................................ 118
SECTION 1404. Conditions to Defeasance or Covenant Defeasance................ 119
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions...................... 120
SECTION 1406. Reinstatement.................................................. 121
TESTIMONIUM................................................................... 117
SIGNATURES AND SEALS.......................................................... 117
EXHIBIT A - Form of Note
INDENTURE, dated as of December 29, 1997, among TUESDAY MORNING
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
00000 Xxxxxx Xxxx, Xxxxxx, Xxxxx 00000, and TMI HOLDINGS, INC., a Delaware
corporation, TUESDAY MORNING, INC., a Texas corporation, FRIDAY MORNING, INC., a
Texas corporation, and TMIL CORPORATION, a Delaware corporation (collectively,
the "Subsidiary Guarantors"), and XXXXXX TRUST AND SAVINGS BANK, an Illinois
corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of and issuance of its
11% Senior Subordinated Notes due 2007 (the "Initial Notes"), and its 11% Series
B Senior Subordinated Notes due 2007 (the "Exchange Notes" and, together with
the Initial Notes, the "Notes"), of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
Each Subsidiary Guarantor has duly authorized the guarantee of up to
$100,000,000 aggregate principal amount of the Initial Notes, and upon the
issuance of the Exchange Notes, if any, up to $100,000,000 aggregate principal
amount of the Exchange Notes and to provide therefor each Subsidiary Guarantor
has duly authorized the execution and delivery of this Indenture.
Upon the issuance of the Exchange Notes, if any, or the effectiveness
of the Shelf Registration Statement (as defined herein), this Indenture will be
subject to, and shall be governed by the provisions of the Trust Indenture Act
of 1939, as amended, that are required to be part of or deemed to be part of and
to govern the indentures qualified thereunder.
All things necessary have been done to make the Notes, when duly
executed and duly issued by the Company and authenticated and delivered
hereunder by the Trustee or the Authenticating Agent, the valid obligations of
the Company and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
2
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-
liquidating paper", as used in TIA Section 311, shall have the meanings
assigned to them in the rules of the Commission adopted under the Trust
Indenture Act;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with Generally Accepted Accounting
Principles; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Acquired Indebtedness" means Indebtedness of a Person (a) existing at the
time such Person becomes a Subsidiary or (b) assumed in connection with the
acquisition of assets from such Person; provided that, for purposes of Section
1008, such Indebtedness shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Restricted Subsidiary.
"Act," when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person that
owns, directly or indirectly, 10% or more of such specified Person's Capital
Stock or (c) any executive officer or director of any such specified Person or
other Person or (d) with respect to any natural Person, any Person having a
relationship with such Person by blood, marriage or adoption not more remote
than first cousin. For the purposes of this definition, "control," when used
with respect to any specified Person, means the power to direct the management
and policies of such Person, directly or indirectly, whether
3
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Bank" means Fleet National Bank in its capacity as administrative
agent under the Senior Credit Agreement and any future or successor or
replacement administrative agent under the Senior Credit Agreement.
"Agent Members" has the meaning specified in Section 311.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction) (collectively, a "transfer"), directly or
indirectly, in one or a series of related transactions, of (a) any Capital Stock
of any Restricted Subsidiary; (b) all or substantially all of the properties and
assets of the Company or its Restricted Subsidiaries; or (c) any other
properties or assets of any division or line of business of the Company or any
Restricted Subsidiary, other than in the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include any
transfer of properties or assets (i) that is governed by the provisions of
Article Eight, (ii) between or among the Company and Restricted Subsidiaries in
accordance with the terms of this Indenture, (iii) that consist of accounts
receivable transferred to third parties that are not Affiliates of the Company
or any Subsidiary of the Company in the ordinary course of business, including
by way of the securitization of such receivables, (iv) of the Company or any
Restricted Subsidiary in exchange for properties or assets of substantially
equal value of another Person to be used in the same line of business being
conducted by the Company or any Restricted Subsidiary at the time of such
transfer having a Fair Market Value of less than $1.0 million in any given
fiscal year, (v) to an Unrestricted Subsidiary, if permitted under Section 1009,
(vi) consisting of the Headquarters Facility to third parties that are not
Affiliates of the Company or any Subsidiary of the Company or (vii) having a
Fair Market Value of less than $1.0 million in any given fiscal year.
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Notes.
"Average Life" means, as of the date of determination with respect to any
Indebtedness, the quotient obtained by dividing (a) the sum of the products of
(i) the number of years from the date of determination to the date or dates of
each successive scheduled principal payment (including, without limitation, any
sinking fund requirements) of such Indebtedness multiplied by (ii) the amount of
each such principal payment by (b) the sum of all such principal payments.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
4
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any duly authorized committee of such board.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day," when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Notes, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment or other location are authorized
or obligated by law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, partnership interests, participation, rights in or other equivalents
(however designated) of such Person's capital stock, and any rights (other than
debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock, whether now outstanding
or issued after the date of the Indenture.
"Capitalized Lease Obligation" means, with respect to any Person, any
obligation of such Person under a lease of (or other agreement conveying the
right to use) any property (whether real, personal or mixed) that is required to
be classified and accounted for as a capital lease obligation under GAAP, and,
for the purpose of this Indenture, the amount of such obligation at any date
shall be the capitalized amount thereof at such date, determined in accordance
with GAAP.
"Cash Equivalents" means: (a) any evidence of Indebtedness with a maturity
of one year or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (b) certificates of deposit or acceptances with a maturity of one year
or less of any financial institution that is a member of the Federal Reserve
System having combined capital and surplus and undivided profits of not less
than $500 million; (c) commercial paper with a maturity of one year or less
issued by a corporation that is not an Affiliate of the Company and is organized
under the laws of any state of the United States or the District of Columbia and
rated at least A-1 by S&P or any successor rating agency or at least P-1 by
Moody's or any successor rating agency; (d) repurchase obligations with a term
of not more than seven days for underlying securities of the types described in
clauses (a) and (b) above; and (e) demand and time deposits with a domestic
commercial bank that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500 million.
5
"Certificate of Designation" means the certificate of designations,
preferences and rights of the Senior Exchangeable Preferred Stock filed with the
Secretary of State of the State of Delaware on December 29, 1997.
"Change in Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total outstanding Voting Stock of the
Company and either (x) the Permitted Holders beneficially own, directly or
indirectly, in the aggregate Voting Stock of the Company that represents a
lesser percentage of the aggregate ordinary voting power of all classes of the
Voting Stock of the Company, voting together as a single class, than such other
person or group and are not entitled (by voting power, contract or otherwise) to
elect directors of the Company having a majority of the total voting power of
the Board of Directors, or (y) such other person or group is entitled to elect
directors of the Company having a majority of the total voting power of the
Board of Directors; (b) the Company consolidates with, or merges with or into,
another Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock of the Company is converted into or
exchanged for cash, securities or other property, other than any such
transaction (i) where the outstanding Voting Stock of the Company is not
converted or exchanged at all (except to the extent necessary to reflect a
change in the jurisdiction of incorporation of the Company) or is converted into
or exchanged for (A) Voting Stock (other than Redeemable Capital Stock) of the
surviving or transferee corporation or (B) Voting Stock (other than Redeemable
Capital Stock) of the surviving or transferee corporation and cash, securities
and other property (other than Capital Stock of the surviving or transferee
corporation) in an amount that could be paid by the Company as a Restricted
Payment as described under Section 1009 and (ii) immediately after such
transaction, no "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person shall be deemed to have "beneficial ownership" of all securities that
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 35% of the total outstanding Voting Stock of the surviving or transferee
corporation and either (x) the Permitted Holders beneficially own, directly or
indirectly, in the aggregate Voting Stock of the surviving or transferee
corporation that represents a lesser percentage of the aggregate ordinary voting
power of all classes of the Voting Stock of the surviving or transferee
corporation, voting together as a single class, than such other person or group
and are not entitled (by voting power, contract or otherwise) to elect directors
of the Surviving Entity having a majority of the total voting power of the Board
of Directors, or (y) such other person or group is entitled to elect directors
of the surviving or transferee having a majority of the total voting power of
the elected
6
Board of Directors; or (c) during any consecutive two year period, individuals
who at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election to such Board of
Directors, or whose nomination for election by the stockholders of the Company,
was approved by a vote of 66 2/3% of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or (d) the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution other than in a transaction which complies with Article Eight.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated, whether voting or
non-voting) of such Person's common stock, whether outstanding on the Issuance
Date or issued after the Issuance Date, and includes, without limitation, all
series and classes of such common stock.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Operating Officer, its Chief
Financial Officer, any Vice President, its Treasurer or an Assistant Treasurer,
and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, for any period, the consolidated
net income (or loss) of the Company and all Restricted Subsidiaries for such
period as determined in accordance with GAAP, adjusted by excluding, without
duplication, (a) any net after-tax extraordinary gains or losses (less all fees
and expenses relating thereto), (b) any net after-tax gains or losses (less all
fees and expenses relating thereto) attributable to asset dispositions other
than in the ordinary course of business, (c) the portion of net income (or loss)
of any Person (other than the Company or a Restricted Subsidiary), including
Unrestricted Subsidiaries, in which the Company or any Restricted Subsidiary has
an ownership interest, except to the extent of the amount of dividends or other
distributions actually paid to the Company or any Restricted Subsidiary in cash
dividends or distributions during such period, (d) the net income (or loss) of
any Person combined with the Company or any Restricted Subsidiary on a "pooling
of interests" basis attributable to any period prior to the date of combination,
(e) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar
7
distributions by such Restricted Subsidiary is not at the date of determination
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary or its
stockholders, and (f) for purposes of calculating Consolidated Adjusted Net
Income under Section 1009, any net income (or loss) from any Restricted
Subsidiary while it was an Unrestricted Subsidiary at any time during such
period other than any amounts actually received from such Restricted Subsidiary
during such period.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for any
period, the ratio of (a) the sum of Consolidated Adjusted Net Income and, to the
extent deducted in computing Consolidated Adjusted Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-Cash
Charges, in each case, for such period to (b) the Consolidated Interest Expense
for such period.
"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes of the Company and all Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, for any period, without duplication,
(1) the sum of (a) the interest expense of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (i) amortization of
debt discount, (ii) the net cost of Interest Rate Agreements (including
amortization of discounts), (iii) the interest portion of any deferred payment
obligation and (iv) amortization of debt issuance costs, plus (b) the interest
component of Capitalized Lease Obligations of the Company and its Restricted
Subsidiaries during such period, plus (c) cash dividends due (whether or not
declared) on Preferred Stock by the Company and any Restricted Subsidiary, plus
(d) cash dividends due (whether or not declared) on Redeemable Capital Stock by
the Company and any Restricted Subsidiary, in each case as determined on a
consolidated basis in accordance with GAAP, less (2) interest on the Exchange
Debentures outstanding on the Exchange Date paid in kind with Exchange
Debentures and on Exchange Debentures so issued as payment in kind interest, all
in accordance with the Debenture Indenture as in effect on the Issuance Date;
provided that (x) the Consolidated Interest Expense attributable to interest on
any Indebtedness computed on a pro forma basis and (A) bearing a floating
interest rate shall be computed as if the rate in effect on the date of
computation had been the applicable rate for the entire period and (B) which was
not outstanding during the period for which the computation is being made but
which bears, at the option of the Company, a fixed or floating rate of interest,
shall be computed by applying at the option of the Company, either the fixed or
floating rate, and (y) in making such computation, the Consolidated Interest
Expense attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the average
daily balance of such Indebtedness during the applicable period; provided
further that, notwithstanding the foregoing, the interest rate with respect to
any Indebtedness covered by any Interest Rate Agreement shall be deemed to be
the effective interest rate with respect to such Indebtedness after taking into
account such Interest Rate Agreement.
8
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization, depletion and other non-cash expenses of the Company
and any Restricted Subsidiary reducing Consolidated Adjusted Net Income for such
period, determined on a consolidated basis in accordance with GAAP (excluding
any such non-cash charge that requires an accrual of or reserve for cash charges
for any future period).
"Corporate Trust Office" means the principal corporate trust office of the
Trustee, at which at any particular time its corporate trust business shall be
administered, which office on the date of execution of this Indenture is located
at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
"corporation" includes corporations, associations, companies and business
trusts.
"Currency Agreements" means any spot or forward foreign exchange agreements
and currency swap, currency option or other similar financial agreements or
arrangements entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business and designed to protect against or manage
exposure to fluctuations in foreign currency exchange rates.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness under
the Senior Credit Agreement and (ii) any other Senior Indebtedness which, at the
time of determination, has an aggregate principal amount outstanding of at least
$25,000,000 and that has been specifically designated in the instrument
evidencing such Senior Indebtedness as "Designated Senior Indebtedness" by the
Company.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under this Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
9
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Exchange Debentures" means the 13 1/4% Subordinated Exchange Debentures
due 2009 of the Company issuable in exchange for the Senior Exchangeable
Preferred Stock, plus any additional Exchange Debentures issued in lieu of cash
interest, pursuant to the Exchange Indenture as in effect on the Issuance Date.
"Exchange Notes" has the meaning stated in the first recital of this
Indenture and refers to any Exchange Notes containing terms substantially
identical to the Initial Notes (except that (i) such Exchange Notes shall not
contain terms with respect to transfer restrictions and shall be registered
under the Securities Act, and (ii) certain provisions relating to an increase in
the stated rate of interest thereon shall be eliminated) that are issued and
exchanged for the Initial Notes in accordance with the Exchange Offer, as
provided for in the Registration Rights Agreement and this Indenture.
"Exchange Offer" means the offer by the Company to the Holders of the
Initial Notes to exchange all of the Initial Notes for Exchange Notes, as
provided for in the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the date of this Indenture.
"Global Notes" has the meaning set forth in Section 201.
"guarantee" means, as applied to any obligation, (a) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or any
part of such obligation, including, without limiting the foregoing, the payment
of amounts drawn down by letters of credit.
10
"Guarantor Senior Indebtedness" of a Subsidiary Guarantor means
Indebtedness of such Subsidiary Guarantor consisting of (i) a guarantee of any
Senior Indebtedness under the Senior Credit Agreement or any other Senior
Indebtedness and (ii) the principal of, premium, if any, and interest on all
other Indebtedness of such Subsidiary Guarantor (other than the Note Guarantee
issued by such Subsidiary Guarantor), whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
indebtedness shall not be senior in right of payment to such Note Guarantee.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" of a Subsidiary
Guarantor shall not include (i) Indebtedness evidenced by the Note Guarantee of
such Subsidiary Guarantor, (ii) Indebtedness of such Subsidiary Guarantor that
is expressly subordinated in right of payment to any Guarantor Senior
Indebtedness of such Subsidiary Guarantor, (iii) Indebtedness of such Subsidiary
Guarantor that by operation of law is subordinate to any general unsecured
obligations of such Subsidiary Guarantor, (iv) Indebtedness of such Subsidiary
Guarantor to the extent incurred in violation of any covenant of this Indenture,
(v) any liability for federal, state or local taxes or other taxes, owed or
owing by such Subsidiary Guarantor, (vi) trade account payables owed or owing by
such Subsidiary Guarantor, (vii) amounts owed by such Subsidiary Guarantor for
compensation to employees or for services rendered to such Subsidiary Guarantor,
(viii) Indebtedness of such Subsidiary Guarantor to any Affiliate of the
Company, (ix) Redeemable Capital Stock of such Subsidiary Guarantor and (x)
Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code is without recourse to
such Subsidiary Guarantor or any Subsidiary.
"Headquarters Facility" means the headquarters facility and warehouse of
the Company as of the Issuance Date located in Dallas, Texas.
"Holder" means the Person in whose name a Note is registered in the Note
Register.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities of such Person for borrowed money (including overdrafts) or for
the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities incurred in the ordinary course
of business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit and
acceptances issued under letter of credit facilities, acceptance facilities or
other similar facilities, (b) all obligations of such Person evidenced by bonds,
notes, debentures or other similar instruments, (c) all indebtedness of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even if the rights
and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), but excluding
trade payables arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such Person, (e) all obligations of such Person under or in
respect of Interest Rate Agreements or Currency Agreements, (f) all Indebtedness
referred to in (but not excluded from) the preceding clauses of other Persons
and all dividends of other Persons, the payment of which
11
is secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or with respect
to property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligation being deemed to be
the lesser of the value of such property or asset or the amount of the
obligation so secured), (g) all guarantees by such Person of Indebtedness
referred to in this definition of any other Person, and (h) all Redeemable
Capital Stock of such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends.
For purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Redeemable Capital Stock as if such
Redeemable Capital Stock were purchased on any date on which Indebtedness shall
be required to be determined pursuant to this Indenture, and if such price is
based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Initial Notes" has the meaning specified in the recitals to this
Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
"Interest Payment Date," when used with respect to any Note, means the
Stated Maturity of an installment of interest on such Note.
"Interest Rate Agreements" means any interest rate protection agreements
and other types of interest rate hedging agreements (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements)
designed to protect against or manage exposure to fluctuations in interest
rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee or other extension of credit or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase,
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP. In addition, the fair market
value of the net assets of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary shall be deemed
to be an "Investment" made by the Company in such Unrestricted Subsidiary at
12
such time. "Investments" shall exclude extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices.
"Issuance Date" means the closing date for the sale and original issuance
of Notes hereunder.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance upon or with respect to any property
of any kind, real or personal, movable or immovable, now owned or hereafter
acquired. A Person shall be deemed to own subject to a Lien any property which
such Person has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement.
"Management Stock" means the Capital Stock of the Company and the options
to acquire Capital Stock of the Company owned by Xxxxx X. Xxxx and Xxxxx X.
Xxxxx as of the Issuance Date together with Preferred Stock issued as payment in
kind dividends on such Preferred Stock and any shares of Preferred Stock issued
as payment in kind dividends thereon, and such dividends made pursuant to the
terms of the certificate of designation or the certificate of incorporation, as
the case may be, for such Preferred Stock as in effect on the Issuance Date.
"Maturity" means, with respect to any Note, the date on which any principal
of such Note becomes due and payable as therein or herein provided, whether at
the Stated Maturity with respect to such principal or by declaration of
acceleration, call for redemption or purchase or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or Cash Equivalents (except to the extent that
such obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary), net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of legal counsel and investment banks)
related to such Asset Sale, (ii) provisions for all taxes payable as a result of
such Asset Sale, (iii) payments made to retire Indebtedness where payment of
such Indebtedness is secured by the assets or properties the subject of such
Asset Sale, (iv) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary) owning a beneficial interest in the assets
subject to the Asset Sale and (v) appropriate amounts to be provided by the
Company or any Restricted Subsidiary, as the case may be, as a reserve required
in accordance with GAAP against any liabilities associated with such Asset Sale
and retained by the Company or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension and other post-
employment benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification
13
obligations associated with such Asset Sale, all as reflected in an Officers'
Certificate delivered to the Trustee.
"Non-Payment Default" means any event of default (other than a Payment
Default) the occurrence of which entitles one or more Persons to accelerate the
maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" means a person who is not a U.S. person as defined in
Regulation S.
"Note Guarantee" means any guarantee of the obligations of the Company
under the Indenture and the Notes by any Restricted Subsidiary in accordance
with the provisions of the Indenture.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 305.
"Notes" has the meaning stated in the first recital of this Indenture and
more particularly means any Notes authenticated and delivered under this
Indenture.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Offshore Global Note" has the meaning set forth in Section 201.
"Offshore Note Exchange Date" has the meaning set forth in Section 201.
"Offshore Physical Note" has the meaning set forth in Section 201.
"Opinion of Counsel" means a written opinion of legal counsel, which and
who may be counsel for the Company, including an employee of the Company, and
who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption or
repayment at the option of the Holder money in the necessary amount has
been theretofore deposited
14
with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Notes; provided that, if
such Notes are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Notes, except to the extent provided in Sections 1402 and 1403,
with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Fourteen; and
(iv) Notes which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture, other than any such Notes in respect
of which there shall have been presented to the Trustee proof satisfactory
to it that such Notes are held by a bona fide purchaser in whose hands such
Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding
(provided that in connection with any offer by the Company or any obligor to
purchase the Notes, Notes tendered for purchase will be deemed to be Outstanding
and held by the tendering Holder until the date of purchase), except that, in
determining whether the Trustee shall be protected in making such calculation or
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Notes which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Notes so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right to act with
respect to such Notes and that the pledgee is not the Company or any other
obligor upon the Notes or any Affiliate of the Company or such other obligor.
"Pari Passu Indebtedness" means (a) with respect to the Notes, Indebtedness
that ranks pari passu in right of payment to the Notes and (b) with respect to
any Note Guarantee, Indebtedness that ranks pari passu in right of payment to
such Note Guarantee.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (or premium, if any,
on) or interest on any Notes on behalf of the Company.
"Payment Blockage Period" has the meaning specified in Section 1203.
15
"Payment Default" means any default in the payment (whether at stated
maturity, upon scheduled installment, by acceleration or otherwise) of principal
of, or premium, if any, or interest on Designated Senior Indebtedness.
"Permitted Holders" means, as of the date of determination, Madison
Dearborn Capital Partners II, L.P. and its Affiliates.
"Permitted Indebtedness" means any of the following:
(a) (i) Indebtedness of the Company under the Senior Credit Agreement
in an aggregate principal amount at any one time outstanding not to exceed
the sum of (A) $110 million less the amount of any permanent reductions
made by the Company in respect of any term loans under the Senior Credit
Agreement and (B) with respect to revolving borrowings, the greater of (1)
$115 million and (2) 60% of the Eligible Inventory (as defined in the
Senior Credit Agreement on the Issuance Date) of the Company and the
Restricted Subsidiaries and (ii) any guarantee by a Subsidiary Guarantor of
Indebtedness incurred under this clause (a);
(b) Indebtedness of the Company pursuant to the Notes or of any
Restricted Subsidiary pursuant to a Note Guarantee;
(c) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of this Indenture and listed on Schedule A;
(d) Indebtedness of the Company owing to any wholly owned Restricted
Subsidiary; provided that any Indebtedness of the Company owing to any such
Restricted Subsidiary is subordinated in right of payment from and after
such time as the Notes shall become due and payable (whether at Stated
Maturity, acceleration or otherwise) to the payment and performance of the
Company's obligations under such Notes; provided further that any
disposition, pledge or transfer of any such Indebtedness to a Person (other
than a disposition, pledge or transfer to the Company or another wholly
owned Restricted Subsidiary) shall be deemed to be an incurrence of such
Indebtedness by the Company not permitted by this clause (d);
(e) Indebtedness of a Restricted Subsidiary owing to the Company or
to another wholly owned Restricted Subsidiary; provided that any such
Indebtedness of any Subsidiary Guarantor is subordinated in right of
payment to the Note Guarantee of such Subsidiary Guarantor; provided
further that any disposition, pledge or transfer of any such Indebtedness
to a Person (other than a disposition, pledge or transfer to the Company or
a wholly owned Restricted Subsidiary) shall be deemed to be an incurrence
of such Indebtedness by such Restricted Subsidiary not permitted by this
clause (e);
16
(f) guarantees of any Restricted Subsidiary made in accordance with
the provisions of Section 1015;
(g) obligations of the Company or any Subsidiary Guarantor entered
into in the ordinary course of business (i) pursuant to Interest Rate
Agreements designed to protect the Company or any Restricted Subsidiary
against fluctuations in interest rates in respect of Indebtedness of the
Company or any Restricted Subsidiary, which obligations do not exceed the
aggregate principal amount of such Indebtedness and (ii) pursuant to
Currency Agreements entered into by the Company or any of its Restricted
Subsidiaries in respect of its (x) assets or (y) obligations, as the case
may be, denominated in a foreign currency;
(h) Indebtedness of the Company or any Subsidiary Guarantor in
respect of Purchase Money Obligations and Capitalized Lease Obligations of
the Company or any Subsidiary Guarantor in an aggregate amount which does
not exceed $15,000,000 at any one time outstanding;
(i) Indebtedness of the Company or any Subsidiary Guarantor
consisting of guarantees, indemnities or obligations in respect of purchase
price adjustments in connection with the acquisition or disposition of
assets, including, without limitation, shares of Capital Stock of
Restricted Subsidiaries;
(j) Indebtedness of the Company or any Subsidiary Guarantor
represented by (x) letters of credit for the account of the Company or any
Restricted Subsidiary or (y) other obligations to reimburse third parties
pursuant to any surety bond or other similar arrangements, which letters of
credit or other obligations, as the case may be, are intended to provide
security for workers' compensation claims, payment obligations in
connection with self-insurance or other similar requirements in the
ordinary course of business;
(k) Acquired Indebtedness of any Restricted Subsidiary that is
organized outside of the United States of America in an aggregate amount
which, together with any Indebtedness permitted to be incurred pursuant to
this clause (k) and refinanced pursuant to clause (p) below, does not
exceed $10,000,000 at any one time outstanding;
(l) Indebtedness of the Company owing to Xxxxx X. Xxxxx, under a note
issued pursuant to a written agreement between the Company and Xxxxx X.
Xxxxx as in effect on the Issuance Date, in consideration for the
repurchase of Common Stock of the Company owned by Xxxxx X. Xxxxx at his
retirement, in an aggregate amount not to exceed $15,000,000 outstanding at
any time;
(m) Preferred Stock issued as payment in kind dividends on Preferred
Stock outstanding on the Issuance Date and any shares of Preferred Stock
issued as payment in kind dividends thereon, such dividends made pursuant
to the terms of the certificate of
17
designation for such Preferred Stock or the certificate of incorporation,
as the case may be, as in effect on the Issuance Date;
(n) Indebtedness of the Company or a Subsidiary Guarantor incurred in
connection with the Company's Headquarters Facility or the purchase or
construction of a new headquarters facility, in each case, as permitted
under the Senior Credit Agreement as in effect on the Issuance Date;
(o) Indebtedness of the Company or any Subsidiary Guarantor not
otherwise permitted by the foregoing clauses (a) through (n) in an
aggregate principal amount not in excess of $20,000,000 at any one time
outstanding; and
(p) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
Indebtedness, referred to in clauses (b), (c) and (k) of this definition,
including any successive refinancings, so long as (i) any such new
Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if such Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced, plus the lesser of the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Indebtedness refinanced or the amount of any premium
reasonably determined as necessary to accomplish such refinancing, (ii) in
the case of any refinancing by the Company of Pari Passu Indebtedness or
Subordinated Indebtedness, such new Indebtedness is made pari passu with or
subordinate to the Notes at least to the same extent as the Indebtedness
being refinanced, (iii) in the case of any refinancing by any Subsidiary
Guarantor of Pari Passu Indebtedness or Subordinated Indebtedness, such new
Indebtedness is made pari passu with or subordinate to the Note Guarantee
of such Subsidiary Guarantor at least to the same extent as the
Indebtedness being refinanced, (iv) such new Indebtedness has an Average
Life longer than the Average Life of the Notes and a final Stated Maturity
later than the final Stated Maturity of the Notes and (v) Indebtedness of
the Company or a Subsidiary Guarantor may only be refinanced with
Indebtedness of the Company or a Subsidiary Guarantor and Indebtedness of a
Restricted Subsidiary that is not a Subsidiary Guarantor may only be
refinanced with Indebtedness of such Restricted Subsidiary.
"Permitted Investments" means any of the following:
(a) Investments in Cash Equivalents;
(b) Investments in the Company or any wholly owned Restricted
Subsidiary;
18
(c) intercompany Indebtedness to the extent permitted under clause
(d) or (e) of the definition of "Permitted Indebtedness;"
(d) Investments in an amount not to exceed $10,000,000 at any one
time outstanding;
(e) Investments by the Company or any Restricted Subsidiary in
another Person, if as a result of such Investment (i) such other Person
becomes a wholly owned Restricted Subsidiary or (ii) such Person, in one
transaction or a series of related transactions, is merged or consolidated
with or into, or transfers or conveys all or substantially all of its
assets to, the Company or a wholly owned Restricted Subsidiary;
(f) bonds, notes, debentures and other securities received as
consideration for Assets Sales to the extent permitted under Section 1014;
(g) negotiable instruments held for deposit or collection in the
ordinary course of business, except to the extent they would constitute
Investments in Affiliates; or
(h) Investments in the form of the sale (on a "true-sale" non-
recourse basis) or the servicing of receivables transferred from the
Company or any Restricted Subsidiary.
"Permitted Junior Securities" has the meaning specified in Section 1202.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Notes" has the meaning set forth in Section 201.
"Place of Payment" means the office or agency maintained by the Company
where the principal of (and premium, if any, on) and interest on the Notes are
payable as specified in Section 1002.
"Predecessor Note" of any particular Note, means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference
19
stock whether now outstanding, or issued after the Issuance Date, and including,
without limitation, all classes and series of preferred or preference stock of
such Person.
"Private Placement Legend" has the meaning set forth in Section 203.
"Public Equity Offering" means an offer and sale of common stock (which is
Qualified Capital Stock) of the Company made on a primary basis by the Company
pursuant to a registration statement that has been declared effective by the
Commission pursuant to the Securities Act (other than a registration statement
on Form S-8 or otherwise relating to equity securities issuable under any
employee benefit plan of the Company).
"Purchase Money Obligations" means, with respect to any Person,
obligations, other than Capitalized Lease Obligations, incurred or assumed in
the ordinary course of business in connection with the purchase of property to
be used in the business of such Person within 90 days of such purchase, provided
that the amount of any Purchase Money Obligation shall not exceed the purchase
price of the property purchased.
"QIB" means a "Qualified Institutional Buyer" within the meaning of Rule
144A under the Securities Act.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any class or series of Capital Stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, is, or upon the happening of an
event or passage of time would be, required to be redeemed prior to the final
Stated Maturity of the Notes or is redeemable at the option of the holder
thereof at any time prior to such final Stated Maturity, or is convertible into
or exchangeable for debt securities at any time prior to such final Stated
Maturity.
"Redemption Date," when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of December 29, 1997, among the Company, the Subsidiary Guarantors and
the Holders of Initial Notes.
"Registration Statement" means the Registration Statement as defined in the
Registration Rights Agreement.
20
"Regular Record Date" has the meaning specified in Section 301.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means (i) with respect to the Senior Credit Agreement, the
Agent Bank and (ii) with respect to any other Senior Indebtedness, the indenture
trustee or other trustee, agent or representative for the holders of such Senior
Indebtedness.
"Responsible Officer," when used with respect to the Trustee, means any
vice president, any assistant secretary, any assistant treasurer, any trust
officer or assistant trust officer, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above-
designated officers, and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
or her knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means, at any time, any direct or indirect
Subsidiary of the Company that is not then an Unrestricted Subsidiary; provided,
however, that upon the occurrence of any Unrestricted Subsidiary ceasing to be
an Unrestricted Subsidiary, such Subsidiary shall be included in the definition
of "Restricted Subsidiary."
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard and Poor's Ratings Group, a division of XxXxxx-Xxxx,
Inc. and its successors.
"Sale and Leaseback Transaction" means any transaction or series of related
transactions pursuant to which the Company or a Restricted Subsidiary sells or
transfers any property or asset in connection with the leasing of such property
or asset to the seller or transferor.
"Securities Act" means Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Senior Credit Agreement" means the credit agreement dated as of December
29, 1997, among the Company, the several lenders parties thereto, the Subsidiary
Guarantors, Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, as arranger and syndication agent, and Fleet National Bank, as
administrative agent, as such agreement may be amended, renewed, extended,
substituted, restated, refinanced, restructured, supplemented, increased or
otherwise modified from time to time (including, without limitation, any
successive amendments, renewals, extensions, substitutions, restatements,
refinancings, restructurings, supplements or other modifications of the
foregoing); provided that with respect to any agreement providing for the
refinancing of Indebtedness under the Senior Credit Agreement, such agreement
shall be the Senior Credit Agreement under the Indenture only if a notice to
that effect is delivered by the
21
Company to the Trustee and there shall be at any time only one instrument that
is the Senior Credit Agreement under the Indenture.
"Senior Exchangeable Preferred Stock" means the 13 1/4% Senior Exchangeable
Preferred Stock issued by the Company on the Issuance Date and any shares of
Senior Exchangeable Preferred Stock issued as payment in kind dividends thereon
or on shares of Senior Exchangeable Preferred Stock so issued as payment in kind
dividends pursuant to the Certificate of Designation as in effect on the
Issuance Date.
"Senior Indebtedness" means (i) all obligations of the Company, now or
hereafter existing, under or in respect of the Senior Credit Agreement, whether
for principal, premium, if any, interest (including, interest accruing after the
filing of, or which would have accrued but for the filing of, a petition by or
against the Company under Bankruptcy Law, whether or not such interest is
allowed as a claim after such filing in any proceeding under such law) and other
amounts due in connection therewith (including any fees, premiums, expenses and
indemnities) and (ii) the principal of, premium, if any, and interest on all
other Indebtedness of the Company (other than the Notes), whether outstanding on
the date of this Indenture or thereafter created, incurred or assumed, unless,
in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes. Notwithstanding the foregoing, "Senior Indebtedness" shall not include
(i) Indebtedness evidenced by the Notes, (ii) Indebtedness of the Company that
is expressly subordinated in right of payment to any Senior Indebtedness of the
Company or the Notes, (iii) Indebtedness of the Company that by operation of law
is subordinate to any general unsecured obligations of the Company, (iv)
Indebtedness of the Company to the extent incurred in violation of Section 1008,
(v) any liability for federal, state or local taxes or other taxes, owed or
owing by the Company, (vi) trade account payables owed or owing by the Company,
(vii) amounts owed by the Company for compensation to employees or for services
rendered to the Company, (viii) Indebtedness of the Company to any Restricted
Subsidiary or any other Affiliate of the Company, (ix) Redeemable Capital Stock
of the Company and (x) Indebtedness which when incurred and without respect to
any election under Section 1111(b) of Title 11 of the United States Code is
without recourse to the Company or any Restricted Subsidiary.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary of the Company
that, together with its Subsidiaries, (i) for the most recent fiscal year of the
Company, accounted for more than 10% of the consolidated revenues of the Company
and its Restricted Subsidiaries or (ii) as of the end of such fiscal year, was
the owner of more than 10% of the consolidated assets of the Company and its
Restricted Subsidiaries, all as set forth on the most recently available
consolidated financial statements of the Company for such fiscal year.
22
"Special Record Date" for the payment of any Defaulted Interest on the
Notes means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and, when used with respect to any other Indebtedness, means the
date specified in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Notes or the Note Guarantee of such Subsidiary Guarantor, as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or Voting
Stock of which is at the time owned, directly or indirectly, by the Company or
by one or more other Subsidiaries or by the Company and one or more other
Subsidiaries.
"Subsidiary Guarantor" means each of TMI Holdings Inc., Tuesday Morning
Inc., Friday Morning, Inc. and TMIL Corporation and any Restricted Subsidiary
that incurs a Note Guarantee; provided that, upon the release and discharge of
any Person from its Note Guarantee in accordance with the Indenture, such Person
shall cease to be a Subsidiary Guarantor.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was executed, except as provided in
Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder.
"United States" means the United States of America (including the states
and the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
"Unrestricted Subsidiary" means (a) any Subsidiary that at the time of
determination shall be an Unrestricted Subsidiary (as designated by the Board of
Directors of the Company, as provided below) and (b) any Subsidiary of an
Unrestricted Subsidiary; provided, however, that in no event shall any
Subsidiary Guarantor be an Unrestricted Subsidiary. The Board of Directors of
the Company may designate any Subsidiary (including any newly acquired or newly
formed Subsidiary) to be an Unrestricted Subsidiary so long as (i) neither the
Company nor any Restricted Subsidiary is directly or indirectly liable for any
Indebtedness of such Subsidiary, (ii) no default with respect to any
Indebtedness of such Subsidiary would permit (upon notice, lapse of time or
23
otherwise) any holder of any other Indebtedness of the Company or any Restricted
Subsidiary to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity, (iii) any
Investment in such Subsidiary made as a result of designating such Subsidiary an
Unrestricted Subsidiary will not violate the provisions of Section 1019, (iv)
neither the Company nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or oral,
with such Subsidiary other than those that might be obtained at the time from
Persons who are not Affiliates of the Company, and (v) neither the Company nor
any Restricted Subsidiary has any obligation (1) to subscribe for additional
shares of Capital Stock or other equity interest in such Subsidiary, or (2) to
maintain or preserve such Subsidiary's financial condition or to cause such
Subsidiary to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Company shall be evidenced to the Trustee by
filing a board resolution with the Trustee giving effect to such designation.
The Board of Directors of the Company may designate any Unrestricted Subsidiary
as a Restricted Subsidiary if immediately after giving effect to such
designation, there would be no Default or Event of Default under this Indenture
and the Company could incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to Section 1008.
"U.S. Global Note" has the meaning set forth in Section 201.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. Physical Note" has the meaning set forth in Section 201.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
24
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company, the Subsidiary
Guarantors and any other obligor on the Notes (if applicable) shall, at the
request of the Trustee, furnish to the Trustee an Officers' Certificate in form
and substance reasonably acceptable to the Trustee stating that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance with which constitutes a condition precedent) relating to the
proposed action have been complied with and, at the request of the Trustee, an
Opinion of Counsel to the effect that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of any such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Each certificate or opinion with respect to compliance with a covenant
or condition provided for in this Indenture (other than pursuant to Section
1007) shall include:
(1) a statement that each individual or firm signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual or such
firm, he or it has made such examination or investigation as is necessary
to enable him or it to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual or such firm, such covenant or condition has been complied with.
25
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any
Subsidiary Guarantor or other obligor on the Notes may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his or her certificate or opinion is based are erroneous.
Any such certificate or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company, any Subsidiary Guarantor or other obligor on
the Notes stating that the information with respect to such factual matters is
in the possession of the Company, any Subsidiary Guarantor or other obligor on
the Notes, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the
26
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Note Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for that purpose the Outstanding Notes shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than eleven months after
the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company or
any Subsidiary Guarantor in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 105. Notices, Etc., to Trustee, Company, any Subsidiary
--------------------------------------------------
Guarantor and Agent Bank.
------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
27
(1) the Trustee by any Holder or by the Company or any Subsidiary
Guarantor or any other obligor on the Notes shall be sufficient for every
purpose hereunder if made, given, furnished or delivered in writing and
mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to or with the Trustee at its Corporate Trust Office, Attention:
Indenture Trust Division/X. Xxxxxxxxx, or
(2) the Company or any Subsidiary Guarantor by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or delivered in
writing, or mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to the Company or such Subsidiary Guarantor addressed to
it at the address of its principal office, for the attention of the Chief
Financial Officer, specified in the first paragraph of this Indenture or at
any other address previously furnished in writing to the Trustee by the
Company or such Subsidiary Guarantor, or
(3) the Agent Bank by the Company or any Subsidiary Guarantor, the
Trustee or any Holder shall be sufficient for any purpose hereunder if
made, given, furnished or delivered in writing to or with the Agent Bank
addressed to it as set forth in the Senior Credit Agreement, or at any
other address previously furnished in writing to the Company, the
Subsidiary Guarantors and the Trustee by the Agent Bank.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders of
Notes by the Company or the Trustee, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first-
class postage prepaid, to each such Holder affected by such event, at its
address as it appears in the Note Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such notice.
In any case where notice to Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Any notice mailed to a Holder in the manner herein prescribed shall be
conclusively deemed to have been received by such Holder, whether or not such
Holder actually receives such notice.
In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impractical to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be sufficient giving of
such notice for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such
28
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
-------------------
In case any provision in this Indenture or in any Note 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.
SECTION 110. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Authenticating Agent, any
Paying Agent, any Notes Registrar and their successors hereunder and the Holders
and, with respect to any provisions hereof relating to the subordination of the
Notes or the rights of holders of Senior Indebtedness, the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 111. Governing Law.
-------------
This Indenture and the Notes shall be governed by and construed in
accordance with the law of the State of New York. Upon the effectiveness of the
Shelf Registration Statement or the consummation of the Exchange Offer, this
Indenture will be subject to the provisions of the Trust Indenture Act that are
required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 112. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, or
Stated Maturity or Maturity of any Note shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of this Indenture or of
any Note) payment of principal (and
29
premium, if any) or interest need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date or at the Stated Maturity or Maturity; provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date, Stated Maturity or Maturity, as the case may be.
SECTION 113. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the provision required by the TIA shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provision shall be deemed to apply to this Indenture as
so modified or excluded, as the case may be.
SECTION 114. No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or any Subsidiary Guarantor shall not have any liability for any obligations of
the Company or such Subsidiary Guarantor under the Notes, any Note Guarantee or
this Indenture, as applicable, or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Note and the
related Note Guarantee, each Holder shall waive and release all such liability.
The waiver and release shall be part of the consideration for the issue of the
Notes and the Note Guarantees.
SECTION 115. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be original; but such counterparts shall together constitute but one
and the same instrument.
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally.
---------------
The Initial Notes shall be known as the "11% Senior Subordinated Notes
due 2007" and the Exchange Notes shall be known as the "11% Series B Senior
Subordinated Notes due 2007," in each case, of the Company. The Notes and the
Trustee's certificate of authentication shall be in substantially the forms set
forth in Exhibit A hereto and in this Article, respectively, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification
30
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers of the Company executing such Notes, as evidenced by
their execution of the Notes. Any portion of the text of any Note may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Note. Each Note shall be dated the date of its authentication.
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Notes, as evidenced by their
execution of such Notes.
Initial Notes offered and sold in reliance on Rule 144A under the
Securities Act shall be issued initially in the form of a single permanent
global Note in substantially the form set forth in Exhibit A and contain each of
the legends set forth in Section 203 (the "U.S. Global Note"), registered in the
name of the nominee of the Depositary, deposited with the Trustee, as custodian
for the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the U.S. Global Note may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
Initial Notes offered and sold in offshore transactions in reliance on
Regulation S under the Securities Act shall be issued initially in the form of a
single temporary global Note in substantially the form set forth in Exhibit A
and contain the legends set forth in Section 203 (the "Temporary Offshore Global
Note"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. At any
time following 41 days after the date hereof (the "Offshore Note Exchange
Date"), upon receipt by the Trustee and the Company of a certificate
substantially in the form set forth in Section 204, a single permanent global
Note substantially in the form of Exhibit A hereto (the "Permanent Offshore
Global Note"; and together with the Temporary Offshore Global Note, the
"Offshore Global Note") duly executed by the Company and authenticated by the
Trustee as hereinafter provided shall be deposited with the Trustee, as
custodian for the Depositary, and the Note Registrar shall reflect on its books
and records the date and a decrease in the principal amount of the Temporary
Offshore Global Note in an amount equal to the principal amount of the
beneficial interest in the Temporary Offshore Global Note transferred. The
aggregate principal amount of the Offshore Global Note may from time to time be
increased or decreased by adjustments made in the records of the Trustee, as
custodian for the Depositary or its nominee, as herein provided. Initial Notes
issued pursuant to Section 305 in exchange for or upon transfer of beneficial
interests in the U.S. Global Note or the Offshore Global Note shall be in the
form of U.S. Physical Notes or in the form of permanent certificated Notes
substantially in the form set forth in Exhibit A (the "Offshore Physical
Notes"), respectively, as hereinafter provided.
31
Initial Notes which are offered and sold to Institutional Accredited
Investors which are not QIBs (excluding Non-U.S. Persons) shall be issued in the
form of permanent certificated Notes in substantially the form set forth in
Exhibit A and contain the Private Placement Legend as set forth in Section 203
(the "U.S. Physical Notes").
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes." The U.S. Global Note
and the Offshore Global Note are sometimes collectively referred to as the
"Global Notes."
Exchange Notes shall be issued substantially in the form set forth in
Exhibit A.
SECTION 202. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form:
This is one of the Notes referred to in the within-mentioned
Indenture.
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
Dated: __________ By: ____________________
Authorized Signatory
SECTION 203. Restrictive Legends.
-------------------
Unless and until (i) an Initial Note is sold pursuant to an effective
Shelf Registration Statement or (ii) an Initial Note is exchanged for an
Exchange Note in an Exchange Offer pursuant to an effective Exchange Offer
Registration Statement, in each case pursuant to the Registration Rights
Agreement, (A) each U.S. Global Note and U.S. Physical Note shall bear the
following legend set forth below (the "Private Placement Legend") on the face
thereof and (B) the Offshore Physical Notes and the Temporary Offshore Global
Note shall bear the Private Placement Legend on the face thereof until the
Offshore Note Exchange Date and receipt by the Company and the Trustee of a
certificate substantially in the form provided in Section 204:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR
OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION
32
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")) OR
(B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE
TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S, (2) AGREES THAT
IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT AND ANY
SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF (OR OF ANY PREDECESSOR AND THIS SECURITY) AND THE LAST DAY ON WHICH
THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH LATER DATE, IF ANY, AS
MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION
DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 000X XXXXXX XXX
XXXXXX XXXXXX, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
PURSUANT TO RULE 000 XX XXXXXXXXXX X, XX (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED
THAT THE COMPANY, THE TRUSTEE, THE TRANSFER AGENT AND THE REGISTRAR SHALL
HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO
CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND
(II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE
33
RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note, whether or not an Initial Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN 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 SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTIONS 311 AND 312 OF THE INDENTURE.
SECTION 204. Form of Certificate to be Delivered After the Offshore
------------------------------------------------------
Note Exchange Date.
------------------
On or after February 8, 1998
XXXXXX TRUST AND SAVINGS BANK
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Indenture Trust Division/X. Xxxxxxxxx
Re: TUESDAY MORNING CORPORATION (the "Company")
11% Senior Subordinated Notes due 2007 (the "Notes")
----------------------------------------------------
Ladies and Gentlemen:
This letter relates to $_______________ principal amount of Notes
represented by the temporary offshore global note certificate (the "Temporary
Offshore Global Note"). Pursuant to Section [201] [203] of the Indenture dated
as of December 29, 1997 (the "Indenture") relating to
34
the Notes, we hereby certify that (1) we are the beneficial owner of such
principal amount of Notes represented by the Temporary Offshore Global Note and
(2) we are a Non-U.S. Person to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the Securities Act of
1933, as amended (the "Regulation S"). [Accordingly, you are hereby requested to
exchange the Temporary Offshore Global Note for an unlegended Permanent Offshore
Global Note representing the undersigned's interest in the principal amount of
Notes represented by the Temporary Offshore Global Note, all in the manner
provided for in the Indenture.] [Accordingly, you are hereby requested to issue
an Offshore Physical Note representing the undersigned's interest in the
principal amount of Notes represented by the Temporary Offshore Global Note, all
in the manner provided by the Indenture.]
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:__________________________
Authorized Signature
ARTICLE THREE
THE NOTES
SECTION 301. Amount.
------
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $100,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 303, 304, 305, 306, 311,
312, 906, 1013, 1014 or 1108 or pursuant to an Exchange Offer.
The Initial Notes shall be known and designated as the "11% Senior
Subordinated Notes due 2007" and the Exchange Notes shall be known and
designated as the "11% Series B Senior Subordinated Notes due 2007," in each
case, of the Company. The Stated Maturity of the Notes shall be December 15,
2007, and they shall bear interest at the rate of 11% per annum from December
29, 1997, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, payable on June 15, 1998 and semi-annually
thereafter on June 15 and
35
December 15 in each year, until the principal thereof is paid in full and to the
Person in whose name the Note (or any predecessor Note) is registered at the
close of business on the June 1 or December 1 immediately preceding such
Interest Payment Date (each, a "Regular Record Date"). Interest will be computed
on the Notes as specified in Section 310 hereof.
The principal of (and premium, if any) and interest on the Notes shall
be payable at the office or agency of the Company maintained for such purpose in
The City of New York, or at such other office or agency of the Company as may be
maintained for such purpose; provided, however, that, at the option of the
Company, interest may be paid (a) by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Note Register or (b) by
wire transfer to an account located in the United States maintained by the
payee.
Holders shall have the right to require the Company to purchase their
Notes, in whole or in part, in the event of a Change in Control pursuant to
Section 1013. The Notes shall be subject to repurchase pursuant to an Excess
Proceeds Offer as provided in Section 1014.
The Notes shall be redeemable as provided in Article Eleven and in the
Notes. The Indebtedness evidenced by the Notes shall be subordinated in right
of payment to Senior Indebtedness as provided in Article Twelve. The due and
punctual payment of principal of, and premium, if any, and interest on the Notes
payable by the Company is irrevocably and unconditionally guaranteed, to the
extent set forth herein, by each of the Subsidiary Guarantors. The Note
Guarantee issued by any Subsidiary Guarantor will be subordinated to all
existing and future Guarantor Senior Indebtedness of such Subsidiary Guarantor
as provided in Article 12.
SECTION 302. Denominations.
-------------
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Notes shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive Officer, its President, its Chief Operating
Officer, its Chief Financial Officer or a Vice President. The signature of any
of these officers on the Notes may be the manual or facsimile signatures of the
present or any future such authorized officer and may be imprinted or otherwise
reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
36
On Company Order, the Trustee shall authenticate for original issue
Initial Notes in an aggregate principal amount not to exceed $100,000,000. On
Company Order, the Trustee shall authenticate for original issue Exchange Notes
in an aggregate principal amount not to exceed $100,000,000; provided that such
Exchange Notes shall be issuable only upon the valid surrender for cancellation
of Initial Notes of a like aggregate principal amount in accordance with an
Exchange Offer pursuant to the Registration Rights Agreement. In each case, the
Trustee shall be entitled to receive an Officers' Certificate and an Opinion of
Counsel of the Company that it may reasonably request in connection with such
authentication of Notes. Such order shall specify the amount of Notes to be
authenticated and the date on which the original issue of Notes is to be
authenticated.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
In case the Company or any Subsidiary Guarantor, pursuant to Article
Eight, shall be consolidated or merged with or into any other Person or shall
convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
such Subsidiary Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Notes authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Notes executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like
tenor as the Notes surrendered for such exchange and of like principal amount;
and the Trustee, upon Company Request of the successor Person, shall
authenticate and deliver Notes as specified in such request for the purpose of
such exchange. If Notes shall at any time be authenticated and delivered in any
new name of a successor Person pursuant to this Section 303 in exchange or
substitution for or upon registration of transfer of any Notes, such successor
Person, at the option of the Holders but without expense to them, shall provide
for the exchange of all Notes at the time Outstanding for Notes authenticated
and delivered in such new name.
37
SECTION 304. Temporary Notes.
---------------
Pending the preparation of definitive Notes, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Notes may determine, as conclusively evidenced by their execution
of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes, upon
surrender of the temporary Notes at the office or agency of the Company in a
Place of Payment, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Notes, the Company shall execute and, upon Company
Order, the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Notes of authorized denominations. Until so
exchanged the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register for the Notes (the register maintained in the Corporate
Trust Office of the Trustee and in any other office or agency of the Company in
a Place of Payment being herein sometimes collectively referred to as the "Note
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Notes and of transfers of
Notes. The Note Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. At all reasonable
times, the Note Register shall be open to inspection by the Trustee. The Trustee
is hereby initially appointed as note registrar (the Trustee in such capacity,
together with any successor of the Trustee in such capacity, the "Note
Registrar") for the purpose of registering Notes and transfers of Notes as
herein provided.
Upon surrender for registration of transfer of any Note at the office
or agency in a Place of Payment, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denomination or
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Notes may be exchanged for other Notes,
of any authorized denomination and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange (including an exchange of Initial Notes
for Exchange Notes), the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled
38
to receive; provided that no exchange of Initial Notes for Exchange Notes shall
occur until an Exchange Offer Registration Statement shall have been declared
effective by the Commission, the Trustee shall have received an Officers'
Certificate confirming that the Exchange Offer Registration Statement has been
declared effective by the Commission and the Initial Notes to be exchanged for
the Exchange Notes shall be cancelled by the Trustee.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Note Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Note Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 303, 304, 906, 1013, 1014 or 1108 not involving
any transfer.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
-------------------------------------------
If any mutilated Note is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding, or, in case any such mutilated Note has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Note, pay such Note.
If there shall be delivered to the Company, any Subsidiary Guarantor
and to the Trustee (i) evidence to their satisfaction of the destruction, loss
or theft of any Note and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company, any Subsidiary Guarantor or the Trustee that
such Note has been acquired by a bona fide purchaser, the Company shall execute
and upon Company Order the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Note, a new Note of like tenor and principal
amount and bearing a number not contemporaneously outstanding, or, in case any
such destroyed, lost or stolen Note has become or is about to become due and
payable, the Company in its discretion may, instead of issuing a new Note, pay
such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be
39
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) in connection therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note, shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor and
any other obligor upon the Notes, whether or not the mutilated, destroyed, lost
or stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the Place of Payment;
provided, however, that each installment of interest on any Note may at the
Company's option be paid (i) by mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears on the Note Register or (ii) by wire
transfer to an account located in the United States maintained by the payee.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such defaulted interest and, if applicable, interest on
such defaulted interest (to the extent lawful) at the rate specified in the
Notes (such defaulted interest and, if applicable, interest thereon herein
collectively called "Defaulted Interest") may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note and the date
of the proposed payment (the "Special Record Date"), and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit on
or prior to the date of the
40
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given in the manner provided in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose name the Registered Notes (or their respective
Predecessor Notes) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted Interest on the
Notes in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Note for registration of transfer, the
Company, any Subsidiary Guarantor, the Trustee and any agent of the Company, any
Subsidiary Guarantor or the Trustee may treat the Person in whose name such Note
is registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Sections 305 and 307)
interest on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and none of the Company, any Subsidiary Guarantor, the Trustee
or any agent of the Company, any Subsidiary Guarantor or the Trustee shall be
affected by notice to the contrary.
41
SECTION 309. Cancellation.
------------
All Notes surrendered for payment, redemption, repayment at the option
of the Holder, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Notes so
delivered to the Trustee shall be promptly cancelled by it. The Company may at
any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Trustee shall be disposed of by the Trustee in accordance with
its customary procedures unless by Company Order the Company shall direct that
cancelled Notes be returned to it.
SECTION 310. Computation of Interest.
-----------------------
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 311. Book-Entry Provisions for Global Notes.
--------------------------------------
(a) Each Global Note initially shall (i) be registered in the name of
the Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) bear legends
as set forth in Section 203.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, the Subsidiary Guarantors, the Trustee
and any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Subsidiary
Guarantors, the Trustee or any agent of the Company, the Subsidiary Guarantors
or the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Note. The registered holder
of a Global Note may 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.
42
(b) Interests of beneficial owners in a Global Note may be
transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 312. Transfers of a Global Note shall
be limited to transfers of such Global Note in whole, but not in part, to the
Depositary, its successors or their respective nominees, except (i) as otherwise
set forth in Section 312 and (ii) U.S. Physical Notes or Offshore Physical Notes
shall be transferred to all beneficial owners in exchange for their beneficial
interests in the U.S. Global Note or the Offshore Global Note, respectively, in
the event that the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for the applicable Global Note or the
Depositary ceases to be a "Clearing Agency" registered under the Exchange Act
and a successor depositary is not appointed by the Company within 90 days or an
Event of Default has occurred and is continuing and the Note Registrar has
received a request from the Depositary. In connection with a transfer of an
entire Global Note to beneficial owners pursuant to clause (ii) of this
paragraph (b), the applicable Global Note shall be deemed to be surrendered to
the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in the applicable Global
Note, an equal aggregate principal amount at maturity of U.S. Physical Notes (in
the case of the U.S. Global Note) or Offshore Physical Notes (in the case of the
Offshore Global Note), as the case may be, of authorized denominations.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b) of this Section shall, unless
such exchange is made on or after the Resale Restriction Termination Date and
except as otherwise provided in Section 312, bear the Private Placement Legend.
SECTION 312. Transfer Provisions.
-------------------
Unless and until (i) an Initial Note is sold pursuant to an effective
Registration Statement, or (ii) an Initial Note is exchanged for an Exchange
Note in the Exchange Offer pursuant to an effective Registration Statement, in
each case, pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) General. The provisions of this Section 312 shall apply to all
-------
transfers involving any Physical Note and any beneficial interest in any
Global Note.
43
(b) Certain Definitions. As used in this Section 312 only, "delivery"
-------------------
of a certificate by a transferee or transferor means the delivery to the
Note Registrar by such transferee or transferor of the applicable
certificate duly completed; "holding" includes both possession of a
Physical Note and ownership of a beneficial interest in a Global Note, as
the context requires; "transferring" a Global Note means transferring that
portion of the principal amount of the transferor's beneficial interest
therein that the transferor has notified the Note Registrar that it has
agreed to transfer; and "transferring" a Physical Note means transferring
that portion of the principal amount thereof that the transferor has
notified the Note Registrar that it has agreed to transfer.
As used in this Indenture, "Accredited Investor Certificate" means a
certificate substantially in the form set forth in Section 313; "Regulation
S Certificate" means a certificate substantially in the form set forth in
Section 314; "Rule 144A Certificate" means a certificate substantially in
the form set forth in Section 315; and "Non-Registration Opinion and
Supporting Evidence" means a written opinion of counsel reasonably
acceptable to the Company to the effect that, and such other certification
or information as the Company may reasonably require to confirm that, the
proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act.
(c) [Intentionally Omitted]
(d) Deemed Delivery of a Rule 144A Certificate in Certain
-----------------------------------------------------
Circumstances. A Rule 144A Certificate, if not actually delivered, will be
-------------
deemed delivered if (A) (i) the transferor advises the Company and the
Trustee in writing that the relevant offer and sale were made in accordance
with the provisions of Rule 144A (or, in the case of a transfer of a
Physical Note, the transferor checks the box provided on the Physical Note
to that effect) and (ii) the transferee advises the Company and the Trustee
in writing that (x) it and, if applicable, each account for which it is
acting in connection with the relevant transfer, is a qualified
institutional buyer within the meaning of Rule 144A, (y) it is aware that
the transfer of Notes to it is being made in reliance on the exemption from
the provisions of Section 5 of the Securities Act provided by Rule 144A,
and (z) prior to the proposed date of transfer it has been given the
opportunity to obtain from the Company the information referred to in Rule
144A(d)(4), and has either declined such opportunity or has received such
information (or, in the case of a transfer of a Physical Note, the
transferee signs the certification provided on the Physical Note to that
effect); or (B) the transferor holds the U.S. Global Note and is
transferring to a transferee that will take delivery in the form of the
U.S. Global Note.
44
(e) Procedures and Requirements.
---------------------------
1. If the proposed transfer occurs prior to the Offshore Note
Exchange Date, and the proposed transferor holds:
(A) a U.S. Physical Note which is surrendered to the Note
Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the Note Registrar
shall (x) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (y) cancel such surrendered U.S. Physical Note and
(z) deliver a new U.S. Physical Note to such transferee duly
registered in the name of such transferee in principal
amount equal to the principal amount being transferred of
such surrendered U.S. Physical Note;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the Note
Registrar shall (x) cancel such surrendered U.S. Physical
Note, (y) record an increase in the principal amount of the
U.S. Global Note equal to the principal amount being
transferred of such surrendered U.S. Physical Note and (z)
notify the Depositary in accordance with the procedures of
the Depositary that it approves of such transfer; or
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Temporary Offshore Global Note,
then the Note Registrar shall (x) cancel such surrendered
U.S. Physical Note, (y) record an increase in the principal
amount of the Temporary Offshore Global Note equal to the
principal amount being transferred of such surrendered U.S.
Physical Note and (z) notify the Depositary in accordance
with the procedures of the Depositary that it approves of
such transfer.
45
In any of the cases described in this Section 312(e)(1)(A), the
Note Registrar shall deliver to the transferor a new U.S.
Physical Note in principal amount equal to the principal amount
not being transferred of such surrendered U.S. Physical Note, as
applicable.
(B) the U.S. Global Note, and the proposed transferee or
transferor, as applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the Note Registrar
shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of
the U.S. Global Note in an amount equal to the beneficial
interest therein being transferred, (y) deliver a new U.S.
Physical Note to such transferee duly registered in the name
of such transferee in principal amount equal to the amount
of such decrease and (z) notify the Depositary in accordance
with the procedures of the Depositary that it approves of
such transfer;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the
transfer shall be effected in accordance with the procedures
of the Depositary therefor; or
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Temporary Offshore Global Note,
then the Note Registrar shall (w) register such transfer in
the name of such transferee and record the date thereof in
its books and records, (x) record a decrease in the
principal amount of the U.S. Global Note in an amount equal
to the beneficial interest therein being transferred, (y)
record an increase in the principal amount of the Temporary
Offshore Global Note equal to the amount of such decrease
and (z) notify the Depositary in accordance with the
procedures of the Depositary that it approves of such
transfer.
46
(C) the Temporary Offshore Global Note, and the proposed
transferee or transferor, as applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the Note Registrar
shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of
the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) deliver a
new U.S. Physical Note to such transferee duly registered in
the name of such transferee in principal amount equal to the
amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the Note
Registrar shall (x) record a decrease in the principal
amount of the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) record an
increase in the principal amount of the U.S. Global Note
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer; or
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Temporary Offshore Global Note,
then the transfer shall be effected in accordance with the
procedures of the Depositary therefor; provided, however,
that until the Offshore Note Exchange Date occurs,
beneficial interests in the Offshore Global Note may be held
only in or through accounts maintained at the Depositary by
Euroclear or Cedel (or by Agent Members acting for the
account thereof), and no person shall be entitled to effect
any transfer or exchange that would result in any such
interest being held otherwise than in or through such an
account.
47
2. If the proposed transfer occurs on or after the Offshore
Note Exchange Date and the proposed transferor holds:
(A) a U.S. Physical Note which is surrendered to the Note
Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the procedures set
forth in Section 312(e)(1)(A)(i) shall apply;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Offshore Global Note, then the
procedures set forth in Section 312(e)(1)(A)(ii) shall
apply; or
(iii) delivers a Regulation S Certificate, then the
Note Registrar shall cancel such surrendered U.S. Physical
Note and at the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and
records and deliver a new Offshore Physical Note to
such transferee in principal amount equal to the
principal amount being transferred of such surrendered
U.S. Physical Note, or
(y) if the proposed transferee is or is acting
through an Agent Member, record an increase in the
principal amount of the Offshore Global Note equal to
the principal amount being transferred of such
surrendered U.S. Physical Note and notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer.
In any of the cases described in this Section
312(e)(2)(A)(i), (ii) or (iii)(x), the Note Registrar shall
deliver to the transferor a new U.S. Physical Note in
principal amount equal to the principal amount not
48
being transferred of such surrendered U.S. Physical Note, as
applicable.
(B) the U.S. Global Note, and the proposed transferee or
transferor, as applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the procedures set
forth in Section 312(e)(1)(B)(i) shall apply; or
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the
procedures set forth in Section 312(e)(1)(B)(ii) shall
apply; or
(iii) delivers a Regulation S Certificate, then the
Note Registrar shall (x) record a decrease in the principal
amount of the U.S. Global Note in an amount equal to the
beneficial interest therein being transferred, (y) notify
the Depositary in accordance with the procedures of the
Depositary that it approves of such transfer and (z) at the
direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and
records and deliver a new Offshore Physical Note to
such transferee in principal amount equal to the amount
of such decrease, or
(y) if the proposed transferee is or is acting
through an Agent Member, record an increase in the
principal amount of the Offshore Global Note equal to
the amount of such decrease.
(C) an Offshore Physical Note which is surrendered to the
Note Registrar, and the proposed transferee or transferor, as
applicable:
49
(i) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests delivery in the form of the U.S. Global Note,
then the Note Registrar shall (x) cancel such surrendered
Offshore Physical Note, (y) record an increase in the
principal amount of the U.S. Global Note equal to the
principal amount being transferred of such surrendered
Offshore Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer;
(ii) where the proposed transferee is or is acting
through an Agent Member, requests that the proposed
transferee receive a beneficial interest in the Offshore
Global Note, then the Note Registrar shall (x) cancel such
surrendered Offshore Physical Note, (y) record an increase
in the principal amount of the Offshore Global Note equal to
the principal amount being transferred of such surrendered
Offshore Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer; or
(iii) does not make a request covered by Section
312(e)(2)(C)(i) or Section 312(e)(2)(C)(ii), then the Note
Registrar shall (x) register such transfer in the name of
such transferee and record the date thereof in its books and
records, (y) cancel such surrendered Offshore Physical Note
and (z) deliver a new Offshore Physical Note to such
transferee duly registered in the name of such transferee in
principal amount equal to the principal amount being
transferred of such surrendered Offshore Physical Note.
In any of the cases described in this Section 312(e)(2)(C),
the Note Registrar shall deliver to the transferor a new
U.S. Physical Note in principal amount equal to the
principal amount not being transferred of such surrendered
U.S. Physical Note, as applicable.
(D) the Offshore Global Note, and the proposed transferee
or transferor, as applicable:
(i) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests delivery in the form of the U.S. Global Note,
then the Note
50
Registrar shall (x) record a decrease in the principal
amount of the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) record an
increase in the principal amount of the U.S. Global Note
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer;
(ii) where the proposed transferee is or is acting
through an Agent Member, requests that the proposed
transferee receive a beneficial interest in the Offshore
Global Note, then the transfer shall be effected in
accordance with the procedures of the Depositary therefor;
or
(iii) does not make a request covered by Section
312(e)(2)(D)(i) or Section 312(e)(2)(D)(ii), then the Note
Registrar shall (w) register such transfer in the name of
such transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of
the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) deliver a
new Offshore Physical Note to such transferee duly
registered in the name of such transferee in principal
amount equal to the amount of such decrease and (z) notify
the Depositary in accordance with the procedures of the
Depositary that it approves of such transfer.
(f) Execution, Authentication and Delivery of Physical Notes. In any
--------------------------------------------------------
case in which the Note Registrar is required to deliver a Physical Note to
a transferee or transferor, the Company shall execute, and the Trustee
shall authenticate and make available for delivery, such Physical Note.
(g) Certain Additional Terms Applicable to Physical Notes. Any
-----------------------------------------------------
transferee entitled to receive a Physical Note may request that the
principal amount thereof be evidenced by one or more Physical Notes in any
authorized denomination or denominations and the Note Registrar shall
comply with such request if all other transfer restrictions are satisfied.
(h) Transfers Not Covered by Section 312(e). The Note Registrar
---------------------------------------
shall effect and record, upon receipt of a written request from the Company
so to do, a transfer not otherwise permitted by Section 312(e), such
recording to be done in accordance with the otherwise applicable provisions
of Section 312(e), upon the furnishing by the proposed transferor or
transferee of a Non-Registration Opinion and Supporting Evidence.
51
(i) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as
provided in the Indenture. The Note Registrar shall not register a transfer
of any Note unless such transfer complies with the restrictions with
respect thereto set forth in this Indenture. The Note Registrar shall not
be required to determine (but may rely upon a determination made by the
Company) the sufficiency or accuracy of any such certifications, legal
opinions, other information or document.
(j) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Note
Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Note Registrar shall deliver only Notes that
bear the Private Placement Legend unless (i) the circumstances exist
contemplated by the fourth paragraph of Section 201 (with respect to an
Offshore Physical Note) or the requested transfer is at least two years
after the original issue date of the Initial Note (with respect to any
Physical Note), (ii) there is delivered to the Note Registrar an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer
are required in order to maintain compliance with the provisions of the
Securities Act or (iii) such Notes are exchanged for Exchange Notes
pursuant to an Exchange Offer.
SECTION 313. Form of Accredited Investor Certificate.
---------------------------------------
Transferee Letter of Representation
-----------------------------------
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Indenture Trust Division/X. Xxxxxxxxx
Ladies and Gentlemen:
In connection with our proposed purchase of $_______ aggregate
principal amount of the 11% Senior Subordinated Notes due 2007 (the "Notes") of
Tuesday Morning Corporation. (the "Company"), we confirm that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of
1933, as amended (the "Securities Act")) purchasing for our own account or
for the account of such an
52
institutional "accredited investor," and we are acquiring the Notes 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 or
other applicable securities law and 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 and any accounts for which
we are acting are each able to bear the economic risk of our or its
investment.
2. We understand and acknowledge that the Notes have not been
registered under the Securities Act, or any other applicable securities law
and may not be offered, sold or otherwise transferred except in compliance
with the registration requirements of the Securities Act or any other
applicable securities law, or pursuant to an exemption therefrom, and in
each case in compliance with the conditions for transfer set forth below.
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 which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of
the Company was the owner of such Notes (or any predecessor thereto) (the
"Resale Restriction Termination Date") only (a) to the Company or any
subsidiary thereof, (b) pursuant to a registration statement which has been
declared effective under the Securities Act, (c) for so long as the Notes
are eligible for resale pursuant to Rule 144A under the Securities Act
("Rule 144A"), to a person we reasonably believe is a "Qualified
Institutional Buyer" within the meaning of Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom
notice is given that the transfer is being made in reliance on Rule 144A,
(d) pursuant to offers and sales to non-U.S. persons that occur outside the
United States within the meaning of Regulation S under the Securities Act,
or (e) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases
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 to 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 (d) or (e) above prior to
the Resale Restriction Termination Date, the transferor shall deliver to
the trustee (the "Trustee") under the Indenture pursuant to which the Notes
are issued a letter from the transferee substantially in the form of this
letter, which shall provide, among other things, that the transferee is a
person or entity as defined in paragraph 1 of this letter and that it is
acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. We acknowledge that the Company and the
Trustee reserve the right prior to any offer, sale or other transfer of the
Notes pursuant to clauses (d) and (e) above prior to the Resale Restriction
Termination Date to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and
the Trustee.
53
3. We are acquiring the Notes purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
4. You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
(Name of Purchaser)
By:______________________________
Date:____________________________
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
NAME ADDRESS TAXPAYER ID NUMBER
------ ------- ------------------
54
Date of this Certificate: _________ __, 199_
55
SECTION 314. Form of Regulation S Certificate.
--------------------------------
Regulation S Certificate
------------------------
To: Xxxxxx Trust and Savings Bank,
as Trustee (the "Trustee")
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Indenture Trust Division/X. Xxxxxxxxx
Re: Tuesday Morning Corporation (the "Company")
11% Senior Subordinated Notes due 2007 (the "Notes")
----------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____ aggregate principal
amount of Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S ("Regulation S") under the Securities Act of 1933,
as amended (the "Securities Act"), and accordingly, we hereby certify as
follows:
1. The offer of the Notes was not made to a person in the United
States (unless such person or the account held by it for which it is acting
is excluded from the definition of "U.S. person" pursuant to Rule 902(o) of
Regulation S under the circumstances described in Rule 902(i)(3) of
Regulation S) or specifically targeted at an identifiable group of U.S.
citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer
was outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market, and neither we nor any person acting on our
behalf knows that the transaction was pre-arranged with a buyer in the
United States.
3. Neither we, any of our affiliates, nor any person acting on our
or their behalf has made any directed selling efforts in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable.
4. The proposed transfer of Notes is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
56
5. If we are a dealer or a person receiving a selling concession
or other fee or remuneration in respect of the Notes, and the proposed
transfer takes place before the Offshore Note Exchange Date referred to in
the Indenture, dated as of December 29, 1997, among the Company, the
guarantors thereunder and the Trustee, or we are an officer or director of
the Company or a distributor, we certify that the proposed transfer is
being made in accordance with the provisions of Rules 903 and 904(c) of
Regulation S.
You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[NAME OF SELLER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: __________ __, 199_
57
SECTION 315. Form of Rule 144A Certificate.
-----------------------------
Rule 144A Certificate
---------------------
To: Xxxxxx Trust and Savings Bank,
as Trustee (the "Trustee")
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Indenture Trust Division/X. Xxxxxxxxx
Re: Tuesday Morning Corporation (the "Company")
11% Senior Subordinated Notes due 2007 (the "Notes")
----------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____ aggregate principal
amount of Notes, we confirm that such sale has been effected pursuant to and in
accordance with Rule 144A ("Rule 144A") under the Securities Act of 1933, as
amended (the "Securities Act"). We are aware that the transfer of Notes to us is
being made in reliance on the exemption from the provisions of Section 5 of the
Securities Act provided by Rule 144A. Prior to the date of this Certificate we
have been given the opportunity to obtain from the Company the information
referred to in Rule 144A(d)(4), and have either declined such opportunity or
have received such information.
You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: __________ __, 199_
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SECTION 316. CUSIP Numbers.
-------------
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers, and, if so, the Trustee shall
use such "CUSIP" numbers in addition to serial numbers in notices of redemption,
repurchase or other notices to Holders as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such CUSIP numbers either as printed on the Notes or as contained
in any notice of a redemption or repurchase and that reliance may be placed only
on the serial or other identification numbers printed on the Notes, and any such
redemption or repurchase shall not be affected by any defect in or omission of
such numbers. The Company will promptly notify the Trustee of any change in the
CUSIP numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall, upon Company Request, cease to be of further
effect with respect to Notes (except as to any surviving rights of registration
of transfer or exchange of Notes expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
(1) either
(A) all Notes theretofore authenticated and delivered (other than
(i) Notes which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306, and (ii) Notes for
whose payment money has theretofore been deposited in trust with the
Trustee or any Paying Agent or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all Notes and, in the case of (i) or (ii) below, not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their Stated Maturity
within one year, or
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(iii) if redeemable at the option of the Company, 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
Company,
and the Company or any Subsidiary Guarantor, in the case of
(i), (ii) or (iii) above, has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for such
purpose an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest on the Notes to the date of such deposit (in the case of
Notes which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) no Default or Event of Default with respect to this
Indenture or the Notes shall have occurred and be continuing on the
date of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument or agreement to which
the Company or any Subsidiary Guarantor is a party or by which it is
bound;
(3) the Company or any Subsidiary Guarantor has paid or caused
to be paid all other sums payable hereunder by the Company or any
Subsidiary Guarantor;
(4) the Company has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of such Notes
at maturity or the Redemption Date, as the case may be; and
(5) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606, the obligations of
the Company to any Authenticating Agent under Section 612 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
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SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money in
accordance with Section 401 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's and any
Subsidiary Guarantor's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
401; provided that if the Company has made any payment of principal of, premium,
if any, or interest on any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article 12 or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest on any Note when it
becomes due and payable and continuance of such default for a period of 30
days;
(2) default in the payment of the principal of, or premium, if any,
on any Note at its Maturity (upon acceleration, optional redemption,
required purchase or otherwise);
(3) default in the performance, or breach, of the provisions of
Article Eight, the failure to make or consummate a Change in Control Offer
in accordance with Section 1013
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or the failure to make or consummate an Excess Proceeds Offer in accordance
with Section 1014;
(4) default in the performance, or breach, of any covenant or
warranty of the Company or any Subsidiary Guarantor contained in this
Indenture or any Note Guarantee (other than a default in the performance,
or breach, of a covenant or warranty which is specifically dealt with in
clause (1), (2) or (3) of this Section) and continuance of such default or
breach for a period of 30 days after there has been given to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least
25% in aggregate principal amount of all Outstanding Notes;
(5) (a) one or more defaults in the payment of principal of or
premium, if any, on Indebtedness of the Company or any Restricted
Subsidiary aggregating $10,000,000 or more, when the same becomes due and
payable at the stated maturity thereof, and such default or defaults shall
have continued after any applicable grace period and shall not have been
cured or waived or (b) Indebtedness of the Company or any Restricted
Subsidiary aggregating $10,000,000 or more shall have been accelerated or
otherwise declared due and payable, or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior
to the stated maturity thereof;
(6) one or more final judgments or orders shall be rendered against
the Company or any Restricted Subsidiary which require the payment of
money, either individually or in an aggregate amount, in excess of
$10,000,000 and shall not be discharged and either (a) an enforcement
proceeding shall have been commenced by any creditor upon such judgment or
order or (b) there shall have been a period of 60 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, was not in effect;
(7) any Note Guarantee ceases to be in full force and effect or is
declared null and void or any Subsidiary Guarantor denies that it has any
further liability under any Note Guarantee, or gives notice to such effect
(other than by reason of the termination of this Indenture or the release
of any such Note Guarantee in accordance with this Indenture);
(8) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Bankruptcy Law: (A) commences a voluntary case; (B)
consents to the entry of an order for relief against it in an involuntary
case; (C) consents to the appointment of a Custodian of it or for all or
substantially all of its property; (D) makes a general assignment for the
benefit of its creditors, or (E) admits in writing that it is generally not
paying its debts (other than debts which are the subject of a bona fide
dispute) as they become due; or
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(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that remains unstayed and in effect for 60 days and: (A)
is for relief against the Company or any of its Significant Subsidiaries in
an involuntary case; (B) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of the property of
the Company or any of its Significant Subsidiaries; or (C) orders the
liquidation of the Company or any of its Significant Subsidiaries; provided
that clauses (A), (B) and (C) shall not apply to an Unrestricted
Subsidiary, unless such action or proceeding has a material adverse effect
on the interests of the Company or any Restricted Subsidiary.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
clause (8) or (9) of Section 501) occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Notes by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee, upon the
written request of such Holders, shall declare the principal of, premium, if
any, and accrued interest on all of the Outstanding Notes to be due and payable
immediately; provided that so long as the Senior Credit Agreement shall be in
full force and effect, if an Event of Default shall have occurred and be
continuing (other than as specified in clause (8) or (9) of Section 501 with
respect to the Company), any such acceleration shall not be effective until the
earlier to occur of (x) five Business Days following delivery of a written
notice of such acceleration of the Notes to the agent under the Senior Credit
Agreement and (y) the acceleration of any Indebtedness under the Senior Credit
Agreement. Upon any such declaration all such amounts payable in respect of the
Notes shall become immediately due and payable. If an Event of Default specified
in clause (8) or (9) of Section 501 occurs and is continuing, then the principal
of, premium, if any, and accrued interest on all of the Outstanding Notes shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in aggregate principal amount of the Outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Outstanding Notes,
(B) all unpaid principal of (and premium, if any, on) any
Outstanding Notes that has become due otherwise than by such
declaration of acceleration together with interest on such unpaid
principal at the rate borne by such Notes,
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(C) to the extent that payment of such interest is lawful,
interest on overdue interest and overdue principal at the rate borne
by such Notes, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
(2) all Events of Default, other than the non-payment of amounts of
principal (or premium, if any, on) or interest on Notes which have become
due solely by such declaration of acceleration, have been cured or waived
as provided in Section 513,
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company covenants that if
(1) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Note at the Maturity thereof,
then the Company will, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by such Notes, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any Subsidiary Guarantor (in accordance with the
applicable Note Guarantee) or any other obligor upon such Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company, any Subsidiary Guarantor or any other obligor upon
such Notes, wherever situated.
64
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the Note Guarantees by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, including seeking recourse against any Subsidiary Guarantor,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy, including, without limitation, seeking recourse against
any Subsidiary Guarantor.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including any
Subsidiary Guarantor, upon the Notes or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes, to
take such other actions (including participating as a member, voting or
otherwise, of any official committee of creditors appointed in such matter)
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding; provided,
65
however, that the Trustee may, on behalf of such Holders, vote for the election
of a trustee in bankruptcy or other similar official.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
------------------------------------------------------
All rights of action and claims under this Indenture, the Notes or the
Note Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Subject to Article Twelve, any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (or premium, if any) or interest, upon presentation of the Notes
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
-----
607;
Second: To the payment of the amounts then due and unpaid for
------
principal of (and premium, if any, on) and interest on the Notes in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Notes for principal (and premium, if any)
and interest, respectively; and
Third: The balance, if any, to the Person or Persons entitled
-----
thereto, including the Company or any other obligor on the Notes, as their
interests may appear or as a court of competent jurisdiction may direct;
provided that all sums due and owing to the Holders and the Trustee have
been paid in full as required by this Indenture.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
66
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Notes shall have made a written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the Holders of a majority
in principal amount of the Outstanding Notes;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture, any Note or any Note Guarantee to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right
under this Indenture, any Note or any Note Guarantee, except in the manner
herein provided and for the equal and ratable benefit of all Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Eleven) and in
such Note of the principal of (and premium, if any, on) and (subject to Section
307) interest on, such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Note Guarantee and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, any
Subsidiary Guarantor, any other obligor on the Notes, the Trustee and the
Holders of Notes shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
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SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders of Notes is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) subject to Section 315 of the Trust Indenture Act, the Trustee
may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or that the Trustee determines in good faith is unjustly
prejudicial to the Holders of Notes not consenting, it being understood
that, subject to Section 601, the Trustee shall have no duty to ascertain
whether or not such actions or forbearances are unjustly prejudicial to
such holders.
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SECTION 513. Waiver of Past Defaults.
-----------------------
Subject to Sections 508, 902 and the last paragraph of Section 502,
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes) may on behalf of the Holders of all the Notes
waive any past default hereunder and its consequences under this Indenture or
any Note Guarantee, except a default
(1) in respect of the payment of the principal of (or premium, if
any, on) or interest on any Note, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, any such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture and the Note Guarantees; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
--------------------------------
Each of the Company, the Subsidiary Guarantors and any other obligor
on the Notes covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which would prohibit or forgive the Company, any
Subsidiary Guarantor or any such obligor from paying all or any portion of the
principal of, premium, if any, or interest on the Notes contemplated herein or
in the Notes or which may affect the covenants or the performance of this
Indenture; and each of the Company, the Subsidiary Guarantors and any other
obligor on the Notes (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of a Default or an Event of
Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith or willful misconduct 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; but in the case of any such certificates or opinions, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture, but not to verify
the contents thereof.
(b) In case a Default or an Event of Default has occurred and is
continuing of which a Responsible Officer of the Trustee has actual knowledge or
of which written notice of such Default or Event of Default shall have been
given to the Trustee by the Company, any other obligor of the Notes or by any
Holder, the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
------
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in aggregate principal amount of the
Outstanding Notes relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and
70
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, 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 602. Notice of Defaults.
------------------
Within ten days after the earlier of receipt from the Company of
notice of the occurrence of any Default or Event of Default hereunder or the
date when such Default or Event of Default becomes known to the Trustee, the
Trustee shall transmit, in the manner and to the extent provided in TIA Section
313(c), notice of such Default or Event of Default hereunder known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of (or premium, if any, on) or interest
on any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders.
SECTION 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of TIA Sections 315(a) through 315(d)
(determined as if the TIA were applicable to this Indenture at all times):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate;
71
(4) before the Trustee acts or refrains from acting, the Trustee may
consult with counsel of its selection and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) 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 of Notes pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(9) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(10) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty; and
(11) except for a default under Sections 501(1) or (2) hereof, or any
other event of which the Trustee has "actual knowledge" and which event,
with the giving of notice or the passage of time or both, would constitute
an Event of Default under this Indenture, the Trustee shall not be deemed
to have notice of any default or Event of Default unless specifically
notified in writing of such event by the Company or the Holders of not less
than 25% in aggregate principal amount of the Notes then outstanding; as
used herein, the term "actual knowledge" means the actual fact or statement
of knowing, without any duty to make any investigation with regard thereto.
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The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Notes.
-----
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Notes, except that the
Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder and that
the statements made by it in its Statement of Eligibility on Form T-1 supplied
to the Company are true and accurate, subject to the qualifications set forth
therein. Neither the Trustee nor any Authenticating Agent shall be accountable
for the use or application by the Company of Notes or the proceeds thereof.
SECTION 605. May Hold Notes.
--------------
The Trustee, any Authenticating Agent, any Paying Agent, any Note
Registrar or any other agent of the Company or of the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Notes and, subject to
TIA Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Note Registrar or such other agent.
SECTION 606. Money Held in Trust.
-------------------
All money received by the Trustee shall, until used or applied as
herein provided, be held in trust hereunder for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
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(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel and costs and expenses of
collection), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee or any predecessor Trustee and
its agents for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a claim prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any, on) or interest
on particular Notes.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(8) or Section 501(9), the
expenses (including the reasonable charges and expenses of its counsel) of and
the compensation of the Trustee for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and which shall have an
office in The City of New York, and shall have a combined capital and surplus of
at least $50,000,000. If the Trustee does not have an office in The City of New
York, the Trustee may appoint an agent in The City of New York reasonably
acceptable to the Company to conduct any activities which the Trustee may be
required under this Indenture to conduct in The City of New York. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital
74
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 610.
(b) The Trustee may resign at any time with respect to the Notes by
giving written notice thereof to the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument executed by authority of the Board of Directors, a copy of which
shall be delivered to the resigning Trustee and a copy to the successor trustee.
If the instrument of acceptance by a successor Trustee required by Section 610
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Notes.
(c) The Trustee may be removed at any time with respect to the Notes
by Act of the Holders of not less than a majority in principal amount of the
Outstanding Notes, delivered to the Trustee and to the Company. If the
instrument of acceptance by a successor Trustee required by Section 610 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of removal, the Trustee being removed may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Notes.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
or
(2) the Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Note for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a Custodian of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
75
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Notes, or (ii) subject to TIA Section 315(e), any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all Notes
and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Notes, the Company, by a Board Resolution, shall promptly appoint
a successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Notes shall be appointed by Act of the Holders of a majority in
aggregate principal amount of the Outstanding Notes delivered to the Company and
the retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment, become the successor Trustee with respect to
the Notes and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Notes shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a Note for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Notes.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Notes and each appointment of a
successor Trustee with respect to the Notes to the Holders of Notes in the
manner provided for in Section 106. Each notice shall include the name of the
successor Trustee with respect to the Notes and the address of its Corporate
Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
--------------------------------------
(a) Each successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred to
in paragraph (a) of this Section.
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(c) No successor Trustee shall accept its appointment unless at the
time of such acceptance, such successor Trustee shall be qualified and eligible
under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes. In case at that time
any of the Notes shall not have been authenticated, any successor Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor Trustee. In all such cases such certificates shall
have the full force and effect which this Indenture provides for, the
certificate of authentication of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any predecessor Trustee
or to authenticate Notes in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 612. Appointment of Authenticating Agent.
-----------------------------------
At any time when any of the Notes remain Outstanding, the Trustee may
appoint an Authenticating Agent or Agents with respect to the Notes which shall
be authorized to act on behalf of the Trustee to authenticate Notes and the
Trustee shall give written notice of such appointment to all Holders of Notes
with respect to which such Authenticating Agent will serve, in the manner
provided for in Section 106. Notes so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, and a copy of such instrument shall be promptly furnished to the
Company. Wherever reference is made in this Indenture to the authentication and
delivery of Notes by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority,
77
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give written notice of
such appointment to all Holders of Notes, in the manner provided for in Section
106. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time such compensation for its services under this Section as shall be agreed in
writing between the Company and such Authenticating Agent.
If an appointment is made pursuant to this Section, the Notes may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
78
This is one of the Notes designated therein referred to in the within-
mentioned Indenture.
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
By: _______________________________
as Authenticating Agent
By: _______________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses.
----------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a
list of similar form and content to that in Subsection (a) hereof as of a
date not more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Note
Registrar, no such list need be furnished.
SECTION 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company or the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
79
SECTION 703. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Notes pursuant to this Indenture, the Trustee
shall transmit to the Holders of Notes (with a copy to the Company at the Place
of Payment), in the manner and to the extent provided in TIA Section 313(c), a
brief report dated as of such May 15 if required by TIA Section 313(a).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company will not, in a single transaction or through a series of
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any other Person or Persons or permit any of its
Restricted Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and assets of the
Company and its Restricted Subsidiaries on a consolidated basis to any other
Person or Persons, unless at the time and immediately after giving effect
thereto:
(a) either (1) the Company shall be the continuing corporation or (2)
the Person (if other than the Company) formed by such consolidation or into
which the Company or such Restricted Subsidiary is merged or the Person
which acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all of the properties and assets of the
Company and its Restricted Subsidiaries on a consolidated basis (the
"Surviving Entity") (i) will be a corporation duly organized and validly
existing under the laws of the United States of America, any state thereof
or the District of Columbia and (ii) will expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustees, in form
reasonably satisfactory to the Trustee, the Company's obligation for the
due and punctual payment of the principal of (and premium, if any) and
interest on all the Notes and the performance and observance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any obligation of the Company or any Restricted Subsidiary incurred in
connection with or as a result of such transaction or series of
transactions as having been incurred at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing;
80
(c) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (on the
assumption that the transaction or series of transactions occurred on the
first day of the four-quarter period immediately prior to the consummation
of such transaction or series of transactions with the appropriate
adjustments with respect to the transaction or series of transactions being
included in such pro forma calculation), the Company (or the Surviving
Entity if the Company is not the continuing obligor under this Indenture)
could incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 1008;
(d) each Subsidiary Guarantor, if any, unless it is the other party
to the transactions described above, shall have by supplemental indenture
confirmed that its Note Guarantee will apply to such Person's obligations
hereunder and under the Notes;
(e) if any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 1012 are complied with; and
(f) the Company or the Surviving Entity shall have delivered to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or
other disposition, and if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with
this Section 801 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on
----------------------------------------------------
Certain Terms.
-------------
Each Subsidiary Guarantor, if any (other than any Subsidiary whose
Note Guarantee is being released pursuant to the provisions of Section 1309 as a
result of such transaction), will not, and the Company will not permit a
Subsidiary Guarantor to, in a single transaction or through a series of related
transactions, merge or consolidate with or into any other corporation or other
entity (other than the Company or any Subsidiary Guarantor), or sell, assign,
convey, transfer, lease or otherwise dispose of its properties and assets on a
consolidated basis substantially as an entirety to any entity (other than the
Company or any Subsidiary Guarantor) unless at the time and after giving effect
thereto:
(a) either (1) such Subsidiary Guarantor shall be the continuing
corporation or partnership or (2) the Person (if other than such Subsidiary
Guarantor) formed by such consolidation or into which such Subsidiary
Guarantor is merged or the entity which acquires by sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially
all of the properties and assets of such Subsidiary Guarantor, as the case
may
81
be, shall be a corporation or partnership organized and validly existing
under the laws of the United States, any state thereof or the District of
Columbia, and shall expressly assume by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
all obligations of such Subsidiary Guarantor under the Notes and this
Indenture;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any obligation of the Company or such Subsidiary Guarantor incurred in
connection with or as a result of such transaction or series of
transactions as having been incurred at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing; and
(c) such Subsidiary Guarantor or such Person shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or disposition and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Section 802 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
SECTION 803. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Subsidiary Guarantor in accordance with Sections
801 and 802, the successor Person formed by such consolidation or into which the
Company or such Subsidiary Guarantor, as the case may be, is merged or the
successor Person to which such sale, assignment, conveyance, transfer, lease or
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company or such Subsidiary Guarantor, as the case
may be, under this Indenture and/or the Note Guarantees, as the case may be,
with the same effect as if such successor had been named as the Company or such
Subsidiary Guarantor, as the case may be, herein and/or the Note Guarantees, as
the case may be. When a successor assumes all the obligations of its predecessor
hereunder, the Notes or a Note Guarantee, as the case may be, the predecessor
shall be released from all obligations; provided that in the case of a transfer
by lease, the predecessor shall not be released from the payment of principal
and interest or other obligations on the Notes or a Note Guarantee, as the case
may be.
82
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company or any Subsidiary
Guarantor, when authorized by or pursuant to a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Company, a
Subsidiary Guarantor or any other obligor on the Notes, and the assumption
by any such successor of the covenants of the Company or such obligor or
Subsidiary Guarantor contained herein and in the Notes and in any Note
Guarantee in accordance with Article Eight;
(2) to add to the covenants of the Company, any Subsidiary Guarantor
or any other obligor upon the Notes for the benefit of the Holders or to
surrender any right or power conferred upon the Company, or any Subsidiary
Guarantor or any other obligor on the Notes, as applicable, herein, in the
Notes or in any Note Guarantee;
(3) to cure any ambiguity, or to correct or supplement any provision
herein, in the Notes or in any Note Guarantee which may be defective or
inconsistent with any other provision herein, in the Notes or in any Note
Guarantee or to make any other provisions with respect to matters or
questions arising under this Indenture, the Notes or any Note Guarantee;
provided that, in each case, such provisions shall not adversely affect the
interests of the Holders;
(4) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act;
(5) to add a Subsidiary Guarantor of the Notes under this Indenture;
(6) to evidence and provide for the acceptance of the appointment of
a successor Trustee under this Indenture; or
(7) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security
for the payment and performance of the Company's and any Subsidiary
Guarantor's obligations under this Indenture, in any property, or assets,
including any of which are required to be mortgaged, pledged or
hypothecated, or in which a security interest is required to be granted to
the Trustee pursuant to this Indenture or otherwise.
83
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Notes that are affected thereby, by Act of
said Holders delivered to the Company, the Subsidiary Guarantors and the
Trustee, the Company and the Subsidiary Guarantors, when authorized by or
pursuant to their respective Board Resolutions, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of Notes
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which the principal
of any Note or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(2) amend, change or modify any of the provisions of Section 1013 or
Section 1014 including any definitions relating thereto in any manner
materially adverse to the Holders;
(3) reduce the percentage in principal amount of Outstanding Notes,
the consent of whose Holders is required for any such supplemental
indenture or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(4) modify any provisions of this Section, Section 1021 or Section
513, except to increase the percentage in principal amount of the
Outstanding Notes required to take any of the actions described therein or
to provide that certain additional provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Note affected thereby;
(5) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Subsidiary Guarantor of any of
their rights or obligations under this Indenture;
(6) amend or modify any of the provisions of Article Thirteen in any
manner adverse to the Holders; or
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(7) modify any of the provisions of this Indenture relating to the
subordination of the Notes in a manner adverse to the Holders.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
---------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company, any Subsidiary Guarantor
and the Trustee of any supplemental indenture pursuant to the provisions of
Section 902, the Company shall give notice thereof to the Holders of each
Outstanding Note affected, in the manner provided for in Section 106, setting
forth in general terms the substance of such supplemental indenture.
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SECTION 908. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights of the
holders of Senior Indebtedness under Article Twelve of this Indenture without
the consent of such holders affected thereby.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, and Interest.
---------------------------------------------------
The Company covenants and agrees for the benefit of the Holders of
Notes that it will duly and punctually pay the principal of (and premium, if
any, on) and interest on the Notes in accordance with the terms of the Notes and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in The City of New York an office or agency
where Notes may be presented or surrendered for payment (the "Place of
Payment"), where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company hereby designates the
Corporate Trust Office as the Place of Payment.
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of the Place of Payment. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive such respective presentations, surrenders, notices and demands.
The Company 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 any such designation;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in
accordance with the requirements set forth above for Notes for such purposes.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
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SECTION 1003. Money for Notes Payments to Be Held in Trust.
--------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to the Notes, it will, on or before each due date of the principal of
(and premium, if any) or interest on any of the Notes, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, prior to or on each due date of the principal of (and premium,
if any, on) or interest on any Notes, deposit with a Paying Agent a sum in same
day funds (or New York Clearing House funds if such deposit is made prior to the
date on which such deposit is required to be made) sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) and interest on the Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal of
(and premium, if any) or interest on the Notes; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
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Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment to the Company, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and that of each Restricted Subsidiary and the corporate rights
(charter and statutory), licenses and franchises of the Company and each
Restricted Subsidiary; provided, however, that, subject to the other provisions
of this Indenture, the Company shall not be required to preserve any such
existence (except the Company), right, license or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries as a whole
and that the loss thereof is not, and will not be, disadvantageous in any
material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies, which, if unpaid, would by
law become a material liability or lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate reserves, if necessary (in
the good faith judgment of management of the Company) are being maintained in
accordance with GAAP.
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SECTION 1006. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the maintenance of any of such properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business or the business of any Restricted Subsidiary and not adverse in
any material respect to the Holders.
SECTION 1007. Statement by Officers as to Default.
-----------------------------------
(a) The Company and each Subsidiary Guarantor will deliver to the
Trustee, within 45 days after the end of each fiscal quarter and within 120 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company or the Subsidiary Guarantor, as the case
may be, during the preceding quarter or the preceding fiscal year, as the case
may be, has been made under the supervision of the signing officers with a view
to determining whether it has kept, observed, performed and fulfilled, and has
caused each of its Subsidiaries to keep, observe, perform and fulfill its
obligations under this Indenture and further stating, as to each such officer
signing such certificate, that, to the best of his or her knowledge, the Company
during such preceding quarter or the preceding fiscal year, as the case may be,
has kept, observed, performed and fulfilled, and has caused each of its
Subsidiaries to keep, observe, perform and fulfill each and every such covenant
contained in this Indenture and no Default or Event of Default occurred during
such quarter or year, as the case may be, and at the date of such certificate
there is no Default or Event of Default which has occurred and is continuing or,
if such signers do know of such Default or Event of Default, the certificate
shall describe its status, with particularity and that, to the best of his or
her knowledge, no event has occurred and remains by reason of which payments on
the account of the principal of or interest, if any, on the Notes is prohibited
or if such event has occurred, a description of the event and what action each
is taking or proposes to take with respect thereto. The Officers' Certificate
shall also notify the Trustee should the Company elect to change the manner in
which it fixes its fiscal year-end. For purposes of this Section 1007(a), such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
(b) When any Default or Event of Default has occurred and is
continuing under this Indenture, or if the trustee for or the holder of any
other evidence of Indebtedness of the Company or any Subsidiary gives any notice
or takes any other action with respect to a claimed default (other than with
respect to Indebtedness in the principal amount of less than $10,000,000),
89
the Company shall deliver to the Trustee by registered or certified mail or by
telegram, telex or facsimile transmission an Officers' Certificate specifying
such event, notice or other action within five Business Days of its occurrence.
SECTION 1008. Limitation on Indebtedness.
--------------------------
The Company will not, and will not permit any Restricted Subsidiary
to, create, issue, assume, guarantee or in any manner become directly or
indirectly liable for the payment of, or otherwise incur (collectively,
"incur"), any Indebtedness (including any Acquired Indebtedness), other than
Permitted Indebtedness; provided, however, that the Company and any Subsidiary
Guarantor may incur Indebtedness (including Acquired Indebtedness) if at the
time of such incurrence the Consolidated Fixed Charge Coverage Ratio for the
four full fiscal quarters immediately preceding the incurrence of such
Indebtedness for which internal financial statements are available, taken as one
period (and after giving pro forma effect to (i) the incurrence of such
Indebtedness and (if applicable) the application of the net proceeds therefrom,
including to refinance other Indebtedness, as if such Indebtedness was incurred,
and the application of such proceeds occurred, on the first day of such four-
quarter period, (ii) the incurrence, repayment or retirement of any other
Indebtedness by the Company and its Restricted Subsidiaries since the first day
of such four-quarter period as if such Indebtedness was incurred, repaid or
retired on the first day of such four-quarter period (except that, in making
such computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such Indebtedness
during such four-quarter period) and (iii) the acquisition (whether by purchase,
merger or otherwise) or disposition (whether by sale, merger or otherwise) of
any company, entity or business acquired or disposed of by the Company or its
Restricted Subsidiaries, as the case may be, since the first day of such four-
quarter period, as if such acquisition or disposition occurred on the first day
of such four-quarter period), would have been at least equal to 2.0 to 1.0.
SECTION 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company (other than
dividends or distributions payable solely in shares of Qualified Capital
Stock of the Company or in options, warrants or other rights to acquire
such shares of Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock of the Company or any
Affiliate of the Company or any options, warrants or other rights to
acquire such shares of Capital Stock (other than
90
such options, warrants or rights owned by the Company or a wholly owned
Restricted Subsidiary);
(iii) declare or pay any dividend on, or make any distribution to
holders of, any shares of Capital Stock of any Restricted Subsidiary to any
Person (other than to the Company or any of its wholly owned Restricted
Subsidiaries or to all holders of Capital Stock of such Restricted
Subsidiary on a pro rata basis);
(iv) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Subordinated Indebtedness of
the Company or any Subsidiary Guarantor; or
(v) make any Investment (other than any Permitted Investment) in any
Person
(such payments or other actions described in (but not excluded from) clauses (i)
through (v) are collectively referred to as "Restricted Payments"), unless at
the time of, and immediately after giving effect to, the proposed Restricted
Payment (the amount of any such Restricted Payment, if other than cash, as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution), (1) no Default or Event of
Default shall have occurred and be continuing, (2) the Company could incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 1008 and (3) the aggregate amount of all Restricted Payments
declared or made after the date of this Indenture shall not exceed the sum of:
(A) 50% of the Consolidated Adjusted Net Income of the Company
accrued on a cumulative basis during the period beginning on the first day
of the Company's first fiscal quarter after the date of this Indenture and
ending on the last day of the Company's last fiscal quarter ending prior to
the date of such proposed Restricted Payment (or, if such aggregate
cumulative Consolidated Adjusted Net Income shall be a loss, minus 100% of
such loss), plus
(B) the aggregate net cash proceeds received after the date of this
Indenture by the Company from the issuance or sale (other than to any
Restricted Subsidiary) of shares of Qualified Capital Stock of the Company
(including upon the exercise of options, warrants or fights) or warrants,
options or rights to purchase shares of Qualified Capital Stock of the
Company, plus
(C) the aggregate net cash proceeds received after the date of this
Indenture by the Company from the issuance or sale (other than to any
Restricted Subsidiary) of debt securities or Redeemable Capital Stock that
have been converted into or exchanged for Qualified Capital Stock of the
Company, to the extent such securities were originally sold
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for cash, together with the aggregate net cash proceeds received by the
Company at the time of such conversion or exchange, plus
(D) to the extent that any Investment constituting a Restricted
Payment that was made after the date of this Indenture is sold or is
otherwise liquidated or repaid, an amount (to the extent not included in
Consolidated Adjusted Net Income) equal to the sum of (I) the lesser of (x)
the cash proceeds with respect to such Investment (less the cost of the
disposition of such Investment and net of taxes) and (y) the initial amount
of such Investment, and (II) with respect solely to any Restricted Payment
to be made pursuant to clause (v) of this paragraph (a), the cash proceeds
with respect to such Investment (less the cost of the disposition of such
Investment and net of taxes) in excess of the amount in (I), plus
(E) $5,000,000.
(b) Notwithstanding paragraph (a) above, the Company and its
Restricted Subsidiaries may take the following actions so long as (with respect
to clauses (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix) and (x) below) at
the time of and after giving effect thereto no Default or Event of Default shall
have occurred and be continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration the payment of such
dividend would have complied with the provisions of paragraph (a) above;
(ii) the purchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company in exchange for, or out
of the net cash proceeds of a substantially concurrent issuance and sale
(other than to a Restricted Subsidiary) of, shares of Qualified Capital
Stock of the Company;
(iii) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness in exchange for, or
out of the net cash proceeds of a substantially concurrent issuance and
sale (other than to a Restricted Subsidiary) of, shares of Qualified
Capital Stock of the Company;
(iv) the purchase of any Indebtedness that is expressly subordinated
in right of payment to the Notes at a purchase price not greater than 101%
of the principal amount thereof in the event of a Change in Control in
accordance with provisions similar to those of Section 1013; provided that
prior to such purchase the Company has made the Change in Control Offer as
provided in Section 1013 and has purchased all Notes validly tendered for
payment in connection with such Change in Control Offer;
92
(v) the repurchase, redemption or other acquisition or retirement
for value of shares of Management Stock; provided that (1) the Company is
required, by the terms of written agreements between the Company and each
of Xxxxx X. Xxxx and Xxxxx X. Xxxxx as in effect on the Issuance Date, to
effect such purchase, redemption or other acquisition or retirement for
value of such shares and (2) the aggregate consideration paid by the
Company for such shares so purchased, redeemed or otherwise acquired or
retired for value does not exceed $25,000,000 in the aggregate;
(vi) the repurchase, redemption or other acquisition or retirement
for value of shares of Capital Stock of the Company from employees who have
died (or their estates or beneficiaries) or whose employment has been
terminated; provided that such payment shall not exceed $1,500,000 in any
twelve month period, excluding any amounts used to repurchase, redeem,
acquire or retire for value shares of Capital Stock of the Company pursuant
to clause (v) above;
(vii) repurchases of Capital Stock of the Company (or warrants or
options convertible into or exchangeable for such Capital Stock) deemed to
occur upon exercise of stock options to the extent that shares of such
Capital Stock (or warrants or options convertible into or exchangeable for
such Capital Stock) represent a portion of the exercise price of such
options;
(viii) the issuance by the Company of shares of Preferred Stock as
dividends paid in kind on the Preferred Stock of the Company outstanding on
the Issuance Date or on shares of Preferred Stock so issued as payment in
kind dividends, such dividends made pursuant to the terms of the
Certificate of Designation for such Preferred Stock as in effect on the
Issuance Date;
(ix) the issuance by the Company of Exchange Debentures in exchange
for Senior Exchangeable Preferred Stock; and
(x) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness (other than
Redeemable Capital Stock) in exchange for, or out of the net cash proceeds
of a substantially concurrent incurrence (other than to a Restricted
Subsidiary) of, new Subordinated Indebtedness so long as (A) the principal
amount of such new Subordinated Indebtedness does not exceed the principal
amount (or, if such Subordinated Indebtedness being refinanced provides for
an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, such lesser amount as of the date of
determination) of the Indebtedness being so purchased, redeemed, defeased,
acquired or retired, plus either the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of such
Indebtedness being refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing,
plus, in either case, the amount of reasonable
93
expenses of the Company incurred in connection with such refinancing, (B)
such new Subordinated Indebtedness is pari passu or subordinated, as
applicable, to the Notes to the same extent as such Indebtedness so
purchased, redeemed, defeased, acquired or retired and (C) such new
Indebtedness has an Average Life longer than the Average Life of the Notes
and a final Stated Maturity of principal later than the final Stated
Maturity of principal of the Notes.
The actions described in clauses (i), (ii), (iii), (iv), (v), (vi) and
(vii) of this paragraph (b) shall be Restricted Payments that shall be permitted
to be taken in accordance with this paragraph (b) but shall reduce the amount
that would otherwise be available for Restricted Payments under clause (3) of
paragraph (a) above and the actions described in clauses (viii), (ix) and (x) of
this paragraph (b) shall be Restricted Payments that shall be permitted to be
taken in accordance with this paragraph (b) and shall not reduce the amount that
would otherwise be available for Restricted Payments under clause (3) of
paragraph (a).
(c) Notwithstanding the foregoing, the Company will not, and will not
permit any Restricted Subsidiary to, pay any cash dividends on any shares of
Capital Stock of the Company which shall rank junior to the Senior Exchangeable
Preferred Stock until such time as the Notes have received a rating from Xxxxx'x
of at least "B1" or higher.
SECTION 1010. Limitation on Issuances and Sales of Capital Stock of
-----------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Company (i) shall not permit any Restricted Subsidiary to issue
any Capital Stock (other than to the Company or a wholly owned Restricted
Subsidiary) and (ii) shall not permit any Person (other than the Company or a
wholly owned Restricted Subsidiary) to own any Capital Stock of any Restricted
Subsidiary; provided, however, that this Section 1010 shall not prohibit (a) the
issuance and sale of all, but not less than all, of the issued and outstanding
Capital Stock of any Restricted Subsidiary owned by the Company or any of its
Restricted Subsidiaries in compliance with the other provisions of this
Indenture, (b) the ownership by other Persons of Qualified Capital Stock (other
than Preferred Stock) issued prior to the time such Restricted Subsidiary became
a Subsidiary of the Company that was neither issued in contemplation of such
Subsidiary becoming a Subsidiary nor acquired at that time or (c) the ownership
by directors of director's qualifying shares or the ownership by foreign
nationals of Capital Stock of any Restricted Subsidiary, to the extent mandated
by applicable law.
SECTION 1011. Limitation on Transactions with Affiliates.
------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with, or for the
benefit of, any Affiliate of the Company or any Restricted Subsidiary (other
than
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the Company or a Restricted Subsidiary) (collectively, "Interested Persons"),
unless (i) such transaction or series of transactions are on terms that are no
less favorable to the Company or such Restricted Subsidiary, as the case may be,
than those that could have been able to be obtained in an arm's-length
transaction with third parties that are not Interested Persons, (ii) with
respect to any transaction or series of related transactions involving aggregate
consideration equal to or greater than $1,000,000, the Company has delivered an
Officers' Certificate to the Trustee certifying that such transaction or series
of transactions complies with clause (i) above and (iii) with respect to any
transaction or series of related transactions involving aggregate consideration
equal to or greater than $5,000,000, such transaction or series of related
transactions (x) has been approved by the Board of Directors of the Company
(including a majority of the Disinterested Directors of the Company) or (y) the
Company has obtained a written opinion from a nationally recognized investment
banking or valuation firm certifying that such transaction or series of related
transactions is fair to the Company or its Restricted Subsidiary, as the case
may be, from a financial point of view; provided, however, that this Section
1011 shall not restrict (1) the Company from paying reasonable and customary
regular compensation and fees to directors of the Company or any Restricted
Subsidiary who are not employees of the Company or any Restricted Subsidiary,
(2) the payment of management fees to Permitted Holders in an aggregate amount
not to exceed $500,000 per year, (3) loans and advances to officers, directors
and employees of the Company or any Restricted Subsidiary in the ordinary course
of business in accordance with the past practices of the Company or any
Restricted Subsidiary not to exceed $3,000,000 in the aggregate outstanding at
any time, (4) any transactions made in compliance with Section 1009, (5) the
issuance and sale of Qualified Capital Stock of the Company to Persons who are
stockholders of the Company at the time of such issuance and sale and (6) the
performance of any written agreement as in effect on the date of this Indenture
and as amended from time to time, provided that any such amendment is not less
favorable in any material respect to the Company or any Restricted Subsidiary
than the terms of such agreement as in effect on the date of this Indenture.
SECTION 1012. Limitation on Liens.
-------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien of any kind securing Pari Passu Indebtedness or Subordinated
Indebtedness of the Company on or with respect to any of its property or assets,
including any shares of stock or indebtedness of any Restricted Subsidiary,
whether owned at the date of this Indenture or thereafter acquired, or any
income, profits or proceeds therefrom, or assign or otherwise convey any right
to receive income thereon, unless (x) in the case of any Lien securing Pari
Passu Indebtedness of the Company, the Notes are secured by a Lien on such
property, assets or proceeds that is senior in priority to or pari passu with
such Lien and (y) in the case of any Lien securing Subordinated Indebtedness of
the Company, the Notes are secured by a Lien on such property, assets or
proceeds that is senior in priority to such Lien.
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(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist
any Lien securing Pari Passu Indebtedness or Subordinated Indebtedness of such
Restricted Subsidiary on or with respect to any such Restricted Subsidiary's
properties or assets, including any shares of stock or Indebtedness of any
Subsidiary of such Restricted Subsidiary, whether owned at the date of this
Indenture or thereafter acquired, or any income, profits or proceeds therefrom,
or assign or otherwise convey any right to receive income thereon, unless (x) in
the case of any Lien securing Pari Passu Indebtedness of the Restricted
Subsidiary, such Note Guarantee is secured by a Lien on such property, assets or
proceeds that is senior in priority to or pari passu with such Lien and (y) in
the case of any Lien securing Subordinated Indebtedness of the Restricted
Subsidiary, such Note Guarantee is secured by a Lien on such property, assets or
proceeds that is senior in priority to such Lien.
SECTION 1013. Purchase of Notes upon Change in Control.
----------------------------------------
(a) If a Change in Control shall occur at any time, then each Holder
of Notes will have the right to require that the Company purchase such Holder's
Notes, in whole or in part in integral multiples of $1,000, at a purchase price
(the "Change in Control Purchase Price") in cash in an amount equal to 101% of
the principal amount thereof, plus accrued interest, if any, to the date of
purchase (the "Change in Control Purchase Date"), pursuant to the offer
described below (the "Change in Control Offer") and the other procedures set
forth in this Indenture.
(b) Within 30 days following any Change in Control, the Company shall
notify the Trustee thereof and give written notice of such Change in Control
Offer to each Holder by first-class mail, postage prepaid, at the address of
such Holder appearing in the Note Register, stating, among other things, (i) the
Change in Control Purchase Price and the Change in Control Purchase Date, which
shall be a Business Day no earlier than 30 days nor later than 75 days from the
date such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act or any applicable securities laws or
regulations; (ii) that any Note not tendered will continue to accrue interest;
(iii) that, unless the Company defaults in the payment of the Change in Control
Purchase Price, any Notes accepted for payment pursuant to the Change in Control
Offer shall cease to accrue interest after the Change in Control Purchase Date;
and (iv) that Holders electing to have any Notes purchased pursuant to a Change
in Control Offer shall be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change in Control
Purchase Date; (v) that Holders shall be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change in Control Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing its election to have such Notes purchased; (vi) that
Holders whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased
96
portion of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof; (vii) the
instructions that the Holders of Notes must follow in order to tender their
Notes; and (viii) the circumstances and relevant facts regarding such Change in
Control.
(c) The Company shall comply to the extent applicable with the
requirements of the tender offer rules, including Rule 14e-1 under the Exchange
Act, and any other applicable securities laws and regulations in connection with
a Change in Control Offer.
(d) The Company shall not, and shall not permit any Restricted
Subsidiary to, create or permit to exist or become effective any restriction
(other than restrictions existing under the Senior Credit Agreement or under
Indebtedness as in effect on the date of this Indenture) that would materially
impair the ability of the Company to make a Change in Control Offer to purchase
the Notes or, if such Change in Control Offer is made, to pay for the Notes
tendered for purchase.
(e) Prior to complying with the provisions of this Section 1013, but
in any event within 30 days following a Change in Control, the Company shall
either terminate all commitments and repay in full all Indebtedness under the
Senior Credit Agreement and or obtain the requisite consents, if any, under the
Senior Credit Agreement to permit the purchase of the Notes as provided for
under this Section 1013.
(f) The Company shall not, and shall not permit any Restricted
Subsidiary to, create or permit to exist or become effective any restriction
(other than restrictions existing under the Senior Credit Agreement or under
Indebtedness as in effect on the date of this Indenture) that would materially
impair the ability of the Company to make a Change in Control Offer to purchase
the Notes or, if such Change in Control Offer is made, to pay for the Notes
tendered for purchase.
SECTION 1014. Limitation on Sale of Assets.
----------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly, or indirectly, consummate any Asset Sale unless (i) the
consideration received by the Company or such Restricted Subsidiary for such
Asset Sale is not less than the fair market value of the assets sold (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and evidenced by a Board Resolution) and (ii) at least 75% of such
consideration consists of cash or Cash Equivalents. The amount of any (I)
Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor or
any Senior Indebtedness of the Company or any Subsidiary Guarantor that is
actually assumed by the transferee in such Asset Sale and from which the Company
and the Restricted Subsidiaries are fully released shall be deemed to be cash
for purposes of determining the percentage of cash consideration received by the
Company or the Restricted Subsidiaries (excluding any liabilities that are
incurred in connection with or in anticipation of such Asset Sale) and (II)
notes or other similar obligations received by the Company or any Restricted
Subsidiary from such transferee that are converted, sold or
97
exchanged within 30 days of the related Asset Sale by the Company or the
Restricted Subsidiaries into cash shall be deemed to be cash, in an amount equal
to the net cash proceeds realized upon such conversion, sale or exchange for
purposes of determining the percentage of cash consideration received by the
Company or the Restricted Subsidiaries.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may use the Net Cash Proceeds thereof, within 12 months after
such Asset Sale, to (i) permanently repay or prepay any then outstanding Senior
Indebtedness of the Company or any Restricted Subsidiary (and to correspondingly
reduce commitments with respect thereto) or (ii) invest (or enter into a legally
binding agreement to invest) in other properties or assets to replace the
properties or assets that were the subject of the Asset Sale or in properties
and assets that will be used in businesses of the Company or its Restricted
Subsidiaries, as the case may be, existing at the time such assets are sold. If
any such legally binding agreement to invest such Net Cash Proceeds is
terminated, then the Company may, within 90 days of such termination or within
12 months of such Asset Sale, whichever is later, invest such Net Cash Proceeds
as provided in clause (i) or (ii) (without regard to the parenthetical contained
in such clause (ii)) above. The amount of such Net Cash Proceeds not so used as
set forth above in this paragraph (b) shall constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $10,000,000,
the Company shall, within 30 Business Days, make an offer to purchase (an
"Excess Proceeds Offer") from all holders of Notes, on a pro rata basis, in
accordance with the procedures set forth below, the maximum principal amount
(expressed as an integral multiple of $1,000) of Notes that may be purchased
with the Excess Proceeds. The offer price as to each Note shall be payable in
cash in an amount equal to 100% of the principal amount of such Note plus
accrued interest, if any (the "Offered Price"), to the date such Excess Proceeds
Offer is consummated (the "Offer Date"). To the extent that the aggregate
principal amount of Notes tendered pursuant to an Excess Proceeds Offer is less
than the Excess Proceeds, the Company may use such deficiency for any lawful
purposes. If the aggregate principal amount of Notes validly tendered and not
withdrawn by holders thereof exceeds the Excess Proceeds, Notes to be purchased
will be selected on a pro rata basis. Upon completion of such Exceeds Proceeds
Offer, the amount of Excess Proceeds shall be reset to zero.
(d) Whenever the Excess Proceeds received by the Company exceed
$10,000,000, such Excess Proceeds shall be set aside by the Company in a
separate account pending (i) deposit with the Trustee or a paying agent of the
amount required to purchase the Notes tendered in an Excess Proceeds Offer, (ii)
delivery by the Company of the Offered Price to the holders of the Notes
tendered in an Excess Proceeds Offer and (iii) application, as set forth above,
of Excess Proceeds for any lawful purposes. Such Excess Proceeds may be
invested in Cash Equivalents, provided that the maturity date of any investment
shall not be later than the Offer Date. The Company shall be entitled to any
interest or dividends accrued, earned or paid on such Cash Equivalents.
98
(e) If the Company becomes obligated to make an Excess Proceeds Offer
pursuant to clause (c) above, the Notes shall be purchased by the Company, at
the option of the Holders thereof, in whole or in part in integral multiples of
$1,000, on a date that is not earlier than 30 days and not later than 60 days
from the date the notice is given to holders, or such later date as may be
necessary for the Company to comply with the requirements under the Exchange
Act, subject to proration in the event the amount of Excess Proceeds is less
than the aggregate Offered Price of all Notes tendered.
(f) Within 15 days after the obligation of the Company to make an
Excess Proceeds Offer arises, the Company shall notify the Trustee thereof and
give written notice of such Excess Proceeds Offer to each Holder of Notes by
first-class mail, postage prepaid, at the address of such Holder appearing in
the Note Register, stating, (i) the Offered Price and the Offer Date, which
shall be a Business Day no earlier than 30 days nor later than 60 days from the
date such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act or any applicable securities laws or
regulations; (ii) that any Note not tendered will continue to accrue interest;
(iii) that, unless the Company defaults in the payment of the Offered Price, any
Notes accepted for payment pursuant to the Excess Proceeds Offer shall cease to
accrue interest after the date of purchase; (iv) that Holders electing to have
any Notes purchased pursuant to an Excess Proceeds Offer shall be required to
surrender the Notes, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Offer Date; (v) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business on
the second Business Day preceding the Offer Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing its election to have such Notes purchased; (vi) that Holders whose
Notes are being purchased only in part shall be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral
multiple thereof; (vii) the instructions that the Holders of Notes must follow
in order to tender their Notes; and (viii) the circumstances and relevant facts
regarding such Excess Proceeds Offer.
(g) The Company shall comply to the extent applicable with the
requirements of the tender offer rules, including Rule 14e-1 under the Exchange
Act, and any other applicable securities laws and regulations in connection with
an Excess Proceeds Offer.
SECTION 1015. Limitations on Guarantees of Indebtedness by Restricted
-------------------------------------------------------
Subsidiaries.
------------
(a) The Company will not permit any Restricted Subsidiary, directly
or indirectly, to guarantee, assume or in any other manner become liable with
respect to any Indebtedness of the Company unless (i) (A) if such Restricted
Subsidiary is not a Subsidiary
99
Guarantor, such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture, in form satisfactory to the Trustee, providing for a
guarantee of the Notes by such Restricted Subsidiary and delivers to such
Trustee an Opinion of Counsel reasonably satisfactory to such Trustee to the
effect that such supplemental indenture has been duly executed and delivered by
such Restricted Subsidiary and is in compliance with the terms of this Indenture
and (B) with respect to any guarantee by a Restricted Subsidiary of Subordinated
Indebtedness of the Company, any such guarantee shall be subordinated to such
Restricted Subsidiary's Note Guarantee at least to the same extent as such
guaranteed Indebtedness is subordinated to the Notes and (ii) such Restricted
Subsidiary waives and will not in any manner whatsoever claim or take the
benefit or advantage of, any rights of reimbursement, indemnity or subrogation
or any other rights against the Company or any other Restricted Subsidiary as a
result of any payment by such Restricted Subsidiary under its Note Guarantee.
(b) Notwithstanding the foregoing, any guarantee of the Notes created
pursuant to the provisions described in the foregoing paragraph (a) will provide
by its terms that it will be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer to any Person not an
Affiliate of the Company of all of the Company's Capital Stock in, or all or
substantially all the assets of, the applicable Subsidiary Guarantor (which
sale, exchange or transfer is otherwise in compliance with this Indenture) or
(ii) the designation of such Restricted Subsidiary as an Unrestricted Subsidiary
in accordance with the terms of this Indenture.
SECTION 1016. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries.
---------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise,
or make any other distributions on or in respect of its Capital Stock to the
Company or any other Restricted Subsidiary, (b) pay any Indebtedness owed to the
Company or any other Restricted Subsidiary, (c) make loans or advances to the
Company or any other Restricted Subsidiary, (d) transfer any of its properties
or assets to the Company or any other Restricted Subsidiary (other than
customary restrictions on transfers of property subject to a Lien permitted
under this Indenture that would not materially adversely affect the Company's
ability to satisfy its obligations under the Notes and this Indenture) or (e)
guarantee any Indebtedness of the Company or any other Restricted Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) customary provisions restricting subletting or assignment
of any lease or assignment of any other contract to which the Company or any
Restricted Subsidiary is a party or to which any of their respective properties
or assets are subject, (iii) any agreement or other instrument of a Person
acquired by the Company or any Restricted Subsidiary in existence at the time of
such acquisition (but not created in contemplation thereof), which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired, (iv)
100
encumbrances and restrictions in effect on the Issuance Date pursuant to the
Senior Credit Facility and its related documentation, (v) any encumbrance or
restriction contained in contracts for sales of assets permitted by Section 1014
with respect to the assets to be sold pursuant to such contract and (vi) any
encumbrance or restriction existing under any agreement that extends, renews,
refinances or replaces the agreements containing the encumbrances or
restrictions in the foregoing clauses (iii) and (iv); provided that the terms
and conditions of any such encumbrances or restrictions are not materially less
favorable to the Holders than those under or pursuant to the agreement so
extended, renewed, refinanced or replaced.
SECTION 1017. Limitation on Sale and Leaseback Transactions.
---------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into any Sale and Leaseback Transaction with
respect to any property or assets (whether now owned or hereafter acquired),
unless (i) the sale or transfer of such property or assets to be leased is
treated as an Asset Sale and the Company complies with Section 1014 and (ii) the
Company or such Restricted Subsidiary would be permitted to incur Indebtedness
under Section 1008 in the amount of the Capitalized Lease Obligations incurred
in respect of such Sale and Leaseback Transaction; provided, however, that the
Company and its Restricted Subsidiaries will not be required to comply with
Section 1017 with respect to the sale and leaseback of the Headquarters
Facility.
SECTION 1018. Limitation on Other Senior Subordinated Indebtedness.
----------------------------------------------------
Neither the Company nor any Restricted Subsidiary shall incur, create,
assume, guarantee or in any other manner become directly or indirectly liable
with respect to or responsible for, or permit to remain outstanding, any
Indebtedness, other than the Notes, that is subordinate or junior in right of
payment to any Senior Indebtedness unless such Indebtedness is also pari passu
with, or subordinate in right of payment to, the Notes pursuant to subordination
provisions substantially similar to those contained in this Indenture.
SECTION 1019. Limitation on Unrestricted Subsidiaries.
---------------------------------------
The Company shall not make, and shall not permit any of its Restricted
Subsidiaries to make, any Investments in Unrestricted Subsidiaries if, at the
time thereof, the aggregate amount of such Investments would exceed the amount
of Restricted Payments then permitted to be made pursuant to Section 1008. Any
Investments in Unrestricted Subsidiaries permitted to be made pursuant to this
Section 1019 (i) shall be treated as the making of a Restricted Payment in
calculating the amount of Restricted Payments made by the Company or a
Restricted Subsidiary and (ii) may be made in cash or property.
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SECTION 1020. Reports.
-------
The Company shall file on a timely basis with the Commission, to the
extent such filings are accepted by the Commission and whether or not the
Company has a class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13 or 15 of the Exchange Act.
The Company shall also (a) file with the Trustee, and provide to each Holder of
Notes (at their respective addresses set forth in the Note Register, without
cost to such Holder, copies of such reports and documents within 15 days after
the date on which the Company files such reports and documents with the
Commission or the date on which the Company would be required to file such
reports and documents if the Company were so required, and (b) if filing such
reports and documents with the Commission is not accepted by the Commission or
is prohibited under the Exchange Act, supply at the Company's cost copies of
such reports and documents to any prospective Holder promptly upon written
request.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 1021. Waiver of Certain Covenants.
---------------------------
The Company and the Restricted Subsidiaries may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1007 to 1012, inclusive, and Sections 1015 to 1019, inclusive, if before or
after the time for such compliance the Holders of at least a majority in
aggregate principal amount of all Outstanding Notes affected by such term,
provision or covenant, by Act of such Holders, waive such compliance in such
instance with such term, provision or condition, but no such waiver shall extend
to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company, the Restricted Subsidiaries and the duties of the Trustee, as
applicable, in respect of any such term, provision or condition shall remain in
full force and effect.
102
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Redemption.
----------
The Notes may or shall be, as the case may be, redeemed, as a whole or
from time to time in part, subject to the conditions and the Redemption Prices
specified in the form of Note, together with accrued and unpaid interest, if
any, to the Redemption Date (subject to the right of Holders of record on
relevant record dates to receive interest due on an Interest Payment Date), on
the Redemption Date.
SECTION 1102. Applicability of Article.
------------------------
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with the terms of such Notes and in accordance with this Article
Eleven.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
--------------------------------------------
If less than all the Notes are to be redeemed, the particular Notes to
be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Notes not previously called for redemption,
in compliance with the requirements of the principal national securities
exchange, if any, on which such Notes are listed, or, if such Notes are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee shall
deem fair and appropriate (and in such manner as complies with applicable legal
requirements) and which may provide for the selection for redemption of portions
of the principal of Notes; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Note not redeemed to less
than $1,000.
103
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Notes to be redeemed. The Trustee shall give notice of
redemption in the Company's name and at the Company's expense; provided,
however, that the Company shall deliver to the Trustee, at least 45 days prior
to the Redemption Date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to the
Redemption Date payable as provided in Section 1107, if any,
(3) if less than all Outstanding Notes are to be redeemed, the
identification of the particular Notes to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption,
(4) in case any Note is to be redeemed in part only, the notice which
relates to such Note shall state that on and after the Redemption Date,
upon surrender of such Note, the holder will receive, without charge, a new
Note or Notes of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
1107) will become due and payable upon each such Note, or the portion
thereof, to be redeemed, and, unless the Company defaults in making the
redemption payment, that interest on Notes called for redemption (or the
portion thereof) will cease to accrue on and after said date,
104
(6) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued interest, if any,
(7) the name and address of the Paying Agent,
(8) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to the
accuracy or correctness of the CUSIP number, if any, listed in such notice
or printed on the Notes, and
(10) the paragraph of the Notes pursuant to which the Notes are to be
redeemed.
SECTION 1106. Deposit of Redemption Price.
---------------------------
Prior to 10:00 A.M. on any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of, and accrued interest on, all
the Notes which are to be redeemed on that date.
SECTION 1107. Notes Payable on Redemption Date.
--------------------------------
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at the close of
business on the relevant Regular Record Date or Special Record Date, as the case
may be, according to their terms and the provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate of interest set forth in the
Note.
105
SECTION 1108. Notes Redeemed in Part.
----------------------
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holders attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder,
in an aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Note so surrendered, provided, that each such
new Note will be in a principal amount of $1,000 or integral multiple thereof.
ARTICLE TWELVE
SUBORDINATION OF NOTES
SECTION 1201. Notes Subordinate to Senior Indebtedness.
----------------------------------------
The Company covenants and agrees, and each Holder of a Note, by its
acceptance thereof, likewise covenants and agrees, for the benefit of the
holders, from time to time, of Senior Indebtedness that, to the extent and in
the manner hereinafter set forth in this Article, the Indebtedness represented
by the Notes and the payment of the principal of (and premium, if any) and
interest on each and all of the Notes are hereby expressly made subordinate and
subject in right of payment as provided in this Article to the prior payment in
full in cash or cash equivalents of all Senior Indebtedness; provided, however,
that the Notes, the Indebtedness represented thereby and the payment of the
principal of (and premium, if any) and interest on the Notes in all respects
shall rank equally with, or prior to, all existing and future senior
subordinated indebtedness (including, without limitation, Indebtedness) of the
Company that is subordinated to Senior Indebtedness.
SECTION 1202. Payment over of Proceeds upon Dissolution, etc.
-----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its assets, or
(b) any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or other marshalling of
assets or liabilities of the Company (except in connection with the
consolidation or merger of the Company or its liquidation or dissolution
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety upon the terms and conditions described under
Article Eight), then and in any event:
106
(1) the holders of Senior Indebtedness shall first be entitled to
receive payment in full in cash or cash equivalents of all Senior
Indebtedness, or provision shall be made for such payment in full, before
the Holders will be entitled to receive any payment or distribution of any
kind or character (other than any payment or distribution in the form of
equity securities or subordinated securities of the Company or any
successor obligor that, in the case of any such subordinated securities,
are subordinated in right of payment to all Senior Indebtedness that may at
the time be outstanding to at least the same extent as the Notes are so
subordinated as provided in this Indenture (such equity securities or
subordinated securities hereinafter being "Permitted Junior Securities")
and any payment made pursuant to Article Fourteen from monies or U.S.
Government Obligations previously deposited with the Trustee) on account of
principal of (or premium, if any) or interest on the Notes or on account of
the purchase or redemption or other acquisition of Notes; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than a payment
or distribution in the form of Permitted Junior Securities and any payment
made pursuant to Article Fourteen from monies or U.S. Government
Obligations previously deposited with the Trustee), by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Indenture shall be paid by the liquidating trustee
or agent or other Person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their representative
ratably according to the aggregate amounts remaining unpaid on account of
the Senior Indebtedness to the extent necessary to make payment in full of
all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness.
The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance, transfer or lease of its properties and assets substantially as
an entirety to another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Section if the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the conditions
set forth in Article Eight.
SECTION 1203. Suspension of Payment When Designated Senior
--------------------------------------------
Indebtedness in Default.
-----------------------
107
(a) Unless Section 1202 shall be applicable, upon the occurrence of a
Payment Default, no payment or distribution of any assets of the Company of any
kind or character, whether in cash, property or securities (other than Permitted
Junior Securities and payments made pursuant to Article Fourteen from monies or
U.S. Government Obligations previously deposited with the Trustee), shall be
made by or on behalf of the Company on account of principal of (or premium, if
any) or interest on the Notes or on account of the purchase or redemption or
other acquisition of Notes unless and until such Payment Default shall have been
cured or waived in writing from the Agent Bank or any other representative of a
holder of Designated Senior Indebtedness or shall have ceased to exist or such
Designated Senior Indebtedness shall have been discharged or paid in full in
cash or cash equivalents, after which the Company shall resume making any and
all required payments in respect of the Notes, including any missed payments.
(b) Unless Section 1202 shall be applicable, upon (1) the occurrence
of a Non-Payment Default and (2) receipt by the Trustee of written notice
thereof from the Agent Bank or any other representative of a holder of
Designated Senior Indebtedness, then no payment or distribution of any assets of
the Company of any kind or character, whether in cash, property or securities
(other than Permitted Junior Securities and payments made pursuant to Article
Fourteen from monies or U.S. Government Obligations previously deposited with
the Trustee), shall be made by or on behalf of the Company on account of any
principal of (or premium, if any) or interest on the Notes or on account of the
purchase, redemption or other acquisition of Notes for a period ("Payment
Blockage Period") commencing on the date of receipt by the Trustee of written
notice from the Agent Bank or such other representative and ending on the
earliest of (i) 179 days thereafter (provided that any Designated Senior
Indebtedness as to which notice was given shall not theretofore have been
accelerated, in which case the provisions of paragraph (a) shall apply), (ii)
the date on which such Non-Payment Default is cured, waived or ceases to exist
or such Designated Senior Indebtedness is discharged or paid in full in cash or
cash equivalents or (iii) the date on which such Payment Blockage Period shall
have been terminated by written notice to the Trustee or the Company from the
Agent Bank or such other representative initiating such Payment Blockage Period,
after which the Company will resume making any and all required payments in
respect of the Notes, including any missed payments. In any event, not more than
one Payment Blockage Period may be commenced during any period of 360
consecutive days. No event of default that existed or was continuing on the date
of the commencement of any Payment Blockage Period will be, or can be, made the
basis for the commencement of a subsequent Payment Blockage Period, unless such
default has been cured or waived for a period of not less than 90 consecutive
days subsequent to the commencement of such initial Payment Blockage Period. In
no event will a Payment Blockage Period extend beyond 179 days.
In the event that, notwithstanding the foregoing and the provisions of
Section 1202, any payments or distribution shall be made to the Trustee (and not
paid over to the Holders of the Notes) which is prohibited by the foregoing
provisions of this Section and the provisions of Section 1202, then and in such
event such payment shall be paid over and delivered forthwith by the Trustee to
the Agent Bank and any other representative of holders of Designated Senior
108
Indebtedness, as their interests may appear, to the extent necessary to pay in
full, in cash or cash equivalents all Designated Senior Indebtedness.
SECTION 1204. Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Notes shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 1202 or under the conditions
described in Section 1203, from making payments at any time of principal of, and
premium, if any, or interest on the Notes.
SECTION 1205. Subrogation to Rights of Holders of Senior
------------------------------------------
Indebtedness.
------------
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Notes shall be subrogated (equally and ratably with the holders of all
Pari Passu Indebtedness of the Company) to the rights of the holders of such
Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness. For purposes of such
subrogation, no payments or distributions to the holders of Senior Indebtedness
of any cash, property or securities to which the Holders of the Notes or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Notes or on their behalf or by the
Trustee, shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Notes, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness; it
being understood that the provisions of this Article are intended solely for the
purpose of determining the relative rights of the Holders of Notes, on the one
hand, and the holders of Senior Indebtedness, on the other hand.
SECTION 1206. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Notes is intended to or shall
(a) impair, as between the Company and the Holders, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders the
principal of, and premium, if any, and interest on the Notes as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Indebtedness.
109
SECTION 1207. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Note by its acceptance thereof authorizes and directs
the Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes. If the Trustee does
not file a proper proof of claim or proof of debt in the form required in any
proceeding referred to in Section 504 hereof at least 30 days before the
expiration of the time to file such claim, the Agent Bank (if the Senior Credit
Agreement is still outstanding) is hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
SECTION 1208. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without in any way limiting the generality of paragraph (a) of
this Section, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
Holders to the holders of Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection of Senior Indebtedness; and (4)
exercise or refrain from exercising any rights against the Company and any other
Person.
SECTION 1209. Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article Twelve, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or
110
payable thereon, the amount or amounts paid or distributed thereon and all other
acts pertinent thereto or to this Article Twelve.
SECTION 1210. Notice to Trustee.
-----------------
(a) The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Notes. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Notes, unless and
until the Trustee shall have received written notice thereof from the Company,
the Agent Bank or a holder of Senior Indebtedness or from any trustee, fiduciary
or agent therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to TIA Sections 315(a) through 315(d), shall be entitled in all
respects to assume that no such facts exist; provided, however, that, if the
Trustee shall not have received the notice provided for in this Section at least
three Business Days prior to the date upon which by the terms hereof any money
may become payable for any purpose (including, without limitation, the payment
of the principal of, and premium, if any, or interest on any Note), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.
(b) Subject to TIA Sections 315(a) through 315(d), the Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing itself to be a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor). In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 1211. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent.
-----------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to TIA Sections 315(a) through 315(d), and
the Holders of the Notes shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy,
111
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Notes, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article; provided that such court, trustee,
receiver, custodian, assignee, agent or other Person has been apprised of, or
the order, decree or certificate makes reference to, the provisions of this
Article.
SECTION 1212. Rights of Trustee As a Holder of Senior Indebtedness;
-----------------------------------------------------
Preservation of Trustee's Rights.
--------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 606.
SECTION 1213. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1212 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 1214. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Article Five or to pursue any rights or remedies hereunder or
under applicable law, except as provided in Article Five.
SECTION 1215. Trust Moneys Not Subordinated.
-----------------------------
Notwithstanding anything contained herein to the contrary, payments
from cash or the proceeds of U.S. Government Obligations held in trust under
Article Fourteen hereof by the Trustee (or other qualifying trustee) and which
were deposited in accordance with the terms of Article Fourteen hereof and not
in violation of Section 1203 hereof for the payment of principal of (and
premium, if any) and interest on the Notes shall not be subordinated to the
prior payment
112
of any Senior Indebtedness or subject to the restrictions set forth in this
Article Twelve, and none of the Holders shall be obligated to pay over any such
amount to the Company or any holder of Senior Indebtedness or any other creditor
of the Company.
SECTION 1216. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness.
------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if
the Trustee shall mistakenly, in the absence of gross negligence or willful
misconduct, pay over or distribute to Holders of Notes or to the Company or to
any other person cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or otherwise. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
or to observe only such of its covenants or obligations as are specifically set
forth in this Article and no implied covenants or obligations with respect to
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee.
ARTICLE THIRTEEN
GUARANTEES
SECTION 1301. Note Guarantees.
---------------
Each Subsidiary Guarantor hereby jointly and severally, absolutely,
unconditionally and irrevocably guarantees the Notes and obligations of the
Company hereunder and thereunder, and guarantees to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, that: (a) the principal of (and premium, if any) and interest on the
Notes will be paid in full when due, whether at Stated Maturity, by acceleration
or otherwise (including, without limitation, the amount that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Law), together with interest on the overdue principal, if any, and
interest on any overdue interest, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be paid in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or of any such other obligations, the same will be paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration or otherwise, subject, however, in the case
of clauses (a) and (b) above, to the limitations set forth in Section 1305
hereof.
Each Subsidiary Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Subsidiary
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same or
113
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
Each Subsidiary Guarantor hereby waives (to the extent permitted by
law) the benefits of diligence, presentment, demand for payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company or any other Person,
protest, notice and all demands whatsoever and covenants that the Note Guarantee
of such Subsidiary Guarantor shall not be discharged as to any Note except by
complete performance of the obligations contained in such Note, this Indenture
and such Note Guarantee. Each Subsidiary Guarantor acknowledges that the Note
Guarantee is a guarantee of payment and not of collection. Each of the
Subsidiary Guarantors hereby agrees that, in the event of a default in payment
of principal (or premium, if any) or interest on such Note, whether at its
Stated Maturity, by acceleration, purchase or otherwise, legal proceedings may
be instituted by the Trustee on behalf of, or by, the Holder of such Note,
subject to the terms and conditions set forth in this Indenture, directly
against each of the Subsidiary Guarantors to enforce such Subsidiary Guarantor's
Note Guarantee without first proceeding against the Company or any other
Subsidiary Guarantor. Each Subsidiary Guarantor agrees that if, after the
occurrence and during the continuance of an Event of Default, the Trustee or any
of the Holders are prevented by applicable law from exercising their respective
rights to accelerate the maturity of the Notes, to collect interest on the
Notes, or to enforce or exercise any other right or remedy with respect to the
Notes, such Subsidiary Guarantor will pay to the Trustee for the account of the
Holders, upon demand therefor, the amount that would otherwise have been due and
payable had such rights and remedies been permitted to be exercised by the
Trustee or any of the Holders.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company or any Subsidiary Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
any Subsidiary Guarantor, any amount paid by any of them to the Trustee or such
Holder, the Note Guarantee of each of the Subsidiary Guarantors, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (x) subject
to this Article Thirteen, the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article Five hereof for the purposes of the Note
Guarantee of such Subsidiary Guarantor, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Five hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of the Note Guarantee of such Subsidiary Guarantor.
Each Note Guarantee shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should
114
a receiver or trustee be appointed for all or any significant part of the
Company's assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Notes are, pursuant to applicable law, rescinded or reduced
in amount, or must otherwise be restored or returned by any obligee on the
Notes, whether as a "voidable preference", "fraudulent transfer" or otherwise,
all as though such payment or performance had not been made. In the event that
any payment, or any part thereof, is rescinded, reduced, restored or returned,
the Notes shall, to the fullest extent permitted by law, be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
SECTION 1302. Severability.
------------
In case any provision of any Note Guarantee 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.
SECTION 1303. Restricted Subsidiaries.
-----------------------
If the Company or any of its Restricted Subsidiaries acquires or forms
a Restricted Subsidiary organized within the United States, the Company will
cause any such Restricted Subsidiary (and any other Restricted Subsidiary as
required pursuant to Section 1015) to (i) execute and deliver to the Trustee a
supplemental indenture in accordance with the provisions of Article Nine of this
Indenture pursuant to which such Restricted Subsidiary shall guarantee all of
the obligations on the Notes, whether for principal, premium, if any, interest
(including interest accruing after the filing of, or which would have accrued
but for the filing of, a petition by or against the Company under Bankruptcy
Law, whether or not such interest is allowed as a claim after such filing in any
proceeding under such law) and other amounts due in connection therewith
(including any fees, expenses and indemnities), on a senior unsecured
subordinated basis, and (ii) deliver to such Trustee an Opinion of Counsel
reasonably satisfactory to such Trustee to the effect that such supplemental
indenture has been duly executed and delivered by such Restricted Subsidiary and
is in compliance with the terms of this Indenture. Upon the execution of any
such supplemental indenture, the obligations of the Subsidiary Guarantors and
any such Restricted Subsidiary under their respective Note Guarantees shall
become joint and several and each reference to the "Subsidiary Guarantor" in
this Indenture shall, subject to Section 1308, be deemed to refer to all
Subsidiary Guarantors, including such Restricted Subsidiary.
SECTION 1304. Subordination of Note Guarantees.
--------------------------------
The Note Guarantee issued by any Subsidiary Guarantor will be
unsecured senior subordinated obligations of such Subsidiary Guarantor, ranking
pari passu with all other existing and future senior subordinated indebtedness
of such Subsidiary Guarantor, if any. The Indebtedness evidenced by such Note
Guarantee will be subordinated on the same basis to
115
Guarantor Senior Indebtedness of such Subsidiary Guarantor as the Notes are
subordinated to Senior Indebtedness under Article Twelve.
SECTION 1305. Limitation of Subsidiary Guarantors' Liability.
----------------------------------------------
Each Subsidiary Guarantor and by its acceptance hereof each Holder
confirms that it is the intention of all such parties that the guarantee by each
such Subsidiary Guarantor pursuant to its Note Guarantee not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law or the provisions of its local law relating to
fraudulent transfer or conveyance. To effectuate the foregoing intention, the
Holders and each such Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under its Note Guarantee shall be
limited to the maximum amount that will not, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Note Guarantee or pursuant to Section 1305 hereof, result in
the obligations of such Subsidiary Guarantor under its Note Guarantee
constituting such fraudulent transfer or conveyance.
SECTION 1306. Contribution.
------------
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under a Note Guarantee, such Funding Guarantor shall be
entitled to a contribution from all other Subsidiary Guarantors in a pro rata
amount based on the Adjusted Net Assets (as defined below) of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Subsidiary Guarantor's
obligations with respect to the Note Guarantee of such Subsidiary Guarantor.
"Adjusted Net Assets" of such Subsidiary Guarantor at any date shall mean the
lesser of (x) the amount by which the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Note Guarantee of such Subsidiary Guarantor at such date
and (y) the amount by which the present fair salable value of the assets of such
Subsidiary Guarantor at such date exceeds the amount that will be required to
pay the probable liability of such Subsidiary Guarantor on its debts (after
giving effect to all other fixed and contingent liabilities incurred or assumed
on such date), excluding debt in respect of the Note Guarantee of such
Subsidiary Guarantor, as they become absolute and matured.
116
SECTION 1307. Subrogation.
-----------
Each Subsidiary Guarantor shall be subrogated to all rights of Holders
against the Company in respect of any amounts paid by any Subsidiary Guarantor
pursuant to the provisions of Section 1301; provided, however, that, if an Event
of Default has occurred and is continuing, no Subsidiary Guarantor shall be
entitled to enforce or receive any payments arising out of, or based upon, such
right of subrogation until all amounts then due and payable by the Company under
this Indenture or the Notes shall have been paid in full.
SECTION 1308. Reinstatement.
-------------
Each Subsidiary Guarantor hereby agrees (and each Person who becomes a
Subsidiary Guarantor shall agree) that the Note Guarantee provided for in
Section 1301 shall continue to be effective or be reinstated, as the case may
be, if at any time, payment, or any part thereof, of any obligations or interest
thereon is rescinded or must otherwise be restored by a Holder to the Company
upon the bankruptcy or insolvency of the Company or any Subsidiary Guarantor.
SECTION 1309. Release of a Subsidiary Guarantor.
---------------------------------
(a) If no Default exists or would exist under this Indenture, the
Note Guarantee issued by any Subsidiary Guarantor under this Indenture shall be
automatically and unconditionally released and discharged upon any sale,
exchange or transfer to any Person not an Affiliate of the Company or a
Restricted Subsidiary of all of the Company's Capital Stock in, or all or
substantially all the assets of, such Subsidiary Guarantor (which sale, exchange
or transfer is not prohibited by this Indenture).
(b) Concurrently with the discharge of the Notes under Section 401,
the defeasance of the Notes under Section 1402 hereof, or the covenant
defeasance of the Notes under Section 1403 hereof, the Subsidiary Guarantors
shall be released from all their obligations under their Note Guarantees under
this Article Thirteen.
SECTION 1310. Benefits Acknowledged.
---------------------
Each Subsidiary Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that its guarantee and waivers pursuant to its Note Guarantee are knowingly
made in contemplation of such benefits.
117
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
----------
The Company may, at its option and at any time, effect defeasance of
the Notes under Section 1402, or covenant defeasance of the Notes under Section
1403, in accordance with the terms of the Notes and in accordance with this
Article.
SECTION 1402. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 1401 of the option
applicable to this Section 1402, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their obligations with respect to the
Outstanding Notes and the Note Guarantees, respectively, on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company and the Subsidiary
Guarantors shall be deemed to have paid and discharged the entire indebtedness
represented by the Outstanding Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under the Notes and this Indenture insofar as the Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Notes to receive, solely from the trust fund
described in Section 1404 and as more fully set forth in such Section, payments
in respect of the principal of (and premium, if any) and interest on such Notes
when such payments are due, (B) the Company's obligations with respect to such
Notes under Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, and the Company's
obligations in connection therewith and (D) this Article Fourteen. Subject to
compliance with this Article Fourteen, the Company may exercise its option under
this Section 1402 notwithstanding the prior exercise of its option under Section
1403 with respect to such Notes.
SECTION 1403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 1401 of the option
applicable to this Section 1403, the Company and the Subsidiary Guarantors shall
be released from their obligations under Section 801, 802 and Sections 1008
through 1019 with respect to the Outstanding Notes on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "covenant
defeasance"), and such Notes shall thereafter be deemed not to be "Outstanding"
for the purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "Outstanding" for all
118
other purposes hereunder. For this purpose, such covenant defeasance means that,
with respect to such Outstanding Notes, the Company and any Subsidiary
Guarantor, as applicable, may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 501(3) or 501(4) or
otherwise, as the case may be, but, except as specified above, the remainder of
this Indenture and such Notes shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
1402 or Section 1403 to the Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Article Fourteen applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (A) an
amount in cash, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment of principal (including any premium) and interest,
if any, on such Notes, money in an amount, or (C) a combination thereof, in
each case in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of (and premium, if any, on)
and interest on such Outstanding Notes on the Stated Maturity of such
principal (and premium, if any) or installment of interest; provided that
the Trustee (or such qualifying trustee) shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to said payments with respect to such Notes.
(2) No Default or Event of Default with respect to such Notes shall
have occurred and be continuing on the date of such deposit or, insofar as
paragraphs (8) and (9) of Section 501 are concerned, at any time during the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any material agreement to which the Company or any Subsidiary Guarantor is
a party or by which it is bound.
119
(4) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the Issuance Date, there has been a
change in the applicable federal income tax law or interpretation of such
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
Outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
(5) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such covenant defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred.
(6) In the case of defeasance under Section 1402 or covenant
defeasance under Section 1403, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that (A) the trust funds will
not be subject to any rights of holders of Senior Indebtedness under
Article Twelve hereof, and (B) after the 91st day following the deposit or
after the date such opinion is delivered, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders of the Notes or any Note Guarantee over
the other creditors of either the Company or any Subsidiary Guarantor with
the intent of hindering, delaying or defrauding creditors of either the
Company or any Subsidiary Guarantor.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1402
or the covenant defeasance under Section 1403, as the case may be, have
been complied with.
SECTION 1405. Deposited Money and Government Obligations to Be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions.
----------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other
120
qualifying trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Sections 1404 and 1406 in respect of such Outstanding
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Holders of such Notes of all sums due and
to become due thereon in respect of principal (and premium, if any) and
interest, but such money need not be segregated from other funds except to the
extent required by law. Money and U.S. Government Obligations so held in trust
are not subject to Article Twelve.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Notes.
Anything in this Article Fourteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations (or other property and any
proceeds therefrom) held by it as provided in Section 1404 which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent defeasance or covenant defeasance, as applicable, in accordance with
this Article.
SECTION 1406. Reinstatement.
-------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1405 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and such Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1402 or 1403, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1405; provided, however, that if the Company makes any payment of principal of
(or premium, if any) or interest on any such Note following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money held by the Trustee or Paying
Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
TUESDAY MORNING CORPORATION
By ______________________________________
Name: Xxxx X. Xxxxxx
Title: Senior Vice President, Chief
Financial Officer and Secretary
TMI HOLDINGS, INC.
By ______________________________________
Name: Xxxx X. Xxxxxxxxxxx
Title: Senior Vice President, Secretary
and Treasurer
TUESDAY MORNING, INC.
By ______________________________________
Name: Xxxx X. Xxxxxx
Title: Senior Vice President, Chief
Financial Officer and Secretary
FRIDAY MORNING, INC.
By ______________________________________
Name: Xxxxx X. Xxxxx
Title: President and Chief Operating
Officer
TMIL CORPORATION
By ______________________________________
Name: Xxxx X. Xxxxxxxxxxx
Title: Senior Vice President, Secretary
and Treasurer
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
By:______________________________________
Name:
Title:
Exhibit A
---------
[FACE OF NOTE]
TUESDAY MORNING CORPORATION
11% [Series B]/1/ Senior Subordinated Note due 2007
No. _______________ CUSIP No. __________
$ __________
TUESDAY MORNING CORPORATION, a Delaware corporation (the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, promises to pay to ___________, or its
registered assigns, the principal sum of ____________________________________
Dollars ($___________), on December 15, 2007.
[Interest Rate: [__]% per annum.]/1/
Interest Payment Dates: June 15 and December 15 of each year
commencing June 15, 1998.
Regular Record Dates: June 1 and December 1 of each year.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
__________________
/1/ Include only for Exchange Notes.
A-2
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: _____________________ TUESDAY MORNING CORPORATION
By: _________________________
Name:
Title:
A-3
(Form of Trustee's Certificate of Authentication)
This is one of the 11% [Series B]/2/ Senior Subordinated Notes due
2007 referred to in the within-mentioned Indenture.
XXXXXX TRUST AND SAVINGS BANK,
as Trustee
Dated: __________ By: ___________________________
Authorized Signatory
___________________
/2/ Include only for Exchange Note.
A-4
[REVERSE SIDE OF NOTE]
TUESDAY MORNING CORPORATION
11% [Series B] /1/Senior Subordinated Note due 2007
1. Principal and Interest; Subordination.
-------------------------------------
The Company will pay the principal of this Note on December 15, 2007.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate of 11% per
annum [(subject to adjustment as provided below)]/2/ [except that interest
accrued on this Note pursuant to the fourth paragraph of this Section 1 for
periods prior to the applicable Exchange Date (as such term is defined in the
Registration Rights Agreement referred to below) will accrue at the rate or
rates borne by the Notes from time to time during such periods]./1/
Interest will be payable semi-annually (to the Holders of record of
the Notes (or any Predecessor Notes) at the close of business on the June 1 or
December 1 immediately preceding the Interest Payment Date) on each Interest
Payment Date, commencing June 15, 1998.
[The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated December 29, 1997, among the Company, the
Subsidiary Guarantors and the Initial Purchasers named therein (the
"Registration Rights Agreement"). In the event that either (a) the Exchange
Offer Registration Statement (as such term is defined in the Registration Rights
Agreement) is not filed with the Securities and Exchange Commission on or prior
to the 45th calendar day following the date of original issue of the Notes, (b)
the Exchange Offer Registration Statement (as such term is defined in the
Registration Rights Agreement) has not been declared effective on or prior to
the 120th calendar day following the date of original issue of the Notes or (c)
the Exchange Offer is not consummated or a Shelf Registration Statement (as such
terms are defined in the Registration Rights Agreement) is not declared
effective on or prior to the 150th calendar day following the date of original
issue of the Notes, the interest rate borne by this Note shall be increased by
one-quarter of one percent per annum following such 45-day period in the case of
(a) above, following such 120-day period in the case of (b) above or following
such 150-day period in the case of (c) above, which rate will be increased by an
additional one-quarter of one percent per annum for each 90-day period that any
additional interest continues to accrue;
____________________
/1/ Include only for Exchange Note.
/2/ Include only for Exchange Note.
A-5
provided that the aggregate increase in such annual interest rate shall in no
event exceed one percent. Upon (x) the filing of the Exchange Offer Registration
Statement after the 45-day period described in clause (a) above, (y) the
effectiveness of the Exchange Offer Registration Statement after the 120-day
period described in clause (b) above or (z) the consummation of the Exchange
Offer or the effectiveness of a Shelf Registration Statement, as the case may
be, after the 150-day period described in clause (c) above, the interest rate
borne by this Note from the date of such filing, effectiveness or consummation,
as the case may be, will be reduced to the interest rate set forth above;
provided, however, that, if after any such reduction in interest rate, a
different event specified in clause (a), (b) or (c) above occurs, the interest
rate may again be increased pursuant to the foregoing provisions.]/1/
Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
herefor]/2/ or, if no interest has been paid, from December 29, 1997; provided
that, if there is no existing default in the payment of interest and if this
Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum equal to the rate of interest applicable to the Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness, and this Note is issued
subject to such provisions. Each Holder of this Note, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and directs
the Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture and (c) appoints
the Trustee its attorney-in-fact for such purpose.
2. Method of Payment.
-----------------
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes on each June 15 and December 15 to the Persons who
are Holders (as reflected in the Note Register at the close of business on the
June 1 and December 1 immediately preceding the Interest Payment Date), in each
case, even if the Note is cancelled on registration of transfer or registration
of exchange after such Regular Record Date; provided that, with respect to the
___________________
/1/ Include only for Initial Note.
/2/ Include only for Exchange Note.
A-6
payment of principal, the Company will make payment to the Holder that
surrenders this Note to any Paying Agent on or after December 15, 2007.
The Company will pay principal (premium, if any) and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay principal (premium, if
any) and interest by its check payable in such money. The Company may pay
interest on the Notes either (a) by mailing a check for such interest to a
Holder's registered address (as reflected in the Note Register) or (b) by wire
transfer to an account located in the United States maintained by the payee. If
a payment date is a date other than a Business Day at a Place of Payment,
payment may be made at that place on the next succeeding day that is a Business
Day and no interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as Paying Agent and Note Registrar.
The Company may change any Paying Agent or Note Registrar upon written notice
thereto. The Company, any Subsidiary or any Affiliate of any of them may act as
Paying Agent, Note Registrar or co-registrar.
4. Indenture; Limitations.
----------------------
The Company issued the Notes under an Indenture dated as of December
29, 1997 (the "Indenture"), among the Company, the Subsidiary Guarantors and
Xxxxxx Trust and Savings Bank, as trustee (the "Trustee"). Capitalized terms
herein are used as defined in the Indenture unless otherwise indicated. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act. The Notes are subject to
all such terms, and Holders are referred to the Indenture and the Trust
Indenture Act for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this Note
and the terms of the Indenture, the terms of the Indenture shall control.
The Notes are unsecured senior subordinated obligations of the
Company. The Indenture limits the aggregate principal amount of the Notes to
$100,000,000.
5. Redemption.
----------
Optional Redemption. The Notes may be redeemed at the option of the
-------------------
Company, in whole or in part, at any time and from time to time on or after
December 15, 2002, at the following Redemption Prices (expressed in percentages
of principal amount), plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on an Interest Payment Date
that is on or
A-7
prior to the Redemption Date), if redeemed during the 12-month period beginning
December 15 of each of the years set forth below:
Redemption
Year Price
---- ----------
2002........................... 105.50%
2003........................... 103.67%
2004........................... 101.83%
2005 and thereafter............ 100.00%
In addition to the optional redemption of the Notes in accordance with
the provisions of the preceding paragraph, at any time prior to December 15,
2000, the Company may redeem up to $35,000,000 aggregate principal amount of the
Notes, within 20 days of one or more Public Equity Offerings with the net
proceeds of such offerings, at 111% of the principal amount thereof, together
with accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of holders of record on relevant Regular Record Dates to receive interest
due on an Interest Payment Date that is on or prior to the Redemption Date);
provided, however, that at least $65,000,000 of the original aggregate principal
amount of the Notes remains outstanding thereafter.
If less than all the Notes are to be redeemed pursuant to the
preceding two paragraphs, the Trustee shall select the Notes or portions thereof
to be redeemed in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes being redeemed are listed, or if
the Notes are not so listed, on a pro rata basis, by lot or by such other method
the Trustee shall deem fair and appropriate; provided that no such partial
redemption shall reduce the portion of the principal amount of a Note not
redeemed to less than $1,000.
Notice of a redemption will be mailed, first-class postage prepaid, at
least 30 days but not more than 60 days before the Redemption Date to each
Holder to be redeemed at such Holder's last address as it appears in the Note
Register. Notes in original denominations larger than $1,000 may be redeemed in
part in integral multiples of $1,000. On and after the Redemption Date,
interest ceases to accrue on Notes or portions of Notes called for redemption,
unless the Company defaults in the payment of the Redemption Price.
6. Repurchase upon a Change in Control and Asset Sales.
---------------------------------------------------
Upon the occurrence of (a) a Change in Control, the Holders of the
Notes will have the right to require that the Company purchase such Holder's
outstanding Notes, in whole or in part, at a purchase price of 101% of the
principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase and (b) Asset Sales, the Company may
be obligated to make offers to purchase Notes with a portion of the Net Cash
Proceeds of such Asset Sales at a
A-8
redemption price of 100% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase.
7. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form without coupons, in denominations of
$1,000 and multiples of $1,000 in excess thereof. A Holder may register the
transfer or exchange of Notes in accordance with the Indenture. The Note
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Note Registrar need not register the
transfer or exchange of any Notes selected for redemption (except the unredeemed
portion of any Note being redeemed in part).
8. Persons Deemed Owners.
---------------------
A Holder may be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
---------------
If money for the payment of principal (premium, if any) or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
-----------------------------------------
If the Company irrevocably deposits, or causes to be deposited, with
the Trustee money or U.S. Government Obligations sufficient to pay the then
outstanding principal of (premium, if any) and accrued interest on the Notes (a)
to redemption or maturity, the Company will be discharged from the Indenture and
the Notes, except in certain circumstances for certain sections thereof, and (b)
to the Stated Maturity, the Company will be discharged from certain covenants
set forth in the Indenture.
11. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding, and any existing
default or compliance with any provision may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding. Without notice to or the consent of any Holder, the parties thereto
may amend
A-9
or supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not adversely
affect the rights of any Holder.
12. Restrictive Covenants.
---------------------
The Indenture contains certain covenants, including, without
limitation, covenants with respect to the following matters: (i) Indebtedness;
(ii) Restricted Payments; (iii) issuances and sales of Capital Stock of
Restricted Subsidiaries; (iv) transactions with Affiliates; (v) Liens; (vi)
purchase of Notes upon a Change in Control; (vii) disposition of proceeds of
Asset Sales; (viii) guarantees of Indebtedness by Restricted Subsidiaries; (ix)
dividend and other payment restrictions affecting Restricted Subsidiaries; (x)
merger and certain transfers of assets; and (xi) limitation on Unrestricted
Subsidiaries. Within 120 days after the end of each fiscal year and within 45
days after each fiscal quarter, the Company must report to the Trustee on
compliance with such limitations.
13. Successor Persons.
-----------------
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person will
be released from those obligations.
14. Remedies for Events of Default.
------------------------------
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Notes then outstanding may declare all the Notes to be
immediately due and payable; provided that so long as the Senior Credit
Agreement shall be in full force and effect, if an Event of Default shall have
occurred and be continuing (other than with respect to certain bankruptcy or
insolvency defaults with respect to the Company), any such acceleration shall
not be effective until the earlier to occur of (x) five Business Days following
delivery of a written notice of such acceleration of the Notes to the Agent Bank
under the Senior Credit Agreement and (y) the acceleration of any indebtedness
under the Senior Credit Agreement. If a bankruptcy or insolvency default with
respect to the Company or any of its Significant Subsidiaries occurs and is
continuing, the Notes automatically become immediately due and payable. Holders
may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of at least a
majority in aggregate principal amount of the Notes then outstanding may direct
the Trustee in its exercise of any trust or power.
A-10
15. Note Guarantees.
---------------
The Company's obligations under the Notes are fully, irrevocably and
unconditionally guaranteed on a senior unsecured basis, to the extent set forth
in the Indenture, by each of the Subsidiary Guarantors.
16. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Notes and may make loans to, accept
deposits from, perform services for, and otherwise deal with, the Company and
its Affiliates as if it were not the Trustee.
17. Authentication.
--------------
This Note shall not be valid until the Trustee signs the certificate
of authentication on the other side of this Note.
18. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Tuesday Morning
Corporation, 00000 Xxxxxx Xxxx, Xxxxxx, Xxxxx 00000, Attention: Chief Financial
Officer.
A-11
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
----------------------------------
________________________________________________________________________________
(Please print or typewrite name and address including zip code of assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________________________________________
attorney to transfer such Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of the date of an effective Registration Statement or
December 29, 1999, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
Check One
---------
(a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by
Rule 144A thereunder.
or
--
(b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Note Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and
A-12
until the conditions to any such transfer of registration set forth herein and
in Sections 311 and 312 of the Indenture shall have been satisfied.
Date: ______________________
__________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee: ___________________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note 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 Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
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, as amended, 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
Company 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 undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: _____________________ _________________________________________
NOTICE: To be executed by an executive
officer
A-13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 1013 or Section 1014 of the Indenture, check the Box: ].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 1013 or Section 1014 of the Indenture, state the amount (in
original principal amount) below:
$_____________________.
Date: ________________________________
Your Signature: ______________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: _________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note 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 Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
SCHEDULE A
Indebtedness of the Company or any Restricted
Subsidiary Outstanding on the Issuance Date
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Indebtedness under Pacific Atlantic Systems Leasing, Inc. Capital Lease
outstanding as of the Closing Date (monthly payment: $20,928.65).
Real Estate mortgages with Compass Bank outstanding as of the Closing Date.
