EXHIBIT 4.3
MOTORS AND GEARS, INC.
________________________________________
$100,000,000 10 3/4% SERIES C SENIOR NOTES DUE 2006
AND
$270,000,000 10 3/4% SERIES D SENIOR NOTES DUE 2006
________________________________________
___________________
INDENTURE
DATED AS OF DECEMBER 17, 1997
___________________
STATE STREET BANK AND TRUST COMPANY
Trustee
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE........................ 1
SECTION 1.01. DEFINITIONS............................................. 1
SECTION 1.02. OTHER DEFINITIONS....................................... 14
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT......................................... 15
SECTION 1.04. RULES OF CONSTRUCTION................................... 15
ARTICLE 2 THE NOTES........................................................ 15
SECTION 2.01. PRINCIPAL AMOUNT, FORM AND DATING....................... 15
SECTION 2.02. EXECUTION AND AUTHENTICATION............................ 16
SECTION 2.03. REGISTRAR AND PAYING AGENT.............................. 16
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST..................... 17
SECTION 2.05. HOLDER LISTS............................................ 17
SECTION 2.06. TRANSFER AND EXCHANGE................................... 17
SECTION 2.07. REPLACEMENT SENIOR NOTES................................ 24
SECTION 2.08. OUTSTANDING SENIOR NOTES................................ 24
SECTION 2.09. TREASURY SENIOR NOTES................................... 24
SECTION 2.10. TEMPORARY SENIOR NOTES.................................. 24
SECTION 2.11. CANCELLATION............................................ 25
SECTION 2.12. DEFAULTED INTEREST...................................... 25
SECTION 2.13. RECORD DATE............................................. 25
SECTION 2.14. CUSIP NUMBER............................................ 25
ARTICLE 3 OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE.............. 25
SECTION 3.01. NOTICES TO TRUSTEE...................................... 25
SECTION 3.02. SELECTION OF SENIOR NOTES TO BE
REDEEMED OR PURCHASED................................. 26
SECTION 3.03. NOTICE OF REDEMPTION.................................... 26
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.......................... 27
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE............................. 28
SECTION 3.06. SENIOR NOTES REDEEMED IN PART........................... 28
SECTION 3.07. OPTIONAL REDEMPTION PROVISIONS.......................... 28
SECTION 3.08. MANDATORY PURCHASE PROVISIONS........................... 29
ARTICLE 4 COVENANTS......................................................... 30
SECTION 4.01. PAYMENT OF SENIOR NOTES................................. 30
SECTION 4.02. SEC REPORTS............................................. 31
SECTION 4.03. COMPLIANCE CERTIFICATE.................................. 31
SECTION 4.04. STAY, EXTENSION AND USURY LAWS.......................... 32
SECTION 4.05. LIMITATION ON RESTRICTED PAYMENTS....................... 32
SECTION 4.06. CORPORATE EXISTENCE..................................... 35
SECTION 4.07. LIMITATION ON INCURRENCE OF INDEBTEDNESS................ 35
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH AFFILIATES.............. 36
SECTION 4.09. LIMITATION ON LIENS..................................... 37
SECTION 4.10. COMPLIANCE WITH LAWS, TAXES............................. 37
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SECTION 4.11. LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES........ 37
SECTION 4.12. MAINTENANCE OF OFFICE OR AGENCIES....................... 38
SECTION 4.13. CHANGE OF CONTROL....................................... 38
SECTION 4.14. LIMITATION ON ASSET SALES............................... 39
SECTION 4.15. LIMITATION ON GUARANTEES OF COMPANY
INDEBTEDNESS BY RESTRICTED SUBSIDIARIES............... 40
SECTION 4.16. DESIGNATION OF RESTRICTED AND
NON-RESTRICTED SUBSIDIARIES........................... 41
ARTICLE 5 SUCCESSORS........................................................ 41
SECTION 5.01. MERGER OR CONSOLIDATION................................. 41
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED....................... 42
ARTICLE 6 DEFAULTS AND REMEDIES............................................. 42
SECTION 6.01. EVENTS OF DEFAULT....................................... 42
SECTION 6.02. ACCELERATION............................................ 44
SECTION 6.03. OTHER REMEDIES.......................................... 45
SECTION 6.04. WAIVER OF PAST DEFAULTS................................. 45
SECTION 6.05. CONTROL BY MAJORITY..................................... 45
SECTION 6.06. LIMITATION ON SUITS..................................... 45
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.................... 46
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.............................. 46
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM........................ 46
SECTION 6.10. PRIORITIES.............................................. 46
SECTION 6.11. UNDERTAKING FOR COSTS................................... 47
ARTICLE 7 TRUSTEE........................................................... 47
SECTION 7.01. DUTIES OF TRUSTEE....................................... 47
SECTION 7.02. RIGHTS OF TRUSTEE....................................... 48
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE............................ 49
SECTION 7.04. TRUSTEE'S DISCLAIMER.................................... 49
SECTION 7.05. NOTICE TO HOLDERS OF DEFAULTS AND
EVENTS OF DEFAULT..................................... 49
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS........................... 49
SECTION 7.07. COMPENSATION AND INDEMNITY.............................. 50
SECTION 7.08. REPLACEMENT OF TRUSTEE.................................. 50
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC........................ 51
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION........................... 51
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY................................... 52
ARTICLE 8 DISCHARGE OF INDENTURE............................................ 52
SECTION 8.01. DISCHARGE OF LIABILITY ON SENIOR NOTES;
DEFEASANCE............................................ 52
SECTION 8.02. CONDITIONS TO DEFEASANCE................................ 52
SECTION 8.03. APPLICATION OF TRUST MONEY.............................. 54
SECTION 8.04. REPAYMENT TO THE COMPANY................................ 54
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SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.................... 54
SECTION 8.06. REINSTATEMENT........................................... 54
ARTICLE 9 AMENDMENTS........................................................ 55
SECTION 9.01. AMENDMENTS AND SUPPLEMENTS PERMITTED
WITHOUT CONSENT OF HOLDERS............................ 55
SECTION 9.02. AMENDMENTS AND SUPPLEMENTS REQUIRING
CONSENT OF HOLDERS.................................... 55
SECTION 9.03. COMPLIANCE WITH TIA..................................... 56
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS....................... 56
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR NOTES................. 56
SECTION 9.06. TRUSTEE PROTECTED....................................... 57
ARTICLE 10 MISCELLANEOUS.................................................... 57
SECTION 10.01. TRUST INDENTURE ACT CONTROLS........................... 57
SECTION 10.02. NOTICES................................................ 57
SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS............ 58
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT..... 58
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.......... 59
SECTION 10.06. RULES BY TRUSTEE AND AGENTS............................ 59
SECTION 10.07. LEGAL HOLIDAYS......................................... 59
SECTION 10.08. NO RECOURSE AGAINST OTHERS............................. 59
SECTION 10.09. COUNTERPARTS........................................... 59
SECTION 10.10. VARIABLE PROVISIONS.................................... 60
SECTION 10.11. GOVERNING LAW.......................................... 60
SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.......... 60
SECTION 10.13. SUCCESSORS............................................. 60
SECTION 10.14. SEVERABILITY........................................... 60
SECTION 10.15. TABLE OF CONTENTS, HEADINGS, ETC....................... 60
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This Indenture, dated as of December 17, 1997, is between Motors and
Gears, Inc., a Delaware corporation (the "Company"), and State Street Bank and
Trust Company, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Company's 10 3/4% Series
C Senior Notes due 2006 ("Series C Senior Notes")and the Company's 10 3/4%
Series D Senior Notes due 2006("Series D Senior Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" means any of the following: (i) any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, (ii) any spouse, immediate family member or other
relative who has the same principal residence as any Person described in clause
(i) above, (iii) any trust in which any such Persons described in clause (i) or
(ii) above has a beneficial interest, and (iv) any corporation or other
organization of which any such Persons described above collectively own 50% or
more of the equity of such entity.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Amended Credit Agreement" means the credit agreement, dated November
7, 1996, as amended as of the date hereof among M&G Industries, Inc., certain of
its subsidiaries and the lenders party thereto in their capacities as lenders
thereunder and Bankers Trust Company, as agent, together with all loan documents
and instruments thereunder (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including,
without limitation, increasing the amount of available borrowings thereunder,
and all Obligations with respect thereto, in each case, to the extent permitted
by Section 4.07, or adding Subsidiaries of the Company as additional borrowers
or guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
"Asset Sale" means the sale, lease, conveyance or other disposition by
the Company or a Restricted Subsidiary of assets or property whether owned on
the date of original issuance of the Senior Notes or thereafter acquired, in a
single transaction or in a series of related transactions, that are outside of
the ordinary course of business of the Company or such Restricted Subsidiary;
provided that Asset Sales will not include such sales, leases, conveyances or
dispositions in connection with (i) the sale or disposition of any Restricted
Investment, (ii) any Equity Offering by (a) the Company or (b) any Restricted
Subsidiary if the proceeds therefrom are used to make mandatory prepayments of
Indebtedness under the Amended Credit Agreement or Indebtedness of the
Restricted Subsidiaries or redeem Senior Notes as described in Section 3.07,
(iii) the sale or lease of equipment, inventory, accounts receivable or other
assets in the ordinary course of business, (iv) Receivables Financings, (v) the
surrender or waiver of contract rights or the settlement, release or surrender
of contract, tort or other claims of any kind, (vi) the grant of any license of
patents, trademarks, registration therefor and other similar intellectual
property, (vii) a transfer of assets by the Company or a Restricted Subsidiary
to any of the Company, a Restricted Subsidiary or a Non-Restricted Subsidiary,
(viii) the designation of a Restricted Subsidiary as a Non-Restricted Subsidiary
pursuant to
Section 4.17, (ix) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company as permitted under Section 5.01,
(x) the sale or disposition of obsolete equipment or other obsolete assets, or
(xi) Restricted Payments permitted by Section 4.05.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Company's board of directors or any
authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of corporate stock, including any
preferred stock.
"Cash Flow" means, for any given period and Person, the sum of,
without duplication, Consolidated Net Income, plus (a) the portion of Net Income
attributable to the minority interests in its Subsidiaries, to the extent not
included in calculating Consolidated Net Income, plus (b) any provision for
taxes based on income or profits to the extent such income or profits were
included in computing Consolidated Net Income, plus (c) Consolidated Interest
Expense, to the extent deducted in computing Consolidated Net Income, plus (d)
the amortization of all intangible assets, to the extent such amortization was
deducted in computing Consolidated Net Income (including, but not limited to,
inventory write-ups, goodwill, debt and financing costs, and Incentive
Arrangements), plus (e) any non-capitalized transaction costs incurred in
connection with financings, acquisitions or divestitures (including, but not
limited to, financing and refinancing fees, including those in connection with
the Offering, in each case, to the extent deducted in computing Consolidated Net
Income), plus (f) all depreciation and all other non-cash charges (including,
without limitation, those charges relating to purchase accounting adjustments
and LIFO adjustments), to the extent deducted in computing Consolidated Net
Income, plus (g) any interest income, to the extent such income was not included
in computing Consolidated Net Income, plus (h) all dividend payments on
preferred stock (whether or not paid in cash) to the extent deducted in
computing Consolidated Net Income, plus (i) any extraordinary or non-recurring
charge or expense arising out of the implementation of SFAS 106 or SFAS 109 to
the extent deducted in computing Consolidated Net Income, plus (j) to the extent
not covered in clause (e) above, fees paid or payable in respect of the New TJC
Management Consulting Agreement to the extent deducted in computing Consolidated
Net Income, plus (k) the net loss of any Person, other than those of a
Restricted Subsidiary, to the extent deducted in computing Consolidated Net
Income, plus (l) net losses in respect of any discontinued operations as
determined in accordance with GAAP, to the extent deducted in computing
Consolidated Net Income; provided, however, that if any such calculation
includes any period during which an acquisition or sale of a Person or the
incurrence or repayment of Indebtedness occurred, then such calculation for such
period shall be made on a Pro Forma Basis.
"Cash Flow Coverage Ratio" means, for any given period and Person, the
ratio of: (i) Cash Flow, divided by (ii) the sum of Consolidated Interest
Expense and the amount of all dividend payments on any series of preferred stock
of such Person (except dividends paid or payable in additional shares of Capital
Stock (other than Disqualified Stock)), in each case, without duplication;
provided, however, that if any such calculation includes any period during which
an acquisition or sale of a Person or the incurrence or repayment of
Indebtedness occurred, then such calculation for such period shall be made on a
Pro Forma Basis.
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"Change of Control" means the occurrence of each of the following: (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), excluding the Jordan Stockholders, 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 50% of the total Voting Stock of the Company; and (ii)
the Company consolidates with, or merges with or into, another Person or sells,
assigns, 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 where (A) the outstanding Voting Stock of the Company is converted
into or exchanged for (1) Voting Stock (other than Redeemable Capital Stock) of
the surviving or transferee corporation or (2) cash, securities and other
property in an amount which could be paid by the Company as a Restricted Payment
under the Indenture and (B) immediately after such transaction no "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), excluding the Jordan Stockholders, 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 50% of the total
Voting Stock of the surviving or transferee corporation; and (iii) 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 by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who are entitled to vote to elect such new
director and were either directors at the beginning of such period or Persons
whose election as directors 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.
The definition of Change of Control includes a phrase relating to the
sale, lease, transfer, conveyance or other disposition of "all or substantially
all" of the Company's assets. Although there is a developing body of case law
interpreting the phrase "substantially all," there is no precise established
definition of the phrase under applicable law. Accordingly, the ability of a
holder of Senior Notes to require the Company to repurchase such Senior Notes as
a result of a sale, lease, transfer, conveyance or other disposition of less
than all of the assets of the Company and its subsidiaries to another Person may
be uncertain. Furthermore, an acquisition of the Company by the Jordan
Stockholders including pursuant to a spin-off to the Jordan Stockholders by
Jordan Industries, Inc., directly or indirectly of its investment in the
Company, would not constitute a Change of Control.
"Commission" means the Securities and Exchange Commission.
"Company" means Motors and Gears, Inc., a Delaware corporation.
"Consolidated Interest Expense" means, for any given period and
Person, the aggregate of the interest expense in respect of all Indebtedness of
such Person and its Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP (including amortization of original issue
discount on any such Indebtedness, all non-cash interest payments, the interest
portion of any deferred payment obligation and the interest component of capital
lease obligations, but excluding amortization of deferred financing fees if such
amortization would otherwise be included in interest expense); provided,
however, that for the purpose of the Cash Flow Coverage Ratio, Consolidated
Interest Expense shall be calculated on a Pro Forma Basis; provided further that
any premiums, fees and expenses (including the amortization thereof)
3
payable in connection with the Offering and the application of the net proceeds
therefrom or any other refinancing of Indebtedness will be excluded.
"Consolidated Net Income" means, for any given period and Person, the
aggregate of the Net Income of such Person and its Subsidiaries for such period,
on a consolidated basis, determined in accordance with GAAP; provided, however,
that: (i) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, and (ii) Consolidated Net Income of any Person will not include,
without duplication, any deduction for: (A) any increased amortization or
depreciation resulting from the write-up of assets pursuant to Accounting
Principles Board Opinion Nos. 16 and 17, as amended or supplemented from time to
time, (B) the amortization of all intangible assets (including amortization
attributable to inventory write-ups, goodwill, debt and financing costs, and
Incentive Arrangements), (C) any non-capitalized transaction costs incurred in
connection with financings, acquisitions or divestitures (including, but not
limited to, financing and refinancing fees), (D) any extraordinary or
nonrecurring charges relating to any premium or penalty paid, write-off of
deferred financing costs or other financial recapitalization charges in
connection with redeeming or retiring any Indebtedness prior to its stated
maturity, and (E) any Restructuring Charges; provided, however, that for
purposes of determining the Cash Flow Coverage Ratio, Consolidated Net Income
shall be calculated on a Pro Forma Basis.
"Consolidated Net Worth" with respect to any Person means, as of any
date, the consolidated equity of the common stockholders of such Person
(excluding the cumulated foreign currency translation adjustment), all
determined on a consolidated basis in accordance with GAAP, but without any
reduction in respect of the payment of dividends on any series of such Person's
preferred stock if such dividends are paid in additional shares of Capital Stock
(other than Disqualified Stock); provided, however, that Consolidated Net Worth
shall also include, without duplication: (a) the amortization of all write-ups
of inventory, (b) the amortization of all intangible assets (including
amortization of goodwill, debt and financing costs, and Incentive Arrangements),
(c) any non-capitalized transaction costs incurred in connection with
financings, acquisitions or divestitures (including, but not limited to,
financing and refinancing fees), (d) any increased amortization or depreciation
resulting from the write-up of assets pursuant to Accounting Principles Board
Opinion Nos. 16 and 17, as amended and supplemented from time to time, (e) any
extraordinary or nonrecurring charges or expenses relating to any premium or
penalty paid, write-off of deferred financing costs or other financial
recapitalization charges incurred in connection with redeeming or retiring any
Indebtedness prior to its stated maturity, (f) any Restructuring Charges, and
(g) any extraordinary or non-recurring charge arising out of the implementation
of SFAS 106 or SFAS 109; provided, however, that Consolidated Net Worth shall be
calculated on a Pro Forma Basis.
"Contingent Earnout Agreement" means the Contingent Earnout Agreement,
among the Company and certain of its Restricted Subsidiaries and Jordan
Industries, Inc. and certain of its Restricted Subsidiaries, as in effect on
November 7, 1996.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Notes" means Senior Notes that are in the form of Exhibit
A attached hereto (but without including the text referred to in footnotes 1 and
2 thereto).
"Disqualified Stock" means any Capital Stock that by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event,
4
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part on, or prior to, the maturity date of the Senior Notes.
"Equity Interests" means Capital Stock or partnership interests or
warrants, options or other rights to acquire Capital Stock or partnership
interests (but excluding (i) any debt security that is convertible into, or
exchangeable for, Capital Stock or partnership interests, and (ii) any other
Indebtedness or Obligation) provided, however, that Equity Interests will not
include any Incentive Arrangements or obligations or payments thereunder.
"Equity Offering" means a public or private offering by the Company
and/or its Subsidiaries for cash of Capital Stock or other Equity Interests and
all warrants, options or other rights to acquire Capital Stock, other than (i)
an offering of Disqualified Stock or (ii) Incentive Arrangements or obligations
or payments thereunder.
"Exchange Offer" means the offer by the Company to each holder of
Series C Senior Notes and to each holder of Series A/B Senior Notes to exchange
all Series C Senior Notes or Series A/B Senior Notes held by such holder for
Series D Senior Notes that have been registered under the Securities Act in an
aggregate principal amount equal to the aggregate principal amount of the Series
C Senior Notes or Series A/B Senior Notes held by such holder, all in accordance
with the terms and conditions of the Registration Rights Agreement.
"GAAP" means generally accepted accounting principles, consistently
applied, as of the date of original issuance of the Senior Notes. All financial
and accounting determinations and calculations under the Indenture will be made
in accordance with GAAP.
"Global Note" means a Senior Note that contains the paragraph referred
to in footnote 1 and the additional schedule referred to in footnote 2 to the
form of the Senior Note attached hereto as Exhibit A.
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Persons under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (ii) foreign exchange
contracts, currency swap agreements or similar agreements, and (iii) other
agreements or arrangements designed to protect such Person against fluctuations,
or otherwise to establish financial xxxxxx in respect of, exchange rates,
currency rates or interest rates.
"Incentive Arrangements" means any earn-out agreements, stock
appreciation rights, "phantom" stock plans, employment agreements, non-
competition agreements, subscription and stockholders agreements and other
incentive and bonus plans and similar arrangements made in connection with
acquisitions of Persons or businesses by the Company or the Restricted
Subsidiaries or the retention of executives, officers or employees by the
Company or the Restricted Subsidiaries.
"Indebtedness" means, with respect to any Person, any indebtedness,
whether or not contingent, in respect of borrowed money or evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or representing the deferred and unpaid balance
of the purchase price of any property (including pursuant to capital leases),
except any such balance that constitutes an accrued expense or a trade payable,
and any Hedging Obligations, if and to the extent such indebtedness (other than
a Hedging Obligation) would appear as a liability upon a balance sheet of such
Person prepared on a consolidated basis in accordance with GAAP, and also
includes, to the extent not otherwise included, the guarantee of items that
would be included within this definition; provided, however, that "Indebtedness"
will not include any Incentive Arrangements or obligations or payments
thereunder.
5
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Insolvency or Liquidation Proceeding" means (i) any insolvency or
bankruptcy or similar case or proceeding, or any reorganization, receivership,
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, or (ii) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of the Company.
"Investment" means any capital contribution to, or other debt or
equity investment in, any Person.
"Issue" means create, issue, assume, guarantee, incur or otherwise
become directly or indirectly liable for any Indebtedness or Capital Stock, as
applicable; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be issued
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary.
For this definition, the terms "issuing," "issuer," "issuance" and "issued" have
meanings correlative to the foregoing.
"JI Properties Services Agreement" means the properties services
agreement, dated July 25, 1997, between JI Properties, Inc., the Company and
each of its Subsidiaries and Jordan Industries, Inc., as in effect on the date
of original issuance of the Senior Notes.
"Jordan Stockholders" means Jordan Industries, Inc., The Jordan
Company and Jordan/Zalaznick Capital Corporation and their respective
affiliates, principals, partners and employees, family members of any of the
foregoing and trusts for the benefit of any of the foregoing, including, without
limitation, MCIT PLC and Leucadia National Corporation and their respective
Subsidiaries.
"Junior Seller Notes" means the subordinated promissory note, dated
September 22, 1995, issued by Xxxxxx-Xxxxx Industries, Inc., in the principal
amount of $5.0 million, and maturing on December 31, 2003 and the subordinated
promissory note, dated October 27, 1997, issued by Electrical Design and Control
Company, a wholly owned Subsidiary of the Company, in the principal amount of
$4.0 million, and maturing on December 31, 2002, each as in effect on the date
of original issuance of the Senior Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the principal corporate
trust office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP, excluding, however, any gain
or loss, together with any related
6
provision for taxes, realized in connection with any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions).
"Net Proceeds" means, with respect to any Asset Sale, the aggregate
amount of cash proceeds (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, and including
any amounts received as disbursements or withdrawals from any escrow or similar
account established in connection with any such Asset Sale, but, in either such
case, only as and when so received) received by the Company or any of its
Restricted Subsidiaries in respect of such Asset Sale, net of: (i) the cash
expenses of such Asset Sale (including, without limitation, the payment of
principal of, and premium, if any, and interest on, Indebtedness required to be
paid as a result of such Asset Sale (other than the Senior Notes) and legal,
accounting, management and advisory and investment banking fees and sales
commissions), (ii) taxes paid or payable as a result thereof, (iii) any portion
of cash proceeds that the Company determines in good faith should be reserved
for post-closing adjustments, it being understood and agreed that on the day
that all such post-closing adjustments have been determined, the amount (if any)
by which the reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Company or any of its Restricted
Subsidiaries shall constitute Net Proceeds on such date, (iv) any relocation
expenses and pension, severance and shutdown costs incurred as a result thereof,
and (v) any deduction or appropriate amounts to be provided by the Company or
any of its Restricted Subsidiaries as a reserve in accordance with GAAP against
any liabilities associated with the asset disposed of in such transaction and
retained by the Company or such Restricted Subsidiary after such sale or other
disposition thereof, including, without limitation, pension and other post-
employment benefit liabilities and liabilities related to environmental matters
or against any indemnification obligations associated with such transaction.
"New Subsidiary Advisory Agreement" means the advisory agreement,
dated as of July 25, 1997, between the Company and each of its Subsidiaries and
Jordan Industries, Inc., as in effect on the date of original issuance of the
Senior Notes.
"New Subsidiary Consulting Agreement" means the management consulting
agreement, dated as of July 25, 1997, between the Company and each of its
Subsidiaries and Jordan Industries, Inc., as in effect on the date of original
issuance of the Senior Notes.
"New TJC Management Consulting Agreement" means the management
consulting agreement, dated as of July 25, 1997, between Jordan Industries, Inc.
and TJC Management Corp., as in effect on the date of original issuance of the
Senior Notes.
"Non-Restricted Subsidiary" means any Subsidiary of the Company other
than a Restricted Subsidiary.
"Obligations" means, with respect to any Indebtedness, all principal,
interest, premiums, penalties, fees, indemnities, expenses (including legal fees
and expenses), reimbursement obligations and other liabilities payable to the
holder of such Indebtedness under the documentation governing such Indebtedness,
and any other claims of such holder arising in respect of such Indebtedness.
"Offering" means the offer and sale of the Series C Senior Notes as
contemplated by the Offering Circular.
7
"Offering Circular" means the Offering Circular, dated December 10,
1997, relating to the Company's offering and placement of the Series C Senior
Notes.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officer's Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 10.04 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
10.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Other Permitted Indebtedness" means: (i) Indebtedness of the Company
and its Restricted Subsidiaries existing as of the date of original issuance of
the Senior Notes; (ii) Indebtedness of the Company and its Restricted
Subsidiaries in respect of bankers acceptances and letters of credit (including,
without limitation, letters of credit in respect of workers' compensation
claims) issued in the ordinary course of business, or other Indebtedness in
respect to reimbursement-type obligations regarding workers' compensation
claims; (iii) Refinancing Indebtedness, provided that: (A) the principal amount
of such Refinancing Indebtedness shall not exceed the outstanding principal
amount of Indebtedness (including unused commitments) extended, refinanced,
renewed, replaced, substituted or refunded plus any amounts incurred to pay
premiums, fees and expenses in connection therewith, (B) the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Indebtedness being extended,
refinanced, renewed, replaced, substituted or refunded; provided, however, that
this limitation in this clause (B) does not apply to Refinancing Indebtedness of
Senior Indebtedness, and (C) in the case of Refinancing Indebtedness of
Subordinated Indebtedness, such Refinancing Indebtedness shall be subordinated
to the Senior Notes at least to the same extent as the Subordinated Indebtedness
being extended, refinanced, renewed, replaced, substituted or refunded; (iv)
intercompany Indebtedness of and among the Company and its Restricted
Subsidiaries (excluding guarantees by Restricted Subsidiaries of Indebtedness of
the Company not issued in compliance with Section 4.15; (v) Indebtedness of the
Company and its Restricted Subsidiaries incurred in connection with making
permitted Restricted Payments under clauses (iii) or (iv), but only to the
extent that such Indebtedness is provided by the Company or a Restricted
Subsidiary, or (x) of Section 4.05(b); (vi) Indebtedness of any Non-Restricted
Subsidiary created after the date of original issuance of the Senior Notes,
provided that such Indebtedness is nonrecourse to the Company and its Restricted
Subsidiaries and the Company and its Restricted Subsidiaries have no Obligations
with respect to such Indebtedness; (vii) Indebtedness of the Company and its
Restricted Subsidiaries under Hedging Obligations; (viii) Indebtedness of the
Company and its Restricted Subsidiaries arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts, which will not be, and
will not be deemed to be, inadvertent) drawn against insufficient funds in the
ordinary course of business; (ix) Indebtedness of any Person at the time it is
acquired as a Restricted Subsidiary, provided that such Indebtedness was not
issued by such Person in connection with or in anticipation of such acquisition;
(x) guarantees by Restricted Subsidiaries of Indebtedness of any Restricted
Subsidiary if such Indebtedness so guaranteed is permitted under the Indenture;
(xi) guarantees by a Restricted Subsidiary of Indebtedness of the Company if the
Indebtedness so guaranteed is permitted under the Indenture and the Senior Notes
are guaranteed by such
8
Restricted Subsidiary to the extent required by Section 4.15; (xii) guarantees
by the Company of Indebtedness of any Restricted Subsidiary if the Indebtedness
so guaranteed is permitted under the Indenture; (xiii) Indebtedness of the
Company and its Restricted Subsidiaries in connection with performance, surety,
statutory, appeal or similar bonds in the ordinary course of business; (xiv)
Indebtedness of the Company and its Restricted Subsidiaries in connection with
agreements providing for indemnification, purchase price adjustments and similar
obligations in connection with the sale or disposition of any of their business,
properties or assets; (xv) Indebtedness of the Restricted Subsidiaries in
respect of the Junior Seller Notes; and (xvi) Indebtedness of the Company and
its Restricted Subsidiaries in respect of the Contingent Earnout Agreement.
"Parent" means Motors and Gears Holdings, Inc., a Delaware corporation
and corporate parent of the Company.
"Permitted Liens" means:
(a) with respect to the Company and its Restricted Subsidiaries, (i)
Liens for taxes, assessments, governmental charges or claims which are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor; (ii)
statutory Liens of landlords and carriers', warehousemen's, mechanics',
suppliers', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if-any as shall be required in conformity with GAAP shall
have been made therefor; (iii) Liens incurred on deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred on deposits
made to secure the performance of tenders, bids, leases, statutory obligations,
surety and appeal bonds, government contracts, performance and return of money
bonds and other obligations of a like nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money); (v)
easements, rights-of-way, zoning or other restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the business of the Company or any of
its Restricted Subsidiaries incurred in the ordinary course of business; (vi)
Liens (including extensions, renewals and replacements thereof) upon property
acquired (the "Acquired Property") after the date of original issuance of the
Senior Notes, provided that: (A) any such Lien is created solely for the purpose
of securing Indebtedness representing, or issued to finance, refinance or
refund, the cost (including the cost of construction) of the Acquired Property,
(B) the principal amount of the Indebtedness secured by such Lien does not
exceed 100% of the cost of the Acquired Property, (C) such Lien does not extend
to or cover any property other than the Acquired Property and any improvements
on such Acquired Property, and (D) the issuance of the Indebtedness to purchase
the Acquired Property is permitted by Section 4.07; (vii) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; (viii) judgment and
attachment Liens not giving rise to an Event of Default; (ix) leases or
subleases granted to others not interfering in any material respect with the
business of the Company or any of its Restricted Subsidiaries; (x) Liens
securing Indebtedness under Hedging Obligations; (xi) Liens encumbering deposits
made to secure obligations arising from statutory, regulatory, contractual or
warranty requirements; (xii) Liens arising out of consignment or similar
arrangements for the sale of goods entered into by the Company or its Restricted
Subsidiaries in the ordinary course of business; (xiii) any interest or title of
a lessor in property subject to any capital lease obligation or operating lease;
(xiv) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xv) Liens existing on the date of original issuance of the
Senior Notes and any extensions, refinancings, renewals, replacements,
substitutions or refundings
9
thereof; (xvi) any Lien granted to the Trustee and any substantially equivalent
Lien granted to any trustee or similar institution under any indenture for
Senior Indebtedness permitted by the terms of the Indenture; and (xvii)
additional Liens at any one time outstanding in respect of properties or assets
where aggregate fair market value does not exceed $10,000,000 (the fair market
value to be determined on the date such Lien is granted on such properties or
assets);
(b) with respect to the Restricted Subsidiaries, (i) Liens securing
Restricted Subsidiaries' reimbursement Obligations with respect to letters of
credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (ii) Liens securing Indebtedness
issued by Restricted Subsidiaries if such Indebtedness is (A) under the Amended
Credit Agreement, or (B) permitted by Section 4.07(a), clauses (i), (ii), (iii)
or (iv) of Section 4.07(b), or clauses (i), (iii) (to the extent the
Indebtedness subject to such Refinancing Indebtedness was subject to Liens),
(vi), (vii), (ix), (x) or (xvi) of the definition of Other Permitted
Indebtedness; (iii) Liens securing intercompany Indebtedness issued by any
Restricted Subsidiary to the Company or another Restricted Subsidiary; and (iv)
Liens securing guarantees by Restricted Subsidiaries of Indebtedness issued by
the Company if such guarantees permitted by clause (xi) (but only in respect of
the property, rights and assets of the Restricted Subsidiaries issuing such
guarantees) of the definition of Other Permitted Indebtedness;
(c) with respect to the Company, (i) Liens securing Indebtedness
issued by the Company if such Indebtedness is (A) under the Amended Credit
Agreement, or (B) if such Indebtedness is permitted by Section 4.07 (including,
but not limited to, Indebtedness issued by the Company under the Amended Credit
Agreement pursuant to clause (i) and/or clause (iv) of Section 4.07(b)); (ii)
Liens securing Indebtedness of the Company if such Indebtedness is permitted by
clauses (i), (iii) (to the extent the Indebtedness subject to such Refinancing
Indebtedness was subject to Liens) or (vii) of the definition of Other Permitted
Indebtedness; (iii) Liens securing guarantees by the Company of Indebtedness
issued by Restricted Subsidiaries if such Indebtedness is permitted by Section
4.07 (including, but not limited to, Indebtedness issued by Restricted
Subsidiaries under the Amended Credit Agreement pursuant to clause (i) and/or
clause (iv) of Section 4.07(b)) and if such guarantees are permitted by clause
(xii) (but only in respect of Indebtedness issued by the Restricted Subsidiaries
under the Amended Credit Agreement pursuant to Section 4.07) of the definition
of Other Permitted Indebtedness; and (iv) Liens securing the Company's
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the products
and proceeds thereof; provided, however, that, notwithstanding any of the
foregoing, the Permitted Liens referred to in clause (c) of this definition
shall not include any Lien on Capital Stock of Restricted Subsidiaries held
directly by the Company (as distinguished from Liens on Capital Stock of
Restricted Subsidiaries held by other Restricted Subsidiaries) other than Liens
securing (A) Indebtedness of the Company issued under the Amended Credit
Agreement pursuant to Section 4.07 and any permitted Refinancing Indebtedness of
such Indebtedness, and (B) guarantees by the Company of Indebtedness issued by
Restricted Subsidiaries under the Amended Credit Agreement pursuant to Section
4.07 and any permitted Refinancing Indebtedness of such Indebtedness.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pro Forma Basis" means, for purposes of determining Consolidated Net
Income in connection with the Cash Flow Coverage Ratio (including in connection
with Section 4.05, Section 4.16, Section 5.01, the incurrence of Indebtedness
pursuant to Section 4.07(a) and Consolidated Net Worth for purposes of Section
5.01, giving pro forma effect to (x) any acquisition or sale of a Person,
business or asset,
10
related incurrence, repayment or refinancing of Indebtedness or other related
transactions, including any Restructuring Charges which would otherwise be
accounted for as an adjustment permitted by Regulation S-X under the Securities
Act or on a pro forma basis under GAAP, or (y) any incurrence, repayment or
refinancing of any Indebtedness and the application of the proceeds therefrom,
in each case, as if such acquisition or sale and related transactions,
restructurings, consolidations, cost savings, reductions, incurrence, repayment
or refinancing were realized on the first day of the relevant period permitted
by Regulation S-X under the Securities Act or on a pro forma basis under GAAP.
Furthermore, in calculating the Cash Flow Coverage Ratio, (1) interest on
outstanding Indebtedness determined on a fluctuating basis as of the
determination date and which will continue to be so determined thereafter shall
be deemed to have accrued at a fixed rate per annum equal to the rate of
interest on such Indebtedness in effect on the determination date; (2) if
interest on any Indebtedness actually incurred on the determination date may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the determination date will be deemed to have been in
effect during the relevant period; and (3) notwithstanding clause (1) above,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to interest rate swaps or similar
interest rate protection Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
"Receivables" means, with respect to any Person, all of the following
property and interests in property of such Person, whether now existing or
existing in the future or hereafter acquired or arising: (i) accounts, (ii)
accounts receivable (including, without limitation, all rights to payment
created by or arising from sales of goods, leases of goods or leased or the
rendition of services rendered no matter how evidenced, whether or not earned by
performance), (iii) all unpaid seller's or lessor's rights (including, without
limitation, recession, replevin, reclamation and stoppage in transit, relating
to any of the foregoing or arising therefrom), (iv) all rights to any goods or
merchandise represented by any of the foregoing (including, without limitation,
returned or repossessed goods), (v) all reserves and credit balances with
respect to any such accounts receivable or account debtors, (vi) all letters of
credit, security or guarantees of any of the foregoing, (vii) all insurance
policies or reports relating to any of the foregoing, (viii) all collection or
deposit accounts relating to any of the foregoing, (ix) all proceeds of any of
the foregoing, and (x) all books and records relating to any of the foregoing.
"Receivables Financing" means (i) the sale, factoring or other
disposition of Receivables that arise in the ordinary course of business, or
(ii) the sale, factoring or other disposition of Receivables that arise in the
ordinary course of business to a Receivables Subsidiary followed by a financing
transaction in connection with such sale or disposition of such Receivables.
"Receivables Subsidiary" means any Subsidiary of the Company or any
other corporation trust or entity that is exclusively engaged in Receivables
Financings and activities reasonably related thereto.
"Redeemable Preferred Stock" means preferred stock that by its terms
or otherwise is required to be redeemed or is redeemable at the option of the
holder thereof on, or prior to, the maturity date of the Senior Notes.
"Refinancing Indebtedness" means (i) Indebtedness of the Company and
its Restricted Subsidiaries issued or given in exchange for, or the proceeds of
which are used to, extend, refinance, renew, replace, substitute or refund any
Indebtedness permitted under this Indenture or any Indebtedness issued to so
extend, refinance, renew, replace, substitute or refund such Indebtedness, (ii)
any refinancings of
11
Indebtedness issued under the Amended Credit Agreement, and (iii) any additional
Indebtedness issued to pay premiums and fees in connection with clauses (i) and
(ii).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 17, 1997, by and among the Company and the
Initial Purchasers.
"Representative" means the agent or other representative in respect of
the Amended Credit Agreement, with the Representative originally being Bankers
Trust Company.
"Restricted Investment" means Investment in any Person, provided that
Restricted Investments will not include: (i) Investments in marketable
securities and other negotiable instruments permitted by this Indenture; (ii)
any Incentive Arrangements; (iii) Investments in the Company; or (iv)
Investments in any Restricted Subsidiary (provided that any Investment in a
Restricted Subsidiary was made for fair market value (as determined by the Board
of Directors in good faith)). The amount of any Restricted Investment shall be
the amount of cash and the fair market value at the time of transfer of all
other property (as determined by the Board of Directors in good faith) initially
invested or paid for such Restricted Investment, plus all additions thereto,
without any adjustments for increases or decreases in value of or write-ups,
write-downs or write-offs with respect to, such Restricted Investment.
"Restricted Subsidiary" means: (i) any Subsidiary of the Company
existing on the date of issuance of the Series A/B Senior Notes, and (ii) any
other Subsidiary of the Company formed, acquired or existing after the date of
issuance of the Series A/B Senior Notes that is designated as a "Restricted
Subsidiary" by the Company pursuant to a resolution approved a majority of the
Board of Directors, provided, however, that the term Restricted Subsidiary shall
not include any Subsidiary of the Company that has been redesignated by the
Company pursuant to a resolution approved by a majority of the Board of
Directors as a Non-Restricted Subsidiary in accordance with Section 4.16 unless
such Subsidiary shall have subsequently been redesignated a Restricted
Subsidiary in accordance with clause (ii) of this definition.
"Restructuring Charges" means any charges or expenses in respect of
restructuring or consolidating any business, operations or facilities, any
compensation or headcount reduction, or any other cost savings, of any Persons
or businesses either alone or together with the Company or any Restricted
Subsidiary, as permitted by GAAP or Regulation S-X under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means: (i) all Obligations (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of the
Company, whether outstanding on the date of original issuance of the Senior
Notes or thereafter created, incurred or assumed, of the following types: (A)
all Indebtedness of the Company (including without limitation the Senior Notes
and the Series A/B Senior Notes) for money borrowed, and (B) all Indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which the Company is responsible or liable; (ii) all capitalized
lease obligations of the Company; (iii) all Obligations of the Company: (A) for
the reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction, (B) all constituting Hedging Obligations, or (C)
issued as the deferred purchase price of property and all conditional sale
Obligations of the Company and all Obligations of the Company under any title
retention
12
agreement; (iv) all guarantees of the Company with respect to Obligations of
other Persons of the type referred to in clauses (ii) and (iii) and with respect
to the payment of dividends of other Persons; and (v) all Obligations of the
Company consisting of modifications, renewals, extensions, replacements and
refundings of any Obligations described in clauses (i), (ii), (iii) or (iv)
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is expressly provided that such Obligations are
subordinated or junior in right of payment to the Senior Notes; provided,
however, that Senior Indebtedness shall not be deemed to include: (1) any
Obligation of the Company to any Subsidiary, (2) any liability for federal,
state, local or other taxes owed or owing by the Company, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness, guarantee or Obligation of the Company that
is contractually subordinated or junior in any respect to any other
Indebtedness, guarantee or Obligation of the Company, or (5) any Indebtedness to
the extent the same is incurred in violation of the Indenture. Senior
Indebtedness shall include all Obligations in respect of the Senior Notes and
this Indenture and the Series A/B Senior Notes and. the Series A/B Indenture.
To the extent any payment on the Senior Notes, whether by or on behalf
of the Company, as proceeds of security or enforcement of any right of setoff or
otherwise, is declared to be fraudulent or preferential, set aside or required
to be paid to a trustee, receiver or other similar party under any bankruptcy,
insolvency, receivership or similar law, then if such payment is recovered by,
or paid over to, such trustee, receiver or other similar party, the Senior Notes
or part thereof originally intended to be satisfied by such payment shall be
deemed to be reinstated and outstanding as if such payment had not occurred.
"Senior Notes" means the 10 3/4% Series C/D Senior Notes due 2006 of
the Company.
"Series A/B Indenture" means the Indenture dated as of November 7,
1996, as amended and supplemented, between the Company and Fleet National Bank
as Trustee, providing for the issuance of the Series A/B Senior Notes in the
aggregate principal amount of $170,000,000, as such may be amended and
supplemented from time to time.
"SFAS 106" means Statement of Financial Accounting Standards No. 106.
"SFAS 109" means Statement of Financial Accounting Standards No. 109.
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that would be a "significant subsidiary" as defined in clause (2) of the
definition of such term in Rule 1-02 of Regulation S-X under the Securities Act
and the Exchange Act.
"Subordinated Indebtedness" means all Obligations of the type referred
to in clauses (i) through (v) of the definition of Senior Indebtedness, if the
instrument creating or evidencing the same, or pursuant to which the same is
outstanding, designates such Obligations as subordinated or junior in right of
payment to Senior Indebtedness.
"Subsidiary" of any Person means any entity of which the Equity
Interests entitled to cast at least a majority of the votes that may be cast by
all Equity Interests having ordinary voting power for the election of directors
or other governing body of such entity are owned by such Person (regardless of
whether such Equity Interests are owned directly by such Person or through one
or more Subsidiaries).
13
"Transfer Restricted Senior Notes" means securities that bear or are
required to bear the legend set forth in Section 2.06.
"Transition Agreement" means the transition agreement, dated as of
July 25, 1997, between the Company and Jordan Industries, Inc., as in effect on
the date of original issuance of the Senior Notes.
"Trustee" means State Street Bank and Trust Company until a successor
replaces it in accordance with the applicable provisions of this Indenture, and
thereafter means the successor.
"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 the board of directors.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding principal amount of such Indebtedness into (ii) the sum of the
product(s) obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other requirement payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
SECTION 1.02. OTHER DEFINITIONS
Term Defined in
Section
"Affiliate Transaction".................. 4.08
"Asset Sale Disposition Date"............ 4.14
"Asset Sale Trigger Date"................ 4.14
"Change of Control Trigger Date"......... 4.13
"covenant defeasance option"............. 8.01
"Disposition"............................ 5.01
"DTC".................................... 2.03
"Event of Default"....................... 6.01
"Excess Proceeds"........................ 4.14
"legal defeasance option"................ 8.01
"Notice of Default"...................... 6.01
"Offer".................................. 3.08
"Other Indebtedness"..................... 4.15
"Other Indebtedness Guarantee"........... 4.15
"Paying Agent"........................... 2.03
"Purchase Date".......................... 3.08
14
"Registrar".............................. 2.03
"Restricted Payments".................... 4.05
"Successor Corporation".................. 5.01
"Trustee Expenses"....................... 6.08
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in, and made a part of, this Indenture. Any terms
incorporated by reference in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them therein.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the
meaning assigned to it under GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2.
THE NOTES
SECTION 2.01. PRINCIPAL AMOUNT, FORM AND DATING.
(a) Principal Xxxxxx
The aggregate principal amount of Senior Notes which may be issued,
executed, authenticated and outstanding under this Indenture is $270,000,000,
provided that $170,000,000 shall be reserved for issuance and shall be available
for issuance only in connection with the exchange of the Series A/B Senior Notes
for Series D Senior Notes.
(b) Form and Dating
The Senior Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A, which is part of this Indenture. The
Senior Notes may have notations, legends or
15
endorsements required by law, stock exchange rule or usage. Each Senior Note
shall be dated the date of its authentication. The Senior Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Notes shall constitute, and are
hereby expressly made, a part of this Indenture and, to the extent applicable,
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Each Global Note shall represent such of the outstanding Senior Notes
as shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Senior Notes from time to time endorsed thereon
and that the aggregate amount of outstanding Senior Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the amount of outstanding Senior Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer shall sign the Senior Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Senior Notes
and may be in facsimile form.
If an Officer whose signature is on a Senior Note no longer holds that office at
the time a Senior Note is authenticated, the Senior Note shall nevertheless be
valid.
A Senior Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee, and the Trustee's signature
shall be conclusive evidence that the Senior Note has been authenticated under
this Indenture. The form of Trustee's certificate of authentication to be borne
by the Senior Notes shall be substantially as set forth in Exhibit A.
The Trustee shall, upon a written order of the Company signed by two
Officers directing the Trustee to authenticate the Senior Notes and certifying
that all conditions precedent to the issuance of the Senior Notes contained
herein have been complied with, authenticate Senior Notes for original issuance
up to an aggregate principal amount stated in paragraph 4 of the Senior Notes
(the aggregate principal amount of outstanding Senior Notes may not exceed that
amount at any time, except as provided in Section 2.07). The Trustee may appoint
an authenticating agent acceptable to the Company to authenticate Senior Notes.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Senior Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (the "Registrar") where
Senior Notes may be presented for registration of transfer or for exchange and
an office or agency (the "Paying Agent") where Senior Notes may be presented for
payment. The Registrar shall keep a register of the Senior Notes and of their
transfer and exchange. The Company may appoint one or more co-registrars and
one or more additional paying agents. The term "Registrar" includes any co-
registrar, and the term "Paying Agent" includes any additional paying agent.
The Company may change any Paying Agent or Registrar without prior notice to any
Holder. The Company shall notify in writing the Trustee and the Trustee shall
notify the Holders in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such. The Company shall
16
enter into an appropriate agency agreement with any Agent not a party to this
Indenture, and such agreement shall incorporate the TIA's provisions and
implement the provisions of this Indenture that relate to such Agent.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Senior Notes
and as Note Custodian with respect to the Global Notes. The Company or any of
its Subsidiaries may act as Paying Agent, Registrar or co-registrar. If the
Company fails to appoint or maintain a Registrar and Paying Agent, the Trustee
shall act as such, and shall be entitled to appropriate compensation in
accordance with Section 7.07.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the Holders'
benefit or the Trustee all money the Paying Agent holds for redemption or
purchase of the Senior Notes or for the payment of principal of, or premium, if
any, or interest on, or Liquidated Damages, if any, with respect to the Senior
Notes, and will promptly notify the Trustee of any Default by the Company in
providing the Paying Agent with sufficient funds to (i) purchase Senior Notes
tendered pursuant to an Offer arising under Section 4.13, (ii) redeem Senior
Notes called for redemption, or (iii) make any payment of principal, premium,
interest or Liquidated Damages due on the Senior Notes. While any such Default
continues, the Trustee may require the Paying Agent to pay all money it holds to
the Trustee and to account for any funds disbursed. The Company at any time may
require the Paying Agent to pay all money it holds to the Trustee and to account
for any funds disbursed. Upon payment over to the Trustee, the Paying Agent (if
other than the Company or any of its Subsidiaries) shall have no further
liability for the money it delivered to the Trustee. If the Company or any of
its Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the Holders' benefit or the Trustee all money it holds as Paying
Agent.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S)312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require that sets forth the names and addresses of, and the
aggregate principal amount of Senior Notes held by, each Holder, and the Company
shall otherwise comply with Section 312(a) of the TIA.
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
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(y) to exchange such Definitive Notes for an equal principal amount
of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by
such Xxxxxx or by his attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer Restricted
Senior Note, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Senior Note is being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification to that
effect from such Holder (in substantially the form of
Exhibit B hereto); or
(B) if such Transfer Restricted Senior Note is being transferred
(1) to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A
under the Securities Act or (2) pursuant to an exemption
from registration in accordance with Rule 144 under the
Securities Act (and based on an opinion of counsel if the
Company so requests) or (3) pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto);
(C) if such Transfer Restricted Senior Note is being transferred
to an institutional "accredited investor," within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement exemption
from the registration requirements of the Securities Act
(and based on an opinion of counsel if the Company so
requests), a certification to that effect from such Holder
(in substantially the form of Exhibit B hereto) and a
certification from the applicable transferee (in
substantially the form of Exhibit C hereto);
(D) if such Transfer Restricted Senior Note is being transferred
pursuant to an exemption from registration in accordance
with Rule 904 under the Securities Act (and based on an
opinion of counsel if the Company so requests),
certifications to that effect from such Holder (in
substantially the form of Exhibits B and D hereto); or
(E) if such Transfer Restricted Senior Note is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act (and based on an opinion
of counsel if the Company so requests), a
18
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto).
(b) Transfer of a Definitive Note for a Beneficial Interest in a Global
Note. A Definitive Note may not be exchanged for a beneficial interest in a
Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted Senior Note, a
certification from the Holder thereof (in substantially the form
of Exhibit B hereto) to the effect that such Definitive Note is
being transferred by such Holder to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted
Senior Note, written instructions from the Holder thereof
directing the Trustee to make, or to direct the Note Custodian to
make, an endorsement on the Global Note to reflect an increase in
the aggregate principal amount of the Senior Notes represented by
the Global Note,
the Trustee shall cancel such Definitive Note in accordance with Section 2.11
and cause, or direct the Note Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and the
Note Custodian, the aggregate principal amount of Senior Notes represented by
the Global Note to be increased accordingly. If no Global Notes are then
outstanding, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02, the Trustee shall authenticate a new
Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a Definitive
Note.
(i) Any Person having a beneficial interest in a Global Note may upon
request exchange such beneficial interest for a Definitive Note.
Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Note, and, in the case of a
Transfer Restricted Senior Note, the following additional
information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial
owner, a certification to that effect from such Person (in
substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred (1) to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance
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with Rule 144A under the Securities Act or (2) pursuant to
an exemption from registration in accordance with Rule 144
under the Securities Act (and based on an opinion of counsel
if the Company so requests) or (3) pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from the transferor (in
substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred to an
institutional "accredited investor," within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act
pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based
on an opinion of counsel if the Company so requests), a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto) and a
certification from the applicable transferee (in
substantially the form of Exhibit C hereto);
(D) if such beneficial interest is being transferred pursuant to
an exemption from registration in accordance with Rule 904
under the Securities Act (and based on an opinion of counsel
if the Company so requests), certifications to that effect
from such Holder (in substantially the form of Exhibits B
and D hereto); or
(E) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of
the Securities Act (and based on an opinion of counsel if
the Company so requests), a certification to that effect
from such Holder (in substantially the form of Exhibit B
hereto).
the Trustee or the Note Custodian, at the direction of the Trustee, shall, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate principal amount of
Global Notes to be reduced accordingly and, following such reduction, the
Company shall execute and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial interest in
a Global Note pursuant to this Section 2.06(d) shall be
registered in such names and in such authorized denominations as
the Depository, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver in accordance with the standard
procedures of the Depository such Definitive Notes to the Persons
in whose names such Senior Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding
any other provision of this Indenture (other than the provisions set forth in
subsection (f) of this Section 2.06), a Global Note may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Xxxxxxxxxx or a nominee of such
successor Depository.
(f) Authentication of Definitive Notes in Absence of Depository. If at any
time:
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(i) the Depository for the Senior Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository for
the Global Notes and a successor Depository for the Global Notes
is not appointed by the Company within 90 days after delivery of
such notice; or
(ii) The Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Notes
under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02, authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the principal amount
of the Global Notes in exchange for such Global Notes and registered in such
names as the Depository shall instruct the Trustee or the Company in writing.
(g) Legends.
(i) Except for any Transfer Restricted Senior Note sold or
transferred (including any Transfer Restricted Senior Note
represented by a Global Note) as described in (ii) below, each
Senior Note certificate evidencing Global Notes and Definitive
Notes (and all Senior Notes issued in exchange therefor or
substitution thereof) shall bear legends in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE
THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
21
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE
RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Senior Note
(including any Transfer Restricted Senior Note represented by a
Global Note) pursuant to an effective registration statement
under the Securities Act, pursuant to Rule 144 under the
Securities Act or pursuant to an opinion of counsel reasonably
satisfactory to the Company and the Registrar that no legend is
required:
(A) in the case of any Transfer Restricted Senior Note that is a
Definitive Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Senior Note for
a Definitive Note that does not bear the legend set forth in
(i) above and rescind any restriction on the transfer of
such Transfer Restricted Senior Note; and
(B) in the case of any Transfer Restricted Senior Note
represented by a Global Note, such Transfer Restricted
Senior Note shall not be required to bear the legend set
forth in (i) above if all other interests in such Global
Note have been or are concurrently being sold or transferred
pursuant to Rule 144 under the Securities Act or pursuant to
an effective registration statement under the Securities
Act, but such Transfer Restricted Senior Note shall continue
to be subject to the provisions of Section 2.06(c);
provided, however, that with respect to any request for an
exchange of a Transfer Restricted Senior Note that is
represented by a Global Note for a Definitive Note that does
not bear the legend set forth in (i) above, which request is
made in reliance upon Rule 144, the Holder thereof shall
certify in writing to the Registrar that such request is
being made pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the Exchange
Offer, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02, the
Trustee shall authenticate, Series D Senior Notes in exchange
for Series C Senior Notes and Series A/B Senior Notes accepted
for exchange in the Exchange Offer, which Series D Senior Notes
shall not bear the legend set forth in (i) above, and the
Registrar shall rescind any restriction on the transfer of such
Senior Notes, in each case unless the Holder of such Series D
Senior Notes is either (A) a broker-dealer, (B) a Person
participating in the distribution of the Series D Senior Notes
or (C) a Person who is an affiliate (as defined in Rule 144A) of
the Company. The Company shall identify to the Trustee such
Holders of the Series D Senior Notes in a written certification
signed by an Officer of the Company and, absent certification
from the Company to such effect, the Trustee shall assume that
there are no such Holders.
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or canceled, all Global Notes shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11. At any
time
22
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for Definitive Notes, redeemed, repurchased or canceled, the principal
amount of Senior Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive
Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of
a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 3.07, 4.13, 4.14
and 9.05).
(iii) Neither the Company nor the Registrar shall be required to
register the transfer of or exchange any Senior Note selected
for redemption in whole or in part, except the unredeemed
portion of any Senior Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or
Global Notes in accordance with this Indenture (including any
increase in the aggregate principal amount of the Senior Notes
represented by the Global Note pursuant to subsection (b) above)
shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this
Indenture, as the Definitive Notes or Global Notes surrendered
upon such registration of transfer or exchange.
(v) Company shall not be required to issue Senior Notes and the
Registrar shall not be required to register the transfer of or
to exchange Senior Notes during a period beginning at the
opening of business 15 days before the day of any selection of
Senior Notes for redemption under Section 3.02 and ending at the
close of business on the day of selection, or to register the
transfer of or to exchange a Senior Note between a record date
and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer of
any Senior Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Senior Note is registered
as the absolute owner of such Senior Note for the purpose of
receiving payment of principal of, premium, if any, accrued and
unpaid interest, and Liquidated Damages, if any, on such Senior
Notes, and neither the Trustee, any Agent nor the Company shall
be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global Notes
in accordance with the provisions of Section 2.02.
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SECTION 2.07. REPLACEMENT SENIOR NOTES.
If any mutilated Senior Note is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Senior Note, the Company shall issue and the
Trustee, upon the Company's written order signed by two Officers, shall
authenticate a replacement Senior Note if the Trustee's requirements are met.
If the Trustee or the Company requires it, the Holder must supply an indemnity
bond that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss that any of them may suffer if a Senior Note is replaced. The Company and
the Trustee may charge for their expenses in replacing a Senior Note. Every
replacement Senior Note is an additional Obligation of the Company.
SECTION 2.08. OUTSTANDING SENIOR NOTES.
The Senior Notes outstanding at any time are all the Senior Notes the
Trustee has authenticated except for those it has canceled, those delivered to
it for cancellation, those representing reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding.
If a Senior Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that a bona
fide purchaser holds the replaced Senior Note.
If the entire principal of, and premium, if any, and accrued interest on, and
Liquidated Damages, if any, with respect to any Senior Note is considered paid
under Section 4.01, it ceases to be outstanding and interest and Liquidated
Damages on it cease to accrue.
Subject to Section 2.09, a Senior Note does not cease to be
outstanding because the Company or an Affiliate holds the Senior Note.
SECTION 2.09. TREASURY SENIOR NOTES.
In determining whether the Holders of the required principal amount of
Senior Notes have concurred in any direction, waiver or consent, Senior Notes
owned by the Company or an Affiliate shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Senior Notes that a Trust Officer of the Trustee knows are so owned shall be so
disregarded. Notwithstanding the foregoing, Senior Notes that the Company or an
Affiliate offers to purchase or acquires pursuant to an Offer, exchange offer,
tender offer or otherwise shall not be deemed to be owned by the Company or an
Affiliate until legal title to such Senior Notes passes to the Company or such
Affiliate, as the case may be.
SECTION 2.10. TEMPORARY SENIOR NOTES.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Senior Notes. Temporary Senior
Notes shall be substantially in the form of Definitive Notes but may have
variations that the Company considers appropriate for temporary Senior Notes.
Without unreasonable delay, the Company shall prepare and the Trustee, upon
receipt of the Company's written order signed by two Officers which shall
specify the amount of temporary Senior Notes to be authenticated and the date on
which the temporary Senior Notes are to be authenticated, shall authenticate
Definitive Notes and deliver them in exchange for temporary Senior Notes. Until
such exchange, Holders of temporary Senior Notes shall be entitled to the same
rights, benefits and privileges as Definitive Notes.
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SECTION 2.11. CANCELLATION.
The Company at any time may deliver Senior Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Senior Notes surrendered to them for registration of transfer, exchange,
replacement, payment (including all Senior Notes called for redemption and all
Senior Notes accepted for payment pursuant to an Offer) or cancellation, and the
Trustee shall cancel all such Senior Notes and shall destroy all canceled Senior
Notes (subject to the Exchange Act's record retention requirements) and deliver
a certificate of their destruction to the Company unless by written order,
signed by two Officers of the Company, the Company shall direct that canceled
Senior Notes be returned to it. The Company may not issue new Senior Notes to
replace any Senior Notes that have been canceled by the Trustee or that have
been delivered to the Trustee for cancellation. If the Company or an Affiliate
acquires any Senior Notes (other than by redemption or pursuant to an Offer),
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Senior Notes unless and until such Senior Notes
are delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Senior Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to Holders on a subsequent
special record date, in each case at the rate provided in the Senior Notes and
in Section 4.01. The Company shall fix or cause to be fixed each such special
record date and payment date. As early as practicable prior to the special
record date, the Company (or the Trustee, in the name of and at the expense of
the Company) shall mail a notice that states the special record date, the
related payment date and the amount of interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders of
Senior Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in section 316(c) of the TIA.
SECTION 2.14. CUSIP NUMBER.
A "CUSIP" number shall be printed on the Senior Notes, and the Trustee
shall use the CUSIP number in notices of redemption, purchase or exchange as a
convenience to Holders, provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Senior Notes and that reliance may be placed
only on the other identification numbers printed on the Senior Notes. The
Company shall promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3.
OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Senior Notes pursuant to Section 3.07,
it shall furnish to the Trustee, at least 40 days prior to the redemption date
and at least 10 days prior to the date that notice of the redemption is to be
mailed by the Company to Holders, an Officers' Certificate stating that the
Company
25
has elected to redeem Senior Notes pursuant to Section 3.07(a) or 3.07(b), as
the case may be, the date notice of redemption is to be mailed to Holders, the
redemption date, the aggregate principal amount of Senior Notes to be redeemed,
the redemption price for such Senior Notes and the amount of accrued and unpaid
interest on and Liquidated Damages, if any, with respect to such Senior Notes as
of the redemption date. If the Trustee is not the Registrar, the Company shall,
concurrently with delivery of its notice to the Trustee of a redemption, cause
the Registrar to deliver to the Trustee a certificate (upon which the Trustee
may rely) setting forth the name of, and the aggregate principal amount of
Senior Notes held by, each Holder.
If the Company is required to offer to purchase Senior Notes pursuant
to Section 4.13 or 4.14, it shall furnish to the Trustee, at least 2 Business
Days before notice of the Offer is to be mailed to Holders, an Officers'
Certificate setting forth that the Offer is being made pursuant to Section 4.13
or 4.14, as the case may be, the Purchase Date, the maximum principal amount of
Senior Notes the Company is offering to purchase pursuant to the Offer, the
purchase price for such Senior Notes, and the amount of accrued and unpaid
interest on and Liquidated Damages, if any, with respect to such Senior Notes as
of the Purchase Date.
The Company will also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption or Offer.
SECTION 3.02. SELECTION OF SENIOR NOTES TO BE REDEEMED OR PURCHASED.
If less than all outstanding Senior Notes are to be redeemed or if
less than all Senior Notes tendered pursuant to an Offer are to be accepted for
payment, the Trustee shall select the outstanding Senior Notes to be redeemed or
accepted for payment pro rata, by lot or by a method that complies with the
requirements of any stock exchange on which the Senior Notes are listed and that
the Trustee considers fair and appropriate. If the Company elects to mail
notice of a redemption to Holders, the Trustee shall at least 5 business days
prior to the date notice of redemption is to be mailed, (i) select the Senior
Notes to be redeemed from Senior Notes outstanding not previously called for
redemption and (ii) notify the Company of the names of each Holder of Senior
Notes selected for redemption, the principal amount of Senior Notes held by each
such Holder and the principal amount of such Xxxxxx's Senior Notes that are to
be redeemed. If less than all Senior Notes tendered pursuant to an Offer on the
Purchase Date are to be accepted for payment, the Trustee shall select on or
promptly after the Purchase Date the Senior Notes to be accepted for payment.
The Trustee shall select for redemption or purchase Senior Notes or portions of
Senior Notes in principal amounts of $1,000 or integral multiples of $1,000;
except that if all of the Senior Notes of a Holder are selected for redemption
or purchase, the aggregate principal amount of the Senior Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased.
Except as provided in the preceding sentence, provisions of this Indenture that
apply to Senior Notes called for redemption or tendered pursuant to an Offer
also apply to portions of Senior Notes called for redemption or tendered
pursuant to an Offer. The Trustee shall notify the Company promptly of the
Senior Notes or portions of Senior Notes to be called for redemption or selected
for purchase.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder of Senior Notes or
portions thereof that are to be redeemed.
The notice shall identify the Senior Notes or portions thereof to be
redeemed and shall state:
(1) the redemption date;
26
(2) the redemption price for the Senior Notes and separately
stating the amount of unpaid and accrued interest on, and
Liquidated Damages, if any, with respect to, such Senior
Notes as of the date of redemption;
(3) if any Senior Note is being redeemed in part, the portion of
the principal amount of such Senior Notes to be redeemed and
that, after the redemption date, upon surrender of such
Senior Note, a new Senior Note or Senior Notes in principal
amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Senior Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price for, and
any accrued and unpaid interest on, and Liquidated Damages,
if any, with respect to such Senior Notes;
(6) that, unless the Company defaults in making such redemption
payment, interest on Senior Notes called for redemption
ceases to accrue on and after the redemption date;
(7) the paragraph of the Senior Notes pursuant to which the
Senior Notes called for redemption are being redeemed; and
(8) the CUSIP number; provided that no representation is made as
to the correctness or accuracy of the CUSIP number listed in
such notice and printed on the Senior Notes.
At the Company's request, the Trustee shall (at the Company's expense)
give the notice of redemption in the Company's name at least 30 but not more
than 60 days before a redemption; provided, however, that the Company shall
deliver to the Trustee, at least 45 days prior to the redemption date and at
least 10 days prior to the date that notice of the redemption is to be mailed to
Holders, an Officers' Certificate that (i) requests the Trustee to give notice
of the redemption to Holders, (ii) sets forth the information to be provided to
Holders in the notice of redemption, as set forth in the preceding paragraph,
(iii) states that the Company has elected to redeem Senior Notes pursuant to
Section 3.07(a) or 3.07(b), as the case may be, and (iv) sets forth the
aggregate principal amount of Senior Notes to be redeemed and the amount of
accrued and unpaid interest and Liquidated Damages, if any, thereon as of the
redemption date. If the Trustee is not the Registrar, the Company shall,
concurrently with any such request, cause the Registrar to deliver to the
Trustee a certificate (upon which the Trustee may rely) setting forth the name
of, the address of, and the aggregate principal amount of Senior Notes held by,
each Holder.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Senior Notes called for
redemption become due and payable on the redemption date at the price set forth
in the Senior Note. Upon surrender to the Trustee or Paying Agent, such Senior
Notes called for redemption shall be paid at the redemption price (which shall
include accrued interest thereon to the redemption date) but installments of
interest, the maturity of which is on or prior to the redemption date, shall be
payable to Holders of record at the close of business on the relevant record
dates.
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SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price
of, and accrued interest on, and Liquidated Damages, if any, with respect to all
Senior Notes to be redeemed on that date. The Trustee or the Paying Agent shall
return to the Company any money that the Company deposited with the Trustee or
the Paying Agent in excess of the amounts necessary to pay the redemption price
of, and accrued interest on, and Liquidated Damages, if any, with respect to all
Senior Notes to be redeemed.
If the Company complies with the preceding paragraph, interest on the
Senior Notes to be redeemed will cease to accrue on such Senior Notes on the
applicable redemption date, whether or not such Senior Notes are presented for
payment. If a Senior Note is redeemed on or after an interest record date but
on or prior to the related interest payment date, then any accrued and unpaid
interest and Liquidated Damages, if any, shall be paid to the Person in whose
name such Senior Note was registered at the close of business on such record
date. If any Senior Note called for redemption shall not be so paid upon
surrender for redemption because of the failure of the Company to comply with
the preceding paragraph, interest will be paid on the unpaid principal, premium,
if any, interest and Liquidated Damages, if any, from the redemption date until
such principal, premium, interest and Liquidated Damages, if any, is paid, at
the rate of interest provided in the Senior Notes and Section 4.01.
SECTION 3.06. SENIOR NOTES REDEEMED IN PART.
Upon surrender of a Senior Note that is redeemed in part, the Company
shall issue and the Trustee, upon receipt of an authentication order shall
authenticate for the Holder at the Company's expense a new Senior Note equal in
principal amount to the unredeemed portion of the Senior Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION PROVISIONS.
(a) Except as provided in Section 3.07(b), the Senior Notes may not be
redeemed at the option of the Company prior to November 15, 2001. During the
twelve (12) month period beginning on November 15 of the years indicated below,
the Senior Notes will be redeemable at the option of the Company, in whole or in
part, on at least 30 but not more than 60 days' notice to each Holder of Senior
Notes to be redeemed, at the redemption prices (expressed as percentages of the
principal amount) set forth below, plus any accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date:
Year Percentage
---- ----------
2001.................................. 105.375%
2002.................................. 103.583%
2003.................................. 101.792%
2004 and thereafter................... 100.000%
(b) Notwithstanding the foregoing, prior to November 15, 1999, the Company
may (but shall not have the obligation to) redeem up to 35% of the original
aggregate principal amount of the Senior Notes at a redemption price of 109.750%
of the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to the redemption date, with the net proceeds of one or more
Equity Offerings; provided that at least 65% of the aggregate principal amount
of Senior Notes originally issued remain
28
outstanding immediately after the occurrence of any such redemption; and
provided, further, that any such redemption shall occur within 60 days of the
date of the closing of any such Equity Offering.
SECTION 3.08. MANDATORY PURCHASE PROVISIONS.
(a) Within 30 days after any Change of Control Trigger Date or Asset Sale
Trigger Date, the Company shall mail a notice to each Holder at such Holder's
registered address stating (i) that an offer ("Offer") is being made pursuant to
Section 4.13 or Section 4.14, as the case may be, the length of time the Offer
shall remain open and the maximum aggregate principal amount of Senior Notes
that will be accepted for payment pursuant to such Offer; (ii) the purchase
price for the Senior Notes (as set forth in Section 4.13 or Section 4.14, as the
case may be), the amount of accrued and unpaid interest on, and Liquidated
Damages, if any, with respect to, such Senior Notes as of the purchase date, and
the purchase date (which shall be no earlier than 30 days and no later than 40
days from the date such notice is mailed (the "Purchase Date")); (iii) that any
Senior Note not accepted for payment will continue to accrue interest and
Liquidated Damages, if any; (iv) that, unless the Company fails to deposit with
the Paying Agent on the Purchase Date an amount sufficient to purchase all
Senior Notes accepted for payment, interest shall cease to accrue on such Senior
Notes after the Purchase Date; (v) that Holders electing to tender any Senior
Note or portion thereof will be required to surrender their Senior Note, with a
form entitled "Option of Holder to Elect Purchase" completed, to the Paying
Agent at the address specified in the notice prior to the close of business on
the Business Day preceding the Purchase Date, provided that Holders electing to
tender only a portion of any Senior Note must tender a principal amount of
$1,000 or integral multiples thereof; (vi) that Holders will be entitled to
withdraw their election to tender Senior Notes, if the Paying Agent receives,
not later than the close of business on the third Business Day preceding the
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of Senior Notes delivered for
purchase, and a statement that such Xxxxxx is withdrawing his election to have
such Senior Note purchased; and (vii) that Holders whose Senior Notes are
accepted for payment in part will be issued new Senior Notes equal in principal
amount to the unpurchased portion of Senior Notes surrendered; provided that
only Senior Notes in a principal amount of $1,000 or integral multiples thereof
will be accepted for payment in part.
(b) On the Purchase Date for any Offer, the Company shall, to the extent
required by this Indenture and such Offer, (i) in the case of an Offer resulting
from a Change of Control, accept for payment all Senior Notes or portions
thereof tendered pursuant to such Offer and, in the case of an Offer resulting
from an Asset Sale, accept for payment the maximum principal amount of Senior
Notes or portions thereof tendered pursuant to such Offer that can be purchased
out of Excess Proceeds from such Asset Sale Trigger Date, (ii) deposit with the
Paying Agent the aggregate purchase price of all Senior Notes or portions
thereof accepted for payment and any accrued and unpaid interest and Liquidated
Damages, if any, on such Senior Notes as of the Purchase Date, and (iii) deliver
or cause to be delivered to the Trustee all Senior Notes tendered pursuant to
the Offer.
(c) With respect to any Offer, if less than all of the Senior Notes
tendered pursuant to an Offer are to be purchased by the Company, the Trustee
shall select on the Purchase Date the Senior Notes or portions thereof to be
accepted for payment pursuant to Section 3.02.
(d) Promptly after consummation of an Offer, (i) the Paying Agent shall
mail (or cause to be transferred by book entry) to each Holder of Senior Notes
or portions thereof accepted for payment an amount equal to the purchase price
for, plus any accrued and unpaid interest on, and Liquidated Damages, if any,
with respect to such Senior Notes, (ii) with respect to any tendered Senior Note
not accepted for payment in whole or in part, the Trustee shall return such
Senior Note to the Holder thereof, and (iii) with
29
respect to any Senior Note accepted for payment in part, the Trustee shall
authenticate and mail to each such Holder a new Senior Note equal in principal
amount to the unpurchased portion of the tendered Senior Note.
(e) The Company will publicly announce the results of the Offer on or as
soon as practicable after the Purchase Date.
(f) The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with an Offer required to be made by the Company to repurchase the Senior Notes
as a result of a Change of Control Trigger Date or an Asset Sale Trigger Date.
To the extent that the provisions of any securities laws or regulations conflict
with provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Indenture by virtue thereof.
(g) With respect to any Offer, if the Company deposits prior to 10 a.m.
New York City time with the Paying Agent on the Purchase Date an amount in
available funds sufficient to purchase all Senior Notes accepted for payment,
interest shall cease to accrue on such Senior Notes after the Purchase Date;
provided, however, that if the Company fails to deposit such amount on the
Purchase Date, interest shall continue to accrue on such Senior Notes until such
deposit is made.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR NOTES.
The Company shall pay the principal of, and premium, if any, and
accrued and unpaid interest on the Senior Notes on the dates and in the manner
provided in the Senior Notes. Holders of Senior Notes must surrender their
Senior Notes to the Paying Agent to collect principal payments. Principal of,
premium, if any, and accrued and unpaid interest, and Liquidated Damages, if
any, shall be considered paid on the date due if the Paying Agent (other than
the Company or any of its Subsidiaries), the Global Note Holder or each Holder
that has specified an account, holds, as of 10:00 a.m. New York City time, money
the Company deposited in immediately available funds designated for and
sufficient to pay in cash all principal, premium, if any, and accrued and unpaid
interest on, and Liquidated Damages, if any, then due; provided that, to the
extent that the Holders have not specified accounts, such amounts shall be
considered paid on the date due if the Company mails a check for such amounts on
such date. The Paying Agent shall return to the Company, no later than five
days following the date of payment, any money (including accrued interest) that
exceeds the amount of principal, premium, if any, accrued and unpaid interest,
and Liquidated Damages, if any, paid on the Senior Notes. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement. If any Liquidated
Damages become payable, the Company shall not later than 3 Business Days prior
to the date that any payment of Liquidated Damages is due (i) deliver an
Officers' Certificate to the Trustee setting forth the amount of Liquidated
Damages payable to Holders and (ii) instruct the Paying Agent to pay such amount
of Liquidated Damages to Holders entitled to receive such Liquidated Damages.
To the extent lawful, the Company shall pay interest (including Post-
Petition Interest) on (i) overdue principal and premium at the rate equal to 2%
per annum in excess of the then applicable interest rate on the Senior Notes,
compounded semiannually and (ii) overdue installments of interest and Liquidated
Damages (without regard to any applicable grace period) at the same rate as set
forth in clause (i), compounded semiannually.
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SECTION 4.02. SEC REPORTS.
(a) The Company shall file with the Trustee, within 15 days after it files
them with the SEC, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the
Company is not subject to the requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the Trustee, within 15 days after it
would have been required to file with the SEC, financial statements, including
any notes thereto (and with respect to annual reports, an auditor's report by a
firm of established national reputation), and a "Management's Discussion and
Analysis of Financial Condition and Results of Operations," both comparable to
that which the Company would have been required to include in such annual
reports, information, documents or other reports if the Company were subject to
the requirements of Section 13 or 15(d) of the Exchange Act. Subsequent to the
qualification of this Indenture under the TIA, the Company also shall comply
with the provisions of section 314(a) of the TIA.
(b) If the Company is required to furnish annual or quarterly reports to
its stockholders pursuant to the Exchange Act, the Company shall cause any
annual report furnished to its stockholders generally and any quarterly or other
financial reports it furnishes to its stockholders generally to be filed with
the Trustee and the Company shall mail to the Holders at their addresses
appearing in the register of Senior Notes maintained by the Registrar. If the
Company is not required to furnish annual or quarterly reports to its
stockholders pursuant to the Exchange Act, the Company shall cause its financial
statements referred to in Section 4.02(a), including any notes thereto (and with
respect to annual reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of Financial Condition
and Results of Operations," to be so mailed to the Holders within 120 days after
the end of each of the Company's fiscal years and within 60 days after the end
of each of the first three fiscal quarters of each year. The Company shall cause
to be disclosed in a statement accompanying any annual report or comparable
information as of the date of the most recent financial statements in each such
report or comparable information the amount available for payments pursuant to
Section 4.05. As of the date hereof, the Company's fiscal year ends on December
31.
(c) If the Company is not subject to the requirements of Section 13 or
15(d) of the Exchange Act, for so long as any Senior Notes remain outstanding,
the Company shall furnish to the Holders and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that, to the best of
his or her knowledge, the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company has taken or proposes to take with respect thereto) and that,
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of, premium,
31
if any, and accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to the Senior Notes are prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the financial statements
delivered pursuant to Section 4.02 shall be accompanied by a written statement
of the Company's independent public accountants (who shall be a firm of
established national reputation reasonably satisfactory to the Trustee) that in
making the examination necessary for certification of such financial statements
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Section 4.01, 4.05, 4.06, 4.07, 4.08,
4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 or 4.16 or of Article 5 or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
The Company shall, so long as any of the Senior Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.04. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that might affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, 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 has been
enacted.
SECTION 4.05. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, (i) declare or pay any dividend or make any
distribution on account of the Company's or such Restricted Subsidiary's Capital
Stock or other Equity Interests (other than dividends or distributions payable
in Capital Stock or other Equity Interests (other than Disqualified Stock) of
the Company or a Restricted Subsidiary and other than dividends or distributions
payable by a Restricted Subsidiary to another Restricted Subsidiary or to the
Company); (ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock or other Equity Interests of the Company or any of its Restricted
Subsidiaries (other than any such Equity Interest purchased from the Company or
any Restricted Subsidiary for fair market value (as determined by the Board of
Directors in good faith); (iii) voluntarily prepay Subordinated Indebtedness,
whether any such Subordinated Indebtedness is outstanding on, or issued after,
the date of original issuance of the Senior Notes except as specifically
permitted by the covenants of this Indenture; (iv) make any Restricted
Investment (all such dividends, distributions, purchases, redemptions,
acquisitions, retirements, prepayments and Restricted Investments, being
collectively referred to as "Restricted Payments"), if, at the time of such
Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof, or
32
(B) immediately after such Restricted Payment and after giving
effect thereto on a Pro Forma basis, the Company shall not
be able to issue $1.00 of additional Indebtedness pursuant
to Section 4.07(a), or
(C) such Restricted Payment, together with the aggregate of all
other Restricted Payments made after the date of original
issuance of the Senior Notes, without duplication, exceeds
the sum of (1) 50% of the aggregate Consolidated Net Income
(including, for this purpose, gains from Asset Sales and, to
the extent not included in Consolidated Net Income, any gain
from a sale or disposition of a Restricted Investment) of
the Company (or, in case such aggregate is a loss, 100% of
such loss) for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing
immediately after the date of original issuance of the
Senior Notes and ended as of the Company's most recently
ended fiscal quarter at the time of such Restricted Payment,
plus (2) 100% of the aggregate net cash proceeds and the
fair market value of any property or securities (as
determined by the Board of Directors in good faith) received
by the Company from the issue or sale of Capital Stock or
other Equity Interests of the Company subsequent to the date
of original issuance of the Senior Notes (other than (x)
Capital Stock or other Equity Interests issued or sold to a
Restricted Subsidiary and (y) the issuance or sale of
Disqualified Stock), plus (3) $5,000,000, plus (4) the
amount by which the principal amount of and any accrued
interest on either (x) Senior Indebtedness of the Company or
(y) any Indebtedness of any Restricted Subsidiary is reduced
on the Company's consolidated balance sheet upon the
conversion or exchange other than by a Restricted Subsidiary
subsequent to the date of original issuance of the Senior
Notes of any Indebtedness of the Company or any Restricted
Subsidiary (not held by the Company or any Restricted
Subsidiary) for Capital Stock or other Equity Interests
(other than Disqualified Stock) of the Company or any
Restricted Subsidiaries (less the amount of any cash, or the
fair market value of any other property or securities (as
determined by the Board of Directors in good faith),
distributed by the Company or any Restricted Subsidiary (to
Persons other than the Company or any other Restricted
Subsidiary) upon such conversion or exchange), plus (5) if
any Non-Restricted Subsidiary is redesignated as a
Restricted Subsidiary, the value of the deemed Restricted
Payment resulting therefrom and determined in accordance
with the second sentence of Section 4.16; provided, however,
that for purposes of this clause (5), the value of any
redesignated Non-Restricted Subsidiary shall be reduced by
the amount that any such redesignation replenishes or
increases the amount of Restricted Investments permitted to
be made pursuant to Section 4.05(b)(iii).
(b) Notwithstanding Section 4.05(a), the following Restricted Payments may
be made: (i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would comply
with all the provisions hereof (including, but not limited to, this Section
4.05); (ii) making Restricted Investments at any time, and from time to time, in
an aggregate outstanding amount
33
of $20,000,000 after the date of original issuance of the Senior Notes (it being
understood that if any Restricted Investment after the date of original issuance
of the Senior Notes pursuant to this clause (ii) is sold, transferred or
otherwise conveyed to any Person other than the Company or a Restricted
Subsidiary, the portion of the net cash proceeds or fair market value of
securities or properties paid or transferred to the Company and its Restricted
Subsidiaries in connection with such sale, transfer or conveyance that relates
or corresponds to the repayment or return of the original cost of such a
Restricted Investment will replenish or increase the amount of Restricted
Investments permitted to be made pursuant to this Section 4.05(b)(ii), so that
up to $20,000,000 of Restricted Investments may be outstanding under this
Section 4.05(b)(ii) at any given time; provided that any Restricted Investment
in a Restricted Subsidiary made pursuant to this clause (ii) is made for fair
market value (as determined by the Board of Directors in good faith); (iii) the
repurchase, redemption, retirement or acquisition of the Company's stock from
the executives, management, employees or consultants of the Company or its
Subsidiaries pursuant to the terms of any subscription, stockholder or other
agreement or plan, up to an aggregate amount not to exceed $5,000,000; (iv) any
loans, advances, distributions or payments from the Company to its Restricted
Subsidiaries, or any loans, advances, distributions or payments by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary, in each case
pursuant to intercompany Indebtedness, intercompany management agreements and
other intercompany agreements and obligations; (v) investments in marketable
securities and other negotiable instruments through the Xxxxxxx Xxxx Funds
(including the Xxxxxxx Xxxx Interest Income Fund); (vi) the purchase,
redemption, retirement or other acquisition of (A) any Senior Indebtedness of
the Company or any Indebtedness of a Restricted Subsidiaries required by its
terms to be purchased, redeemed, retired or acquired with the net proceeds from
asset sales (as defined in the instrument evidencing such Senior Indebtedness or
Indebtedness) or upon a change of control (as defined in the instrument
evidencing such Senior Indebtedness or Indebtedness) and (B) the Senior Notes
pursuant to Sections 4.13 and 4.14; (vii) to the extent constituting Restricted
Payments, payments under the Tax Sharing Agreement, New Subsidiary Consulting
Agreement, Transition Agreement and the JI Properties Services Agreement; (viii)
to the extent constituting Restricted Payments, payments under the New
Subsidiary Advisory Agreement, provided that such payments will not be made and
shall be accrued so long as any Default or Event of Default shall have occurred
and be continuing or shall occur as a consequence thereof, and the Company's
obligations to pay such fees under the New Subsidiary Advisory Agreement shall
be subordinated expressly to the Company's Obligations in respect of the Senior
Notes and indemnities, expenses and other amounts under the New Subsidiary
Advisory Agreement; (ix) the redemption, repurchase, retirement or the
acquisition of any Capital Stock or other Equity Interests of the Company or any
Restricted Subsidiary in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Company) of
other Capital Stock or other Equity Interests of the Company or any Restricted
Subsidiary (other than any Disqualified Stock); provided that any net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition, and any Net Income resulting therefrom, shall be excluded
from this Section 4.05(a)(iv)(c)(1) and (c)(2); (x) the defeasance, redemption
or repurchase of pari passu or Subordinated Indebtedness with the net cash
proceeds from an issuance of permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Capital Stock or other Equity Interests of the Company or of a Restricted
Subsidiary (other than Disqualified Stock); provided that any net cash proceeds
that are utilized for any such defeasance, redemption or repurchase, and any Net
Income resulting therefrom, shall be excluded from this Section
4.05(a)(iv)(c)(1) and (c)(2); (xi) payments of fees, expenses and indemnities in
respect of the Company's and its Subsidiaries' directors and such payments to
Parent (and its parent companies) in respect of their directors, provided that
the aggregate amount of such fees payable to all such directors does not exceed
$250,000 in any fiscal year; (xii) payments in respect of the Junior Seller
Notes, (xiii) payments in connection with the Offering; (xiv) payments in
respect of the Contingent Earnout Agreement; (xv) Restricted Investments made or
received in connection with the sale, transfer or disposition of any business,
properties or assets of the Company or any Restricted Subsidiary, provided, that
if such sale,
34
transfer or disposition constitutes an Asset Sale, the Company complies with
Section 4.14; (xvi) any Restricted Investment constituting securities or
instruments of a Person issued in exchange for trade or other claims against
such Person in connection with a financial reorganization or restructuring of
such Person; and (xvii) any Restricted Investment constituting an equity
investment in a Receivables Subsidiary.
SECTION 4.06. CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5, the Company shall do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and the corporate, partnership or other existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each of its Restricted Subsidiaries and the rights
(charter and statutory), licenses and franchises of the Company and each of its
Restricted Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any Restricted Subsidiary, 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 Restricted Subsidiaries
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
SECTION 4.07. LIMITATION ON INCURRENCE OF INDEBTEDNESS.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, issue any Indebtedness (other than the Indebtedness represented by the
Senior Notes) unless the Company's Cash Flow Coverage Ratio for its four full
fiscal quarters next preceding the date such additional Indebtedness is issued
would have been at least 2.00 to 1, if such date is on or prior to November 15,
1998, and 2.25 to 1 thereafter, in each case determined on a Pro Forma basis
(including, for this purpose, any other Indebtedness incurred since the end of
the applicable four quarter period) as if such additional Indebtedness and any
other Indebtedness issued since the end of such four-quarter period had been
issued at the beginning of such four-quarter period.
(b) Section 4.07(a) shall not apply to the issuance of (i) Indebtedness of
the Company and/or its Restricted Subsidiaries as measured on such date of
issuance in an aggregate principal amount outstanding on any such date of
issuance not exceeding the greater of (A) $115,000,000 aggregate principal
amount pursuant to the Amended Credit Agreement and (B) an aggregate principal
amount up to the sum of (1) 85% of the book value of the Receivables of the
Company and its Restricted Subsidiaries on a consolidated basis and (2) 65% of
the book value of the inventories of the Company and its Restricted Subsidiaries
on a consolidated basis; provided that the aggregate principal amount of
Indebtedness outstanding under this clause (i) together with the aggregate
principal amount of Indebtedness outstanding under clause (iv) below shall not
exceed $140.0 million in aggregate principal amount at any one time outstanding;
(ii) Indebtedness of the Company and its Restricted Subsidiaries pursuant to any
Receivables Financing; (iii) Indebtedness of the Company and its Restricted
Subsidiaries in connection with capital leases, sale and leaseback transactions,
purchase money obligations, capital expenditures or similar financing
transactions relating to (A) their properties, assets and rights as of the date
of original issuance of the Senior Notes up to $5,000,000 in aggregate principal
amount or (B) their properties, assets and rights acquired after the date of
original issuance of the Senior Notes, provided that the aggregate principal
amount of such Indebtedness under this Section 4.07(b)(iii)(B) does not exceed
100% of the cost of such properties, assets and rights; (iv) additional
Indebtedness of the Company and its Restricted Subsidiaries in an aggregate
principal amount up to $25,000,000 (all or any portion of which may be issued as
additional Indebtedness under the Amended Credit Agreement); provided that the
aggregate principal amount of Indebtedness outstanding under this clause (iv)
together with the aggregate principal amount of Indebtedness outstanding under
clause (i) above
35
shall not exceed $120.0 million in aggregate principal amount at any one time
outstanding; and (v) Other Permitted Indebtedness.
(c) Notwithstanding Sections 4.07(a) and (b), no Restricted Subsidiary
shall under any circumstances issue a guarantee of any Indebtedness of the
Company except for guarantees issued by Restricted Subsidiaries pursuant to
Section 4.15, provided, however, that the foregoing will not limit or restrict
guarantees issued by Restricted Subsidiaries in respect of Indebtedness of other
Restricted Subsidiaries.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) Except as otherwise set forth herein, neither the Company nor any of
its Restricted Subsidiaries shall make any loan, advance, guarantee or capital
contribution to, or for the benefit of, or sell, lease, transfer or dispose of
any properties or assets to, or for the benefit of, or purchase or lease any
property or assets from, or enter into or amend any contract, agreement or
understanding with, or for the benefit of, an Affiliate (each such transaction
or series of related transactions that are part of a common plan, an "Affiliate
Transaction"), except in good faith and on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction on an arm's length basis from an
unrelated Person.
(b) The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any Affiliate Transaction involving aggregate payments or other
transfers by the Company and its Restricted Subsidiaries in excess of $5,000,000
(including cash and non-cash payments and benefits valued at their fair market
value by the Board of Directors of the Company in good faith), unless the
Company delivers to the Trustee: (i) a resolution of the Board of Directors
stating that the Board of Directors (including a majority of the disinterested
directors, if any) has, in good faith, determined that such Affiliate
Transaction complies with the provisions of this Indenture; and (ii)(A) with
respect to any Affiliate Transaction involving the incurrence of Indebtedness, a
written opinion of a nationally recognized investment banking or accounting firm
experienced in the review of similar types of transactions, (B) with respect to
any Affiliate Transaction involving the transfer of real property, fixed assets
or equipment, either directly or by a transfer of 50% or more of the Capital
Stock of a Restricted Subsidiary which holds any such real property, fixed
assets or equipment, a written appraisal from a nationally recognized appraiser
experienced in the review of similar types of transactions or (C) with respect
to any Affiliate Transaction not otherwise described in (A) or (B) above, a
written certification from a nationally recognized professional experienced in
evaluating similar types of transactions, in each case, stating that the terms
of such transaction are fair to the Company or such Restricted Subsidiary, as
the case may be, from a financial point of view.
(c) Notwithstanding Sections 4.08(a) and (b), this Section 4.08 shall not
apply to (i) transactions between the Company and any Restricted Subsidiary or
between Restricted Subsidiaries; (ii) payments under the New Subsidiary Advisory
Agreement, the New Subsidiary Consulting Agreement, the Transition Agreement,
the JII Properties Services Agreement and the Tax Sharing Agreement; (iii)
payments under the Contingent Earnout Agreement; (iv) any other payments or
transactions permitted pursuant to Section 4.05; (v) reasonable compensation
paid to officers, employees or consultants of the Company or any Subsidiary as
determined in good faith by the Company's Board of Directors or executives; (vi)
transactions in connection with a Receivables Financing; or (vii) payments and
transactions in connection with the Motion Control Acquisition and the Offering.
36
SECTION 4.09. LIMITATION ON LIENS.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) upon any property or asset now owned
or hereafter acquired by them, or any income or profits therefrom, or assign or
convey any right to receive income therefrom; provided, however, that in
addition to creating Permitted Liens on its properties or assets, the Company
and any of its Restricted Subsidiaries may create any Lien upon any of their
properties or assets (including, but not limited to, any Capital Stock of its
Subsidiaries) if the Senior Notes are equally and ratably secured.
SECTION 4.10. COMPLIANCE WITH LAWS, TAXES.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, comply with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, the non-compliance with which would
materially adversely affect the business, prospects, earnings, properties,
assets or condition, financial or otherwise, of the Company and its Restricted
Subsidiaries taken as a whole.
The Company shall, and shall cause each of its Restricted Subsidiaries
to, pay prior to delinquency all taxes, assessments and governmental levies,
except those contested in good faith by appropriate proceedings.
SECTION 4.11. LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective, any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock or any other interest or participation in, or measured by, its
profits, owned by the Company or any Restricted Subsidiary, or pay any
Indebtedness owed to, the Company or any Restricted Subsidiary; (ii) make loans
or advances to the Company; or (iii) transfer any of its properties or assets to
the Company, except for such encumbrances or restrictions existing under or by
reason of (A) applicable law; (B) Indebtedness permitted (1) under Section
4.07(a), (2) under Sections 4.07(b)(i), (ii), (iii) and (iv) and clauses (i),
(v), (vi), (vii), (ix), (x), (xi), (xv), (xvi) and (xvii) of the definition of
Other Permitted Indebtedness, or (3) by agreements and transactions permitted
under Section 4.05; (C) customary provisions restricting subletting or
assignment of any lease or license of the Company or any Restricted Subsidiary;
(D) customary provisions of any franchise, distribution or similar agreement;
(E) any instrument governing Indebtedness or any other encumbrance or
restriction of a Person acquired by the Company or any Restricted Subsidiary at
the time of such acquisition, which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired; (F) Indebtedness or other
agreements existing on the date of original issuance of the Senior Notes; (G)
any Refinancing Indebtedness of Indebtedness described in Section 4.07(b) and
clauses (i), (v), (vi), (vii), (ix), (x), (xi), (xv), (xvi) and (xvii) of the
definition of Other Permitted Indebtedness; provided that the encumbrances and
restrictions created in connection with such Refinancing Indebtedness are no
more restrictive in any material respect with regard to the interests of the
Holders of Senior Notes than the encumbrances and restrictions in the refinanced
Indebtedness; (H) any restrictions, with respect to a Restricted Subsidiary,
imposed pursuant to an agreement that has been entered into for the sale or
disposition of the stock, business, assets or properties of such Restricted
Subsidiary; (I) the terms of any Indebtedness of the Company incurred in
connection with Section 4.07, provided that the terms of such Indebtedness
37
constitute no greater encumbrance or restriction on the ability of any
Restricted Subsidiary to pay dividends or make distributions, make loans or
advances or transfer properties or assets than is otherwise permitted by this
Section 4.11; and (J) the terms of purchase money obligations, but only to the
extent such purchase money obligations restrict or prohibit the transfer of the
property so acquired.
(b) Nothing contained in this Section 4.11 shall prevent the Company from
entering into any agreement or instrument providing for the incurrence of
Permitted Liens or restricting the sale or other disposition of property or
assets of the Company or any of its Restricted Subsidiaries that are subject to
Permitted Liens.
SECTION 4.12. MAINTENANCE OF OFFICE OR AGENCIES.
The Company shall maintain in the Borough of Manhattan, the City of
New York an office or an agency (which may be an office of any Agent) where
Senior Notes may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Senior Notes
and this Indenture may be served. The Company shall give prompt written notice
to the Trustee of any change in the location of such office or agency. If at
any time the Company 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.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any matter
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee located at Xxxxxxx Square, 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, as one such office or agency of the Company in accordance
with Section 2.03.
SECTION 4.13. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control (such date being the
"Change of Control Trigger Date"), each Holder of Senior Notes shall have the
right to require the Company to purchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Xxxxxx's Senior Notes pursuant to an Offer at
a purchase price in cash equal to 101% of the aggregate principal amount
thereof, plus any accrued and unpaid interest and Liquidated Damages, if any, to
the date of purchase. Although the failure of the Company to purchase all Senior
Notes tendered in such an Offer shall be a Default, if the Company is unable to
purchase all Senior Notes tendered in such an Offer, the Company shall
nevertheless purchase the maximum principal amount of Senior Notes that it is
able to purchase at that time.
(b) Prior to the mailing of the notice referred to in Section 3.08(a), but
in any event within 30 days following any Change of Control Trigger Date, the
Company shall (i) repay in full and terminate all commitments under Indebtedness
under the Amended Credit Agreement and all other Senior Indebtedness the terms
of which require repayment upon a Change of Control or offer to repay in full
and terminate all commitments under all Indebtedness under the Amended Credit
Agreement and all such other Senior Indebtedness and to repay the Indebtedness
owed to each lender which has accepted such offer or (ii) obtain
38
the requisite consents under the Amended Credit Agreement and all such other
Senior Indebtedness to permit the repurchase of the Senior Notes as provided in
Section 3.08(b). The Company shall first comply with Section 4.13(b)(ii) before
it shall be required to repurchase Senior Notes pursuant to the provisions in
Section 3.08. The Company's failure to comply with this Section 4.13(b) shall
constitute an Event of Default described in clause (iii) and not in clause (ii)
under Section 6.01(a)
(c) In the event of a Change of Control, the Company shall not offer to
purchase or redeem any Subordinated Indebtedness required or entitled by its
terms to be redeemed or purchased until the Change of Control Offer for the
Senior Notes has been consummated and all Senior Notes tendered pursuant to such
Offer have been accepted for payment.
SECTION 4.14. LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate an Asset Sale (including the sale of any
of the Capital Stock of any Restricted Subsidiary) providing for Net Proceeds in
excess of $2,500,000 unless at least 75% of the Net Proceeds from such Asset
Sale are applied (in any manner otherwise permitted by this Indenture) to one or
more of the following purposes in such combination as the Company shall elect:
(i) an investment in another asset or business in the same line of business as,
or a line of business similar to that of, the line of business of the Company
and its Restricted Subsidiaries at the time of the Asset Sale; provided that
such investment occurs on or prior to the 365th day following the date of such
Asset Sale (the "Asset Sale Disposition Date"), (ii) to reimburse the Company or
its Subsidiaries for expenditures made, and costs incurred, to repair, rebuild,
replace or restore property subject to loss, damage or taking to the extent that
the Net Proceeds consist of insurance proceeds received on account of such loss,
damage or taking, (iii) the purchase, redemption or other prepayment or
repayment of outstanding Senior Indebtedness of the Company or Indebtedness of
the Company's Restricted Subsidiaries on or prior to the 365th day following the
Asset Sale Disposition Date or (iv) an Offer expiring on or prior to the
Purchase Date.
(b) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate an Asset Sale unless at least 75% of the
consideration thereof received by the Company or such Restricted Subsidiary is
in the form of cash, cash equivalents or marketable securities; provided that,
solely for purposes of calculating such 75% of the consideration, the amount of
(i) any liabilities (as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet or in the notes thereto, excluding contingent
liabilities and trade payables), of the Company or any Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Senior
Notes) that are assumed by the transferee of any such assets and (ii) any notes
or other obligations received by the Company or any such Restricted Subsidiary
from such transferee that are promptly, but in no event more than 30 days after
receipt, converted by the Company or such Restricted Subsidiary into cash (to
the extent of the cash received), shall be deemed to be cash and cash
equivalents for purposes of this provision. Any Net Proceeds from any Asset Sale
that are not applied or invested as provided in Section 4.14(a) shall constitute
"Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $10,000,000 (such
date being an "Asset Sale Trigger Date"), the Company shall make an Offer to all
Holders of Senior Notes to purchase the maximum principal amount of the Senior
Notes then outstanding that may be purchased out of Excess Proceeds that remain
upon completion of the Excess Proceeds offer required under the Series A/B
Indenture, at an offer price in cash in an amount equal to 100% of principal
amount thereof plus any accrued and unpaid
39
interest and Liquidated Damages, if any, to the Purchase Date in accordance with
the procedures set forth in this Indenture.
(d) To the extent that any Excess Proceeds remain after completion of an
Offer, the Company may use such remaining amount for general corporate purposes.
(e) If the aggregate principal amount of Senior Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Senior Notes to be purchased on a pro rata basis.
(f) Upon completion of an Asset Sale Offer, the amount of Excess Proceeds
shall be reset at zero.
(g) Notwithstanding the foregoing, to the extent that any or all of the
Net Proceeds of an Asset Sale is prohibited or delayed by applicable local law
from being repatriated to the United States, the portion of such Net Proceeds so
affected will not be required to be applied pursuant to Section 4.14, but may be
retained for so long, but only for so long, as the applicable local law
prohibits repatriation to the United States. The Company shall promptly take all
reasonable actions required by the applicable local law to permit such
repatriation, and once such repatriation of any affected Net Proceeds is not
prohibited under applicable local law, such repatriation will be immediately
effected and such repatriated Net Proceeds will be applied in the manner set
forth above as if such Asset Sale have occurred on the date of repatriation.
SECTION 4.15. LIMITATION ON GUARANTEES OF COMPANY
INDEBTEDNESS BY RESTRICTED SUBSIDIARIES.
(a) The Company shall not permit any Restricted Subsidiary, directly or
indirectly, to guarantee any Indebtedness of the Company other than the Senior
Notes (the "Other Company Indebtedness") unless (i) such Restricted Subsidiary
contemporaneously executes and delivers a supplemental indenture to the
Indenture providing for a guarantee of payment of the Senior Notes then
outstanding by such Restricted Subsidiary to the same extent as the guarantee of
payment (the "Other Company Indebtedness Guarantee") of the Other Company
Indebtedness (including waiver of subrogation, if any) and (ii) if the Other
Company Indebtedness guaranteed by such Restricted Subsidiary is (A) Senior
Indebtedness, the guarantee for the Senior Notes shall be pari passu in right of
payment with the Other Company Indebtedness Guarantee and (B) Subordinated
Indebtedness, the guarantee for the Senior Notes shall be senior in right of
payment to the Other Company Indebtedness Guarantee; provided that the foregoing
will not limit or restrict guarantees issued by Restricted Subsidiaries in
respect of Indebtedness of other Restricted Subsidiaries.
(b) Each guarantee of the Senior Notes created by a Restricted Subsidiary
pursuant to Section 4.15(a) shall be in accordance with Section 4.15(a), shall
be delivered to the Trustee and shall provide, among other things, that it will
be automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer permitted by this Indenture of (A) all of the Company's
Capital Stock in such Restricted Subsidiary or (B) the sale of all or
substantially all of the assets of the Restricted Subsidiary and upon the
application of the Net Proceeds from such sale in accordance with the
requirements of Section 4.14 or (ii) the release or discharge of the Other
Company Indebtedness Guarantee that resulted in the creation of such guarantee
of the Senior Notes, except a discharge or release by or as a result of direct
payment under such Other Company Indebtedness Guarantee.
40
SECTION 4.16. DESIGNATION OF RESTRICTED AND NON-RESTRICTED SUBSIDIARIES.
(a) From and after the date of original issuance of the Senior Notes, the
Company may designate any existing or newly formed or acquired Subsidiary as a
Non-Restricted Subsidiary, provided that (i) either (A) the Subsidiary to be so
designated has total assets of $1,000,000 or less or (B) immediately before and
after giving effect to such designation on a Pro Forma Basis; (1) the Company
could incur $1.00 of additional Indebtedness pursuant to Section 4.07(a)
determined on a Pro Forma Basis; and (2) no Default or Event of Default shall
have occurred and be continuing, and (ii) all transactions between the
Subsidiary to be so designated and its Affiliates remaining in effect are
permitted pursuant to Section 4.08. Any Investment made by the Company or any
Restricted Subsidiary which is redesignated from a Restricted Subsidiary to a
Non-Restricted Subsidiary shall thereafter be considered as having been a
Restricted Payment (to the extent not previously included as a Restricted
Payment) made on the day such Subsidiary is designated a Non-Restricted
Subsidiary in the amount of the greater of (i) the fair market value (as
determined by the Board of Directors of the Company in good faith) of the Equity
Interests of such Subsidiary held by the Company and its Restricted Subsidiaries
on such date, and (ii) the amount of the Investments determined in accordance
with GAAP made by the Company and any of its Restricted Subsidiaries in such
Subsidiary.
(b) A Non-Restricted Subsidiary may be redesignated as a Restricted
Subsidiary. The Company shall not, and shall not permit any Restricted
Subsidiary to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition, the redesignation of a Non-Restricted
Subsidiary or otherwise, but not including through the creation of a new
Restricted Subsidiary) unless, immediately before and after giving effect to
such action, transaction or series of transactions on a Pro Forma Basis, (i) the
Company could incur at least $1.00 of additional Indebtedness pursuant to
Section 4.07(a) and (ii) no Default or Event of Default shall have occurred and
be continuing.
(c) The designation of a Subsidiary as a Restricted Subsidiary or the
removal of such designation is required to be made by a resolution adopted by a
majority of the Board of Directors of the Company stating that the Board of
Directors has made such designation in accordance with this Indenture, and the
Company is required to deliver to the Trustee such resolution together with an
Officers' Certificate certifying that the designation complies with this
Indenture. Such designation shall be effective as of the date specified in the
applicable resolution, which may not be before the date the applicable Officers'
Certificate is delivered to the Trustee.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER OR CONSOLIDATION.
(a) The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets to,
any Person (any such consolidation, merger or sale being a "Disposition") unless
(i) the successor corporation of such Disposition or the corporation to which
such Disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the successor corporation of such Disposition or the corporation
to which such Disposition shall have been made expressly assumes the Obligations
of the Company, pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee, under the Indenture and the Senior Notes; (iii)
immediately after such Disposition, no Default or Event of Default shall
41
exist; and (iv) the corporation formed by or surviving any such Disposition, or
the corporation to which such Disposition shall have been made, shall (A) have
Consolidated Net Worth (immediately after the Disposition but prior to giving
any pro forma effect to purchase accounting adjustments or Restructuring Charges
resulting from the Disposition) equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the Disposition, (B) be permitted
immediately after the Disposition by the terms of this Indenture to issue at
least $1.00 of additional Indebtedness determined on a Pro Forma Basis, and (C)
have a Cash Flow Coverage Ratio, for the four fiscal quarters immediately
preceding the applicable Disposition, and determined on a Pro Forma Basis, equal
to or greater than the actual Cash Flow Coverage Ratio of the Company for such
four quarter period. The limitations in this Section 5.01(a) on the Company's
ability to make a Disposition do not restrict the Company's ability to sell less
than all or substantially all of its assets, such sales being governed by
Section 4.14.
(b) Prior to the consummation of any proposed Disposition, the Company
shall deliver to the Trustee an Officers' Certificate to the foregoing effect
and an Opinion of Counsel stating that the proposed Disposition and such
supplemental indenture comply with this Indenture.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any Disposition, the Successor Corporation resulting from such
Disposition shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such Successor has been named as the Company herein; provided, however, that
neither the Company nor any Successor Corporation shall be released from its
Obligation to pay the principal of, premium, if any, and accrued and unpaid
interest on, and Liquidated Damages, if any, with respect to the Senior Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
(a) An Event of Default is:
(i) a default for 30 days in payment of interest on, or Liquidated
Damages, if any, with respect to, the Senior Notes;
(ii) a default in payment when due of principal or premium, if any,
with respect to, the Senior Notes;
(iii) the failure of the Company to comply with any of its other
agreements or covenants in, or provisions of, this Indenture or
the Senior Notes outstanding and the Default continues for the
period, if applicable, and after the notice specified in
Section 6.01(b);
(iv) a default by the Company or any Restricted Subsidiary under any
mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any
Restricted Subsidiary (or the payment of which is guaranteed by
the Company or any Restricted Subsidiary), whether such
Indebtedness or guarantee now exists
42
or shall be created hereafter, if (A) either (1) such default
results from the failure to pay principal of or interest on any
such Indebtedness at or after the final maturity thereof (after
giving effect to any extension thereof) and such default
continues for 30 days beyond any applicable grace period or (2)
as a result of such default the maturity of such Indebtedness
has been accelerated prior to its expressed maturity, and (B)
the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for
failure to pay principal or interest thereon at final maturity,
or because of the acceleration of the maturity thereof,
aggregates in excess of $10,000,000;
(v) a failure by the Company or any Restricted Subsidiary to pay
final judgments (not covered by insurance) aggregating in
excess of $10,000,000 which judgments a court of competent
jurisdiction does not rescind, annul or stay within 45 days
after their entry and the Default or Event of Default continues
for the period and after the notice specified in Section
6.01(b);
(vi) in existence when the Company or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; and
(vii) in existence when a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property
of the Company or any Significant Subsidiary, or
(C) orders the liquidation of the Company or any Significant
Subsidiary,
and any such order or decree remains unstayed and in effect for 60 days.
(b) A Default or Event of Default under Section 6.01(a)(iii) (other than
an Event of Default arising under Section 5.01 which shall be an Event of
Default with the notice but without the passage of time specified in this
Section 6.01(b)) or Section 6.01(a)(v) is not an Event of Default under this
Indenture until the Trustee or the Holders of at least 25% in principal amount
of the Senior Notes then outstanding notify the Company of the Default and the
Company does not cure the Default within 30 days after receipt of the
43
notice. The notice must specify the Default, demand that it be remedied, and
state that the notice is a "Notice of Default."
(c) In the case of any Event of Default pursuant to Section 6.01(a) or
Section 6.01(b) occurring by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have to pay if the Company then
had elected to redeem the Senior Notes pursuant to paragraph 5 of the Senior
Notes, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law, anything in this Indenture or in the
Senior Notes contained to the contrary notwithstanding.
(d) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless written notice thereof shall have been given to a Trust
Officer at the Corporate Trust Office of the Trustee by the Company or any other
Person.
SECTION 6.02. ACCELERATION.
(a) Upon the occurrence of an Event of Default (other than an Event of
Default under Section 6.01(a)(vii) or (viii)), the Trustee or the holders of at
least 25% in principal amount of the then outstanding Senior Notes may declare
all Senior Notes (i) to be due and payable immediately and, upon such
declaration, the principal of, premium, if any, and any accrued and unpaid
interest on, and Liquidated Damages, if any, with respect to all Senior Notes
shall be due and payable immediately; or (ii) if there are any amounts
outstanding under the Amended Credit Agreement, to be due and payable
immediately upon the first to occur of (A) an acceleration under the Amended
Credit Agreement or (B) five business days after receipt by the Company and the
Representative under the Amended Credit Agreement of such notice of acceleration
but only if such Event of Default is then continuing; provided, however, that if
an Event of Default arises under Section 6.01(a)(vi) or (vii), the principal of,
premium, if any, and any accrued and unpaid interest on, and Liquidated Damages,
if any, with respect to all Senior 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 Holders of Senior Notes.
(b) The holders of a majority in principal amount of the Senior Notes then
outstanding, by notice to the Trustee, may rescind any declaration of
acceleration of such Senior Notes and its consequences (if the rescission would
not conflict with any judgment or decree) if all existing Events of Default
(other than the nonpayment of principal of or interest on such Senior Notes that
shall have become due by such declaration) shall have been cured or waived.
(c) If there has been a declaration of acceleration of the Senior Notes
because an Event of Default under Section 6.01(a)(iv) has occurred and is
continuing, such declaration of acceleration shall be automatically annulled if
the holders of the Indebtedness described in Section 6.01(a)(iv) have rescinded
the declaration of acceleration in respect of such Indebtedness within 30
Business Days thereof and if (i) the annulment of such acceleration would not
conflict with any judgment or decree of a court of competent jurisdiction, (ii)
all existing Events of Default, except non-payment of principal, premium,
interest or Liquidated Damages that shall have become due solely because of the
acceleration, have been cured or waived, and (iii) the Company has delivered an
Officers' Certificate to the Trustee to the effect of clauses (i) and (ii)
above.
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SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, if
any, or any accrued and unpaid interest on, or Liquidated Damages, if any, with
respect to the Senior Notes or to enforce the performance of any provision of
the Senior Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Senior Notes or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The holders of a majority in aggregate principal amount of the Senior
Notes then outstanding by notice to the Trustee may on behalf of all Holders of
Senior Notes waive any existing Default or Event of Default under this Indenture
and its consequences, except a continuing Default in the payment of the
principal of, premium, if any, and interest on, and Liquidated Damages, if any,
with respect to such Senior Notes, which may only be waived with the consent of
each Holder of Senior Notes affected. Upon any such waiver, 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; provided that no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 7.01(e), the Holders of a majority in principal
amount of the then outstanding Senior Notes may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it by this Indenture. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the rights
of other Holders or would involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Senior Notes only if (i) the Holder gives to the Trustee notice of a continuing
Event of Default; (ii) the Holders of at least 25% in principal amount of the
then outstanding Senior Notes make a request to the Trustee to pursue the
remedy; (iii) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense; (iv) the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer of indemnity; and (v) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Senior Notes do not give the Trustee
a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Holders of the Senior Notes may not enforce this Indenture, except as
provided herein.
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SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, and any accrued
and unpaid interest on, and Liquidated Damages, if any, with respect to a Senior
Note, on or after a respective due date expressed in the Senior Note, or to
bring suit for the enforcement of any such payment on or after such respective
date, shall not be impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for (i) the principal,
premium and Liquidated Damages, if any, and interest remaining unpaid on the
Senior Notes, (ii) interest on overdue principal and premium, if any, and, to
the extent lawful, interest, and (iii) 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 ("Trustee Expenses").
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable to have the claims of the Trustee
(including any claim for Trustee Expenses) and the Holders allowed in any
Insolvency or Liquidation Proceeding or other judicial proceeding relative to
the Company (or any other obligor upon the Senior Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
to Holders any money or other property payable or deliverable on any such claims
and each Holder authorizes any Custodian in any such Insolvency or Liquidation
Proceeding or other judicial proceeding to make such payments to the Trustee,
and if the Trustee shall consent to the making of such payments directly to the
Holders any such Custodian is hereby authorized to make such payments directly
to the Holders, and to pay to the Trustee any amount due to it hereunder for
Trustee Expenses, and any other amounts due the Trustee under Section 7.07. To
the extent that the payment of any such Trustee Expenses, and any other amounts
due the Trustee under Section 7.07 out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties which the Holders may be entitled to receive in
such proceeding, whether in liquidation or under any plan of reorganization or
arrangement or otherwise. 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 Senior Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any Insolvency or
Liquidation Proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
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Second: to Holders for amounts due and unpaid on the Senior Notes for
principal, premium and Liquidated Damages, if any, and interest,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Senior Notes for principal,
premium and Liquidated Damages, if any, and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by Holders of more than 10% in principal
amount of the then outstanding Senior Notes.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default occurs (and has not been cured) the Trustee
shall (i) exercise the rights and powers vested in it by this Indenture, and
(ii) use the same degree of care and skill in exercising such rights and powers
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee's duties shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture
and no others, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to
determine whether they conform to this Indenture's
requirements.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of Section 7.01(b);
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(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a
direction it receives pursuant to Section 6.05.
(d) Whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c), (e) and (f) of this Section and Section 7.02.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money it receives
except as the Trustee may agree in writing with the Company. Money the Trustee
holds in trust need not be segregated from other funds except to the extent
required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) In connection with the Trustee's rights and duties under this
Indenture, the Trustee may rely on any document it believes to be genuine and to
have been signed or presented by the proper Person. The Trustee shall not be
obligated to investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting under this Indenture,
it may reasonably require an Officers' Certificate or an Opinion of Counsel, or
both. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
The Trustee may consult with counsel and 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.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any Agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take, except to the extent that such action or omission to act constitutes
negligence or willful misconduct on the part of the Trustee.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer.
(f) Except with respect to Section 4.01 hereof, the Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article 4
hereof. In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.01(a)(i), 6.01(a)(ii) and 4.01 or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.
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(g) 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
may, in its discretion, 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.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. However,
if the Trustee acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights. The Trustee is also
subject to Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
THE TRUSTEE SHALL NOT BE RESPONSIBLE FOR AND MAKES NO REPRESENTATION AS TO THE
VALIDITY OR ADEQUACY OF THIS INDENTURE OR THE SENIOR NOTES, IT SHALL NOT BE
ACCOUNTABLE FOR THE COMPANY'S USE OF THE PROCEEDS FROM THE SENIOR NOTES OR FOR
ANY MONEY PAID TO THE COMPANY OR UPON THE COMPANY'S DIRECTION UNDER ANY
PROVISIONS HEREOF, IT SHALL NOT BE RESPONSIBLE FOR THE USE OR APPLICATION OF ANY
MONEY ANY PAYING AGENT OTHER THAN THE TRUSTEE RECEIVES, AND IT SHALL NOT BE
RESPONSIBLE FOR ANY STATEMENT OR RECITAL HEREIN OR ANY STATEMENT IN THE SENIOR
NOTES OR ANY OTHER DOCUMENT FURNISHED OR ISSUED IN CONNECTION WITH THE SALE OF
THE SENIOR NOTES OR PURSUANT TO THIS INDENTURE, OTHER THAN ITS CERTIFICATE OF
AUTHENTICATION.
SECTION 7.05. NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT.
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Senior Note (including any
failure to redeem Senior Notes called for redemption or any failure to purchase
Senior Notes tendered pursuant to an Offer that are required to be purchased by
the terms of this Indenture), the Trustee may withhold the notice if and so long
as a committee of its Trust Officers in good faith determines that withholding
the notice is in the Holders' interests.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each January 1 beginning with January 1, 1999,
the Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with section 313(a) of the TIA (but if no event described in
section 313(a) of the TIA has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also shall comply
with section 313(b)(2) of the TIA. The Trustee shall also transmit by mail all
reports as required by section 313(c) of the TIA.
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to Holders shall be filed with
the SEC and each national securities exchange on which
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the Senior Notes are listed. The Company shall notify the Trustee when the
Senior Notes are listed on any national securities exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee (in its capacities as Trustee,
Paying Agent and/or Registrar) from time to time reasonable compensation for its
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable disbursements, advances, fees and
expenses it incurs or makes in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee (in its
capacities as Trustee, Paying Agent and/or Registrar) against any and all
losses, liabilities or expenses the Trustee incurs arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except as set forth below. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its Obligations
hereunder. The Company shall defend the claim and the Trustee shall reasonably
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The Company's Obligations under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability the Trustee incurs which is solely attributable to its
negligence or bad faith.
To secure the Company's payment of its Obligations in this Section,
the Trustee shall have a Lien prior to the Senior Notes on all money or property
the Trustee holds or collects. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(vii) or (viii) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute administrative expenses under any Bankruptcy
Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in principal amount of
the then outstanding Senior Notes may remove the Trustee by so notifying the
Trustee and the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
50
(ii) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a Custodian or public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee, provided that the Holders of a majority in principal amount of the then
outstanding Senior Notes may appoint a successor Trustee to replace any
successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Senior Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee. A successor Trustee shall deliver a
written acceptance of its appointment to the retiring Trustee and to the
Company. Thereupon, the resignation or removal of the retiring Trustee shall
become effective and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its appointment to Holders. The retiring Trustee shall promptly
transfer all property it holds as Trustee to the successor Trustee, provided all
sums owing to the retiring Trustee hereunder have been paid and subject to the
Lien provided for in Section 7.07. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
shall continue for the retiring Trustee's benefit with respect to expenses and
liabilities it incurred prior to being replaced.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times (i) be a corporation organized and
doing business under the laws of the United States of America, of any state
thereof, or the District of Columbia authorized under such laws to exercise
corporate trustee power, (ii) be subject to supervision or examination by
federal or state authority, (iii) have a combined capital and surplus of at
least $80,000,000 as set forth in its most recent published annual report of
condition, and (iv) satisfy the requirements of sections 310(a)(1), (2) and (5)
of the TIA. The Trustee is subject to section 310(b) of the TIA.
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to section 311(a) of the TIA, excluding any
creditor relationship listed in section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to section 311(a) of the TIA to the
extent indicated therein.
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SENIOR NOTES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all outstanding Senior
Notes (other than Senior Notes replaced pursuant to Section 2.07) for
cancellation, or (ii) all outstanding Senior Notes have become due and payable
and the Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity all outstanding Senior Notes, including interest, premium and
Liquidated Damages thereon (other than Senior Notes replaced pursuant to Section
2.07), and if in either case the Company pays all other sums payable under this
Indenture by the Company, then this Indenture shall, subject to Sections 8.01(c)
and 8.06, cease to be of further effect.
(b) Subject to Sections 8.01(c), 8.02, and 8.06, the Company at any time
may terminate (i) all its obligations under the Senior Notes and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.14, 4.15, and 4.16, and the
operation of Sections 5.01(a)(iii), 5.01(a)(iv), or 6.01(a)(iii) through (a)(vi)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Senior Notes may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Senior Notes
shall not be accelerated because of an Event of Default specified in
6.01(a)(iii) through (a)(vi) or because of the Company's failure to comply with
Section 5.01(a)(iii) and 5.01(a)(iv). Upon satisfaction of the conditions set
forth herein and upon the Company's request (and at the Company's expense), the
Trustee shall acknowledge in writing the discharge of those obligations that the
Company has terminated.
(c) Notwithstanding clauses (a) and (b) above, the Company's obligations
in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.04, 7.07, 7.08, 8.04, 8.05 and
8.06, and the Trustee's and the Paying Agent's obligations in Section 8.04 shall
survive until the Senior Notes have been paid in full. Thereafter, the Company's
obligations in Sections 7.07 and 8.05 and the Company's, the Trustee's and the
Paying Agent's obligations in Section 8.04 shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE.
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(1) the Company irrevocably deposits in trust (the "defeasance
trust") with the Trustee money or U.S. Government Obligations
sufficient for the payment in full of the principal of, premium,
if any, and any accrued and unpaid interest on, and
52
Liquidated Damages, if any, with respect to the Senior Notes then
outstanding, as of the maturity date, the redemption date or the
Purchase Date, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants or
investment bankers expressing their opinion that the payments of
principal and interest when due and without reinvestment of the
deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such
amounts as will be sufficient to pay when due principal of,
premium, if any, and any accrued and unpaid interest on, and
Liquidated Damages, if any, with respect to all the Senior Notes
to maturity or redemption, as the case may be;
(3) since the Company's irrevocable deposit provided for in Section
8.02(1), 91 days have passed;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect to it;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940, as amended;
(7) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (ii) under
applicable federal income tax law, in either case, to the effect
that, and based thereon such Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and
defeasance and will be subject to federal income tax on the same
amount, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
(8) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and
covenant defeasance and will be subject to federal income tax on
the same amount, in the same manner and at the same times as
would have been the case if such covenant defeasance had not
occurred (and, in the case of legal defeasance only, such opinion
of counsel must be based on a ruling of the Internal Revenue
Service or other change in applicable federal income tax law);
and
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Senior Notes contemplated
by this Article 8 have been satisfied.
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Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption or purchase of Senior Notes at a
future date in accordance with Article 3.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article 8. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of, premium, if any,
and any accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to the Senior Notes.
SECTION 8.04. REPAYMENT TO THE COMPANY.
After the Senior Notes have been paid in full, the Trustee and the
Paying Agent shall promptly turn over to the Company any excess money or
securities they hold.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money they hold for the payment of principal,
premium, interest or Liquidated Damages that remains unclaimed for 1 year after
the date upon which such payment shall have become due; provided, however, that
the Company shall have either caused notice of such payment to be mailed to each
Holder entitled thereto no less than 30 days prior to such repayment or within
such period shall have published such notice in a financial newspaper of
widespread circulation published in The City of New York (including, without
limitation, The Wall Street Journal). After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Senior Notes shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 8
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article 8;
provided, however, that, if the Company has made any payment of principal of,
premium, if any, and any accrued and unpaid interest on, and Liquidated Damages,
if any, with respect to any Senior Notes because of the reinstatement of its
Obligations, the Company shall be subrogated to the Holders' rights to receive
such payment from the money or U.S. Government Obligations the Trustee or Paying
Agent holds.
54
ARTICLE 9.
AMENDMENTS
SECTION 9.01. AMENDMENTS AND SUPPLEMENTS PERMITTED WITHOUT
CONSENT OF HOLDERS.
Notwithstanding Section 9.02, the Company and the Trustee may amend or
supplement this Indenture or the Senior Notes without the consent of any Holder
(a) to cure any ambiguity, defect or inconsistency; (b) to provide for
uncertificated Senior Notes in addition to or in place of certificated Senior
Notes; (c) to provide for the assumption by a Successor Corporation of the
Company's Obligations to the Holders in the event of a Disposition pursuant to
Article 5; (d) to comply with SEC's requirements to effect or maintain the
qualification of this Indenture under the TIA; (e) to provide for additional
Guarantees with respect to the Senior Notes; or (f) to make any change that does
not materially adversely affect any Holder's legal rights under this Indenture.
Upon the Company's request, after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any amended or
supplemental indenture, the documents described in Section 9.06, the Trustee
shall join with the Company in the execution of any amended or supplemental
indenture authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations that may be contained in any
such amended or supplemental indenture, but the Trustee shall not be obligated
to enter into an amended or supplemental indenture that affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 9.02. AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS.
Subject to Section 6.07, the Company and the Trustee may amend or
supplement this Indenture or the Senior Notes with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Senior Notes (including consents obtained in connection with a tender offer or
exchange offer for the Senior Notes). Subject to Sections 6.04 and 6.07, the
Holders of a majority in principal amount of the Senior Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for the Senior Notes) may also waive any existing Default or Event of Default
(other than a payment Default) and its consequences or compliance in a
particular instance by the Company with any provision of this Indenture or the
Senior Notes.
Upon the Company's request and after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any
supplemental indenture, evidence of the Holders' consent, and the documents
described in Section 9.06, the Trustee shall join with the Company in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but not be obligated to, enter into such amended or supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section becomes effective, the
Company shall mail to each Holder affected thereby a notice briefly describing
the amendment, supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or
55
affect the validity of any such amended or supplemental indenture or waiver.
Without the consent of each Holder affected, an amendment, supplement or waiver
under this Section may not (1) reduce the principal amount of Senior Notes whose
Holders must consent to an amendment, supplement or waiver; (2) reduce the rate
of or change the time for payment of interest, including default interest as set
forth in Section 4.01, or Liquidated Damages on any Senior Note or alter the
redemption or purchase provisions with respect thereto or the price at which the
Company is required to offer to purchase any Senior Note; (3) reduce the
principal of or change the fixed maturity of any Senior Note; (4) make any
Senior Note payable in money other than that stated in the Senior Note; (5) make
any change in Section 6.04 or 6.07 or in this sentence of this Section 9.02; or
(6) waive a default in the payment of the principal of, or premium, if any, or
any accrued and unpaid interest on, or Liquidated Damages, if any, with respect
to, or redemption or purchase payment with respect to, any Senior Note (except a
rescission of acceleration of the Senior Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Senior Notes and
a waiver of the payment default that resulted from such acceleration).
SECTION 9.03. COMPLIANCE WITH XXX.
Every amendment or supplement to this Indenture or the Senior Notes
shall be set forth in an amended supplemental indenture that complies with the
TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Senior Note is a continuing consent by the Holder and
every subsequent Holder of a Senior Note or portion of a Senior Note that
evidences the same Indebtedness as the consenting Xxxxxx's Senior Note, even if
notation of the consent is not made on any Senior Note. However, any such
Holder or subsequent Holder may revoke the consent as to his or her Senior Note
or portion of a Senior Note if the Trustee receives the notice of revocation
before the date on which the Trustee receives an Officer's Certificate
certifying that the Holders of the requisite principal amount of Senior Notes
have consented to the amendment or waiver.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Senior Notes entitled to consent to any
amendment or waiver. If a record date is fixed, then, notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders of Senior Notes at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment or waiver
or to revoke any consent previously given, whether or not such Persons continue
to be Holders of Senior Notes after such record date. No consent shall be valid
or effective for more than 90 days after such record date unless consents from
Holders of the principal amount of Senior Notes required hereunder for such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (1) through (6) of
Section 9.02. In such case, the amendment or waiver shall bind each Holder who
has consented to it and every subsequent Holder of a Senior Note that evidences
the same debt as the consenting Xxxxxx's Senior Note.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR NOTES.
The Trustee may (at the Company's expense) place an appropriate
notation about an amendment, supplement or waiver on any Senior Note thereafter
authenticated. The Company in exchange
56
for all Senior Notes may issue and the Trustee shall authenticate new Senior
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06. TRUSTEE PROTECTED.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing such amendment or supplemental
indenture, the Trustee shall be entitled to receive and, subject to Section
7.01, shall be fully protected in relying upon, an Officers' Certificate and
Opinion of Counsel as conclusive evidence that such amendment or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms. The Company may not sign an amendment or
supplemental indenture until the Board of Directors approves it.
ARTICLE 10.
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of section 318(c) of the TIA, the imposed
duties shall control.
SECTION 10.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person, mailed by registered or
certified mail, postage prepaid, return receipt requested or delivered by
telecopier or overnight air courier guaranteeing next day delivery to the
other's address:
If to the Company:
Motors and Gears, Inc.
ArborLake Centre, Suite 000
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx, Brown & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
57
If to the Trustee:
State Street Bank and Trust Company
Two International Place
Boston, Massachusetts 02110
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; the date receipt is acknowledged, if mailed by registered
or certified mail; when answered back, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail to his or her address shown on the register kept by the Registrar. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to section 312(b) of the TIA with
other Holders with respect to their rights under this Indenture or the Senior
Notes. The Company, the Trustee, the Registrar and any other Person shall have
the protection of section 312(c) of the TIA.
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate (which shall include the statements set forth
in Section 10.05) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel (which shall include the statements set forth in
Section 10.05) stating that, in the opinion of such counsel, all such conditions
precedent provided for in this Indenture relating to the proposed action have
been complied with.
58
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to section 314(a)(4) of the TIA) shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in such Person's opinion, such
condition or covenant has been complied with.
SECTION 10.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 10.07. LEGAL HOLIDAYS.
If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08. NO RECOURSE AGAINST OTHERS.
No officer, employee, director, stockholder or Subsidiary of the
Company shall have any liability for any Obligations of the Company under the
Senior Notes or this Indenture, or for any claim based on, in respect of, or by
reason of, such Obligations or the creation of any such Obligation, except, in
the case of a Subsidiary, for an express guarantee or an express creation of any
Lien by such Subsidiary of the Company's Obligations under the Senior Notes.
Each Holder by accepting a Senior Note waives and releases all such liability,
and such waiver and release is part of the consideration for the issuance of the
Senior Notes. The foregoing waiver may not be effective to waive liabilities
under the Federal securities law and the Commission is of the view that such a
waiver is against public policy.
SECTION 10.09. COUNTERPARTS.
This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
59
SECTION 10.10. VARIABLE PROVISIONS.
The Company initially appoints the Trustee as Paying Agent, Registrar
and authenticating agent.
The first compliance certificate to be delivered by the Company to the
Trustee pursuant to Section 4.03 shall be for the fiscal year ending on December
31, 1996.
SECTION 10.11. GOVERNING LAW.
The internal laws of the State of New York shall govern this Indenture
and the Senior Notes, without regard to the conflict of laws provisions thereof.
SECTION 10.12. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries, and no other
indenture, loan or debt agreement may be used to interpret this Indenture.
SECTION 10.13. SUCCESSORS.
All agreements of the Company in this Indenture and the Senior Notes
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 10.14. SEVERABILITY.
If any provision in this Indenture or in the Senior Notes 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 10.15. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
[NEXT PAGE IS THE SIGNATURE PAGE]
60
Dated as of December 17, 1997
MOTORS AND GEARS, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
Dated as of December 17, 1997
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
61
Dated as of December 17, 1997
MOTORS AND GEARS, INC.
By:________________________________
Name:
Title:
Dated as of December 17, 1997
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Xxxxxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxxxxx Xxxxxx
Title: Assistant Vice President
62
(Face of Note)
EXHIBIT A
10 3/4% Series [C/D] Senior Note due 2006
No. $__________
CUSIP No. [ ]
MOTORS AND GEARS, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on November 15, 2006.
Interest Payment Dates: May 15 and November 15.
Record Dates:_May 1 and November 1.
Dated:
MOTORS AND GEARS, INC.
By:________________________________
Name:
Title:
Trustee's Certificate of Authentication
Dated:
This is one of the [Global]
Senior Notes referred to in the
within-mentioned Indenture:
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:_____________________________
Authorized Signatory
A-1
[Unless and until it is exchanged in whole or in part for Senior Notes
in definitive form, this Senior Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. The Depository Trust Company shall act as the Depository until a
successor shall be appointed by the Company and the Registrar. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be 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.]/1//
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5
OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF
THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO
THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF
THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE.
Additional provisions of this Senior Note are set forth on the other side of
this Senior Note.
____________________
/1// This paragraph should be included only if the Senior Note is issued in
global form.
A-2
(Back of Note)
10 3/4% SERIES [C/D] SENIOR NOTE DUE 2006
1. INTEREST. Motors and Gears, Inc. (the "Company") promises to pay
interest on the principal amount of the Senior Notes at the rate and in the
manner specified below. Interest on the Senior Notes will accrue at 10 3/4% per
annum from November 16, 1997 until maturity. The Company will pay Liquidated
Damages pursuant to Section 5 of the Registration Rights Agreement referred to
below. Interest and Liquidated Damages, if any, will be payable semiannually in
cash in arrears on May 15 and November 15 of each year, or if any such day is
not a Business Day on the next succeeding Business Day (each, an "Interest
Payment Date"). Interest on the Senior Notes will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from
November 16, 1997; provided that the first Interest Payment Date shall be May
15, 1998. The Company shall pay interest on overdue principal and premium, if
any, from time to time on demand at the rate of 2% per annum in excess of the
interest rate then in effect and shall pay interest on overdue installments of
interest and Liquidated Damages, if any, (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered holders of Senior Notes at the close of business on the record date
for the next Interest Payment Date even if such Senior Notes are canceled after
such record date and on or before such Interest Payment Date. Holders must
surrender Senior Notes to a Paying Agent to collect principal payments on such
Senior Notes. The Company will pay principal, premium, if any, interest and
Liquidated Damages, if any, in money of the United States that at the time of
payment is legal tender for payment of public and private debts. The Company
will pay principal, premium, if any, interest and Liquidated Damages, if any, by
wire transfer of immediately available funds to the accounts specified by the
Holders or, if no such account is specified, by mailing a check to each such
Holder's registered address; provided that payment by wire transfer of
immediately available funds will be required with respect to principal, premium,
if any, interest and Liquidated Damages, if any, on all Global Notes.
3. PAYING AGENT AND REGISTRAR. State Street Bank and Trust Company (the
"Trustee") will initially act as the Paying Agent and Registrar. The Company
may appoint additional paying agents or co-registrars, and change the Paying
Agent, any additional paying agent, the Registrar or any co-registrar without
prior notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Senior Notes under an Indenture,
dated as of December 17, 1997 (the "Indenture"), among the Company and the
Trustee. The terms of the Senior Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the date of the original
issuance of the Senior Notes (the "Trust Indenture Act"). The Senior Notes are
subject to, and qualified by, all such terms, certain of which are summarized
herein, and Holders are referred to the Indenture and the Trust Indenture Act
for a statement of such terms (all capitalized terms not defined herein shall
have the meanings assigned them in the Indenture). The Senior Notes are
unsecured senior obligations of the Company limited in aggregate principal
amount to $270,000,000; provided that $170,000,000 shall be reserved for
issuance and shall be available for issuance only in connection with the
exchange of the Series A/B Senior Notes (as defined in the Indenture) for Series
D Senior Notes. Each Holder, by accepting a Senior Note, agrees to be bound by
all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
A-3
5. OPTIONAL REDEMPTION. (a) Except as described in paragraph 5(b)
below, the Senior Notes may not be redeemed at the option of the Company prior
to November 15, 2001. During the twelve (12) month period beginning November 15
of the years indicated below, the Senior Notes will be redeemable at the option
of the Company, in whole or in part, on at least 30 but not more than 60 days'
notice to each Holder of Senior Notes to be redeemed, at the redemption prices
(expressed as percentages of the principal amount) set forth below, plus any
accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption:
Year Percentage
---- ----------
2001................................ 105.375%
2002................................ 103.583%
2003................................ 101.792%
2004 and thereafter................. 100.000%
(b) Notwithstanding the foregoing, prior to November 15, 1999, the
Company may (but shall not have the obligation to) redeem up to 35% of the
original aggregate principal amount of the Senior Notes at a redemption price of
109.750% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date, with the net proceeds of one
or more Equity Offerings; provided that at least 65% of the aggregate principal
amount of Senior Notes originally issued remain outstanding immediately after
the occurrence of any such redemption; and provided, further, that any such
redemption shall occur within 60 days of the date of the closing of such Equity
Offering.
6. MANDATORY REDEMPTION. Subject to the Company's obligation to make an
offer to purchase Senior Notes under certain circumstances pursuant to Sections
4.13 and 4.14 of the Indenture (as described in paragraph 7 below), the Company
is not required to make any mandatory redemption, purchase or sinking fund
payments with respect to the Senior Notes.
7. MANDATORY OFFERS TO PURCHASE SENIOR NOTES. (a) Upon the occurrence of
a Change of Control (such date being the "Change of Control Trigger Date"), each
Holder of Senior Notes shall have the right to require the Company to purchase
all or any part (equal to $1,000 or an integral multiple thereof) of such
Holder's Senior Notes pursuant to an offer (a "Change of Control Offer") at a
purchase price in cash equal to 101% of the aggregate principal amount thereof,
plus any accrued and unpaid interest and Liquidated Damages, if any, to the date
of purchase.
(b) If the Company or any Restricted Subsidiary consummates one or
more Asset Sales and does not use all of the Net Proceeds from such Asset Sales
as provided in the Indenture, the Company will be required, under certain
circumstances, to utilize the Excess Proceeds from such Asset Sales to offer (an
"Asset Sale Offer") to purchase Senior Notes at a purchase price equal to 100%
of the principal amount of the Senior Notes, plus any accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase. If the Excess
Proceeds are insufficient to purchase all Senior Notes tendered pursuant to any
Asset Sale Offer, the Trustee shall select the Senior Notes to be purchased in
accordance with the terms of the Indenture.
(c) Holders may tender all or, subject to paragraph 8 below, any
portion of their Senior Notes in a Change of Control Offer or Asset Sale Offer
(collectively, an "Offer") by completing the form below entitled "OPTION OF
HOLDER TO ELECT PURCHASE."
A-4
(d) The Company shall comply with any tender offer rules under the
Exchange Act which may then be applicable, including Rule 14e-1, in connection
with an offer required to be made by the Company to repurchase the Senior Notes
as a result of a Change of Control or an Asset Sale Trigger Date. To the extent
that the provisions of any securities laws or regulations conflict with
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Indenture by virtue thereof.
8. NOTICE OF REDEMPTION OR PURCHASE. Notice of an optional redemption or
an Offer will be mailed to each Holder at its registered address at least 30
days but not more than 60 days before the date of redemption or purchase. Senior
Notes may be redeemed or purchased in part, but only in whole multiples of
$1,000 unless all Senior Notes held by a Holder are to be redeemed or purchased.
On or after any date on which Senior Notes are redeemed or purchased, interest
ceases to accrue on the Senior Notes or portions thereof called for redemption
or accepted for purchase on such date.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Notes are in registered
form without coupons in denominations of $1,000 and integral multiples thereof.
The transfer of Senior Notes may be registered and Senior Notes may be exchanged
as provided in the Indenture. Holders seeking to transfer or exchange their
Senior Notes may be required, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not exchange or register
the transfer of any Senior Note or portion of a Senior Note selected for
redemption or tendered pursuant to an Offer. Also, it need not exchange or
register the transfer of any Senior Notes for a period of 15 Business Days
before a selection of Senior Notes to be redeemed or between a record date and
the next succeeding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior Note may be
treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture
or the Senior Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Senior Notes, and any existing Default (except a payment Default) may be waived
with the consent of the Holders of a majority in principal amount of the then
outstanding Senior Notes. Without the consent of any Holder, the Indenture or
the Senior Notes may be amended to: cure any ambiguity, defect or inconsistency;
provide for uncertificated Senior Notes in addition to or in place of
certificated Senior Notes; provide for the assumption by another corporation of
the Company's obligations to Holders in the event of a merger or consolidation
of the Company in which the Company is not the surviving corporation or a sale
of substantially all of the Company's assets to such other corporation; comply
with the Securities and Exchange Commission's requirements to effect or maintain
the qualification of the Indenture under the Trust Indenture Act; provide for
additional Guarantees with respect to the Senior Notes; or, make any change that
does not materially adversely affect any Holder's rights under the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: default for 30 days
in payment of interest on, or Liquidated Damages, if any, with respect to, the
Senior Notes; default in payment of principal of, or premium, if any, on the
Senior Notes; failure by the Company for 30 days after notice to it to comply
with any of its other agreements or covenants in, or provisions of, the
Indenture or the Senior Notes; certain defaults under and acceleration prior to
maturity of, or failure to pay at maturity, certain other Indebtedness; certain
final judgments that remain undischarged; certain judicial findings of
unenforceability or invalidity as to any guarantee of the Senior Notes or the
disaffirmance or denial by any guarantor of its guarantee of the Senior Notes;
and certain events of bankruptcy or insolvency involving the Company or any
Restricted
A-5
Subsidiary that is a Significant Subsidiary. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the Senior Notes may declare all the Senior Notes to be immediately due and
payable in an amount equal to the principal of, premium, if any, and any accrued
and unpaid interest on, and Liquidated Damages, if any, with respect to such
Senior Notes; provided, however, that in the case of an Event of Default arising
from certain events of bankruptcy or insolvency, the principal of, premium, if
any, and any accrued and unpaid interest on, and Liquidated Damages, if any,
with respect to the Senior Notes becomes due and payable immediately without
further action or notice. Subject to certain exceptions, Holders of a majority
in principal amount of the then outstanding Senior Notes may direct the Trustee
in its exercise of any trust or power, provided that the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at the
request of Holders unless such Holders have offered to the Trustee security and
indemnity satisfactory to it. Holders may not enforce the Indenture or the
Senior Notes except as provided in the Indenture. The Trustee may withhold from
Holders notice of any continuing default (except a payment Default) if it
determines that withholding notice is in their interests. The Company must
furnish an annual compliance certificate to the Trustee.
13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or any Affiliate, and may otherwise deal with the
Company or any Affiliate, as if it were not Trustee.
14. NO RECOURSE AGAINST OTHERS. No officer, employee, director,
stockholder or Subsidiary of the Company shall have any liability for any
Obligations of the Company under the Senior Notes or the Indenture, or for any
claim based on, in respect of, or by reason of, such Obligations or the creation
of any such Obligation, except, in the case of a Subsidiary, for an express
guarantee or an express creation of any Lien by such Subsidiary of the Company's
Obligations under the Senior Notes. Each Holder by accepting a Senior Note
waives and releases all such liability, and such waiver and release is part of
the consideration for the issuance of the Senior Notes. The foregoing waiver may
not be effective to waive liabilities under the Federal securities law and the
Commission is of the view that such a waiver is against public policy.
15. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SENIOR NOTES. In
addition to the rights provided to Holders of Senior Notes under the Indenture,
Holders of Transfer Restricted Senior Notes shall have all the rights set forth
in the Registration Rights Agreement, dated as of December 17, 1997, among the
Company, Xxxxxxxxx & Company, Inc. and BT Xxxx. Xxxxx Incorporated (the
"Registration Rights Agreement").
16. SUCCESSOR SUBSTITUTED. Upon the consolidation or merger by the Company
with or into another corporation, or upon the sale, lease, conveyance or other
disposition of all or substantially all of its assets to another corporation, in
accordance with the Indenture, the corporation surviving any such merger or
consolidation (if not the Company) or the corporation to which such assets were
sold or transferred to shall succeed to, and be substituted for, and may
exercise every right and power of the Company under the Indenture with the same
effect as if such surviving or other corporation had been named as the Company
in the Indenture.
17. GOVERNING LAW. This Senior Note shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to the
conflict of laws provisions thereof.
18. AUTHENTICATION. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
A-6
19. 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).
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Senior Note Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior Notes and have directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either as
printed on the Senior Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers printed on the
Senior Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture, which has in it the text of this Senior Note in
larger type. Request may be made to:
Motors and Gears, Inc.
ArborLake Centre, Suite 000
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
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ASSIGNMENT FORM
To assign this Senior Note, fill in the form below:
(I) or (we) assign and transfer this Senior Note to:
_____________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_____________________________________________
_____________________________________________
_____________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________________ as agent to
transfer this Senior Note on the books of the Company. The agent may substitute
another to act for him.
Date: Your Signature:___________________________________
(Sign exactly as your name appears
on the other side of this Senior
Note)
Signature Guarantee:
_________________________________
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Senior Note purchased by the Company pursuant to
Section 4.13 of the Indenture, check the box: [_]
If you elect to have this Senior Note purchased by the Company pursuant to
Section 4.14 of the Indenture, check the box: [_]
If you elect to have only part of this Senior Note purchased by the Company
pursuant to Section 4.13 or 4.14 of the Indenture, state the amount (multiples
of $1,000 only):
$__________________________
Date: Your Signature:____________________________
(Sign exactly as your name appears on
the other side of this Senior Note)
Signature Guarantee:
________________________________
A-9
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES/2/
-
The following exchanges of a part of this Global Note for Definitive Notes
have been made:
Principal Amount Signature of
Amount of Amount of of this Global Note authorized officer
decrease in increase in following such of Trustee or
Date of Principal Amount Principal Amount decrease Senior
Exchange of this Global Note of this Global Note (or increase) Note Custodian
-------- ------------------- ------------------- ------------- --------------
__________________________
/2/ This should be included only if the Senior Note is issued in global form.
-
A-10
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
_________________, _______
Re: 10 3/4% Series [C/D] Senior Notes due 2006 of Motors and Gears, Inc.
This Certificate relates to $_____ principal amount of Senior Notes held in
* ________ book-entry or *_______ definitive form by ________________ (the
"Transferor").
The Transferor*:
[_] has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Note held by the Depository a Senior Note or
Senior Notes in definitive, registered form equal to its beneficial interest in
such Global Note (or the portion thereof indicated above); or
[_] has requested the Trustee by written order to exchange or register the
transfer of a Senior Note or Senior Notes.
In connection with such request and in respect of each such Senior Note,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Senior Notes and that the transfer of
this Senior Note does not require registration under the Securities Act (as
defined below) because:*
[_] Such Senior Note is being acquired for the Transferor's own account without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section 2.06(d)(i)(A) of
the Indenture).
[_] Such Senior Note is being transferred (i) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")), in reliance on Rule 144A or (ii) pursuant to an
exemption from registration in accordance with Rule 904 under the Securities Act
(and in the case of clause (ii), based on an opinion of counsel if the Company
so requests and together with a certification in substantially the form of
Exhibit D to the Indenture).
[_] Such Senior Note is being transferred (i) in accordance with Rule 144 under
the Securities Act (and based on an opinion of counsel if the Company so
requests) or (ii) pursuant to an effective registration statement under the
Securities Act.
[_] Such Senior Note is being transferred to an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act pursuant to a private placement exemption from the registration
requirements of the Securities Act (and based on an opinion of counsel if the
Company so requests together with a certification in substantially the form of
Exhibit C to the Indenture).
________________
*Check applicable box.
B-1
[_] Such Senior Note is being transferred in reliance on and in compliance with
another exemption from the registration requirements of the Securities Act (and
based on an opinion of counsel if the Company so requests).
___________________________
[INSERT NAME OF TRANSFEROR]
By:________________________
Name:
Title:
Address:
_______________
*Check applicable box.
B-2
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
_______________, _____
___________________, as Registrar
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of certain 10 3/4% Series
[C/D] Senior Notes due 2006 (the "Senior Notes") of Motors and Gears, Inc., a
Delaware corporation (the "Company"), we represent that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an
"Institutional Accredited Investor"), or an entity in which all
of the equity owners are Institutional Accredited Investors;
(ii) any purchase of Senior Notes will be for our own account or for
the account of one or more other Institutional Accredited
Investors as to which we exercise sole investment discretion;
(iii) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks
of purchasing Senior Notes and we and any accounts for which we
are acting are able to bear the economic risks of our or their
investment;
(iv) we are not acquiring Senior Notes with a view to any
distribution thereof in a transaction that would violate the
Securities Act or the securities laws of any State of the
United States or any other applicable jurisdiction; provided
that the disposition of our property and the property of any
accounts for which we are acting as fiduciary shall remain at
all times within our control; and
(v) we acknowledge that we have had access to such financial and
other information, and have been afforded the opportunity to
ask such questions of representatives of the Company and
receive answers thereto, as we deem necessary in connection
with our decision to purchase Senior Notes.
We understand that the Senior Notes have not been registered under the
Securities Act, and we agree, on our own behalf and on behalf of each account
for which we acquire any Senior Notes, that such Senior Notes may be offered,
resold, pledged or otherwise transferred only (i) to a person whom we reasonably
believe to be a qualified institutional buyer (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act or in accordance with another exemption from the
registration requirements of the
C-1
(Securities Act (and based upon an opinion of counsel if the Company so
requests), (ii) to the Company or (iii) pursuant to an effective registration
statement, and, in each case, in accordance with any applicable securities laws
of any State of the United States or any other applicable jurisdiction. We
understand that the registrar will not be required to accept for registration of
transfer any Senior Notes, except upon presentation of evidence satisfactory to
the Company that the foregoing restrictions on transfer have been complied with.
We further understand that the Senior Notes purchased by us will be in the form
of definitive physical certificates and that such certificates will bear a
legend reflecting the substance of this paragraph. We further agree to provide
to any person acquiring any of the Senior Notes from us a notice advising such
person that resale's of the Senior Notes are restricted as stated herein.
We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
Very truly yours,
____________________________
[Name of Transferor]
By:___________________________
Name:
Title:
Address:
C-2
