EXHIBIT 4.1
Pacific Aerospace & Electronics, Inc.
as Issuer
Aeromet America, Inc.
Balo Precision Parts, Inc.
Cashmere Manufacturing Co., Inc.
Ceramic Devices, Inc.
Electronic Specialty Corporation
Northwest Technical Industries, Inc.
Pacific Coast Technologies, Inc.
PA&E International, Inc.
Seismic Safety Products, Inc.
Skagit Engineering & Manufacturing, Inc
as Guarantors
$15,000,000 aggregate principal amount at Initial Issuance
10% Senior Subordinated Pay-In-Kind Notes
due 2007
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INDENTURE
Dated as of March 19, 2002
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U.S. Bank National Association
Trustee
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE........................................1
SECTION 1.01 DEFINITIONS............................................................1
SECTION 1.02 OTHER DEFINITIONS.....................................................11
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.....................12
SECTION 1.04 RULES OF CONSTRUCTION.................................................12
ARTICLE 2 THE NOTES........................................................................13
SECTION 2.01 FORM AND DATING.......................................................13
SECTION 2.02 EXECUTION AND AUTHENTICATION..........................................13
SECTION 2.03 REGISTRAR AND PAYING AGENT............................................14
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST...................................14
SECTION 2.05 HOLDER LISTS..........................................................14
SECTION 2.06 TRANSFER AND EXCHANGE.................................................15
SECTION 2.07 REPLACEMENT NOTES.....................................................17
SECTION 2.08 OUTSTANDING NOTES.....................................................18
SECTION 2.09 TREASURY NOTES........................................................18
SECTION 2.10 TEMPORARY NOTES.......................................................18
SECTION 2.11 CANCELLATION..........................................................19
SECTION 2.12 DEFAULTED INTEREST....................................................19
ARTICLE 3 REDEMPTION AND PREPAYMENT........................................................19
SECTION 3.01 NOTICES TO TRUSTEE....................................................19
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED.....................................19
SECTION 3.03 NOTICE OF REDEMPTION..................................................20
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION........................................21
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE...........................................21
SECTION 3.06 NOTES REDEEMED IN PART................................................21
SECTION 3.07 OPTIONAL REDEMPTION...................................................21
SECTION 3.08 NO MANDATORY REDEMPTION...............................................21
SECTION 3.09 NO SINKING FUND.......................................................22
ARTICLE 4 COVENANTS........................................................................22
SECTION 4.01 PAYMENT OF NOTES......................................................22
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.......................................22
SECTION 4.03 REPORTS...............................................................23
SECTION 4.04 COMPLIANCE CERTIFICATE................................................23
SECTION 4.05 TAXES.................................................................24
SECTION 4.06 STAY, EXTENSION AND USURY LAWS........................................24
SECTION 4.07 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF
CONTROL...............................................................24
SECTION 4.08 LIMITATION ON RESTRICTED PAYMENTS.....................................25
SECTION 4.09 LIMITATION ON LIENS SECURING INDEBTEDNESS.............................26
SECTION 4.10 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES..........................................................26
SECTION 4.11 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES...........................27
SECTION 4.12 FUTURE SUBSIDIARY GUARANTORS..........................................28
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SECTION 4.13 RELEASE OF GUARANTORS.................................................28
SECTION 4.14 CORPORATE EXISTENCE...................................................28
SECTION 4.15 LIMITATION ON STATUS AS AN INVESTMENT COMPANY.........................28
ARTICLE 5 SUCCESSORS.......................................................................29
SECTION 5.01 MERGER, SALE OR CONSOLIDATION.........................................29
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.....................................29
ARTICLE 6 DEFAULTS AND REMEDIES............................................................29
SECTION 6.01 EVENTS OF DEFAULT.....................................................29
SECTION 6.02 ACCELERATION..........................................................30
SECTION 6.03 OTHER REMEDIES........................................................31
SECTION 6.04 WAIVER OF PAST DEFAULTS...............................................31
SECTION 6.05 CONTROL BY MAJORITY...................................................31
SECTION 6.06 LIMITATION ON SUITS...................................................32
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.........................32
SECTION 6.08 COLLECTION SUIT BY TRUSTEE............................................32
SECTION 6.09 TRUSTEE MAY FILE PROOF OF CLAIM.......................................33
SECTION 6.10 PRIORITIES............................................................33
SECTION 6.11 UNDERTAKING FOR COSTS.................................................34
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES....................................34
ARTICLE 7 TRUSTEE..........................................................................34
SECTION 7.01 DUTIES OF TRUSTEE.....................................................34
SECTION 7.02 RIGHTS OF TRUSTEE.....................................................35
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE..........................................36
SECTION 7.04 TRUSTEE'S DISCLAIMER..................................................36
SECTION 7.05 NOTICE OF DEFAULTS....................................................36
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES............................37
SECTION 7.07 COMPENSATION AND INDEMNITY............................................37
SECTION 7.08 REPLACEMENT OF TRUSTEE................................................38
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC......................................39
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.........................................39
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.....................39
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE.........................................40
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE..............40
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE........................................40
SECTION 8.03 COVENANT DEFEASANCE...................................................40
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE............................41
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS........................................42
SECTION 8.06 REPAYMENT TO COMPANY..................................................43
SECTION 8.07 REINSTATEMENT.........................................................43
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER.................................................44
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES...................................44
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES......................................44
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SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT...................................46
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.....................................46
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES......................................46
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.......................................46
ARTICLE 10 SUBORDINATION...................................................................47
SECTION 10.01 AGREEMENT TO SUBORDINATE.............................................47
SECTION 10.02 LIQUIDATION; DISSOLUTION; BANKRUPTCY.................................47
SECTION 10.03 DEFAULT ON SENIOR INDEBTEDNESS.......................................48
SECTION 10.04 ACCELERATION OF NOTES................................................49
SECTION 10.05 WHEN DISTRIBUTION MUST BE PAID OVER..................................49
SECTION 10.06 NOTICE BY COMPANY....................................................49
SECTION 10.07 SUBROGATION..........................................................49
SECTION 10.08 RELATIVE RIGHTS......................................................50
SECTION 10.09 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.........................50
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.............................50
SECTION 10.11 RIGHTS OF TRUSTEE AND PAYING AGENT...................................51
SECTION 10.12 AUTHORIZATION TO EFFECT SUBORDINATION................................51
SECTION 10.13 AMENDMENTS...........................................................51
ARTICLE 11 SUBSIDIARY GUARANTEES...........................................................51
SECTION 11.01 SUBSIDIARY GUARANTEES................................................51
SECTION 11.02 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES......................53
SECTION 11.03 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS...................53
SECTION 11.04 RELEASES FOLLOWING SALE OF ASSETS....................................54
SECTION 11.05 LIMITATION OF GUARANTOR'S LIABILITY..................................54
SECTION 11.06 APPLICATION OF CERTAIN TERMS AND PROVISIONS TO THE GUARANTOR.........55
SECTION 11.07 SUBORDINATION OF SUBSIDIARY GUARANTEES...............................55
ARTICLE 12 MISCELLANEOUS...................................................................55
SECTION 12.01 TRUST INDENTURE ACT CONTROLS.........................................55
SECTION 12.02 NOTICES..............................................................56
SECTION 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES........57
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT...................57
SECTION 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION........................57
SECTION 12.06 RULES BY TRUSTEE AND AGENTS..........................................57
SECTION 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.........................................................58
SECTION 12.08 GOVERNING LAW........................................................58
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS........................58
SECTION 12.10 SUCCESSORS...........................................................58
SECTION 12.11 SEVERABILITY.........................................................58
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SECTION 12.12 COUNTERPART ORIGINALS................................................58
SECTION 12.13 TABLE OF CONTENTS, HEADINGS, ETC.....................................59
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INDENTURE dated as of March 19, 2002, among Pacific Aerospace &
Electronics, Inc., a Washington corporation (the "Company"), and Aeromet
America, Inc., Balo Precision Parts, Inc., Cashmere Manufacturing Co., Inc.,
Ceramic Devices, Inc., Electronic Specialty Corporation, Northwest Technical
Industries, Inc., Pacific Coast Technologies, Inc., PA&E International, Inc.,
Seismic Safety Products, Inc. and Skagit Engineering & Manufacturing, Inc., each
as guarantors and any other Subsidiaries (as defined herein) of the Company that
executes a Subsidiary Guarantee (as defined herein) guaranteeing the Notes in
accordance with the provisions hereof (collectively, the "Guarantors"), and U.S.
Bank National Association, a national banking association, as trustee (the
"Trustee").
Each party agrees as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the 10% Senior Subordinated
Pay-in-Kind Notes due 2007 (the "Notes"). The term "Notes" as used herein shall
also include each of the additional 10% Senior Subordinated Pay-In-Kind Notes
issued in lieu of the cash payment of interest on the Notes.
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS
"Acquired Indebtedness" means Indebtedness or Disqualified
Capital Stock of any Person existing at the time such person becomes a
Subsidiary of the Company, including by designation, or is merged or
consolidated into or with the Company or one of its Subsidiaries.
"Affiliate" means any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company.
For purposes of this definition, the term "control" means the power to direct
the management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, provided that, with respect to ownership interest in the Company
and its Subsidiaries, a Beneficial Owner of 10% or more of the total voting
power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Average Life" means, as of the date of determination, with
respect to any security or instrument, the quotient obtained by dividing (i) the
sum of the products (a) of the number of years from the date of determination to
the date or dates of each successive scheduled principal (or redemption) payment
of such security or instrument and (b) the amount of each such respective
principal (or redemption) payment by (ii) the sum of all such principal (or
redemption) payments.
"Bank Indebtedness" means Indebtedness of the Company or any of
its Subsidiaries from financial institutions pursuant to a revolving credit or
term loan facility (including, but not limited to, all Indebtedness arising
under the Note Purchase Agreement, the New Senior Secured Notes and the other
Senior Credit Documents), including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith. Without limiting the generality of the foregoing, the term
"Bank Indebtedness" shall also include Indebtedness pursuant to any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any such facility and all refundings, refinancings and
replacements of any such facility, including any agreement (i) extending the
maturity of any Indebtedness incurred thereunder or contemplated thereby, (ii)
adding or deleting borrowers or guarantors thereunder, so long as borrowers and
issuers include one or more of the Company and its Subsidiaries and their
respective successors and assigns, (iii) increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder, or (iv) otherwise
altering the terms and conditions thereof in a manner not prohibited by the
terms of the Indenture.
"Bankruptcy Law" means title 11, U.S. Code or any similar Federal
or state law for the relief of debtors.
"Beneficial Owner" or "beneficial owner" for purposes of the
definitions of Change of Control and Affiliate has the meaning attributed to it
in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue
Date), whether or not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time.
"Board of Directors" means, with respect to any Person, the board
of directors of such person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined on a consolidated basis in
accordance with GAAP.
"Capital Stock" means, shares of capital stock, beneficial,
partnership or limited liability company interests, participations or other
equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity, whether voting or non-voting,
and includes, without limitation, common stock and preferred stock.
"Cash Equivalent" means (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States government or any agency thereof, (b) certificates of
deposit, eurodollar time deposits, overnight bank deposits and bankers'
acceptances of any financial institution having maturities of one year or less
from the date of acquisition, (c) commercial paper of an issuer rated at least
"A-1" by S&P or "P-1" by Moody's, or carrying an equivalent rating by a
nationally recognized rating agency if both of
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S&P and Moody's cease publishing ratings of investments, and (d) mutual funds
investing solely in investments of the type described in the foregoing clauses
(a) through (c).
"Change of Control" means any transaction or series of
transactions in which any of the following occurs: (a) any "person" or "group"
(as such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange
Act, whether or not applicable) (other than any of the Excluded Persons) becomes
following the Issue Date the "beneficial owner," directly or indirectly, of more
than 50% of the issued and outstanding Capital Stock entitled to vote in the
election of directors, managers, or trustees, as applicable, of the Company or
any Guarantor or the surviving entity or entities (if other than the Company or
any Guarantor); or (b) individuals who immediately following the Issue Date
after giving effect to the transactions contemplated by Section 6.6 of the
Exchange Agreement constituted the Board of Directors of the Company or any
Guarantor (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company or
any Guarantor, as applicable, was approved by a vote of at least a majority of
the directors of the Company or any Guarantor then still in office who were
either directors at the Issue Date or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company or any Guarantor then in office.
Notwithstanding the foregoing to the contrary, a "Change of Control" shall
expressly exclude the Exchange Transaction and subsequent conversion of the
Company's Series C Preferred Stock into common stock.
"Consolidated Net Income" means, with respect to any person for
any period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined in accordance with GAAP) for such period, adjusted to
exclude (only to the extent included in computing such net income (or loss) and
without duplication): (a) all gains (but not losses) which are either
extraordinary (as determined in accordance with GAAP) or are either unusual or
nonrecurring (including any gain from the sale or other disposition of assets
outside the ordinary course of business or from the issuance or sale of any
Capital Stock), (b) the net income, if positive, of any person, other than a
Consolidated Subsidiary, in which such person or any of its Consolidated
Subsidiaries has an interest, except to the extent of the amount of any
dividends or distributions actually paid in cash to such person or a
Consolidated Subsidiary of such person during such period, but in any case not
in excess of such person's pro rata share of such person's net income for such
period, (c) the net income or loss of any person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition, and
(d) the net income, if positive, of any of such person's Consolidated
Subsidiaries to the extent that the declaration or payment of dividends or
similar distributions is not at the time permitted by operation of the terms of
its charter or bylaws or any other agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such Consolidated
Subsidiary.
"Consolidated Subsidiary" means, for any person, each Subsidiary
of such person (whether now existing or hereafter created or acquired) the
financial statements of which are consolidated for financial statement reporting
purposes with the financial statements of such person in accordance with GAAP.
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"Corporate Trust Administration Office of the Trustee" shall be
at the address of the Trustee specified in Section 12.02 hereof or such other
address as to which the Trustee may give notice to the Company.
"Credit Parties" means, collectively, the Company and the
Guarantors, and "Credit Party" means any one of them, as the context may
require.
"Default" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Notes, until a successor shall have been
appointed and become such Depositary pursuant to the applicable provision of
this Indenture, and, thereafter, "Depositary" shall mean or include such
successor.
"Disqualified Capital Stock" means (a) except as set forth in
(b), with respect to any Person, Capital Stock of such Person that, by its terms
or by the terms of any security into which it is convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time or
both would be, required to be redeemed or repurchased (including at the option
of the holder thereof) by such Person or any of its Subsidiaries, in whole or in
part, on or prior to the Stated Maturity of the Notes and (b) with respect to
any Subsidiary of such Person (including with respect to any Subsidiary of the
Company), any Capital Stock other than any common equity with no preference,
privileges, or redemption or repayment provisions.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agreement" means the Exchange Agreement, dated as of
March 19, 2002, among the Company, certain of its Subsidiaries and the holders
of the Old Notes.
"Exchange Transaction" means the transaction whereby the holders
of the Company's Old Notes will exchange their Old Notes for shares of the
Company's common stock, preferred stock and Notes pursuant to the Exchange
Agreement.
"Excluded Person" means any officer or director of the Company,
the other Persons listed on Exhibit C hereto, any Persons related to such
Persons by kinship or marriage, and any trust, corporation, partnership or other
entity which is beneficially owned 80% or more by any such Persons.
"Exempted Affiliate Transactions" means (a) customary employee
compensation arrangements approved by a majority of independent (as to such
transactions) members of the Board of Directors of the Company, (b) dividends
permitted under the terms of the covenant discussed in Section 4.08, "Limitation
on Restricted Payments," and payable, in form and amount, on a pro rata basis to
all holders of common stock of the Company and (c) transactions solely between
the Company and any of its wholly owned Consolidated Subsidiaries or solely
among wholly owned Consolidated Subsidiaries of the Company.
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"Foreign Subsidiary" means any Wholly-owned Subsidiary organized
and incorporated in a jurisdiction outside of the United States and is not a
Guarantor.
"GAAP" means United States generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board.
"Global Note" means a Note that contains the paragraph referred
to in footnote 1 to the form of the Note attached hereto as Exhibit A.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation (whether arising by virtue
of partnership agreements, agreements to keep well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has corresponding meaning.
"Guarantor" means each Subsidiary of the Company that executes a
Subsidiary Guarantee guaranteeing the Notes in accordance with the provisions of
the Indenture.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books or, at such time as the Notes are held in global form, the
beneficial owner of the Note.
"Indebtedness" of any Person at any date means, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, (d) all Capitalized Lease Obligations of
such Person, (e) all contingent or non-contingent obligations of such Person to
reimburse any Person in respect of amounts paid or payable (currently or in the
future, on a contingent or non-contingent basis) under a letter of credit or
similar instrument, (f) all Indebtedness of others secured by a Lien on any
asset of such Person, and (g) all Indebtedness of others Guaranteed by such
Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Investment" means any investment in any Person, whether by means
of share purchase, capital contribution, loan, advance, time deposit or
otherwise.
"Issue Date" means the date of first issuance of the Notes under
this Indenture.
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"Junior Securities" of the Company or any Guarantor means
securities of the Company or such Guarantor that are junior in right of payment
to the Notes or the applicable Guarantee.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Cash Proceeds" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale of Qualified Capital
Stock plus, upon any exercise, exchange or conversion of securities (including
options, warrants, rights and convertible or exchangeable debt) of the Company
that were issued for cash on or after the Issue Date, the amount of cash
originally received by the Company upon the issuance of such securities
(including options, warrants, rights and convertible or exchangeable debt) less,
in each case, the sum of all payments, fees, commissions and expenses
(including, without limitation, the fees and expenses of legal counsel and
investment banking fees and expenses) incurred in connection with such sale of
Qualified Capital Stock.
"New Senior Secured Notes" means the Senior Secured Notes due
2007 issued pursuant to that certain Note Purchase Agreement.
"Note Custodian" means the Trustee, as custodian with respect to
the Global Notes, or any successor entity thereto.
"Note Purchase Agreement" means that certain Note Purchase
Agreement dated as of March 19, 2002 between the Company and Jefferies & Co., as
Initial Purchaser of the New Senior Secured Notes.
"Noteholder Affiliate" means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with a
Noteholder. For purposes of this definition, the term "control" means the power
to direct the management and policies of a person, directly or through one or
more intermediaries, whether through the ownership of voting securities, by
contract or otherwise.
"Noteholders" means, collectively, GSCP Recovery, Inc., Xxxxxxx
X. Xxxxx & Sons Special Situation Partners II, L.P., M.W. Post Advisory Group
L.L.C., Alliance Capital Management L.P. and any of their respective Noteholder
Affiliates.
"Notes" has the meaning ascribed to such term in the preamble
hereto. The term Notes shall also include each of the additional 10% Senior
Subordinated Pay-In-Kind Notes issued in lieu of cash payment of interest on the
Notes.
"Obligations" mean all Indebtedness, Guarantees (including the
guarantees made by the Guarantors pursuant to Article 11 hereof) and obligations
owed by the Company and each of the other Credit Parties pursuant to or in
connection with this Agreement and the other Subordinated Debt Documents,
including without limitation, all principal, interest,
6
reimbursement obligations and fees and expenses payable to any Holder in
connection with the Subordinated Debt Documents and indemnification payments,
whether direct or indirect, absolute or contingent, liquidated or unliquidated,
now existing or hereafter arising hereunder or thereunder, and all obligations
and liabilities incurred in connection with collecting and enforcing the
foregoing, together with all renewals, extensions, modifications or refinancings
thereof.
"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 General
Counsel, the Controller, the Secretary or any Vice-President of such Person.
"Officers' 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 12.05 hereof.
"Old Notes" shall mean the Company's 11 1/4% senior subordinated
notes due 2005.
"Opinion of Counsel" means a written opinion from legal counsel
that meets the requirements of Section 12.05 hereof. The counsel may counsel to
the Company, any Subsidiary of the Company or the Trustee.
"Permitted Investment" means (a) Investments in any of the Notes;
(b) Investments in Cash Equivalents; (c) Indebtedness incurred by the Company to
any Guarantor and Indebtedness incurred by any Guarantor to the Company;
provided, that, in the case of Indebtedness of the Company, such obligations
shall be unsecured and subordinated in all respects to the Company's obligations
pursuant to the Notes; and (d) any Investment by the Company or any Subsidiary
in a Person if as a result of such Investment such Person immediately becomes a
Wholly-owned Subsidiary which is a Guarantor or such Person is immediately
merged with or into the Company or a Wholly-owned Guarantor.
"Permitted Lien" means (a) Liens existing on the Issue Date; (b)
Liens imposed by governmental authorities for taxes, assessments or other
charges not yet subject to penalty or which are being contested in good faith
and by appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP; (c) statutory
liens of carriers, warehousemen, mechanics, material men, landlords, repairmen
or other like Liens arising by operation of law in the ordinary course of
business, provided that (i) the underlying obligations are not overdue for a
period of more than 60 days, or (ii) such Liens are being contested in good
faith and by appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of the Company in accordance with GAAP; (d) Liens
securing the performance of bids, trade contracts (other than borrowed money),
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business
and consistent with the Company's past practice; (e) easements, rights-of-way,
zoning, similar restrictions and other similar encumbrances or title defects
which, singly or in the aggregate, do not in any case materially
7
detract from the value of the property, subject thereto (as such property is
used by the Company or any of its Subsidiaries) or interfere with the ordinary
conduct of the business of the Company or any of its Subsidiaries; (f) Liens
arising by operation of law in connection with judgments, only to the extent,
for an amount and for a period not resulting in an Event of Default with respect
thereto; (g) pledges or deposits made in the ordinary course of business and
consistent with the Company's past practice in connection with workers'
compensation, unemployment insurance and other types of social security
legislation; (h) Liens securing the Notes; (i) Liens securing Indebtedness of a
Person existing at the time such Person becomes a Subsidiary or is merged with
or into the Company or a Subsidiary, provided that such Liens were in existence
prior to the date of such acquisition, merger or consolidation, were not
incurred in anticipation thereof, and do not extend to any other assets; (j)
leases or subleases granted to other persons in the ordinary course of business
not materially interfering with the conduct of the business of the Company or
any of its Subsidiaries or materially detracting from the value of the relative
assets of the Company or any Subsidiary; (k) Liens securing Indebtedness
incurred to refinance any Indebtedness that was previously so secured in a
manner no more adverse to the Holders of the Notes than the terms of the Liens
securing such refinanced Indebtedness, and provided that the Indebtedness
secured is not increased and the lien is not extended to any additional assets
or property that would not have been security for the Indebtedness refinanced;
(l) Liens securing Bank Indebtedness incurred in accordance with the terms
hereof; (m) purchase money Liens or purchase money security interests upon or in
any property acquired or held by the Company or any such Subsidiary of the
Company in the ordinary course of business to secure the purchase price of such
property or to secure Indebtedness incurred solely for the purpose of financing
the acquisition of such property, and Liens existing on such property at the
time of its acquisition (other than any such Lien created in contemplation of
such acquisition); provided, however, that the aggregate principal amount of the
Indebtedness secured by the Liens referred to in this clause (m) and in clause
(n) below shall not exceed $5,000,000 in the aggregate at any time outstanding;
(n) Liens to secure Capitalized Lease Obligations; provided, however, that: (i)
any such Lien is created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the cost (including,
without limitation, the cost of construction) of the property subject thereto,
(ii) the principal amount of the Indebtedness secured by such Lien does not
exceed 100% of such cost, and (iii) such Lien does not extend to or cover any
other property other than such item of property and any improvements on such
item and (iv) the aggregate principal amount of Indebtedness secured by the
Liens referred to in this clause (n) and in clause (m) above shall not exceed
$5,000,000 in the aggregate at any time outstanding; and (o) Liens affecting
assets existing at the time such assets are acquired provided that such Liens
are not created in contemplation of such acquisition.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, limited liability company, unincorporated organization
or government or any agency or political subdivision thereof.
"Qualified Capital Stock" means any Capital Stock of the Company
that is not Disqualified Capital Stock.
"Qualified Exchange" means any legal defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock or of Indebtedness
of the Company issued on or after the Issue Date with the Net Cash Proceeds
received by the Company from the substantially
8
concurrent sale of Qualified Capital Stock or any exchange of Qualified Capital
Stock for any Capital Stock or for Indebtedness of the Company issued on or
after the Issue Date.
"Related Business" means the business conducted (or proposed to
be conducted) by the Company and its Subsidiaries as of the Issue Date and any
and all businesses that in the good faith judgment of the Board of Directors of
the Company are materially related businesses.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Indebtedness. GSCP Recovery, Inc. (or its
Noteholder Affiliate) shall be the Representative for the New Senior Secured
Notes until a successor replaces it in accordance with the Note Purchase
Agreement and thereafter means the successor serving in such capacity
thereunder.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investments" means, in one or a series of related
transactions, any Investment, other than: (a) Investments by the Company or any
Guarantor in any Guarantor, (b) Permitted Investments, (c) Investments
consisting of purchase money notes received in connection with the sale or
disposition of any asset, provided that such sale or disposition was made in
accordance with the terms of this Agreement and (d) Investments in Foreign
Subsidiaries which Investments are existing on the date of the Closing and
disclosed on Schedule 1.
"Restricted Payment" means, with respect to the Company or any
Subsidiary, (a) the declaration or payment of any dividend or other distribution
in respect of Capital Stock or Stock Equivalents or to the holders of their
Capital Stock or Stock Equivalents other than (A) dividends or distributions
payable in their Capital Stock or dividends or distributions (or series of
dividends of distributions) made by the Company or any Guarantor to the Company
or any Guarantor or (B) dividends or distributions payable on the Series C
Preferred Stock issued by the Company in connection with the Exchange, (b) the
redemption, repurchase or other acquisition or retirement for value by the
Company or any Subsidiary, of any such Capital Stock or Stock Equivalents
(except shares acquired upon the conversion thereof into other shares of Capital
Stock or rights to acquire such Capital Stock, odd lot shares, and except for
the repurchase or acquisition of such Capital Stock held by directors, officers
or employees of the Company or any Guarantor upon death, disability, retirement
or termination of employment not to exceed $100,000 in the aggregate in any
fiscal year) or rights to acquire such Capital Stock or Stock Equivalents, or
(c) the direct or indirect redemption, repurchase, defeasance or other
acquisition or retirement for value, prior to any scheduled or mandatory
maturity, scheduled or mandatory repayment or scheduled sinking fund payment
(after giving effect to the exercise of any and all unconditional (other than as
to the giving of notice) options to extend the maturity), of the Indebtedness of
the Company or any Guarantor (other than each of the (i) Notes issued pursuant
to this Agreement, (ii) Senior Indebtedness and (iii) New Senior Secured Notes).
9
"S&P" means Standard and Poor's Rating Services, a division of
XxXxxx-Xxxx, Inc.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Documents" shall mean, collectively, (i) the Note
Purchase Agreement, (ii) any other credit agreement, loan agreement or other
debt instrument that governs any indebtedness that extends, refinances, renews,
replaces or refunds, in whole or in part, any indebtedness outstanding under the
Note Purchase Agreement, or that is incurred pursuant to a credit commitment
under a credit facility that extends, increases, refinances, renews, replaces or
refunds, in whole or in part, any indebtedness outstanding under the Note
Purchase Agreement, and (iii) all notes (including the New Senior Secured
Notes), guarantees (including the Subsidiary Guarantees (as defined in the Note
Purchase Agreement)), security agreements, mortgages, pledge agreements, hedging
agreements and other documents and instruments related to or delivered pursuant
to the foregoing agreements referred to in clauses (i) and (ii), as any of the
foregoing documents may be amended, restated, extended, renewed, supplemented or
otherwise modified from time to time.
"Senior Indebtedness" of the Company or any Guarantor means
Indebtedness of the Company or such Guarantor arising under Bank Indebtedness
(including any monetary obligation in respect of Bank Indebtedness, and
interest, whether or not allowable, accruing on Indebtedness after the filing of
a petition initiating any proceeding under any bankruptcy, insolvency or similar
law) or that, by the terms of the instrument creating or evidencing such
Indebtedness, is expressly designated Senior Indebtedness and made senior in
right of payment to the Notes or the applicable Guarantee, provided, that in no
event shall Senior Indebtedness include (a) Indebtedness to any Subsidiary of
the Company or any officer, director or employee of the Company or any
Subsidiary of the Company, (b) Indebtedness incurred in violation of the terms
of the Indenture, (c) Indebtedness to trade creditors, (d) Disqualified Capital
Stock, (e) Capitalized Lease Obligations, and (f) any liability for taxes owed
or owing by the Company or such Guarantor.
"Series C Preferred Stock" shall mean the Company's Series C
Convertible Preferred Stock, par value $0.001 per share.
"Significant Subsidiary" shall have the meaning provided under
Regulation S-X of the Securities Act, as in effect on the Issue Date.
"Stated Maturity," when used with respect to any Note, means
November 1, 2007.
"Stock Equivalent" means all securities convertible into or
exchangeable for Capital Stock and all warrants, options or other rights to
purchase or subscribe for any Capital Stock, whether or not presently
convertible, exchangeable or exercisable.
"Subordinated Debt Documents" means this Agreement, the Notes and
all other related agreements and documents issued or delivered by any Credit
Party hereunder or thereunder or pursuant hereto or thereto.
10
"Subordinated Indebtedness" means Indebtedness of the Company or
a Guarantor that is subordinated in right of payment by its terms or the terms
of any document or instrument relating thereto to the Notes or such Guarantee,
as applicable, in any respect or has a stated maturity after the Stated
Maturity.
"Subsidiary," with respect to any person, means (i) a corporation
a majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such person, by such person and one or more Subsidiaries of such person or by
one or more Subsidiaries of such person, (ii) any other person (other than a
corporation) in which such person, one or more Subsidiaries of such person, or
such person and one or more Subsidiaries of such person, directly, or
indirectly, at the date of determination thereof has at least majority ownership
interest, or (iii) a partnership in which such person or a Subsidiary of such
person is, at the time, a general partner. Unless the context requires
otherwise, Subsidiary means each direct and indirect Subsidiary of the Company.
"Subsidiary Guarantees" means the Subsidiary Guarantees of the
Guarantors in the form set forth as Exhibit B hereto.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"U.S. Government Obligations" means securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof).
"Wholly-owned Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock of which (other than directors'
qualifying shares) shall at the time be owned by such Person or by one or more
Wholly-owned Subsidiaries of such Person.
SECTION 1.02 OTHER DEFINITIONS
Term Defined in Section
---- ------------------
"Acceleration Notice" 6.02
"Affiliate Transaction" 4.11
"Benefitted Party" 11.01
"Certificated Note" 2.06
"Change of Control Offer" 4.07
"Change of Control Purchase Price" 4.07
"Change of Control Purchase Date" 4.07
"Covenant Defeasance" 8.03
"Event of Default" 6.01
"Legal Defeasance" 8.02
"Paying Agent" 2.03
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"Payment Blockage Period" 10.03
"Payment Default" 10.03
"Payment Notice" 10.03
"Registrar" 2.03
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.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, the Guarantors and any
successor obligor upon the Notes.
All other terms used 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.
SECTION 1.04 RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
12
ARTICLE 2
THE NOTES
SECTION 2.01 FORM AND DATING
The Notes and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. The
Company shall furnish any such legend not contained in Exhibit A to the Trustee
in writing. Each Note shall be dated the date of its authentication. The Notes
and any additional Notes issued in lieu of the cash payment of interest on the
Notes, in an aggregate principal amount equal to the amount of interest that
would be payable with respect to such Notes if such interest were paid in cash,
shall be issued in denominations (rounded, if necessary to the nearest dollar)
of $1 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and 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. In the event of a conflict,
the terms of the Indenture shall control.
Global Notes shall be substantially in the form of Exhibit A
attached hereto (including the text referred to in footnote 1 thereto). Notes
issued in certificated form shall be substantially in the form of Exhibit A
attached hereto (but without including the text referred to in footnote 1
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding 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 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 hereof.
SECTION 2.02 EXECUTION AND AUTHENTICATION
Two Officers shall sign the Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon receipt of a written order of the Company
signed by two Officers, authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed $15,000,000,
except as provided in Section 2.07 hereof. Notwithstanding the foregoing, the
aggregate principal amount of Notes permitted to be outstanding at any time may
exceed $15,000,000 by an amount sufficient to permit payments of interest in
kind as provided for in the Notes.
13
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as 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 where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the 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 notice to any Holder. The Company shall notify
the Trustee 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 or any of
its Subsidiaries may act as Paying Agent or Registrar. The Company initially
appoints The Depositary Trust Company ("DTC") to act as depositary with respect
to the Global Notes (the "Depositary"). The Company initially appoints the
Trustee to act as the Registrar and Paying Agent and to act as Note Custodian
with respect to the Global Notes.
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
benefit of Holders or the Trustee all money held by the Paying Agent solely for
the payment of principal, premium, if any, or interest on the Notes, and will
notify the Trustee in writing of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and account
for any funds disbursed, and the Trustee may at any time during the continuance
of any default in the payment of principal of, premium, if any, or accrued
interest on the Notes pursuant to Sections 6.01(i) and 6.01(ii) hereof, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for all funds disbursed. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or any
Affiliate or any Subsidiary acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Company shall so notify the Trustee in writing, and thereafter the
Trustee shall serve as Paying Agent for the Notes.
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 ss. 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
14
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06 TRANSFER AND EXCHANGE
(a)Transfer and Exchange of Certificated Notes. When certificated
notes ("Certificated Notes") are presented by a Holder to the Registrar with a
request: (x) to register the transfer of the Certificated Notes; or (y) to
exchange such Certificated Notes for an equal principal amount of Certificated
Notes of other authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its reasonable requirements for
such transactions are met; provided, however, that the Certificated Notes
presented or surrendered for register of transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form reasonably
satisfactory to the Registrar duly executed by such Holder or by his attorney,
duly authorized in writing.
(b)Transfer of a Certificated Note for a Beneficial Interest in a
Global Note. A Certificated Note may not be exchanged for a beneficial interest
in a Global Note except upon satisfaction of the requirements set forth below
and only if the Company, at the time of such transfer, has appointed a
Depositary that is registered as a clearing agency under the Exchange Act. Upon
receipt by the Trustee of a Certificated Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form reasonably satisfactory to the
Trustee, together with 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
Notes represented by the Global Note, in which case the Trustee shall cancel
such Certificated Note in accordance with Section 2.11 hereof and cause, or
direct the Note Custodian to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Note Custodian, the
aggregate principal amount of 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 hereof, 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 Depositary, in accordance with this Indenture and the procedures of
the Depositary 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
Certificated Note.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a Certificated Note.
Upon receipt by the Trustee of written instructions or such other form
of instructions as is customary for the Depositary, from the Depositary
or its nominee on behalf of any Person having a beneficial interest in a
Global Note, the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depositary and the Note Custodian, cause
the aggregate principal amount of Global Notes to be
15
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 Certificated Note in the appropriate principal amount.
(ii) Certificated 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
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Certificated Notes to the Persons in whose names such 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 Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(f) Authentication of Certificated Notes in Absence of
Depositary. If at any time: (i) the Depositary for the Notes notifies the
Company that the Depositary is unwilling or unable to continue as Depositary for
the Global Notes and a successor Depositary for the Global Notes is not
appointed by the Company within 90 days after delivery of such notice; or (ii)
the Company, at its option, notifies the Trustee in writing that it elects to
cause the issuance of Certificated Notes under this Indenture; or (iii) there
shall have occurred and be continuing a Default or an Event of Default with
respect to the Notes, then the Company shall execute, and the Trustee shall,
upon receipt of an authentication order in accordance with Section 2.02 hereof,
authenticate and deliver Certificated Notes in accordance with Section
2.06(d)(ii) above in an aggregate principal amount equal to the principal amount
of the Global Notes in exchange for such Global Notes.
(g) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in Global Notes have been exchanged for Certificated
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Certificated Notes, redeemed, repurchased or cancelled,
the principal amount of 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 Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Certificated
Notes and Global Notes at the Registrar's request.
16
(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.
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Certificated Notes and Global Notes issued upon any
registration of transfer or exchange of Certificated Notes or Global
Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Certificated Notes or Global Notes surrendered upon such registration of
transfer or exchange.
(v) The Company and the Registrar shall not be required: (A) to
issue, to register the transfer of or to exchange Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection; or (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part; or (C) to register the transfer of or to exchange a 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 Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of and
interest on such Notes, and neither the Trustee, any Agent nor the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Certificated Notes and
Global Notes in accordance with the provisions of Section 2.02 hereof.
SECTION 2.07 REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee, or the
Company or the Trustee receives evidence to its reasonable satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the written order of the Company signed by two Officers of the Company,
shall authenticate a replacement Note if the Trustee's reasonable requirements
are met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the reasonable judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced.
Every replacement Note is an additional Obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
17
SECTION 2.08 OUTSTANDING NOTES
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those 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. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof reasonably satisfactory to
it that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09 TREASURY NOTES
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, amendment, supplement, waiver
or consent, or the taking of any other action, Notes owned by the Company, or by
any Subsidiary or Affiliate (other than a Noteholder or a Noteholder 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, amendment, supplement, waiver or consent, only Notes that a
Responsible Officer of the Trustee actually knows are owned by the Company, any
Subsidiary or an Affiliate (other than a Noteholder or a Noteholder Affiliate)
shall be so disregarded. The Company shall notify the Trustee promptly in
writing, when it, any Subsidiary or any Affiliate (other than a Noteholder or a
Noteholder Affiliate) repurchases or otherwise acquires Notes of the aggregate
principal amount of such Notes so repurchased or otherwise acquired.
SECTION 2.10 TEMPORARY NOTES
Until Certificated Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of Certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Certificated Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
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SECTION 2.11 CANCELLATION
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall deliver to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation in accordance with its
customary procedures (subject to the record retention requirement of the
Exchange Act). Certification of the cancellation of all cancelled Notes shall be
delivered to the Company. The Company may not issue new Notes to replace Notes
that it has paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall, in lieu of paying
defaulted interest on the Notes in cash, execute and deliver to each Noteholder
one or more promissory notes in the form of the promissory note attached hereto
as Exhibit A in a principal amount equal to the sum of defaulted interest due to
such Noteholder under this Section 2.12. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01 NOTICES TO TRUSTEE
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days (unless a shorter period is consented to in writing by the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the redemption date, (ii) the principal amount of
Notes to be redeemed and (iii) the redemption price.
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national security exchange, if
any, on which the Notes are listed or, if the Notes are not so listed, on a pro
rata basis, by lot or in accordance with any other method the Trustee considers
fair and appropriate. In the event of partial redemption by lot, the particular
Notes to be redeemed shall be selected, unless otherwise provided herein, not
less than 20 nor more than 60
19
days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected (other than
Notes issued pursuant to Section 4.01 hereunder) for partial redemption, the
principal amount thereof to be redeemed. Notes and portions of Notes selected
shall be in amounts of $1,000 or integral multiples of $1,000; except that if
all of the Notes of a Holder are to be redeemed, the entire outstanding amount
of Notes held by such Holder, even if not an integral multiple of $1,000, shall
be redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.
SECTION 3.03 NOTICE OF REDEMPTION
Subject to the provisions of Section 3.07 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address as shown upon
the registry books of the Registrar.
The notice shall identify the Notes to be redeemed by CUSIP
number or PPN number and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed, the portion of the principal
amount equal to the unredeemed portion thereof, and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion shall be issued upon cancellation of the original
Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the redemption date;
(g) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
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SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE
On or prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent immediately available funds sufficient
to pay the redemption price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of and accrued
interest on all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption unless the Company
defaults in such payments due on the redemption date. If a 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 shall be paid to the Person in whose
name such Note was registered at the close of business on such record date. If
any Note called for redemption shall not be so paid upon surrender for
redemption due to the Company's failure to fund the Redemption Price, interest
shall be paid on the unpaid principal from the redemption date until such
principal is paid and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.01 hereof.
SECTION 3.06 NOTES REDEEMED IN PART
Upon surrender of a Note that is redeemed in part, the Company
shall issue and the Trustee shall upon a written order of the Company signed by
two Officers authenticate for the Holder at the expense of the Company a new
Note equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.07 OPTIONAL REDEMPTION
(a)The Company shall have the right to redeem the Notes, in whole
or in part, at any time after the date of this Indenture upon not less than 15
days nor more than 60 days notice to each holder of Notes at a redemption price
equal to 100% of the principal amount of such notes being redeemed, together
with accrued and unpaid interest thereon, to the date of redemption.
(b)Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08 NO MANDATORY REDEMPTION
The Company shall not be required to make mandatory redemption
payments with respect to the Notes.
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SECTION 3.09 NO SINKING FUND
The Notes shall not have the benefit of a sinking fund.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF NOTES
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in this Indenture and the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Trustee or Paying
Agent, if other than the Company or any Affiliate or Subsidiary thereof, holds
as of 12:00 p.m. (noon) New York time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, at the rate equal to 1% per annum in excess of the then applicable interest
rate on the Notes to the extent lawful. The Company shall, in lieu of paying
such interest on the Notes in cash, execute and deliver to each Noteholder one
or more promissory notes in the form of the promissory note attached hereto as
Exhibit A in a principal amount equal to the sum of interest due to such
Noteholder under this Section 4.01.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain in the Borough of Manhattan, the City
of New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Administration Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in 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 Administration
Office of the Trustee as one such office or agency of the Company in accordance
with Section 2.03 hereof.
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SECTION 4.03 REPORTS
(a) Whether or not the Company is subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company shall
deliver to the Trustee and to each Holder of the Notes within 15 days after it
is or would have been (if it were subject to such reporting obligations)
required to file such with the SEC, all annual and quarterly financial
statements substantially equivalent to financial statements that would have been
included in reports filed with the SEC on Forms 10-K and 10-Q, if the Company
were subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required in
such reports to the SEC and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports; and, in each case, together with a management's discussion and analysis
of financial condition and results of operations which would be so required and,
unless the SEC will not accept such reports, file with the SEC the annual,
quarterly and other reports which it is or would have been required to file with
the SEC.
(b) Notwithstanding Section 4.03(a) hereof, if the Company timely
files all required reports under Section 13 and 15(d) of the Exchange Act via
XXXXX, the Company shall be deemed to have satisfied in full its obligations
contained in Section 4.03(a) above; provided, however, that this Section 4.03(b)
shall not apply to any current reports required to be filed with the SEC on Form
8-K, which reports shall remain subject to the delivery requirements of Section
4.03(a).
SECTION 4.04 COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, 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 of this
Indenture (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 is taking 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 or premium,
if any, or interest on the Notes is 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.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.03(a) hereof shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) 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
23
provisions of Article 4 or Article 5 hereof 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.
(c) The Company shall, so long as any of the 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 4.05 TAXES
The Company and Guarantors shall pay, and shall cause each of
their Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is
not adverse in any material respect to the Holders of the Notes.
SECTION 4.06 STAY, EXTENSION AND USURY LAWS
The Company covenants (to the extent that it may lawfully do so)
that it shall 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 may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the Trustee
or to any Holder, but shall suffer and permit the execution of every such power
as though no such law has been enacted.
SECTION 4.07 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER
UPON A CHANGE OF CONTROL
After the Company has indefeasibly repaid in full or otherwise
fully discharged all of the Obligations in respect of Senior Indebtedness, then
upon the occurrence of a Change of Control, each Holder of Notes shall have the
right, at such Holder's option, pursuant to an offer (subject only to conditions
required by applicable law, if any) by the Company (the "Change of Control
Offer"), to require the Company to repurchase all or any part of such Holder's
Notes (provided, that the principal amount of such Notes must be $1,000 or an
integral multiple thereof) on a date (the "Change of Control Purchase Date")
that is no later than 35 Business Days after the occurrence of such Change of
Control at a cash price equal to 101% of the principal amount thereof (the
"Change of Control Purchase Price"), together with accrued and unpaid interest
to the Change of Control Purchase Date. The Change of Control Offer shall be
made within 10 Business Days following a Change of Control and shall remain open
for 20 Business Days following its commencement (the "Change of Control Offer
Period"). Upon expiration of the Change of Control Offer Period, the Company
promptly shall purchase all Notes properly tendered in response to the Change of
Control Offer. The Company shall comply with the applicable requirements of
Regulation 14E under the Exchange Act and the rules and regulations thereunder
and all other federal and state securities laws. To the extent that the
24
provisions of any securities laws or regulations conflict with the provisions of
this Section 4.07, compliance by the Company or any of the Guarantors with such
laws and regulations shall not in and of itself cause a breach of its
obligations under this Section 4.07.
On or before the Change of Control Purchase Date, the Company
shall (i) accept for payment Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent cash
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest) of all Notes so tendered and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate listing the Notes or
portions thereof being purchased by the Company. The Paying Agent promptly will
pay the Holders of Notes so accepted an amount equal to the Change of Control
Purchase Price (together with accrued and unpaid interest), and the Trustee
promptly will authenticate and deliver to such Holders, a new Note equal in
principal amount to any unpurchased portion of the Note surrendered. Any Notes
not so accepted will be delivered promptly by the Company to the Holder thereof.
The Company publicly will announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Purchase Date.
If the Change of Control Purchase Date hereunder is on or after
an interest payment record date and on or before the associated interest payment
date, any accrued and unpaid interest due on such interest payment date will be
paid to the person in whose name a Note is registered at the close of business
on such Record Date, and such interest will not be payable to Holders who tender
the Notes pursuant to the Change of Control Offer.
SECTION 4.08 LIMITATION ON RESTRICTED PAYMENTS
The Company and the Guarantors shall not, and shall not permit
any of their Subsidiaries to, directly or indirectly make any Restricted Payment
if, after giving effect to such Restricted Payment on a pro forma basis:
(a) a Default or an Event of Default shall have occurred and be
continuing; or
(b) the aggregate amount of all Restricted Payments made by the
Company and its Subsidiaries, including after giving effect to such proposed
Restricted Payment, from and after the Issue Date, would exceed, without
duplication, the sum of (a) 50% of the aggregate Consolidated Net Income of the
Company for the period (taken as one accounting period), commencing on the first
day of the first full fiscal quarter commencing after the Issue Date, to and
including the last day of the fiscal quarter ended immediately prior to the date
of each such calculation (or, in the event Consolidated Net Income for such
period is a deficit, then minus 100% of such deficit), plus (b) the aggregate
Net Cash Proceeds received by the Company from the sale of its Qualified Capital
Stock (other than (i) to a Subsidiary of the Company, (ii) to the extent applied
in connection with a Qualified Exchange and (iii) to the extent credited in (x)
in the following paragraph), after the Issue Date, plus (c) other than amounts
credited pursuant to clause (x) of the next following paragraph, the net amount
of any Restricted Investments (not to exceed the original amount of such
Investment) made after the Issue Date that is returned to the Company or the
Subsidiary that made such prior Investment, without restriction in cash on or
prior to the date of any such calculation.
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The foregoing clauses (a) and (b) of the immediately preceding
paragraphs, however, will not prohibit (x) Restricted Investments in a Related
Business, (y) a Qualified Exchange or (z) the payment of any dividend on
Qualified Capital Stock within 60 days after the date of its declaration if such
dividend could have been made on the date of such declaration in compliance with
the foregoing provisions. The full amount of any Restricted Payment made
pursuant to the foregoing clauses (x) and (z) (but not pursuant to clause (y))
of the immediately preceding sentence, however, will be deducted in the
calculation of the aggregate amount of Restricted Payments available to be made
referred to in clause (c) of the immediately preceding paragraph.
For purposes of this Section 4.08, the amount of any Restricted
Payment, if other than in cash, shall be the fair market value thereof, as
determined in the good faith reasonable judgment of the Board of Directors of
the Company. Additionally, on the date of each Restricted Payment, the Company
shall deliver an Officers' Certificate to the Trustee describing in reasonable
detail the nature of such Restricted Payment, stating the amount of such
Restricted Payment, stating in reasonable detail the provisions of this
Indenture pursuant to which such Restricted Payment was made and certifying that
such Restricted Payment was made in compliance with the terms of this Indenture.
SECTION 4.09 LIMITATION ON LIENS SECURING INDEBTEDNESS
The Company and the Subsidiaries shall not, and shall not permit
any of their Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind, other than Permitted Liens, upon any of
their respective assets now owned or acquired on or after the date of this
Indenture or upon any income or profits therefrom securing any Indebtedness of
the Company or any Subsidiary other than Senior Indebtedness, unless the Company
and such Subsidiary provides, and causes its Subsidiaries to provide,
concurrently therewith, that the Notes are equally and ratably so secured;
provided that, if such Indebtedness is Subordinated Indebtedness, the Lien
securing such Subordinated Indebtedness shall be subordinate and junior to the
Lien securing the Notes with the same relative priority as such Subordinated
Indebtedness shall have with respect to the Notes; and provided, further, that
this Section 4.09 shall not be applicable to any Liens securing any such
Indebtedness which became Indebtedness of the Company pursuant to a transaction
subject to the provisions described in Section 5.01 hereof or which constitutes
Acquired Indebtedness and which in either case were in existence at the time of
such transaction (unless such Indebtedness was incurred or such Lien created in
connection with or in contemplation of such transaction), so long as such Liens
do not extend to or cover any property or assets of the Company or any
Subsidiary of the Company other than property or assets acquired in such
transaction.
SECTION 4.10 LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING SUBSIDIARIES
The Company and the Guarantors shall not, and shall not permit
any of their Subsidiaries to, directly or indirectly, create, assume or suffer
to exist any consensual restriction on the ability of any Subsidiary of the
Company to pay dividends or make other distributions to or on behalf of, or to
pay any obligation to or on behalf of, or otherwise to transfer assets or
property to or on behalf of, or make or pay loans or advances to or on behalf
of, the Company or
26
any Subsidiary of the Company, except (a) restrictions imposed by the Notes or
this Indenture, (b) restrictions imposed by applicable law, (c) existing
restrictions under Indebtedness outstanding on the Issue Date, (d) restrictions
under any Acquired Indebtedness not incurred in violation of this Indenture or
any agreement relating to any property, asset, or business acquired by the
Company or any of its Subsidiaries, which restrictions in each case existed at
the time of acquisition, were not put in place in connection with or in
anticipation of such acquisition and are not applicable to any person, other
than the person acquired, or to any property, asset or business, other than the
property, assets and business so acquired, (e) any such restriction or
requirement imposed by Bank Indebtedness, (f) restrictions with respect solely
to a Subsidiary of the Company imposed pursuant to a binding agreement which has
been entered into for the sale or disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary, provided such restrictions apply
solely to the Capital Stock or assets of such Subsidiary which are being sold,
and (g) in connection with and pursuant to permitted refinancings, replacements
of restrictions imposed pursuant to clauses (a), (c) or (d) of this Section 4.10
that are not more restrictive than those being replaced and do not apply to any
other person or assets than those that would have been covered by the
restrictions in the Indebtedness so refinanced. Notwithstanding the foregoing,
neither (a) customary provisions restricting subletting or assignment of any
lease entered into in the ordinary course of business, consistent with industry
practice, nor (b) Liens permitted under the terms of this Indenture on assets
securing Senior Indebtedness incurred in accordance with the terms of Section
4.09 hereof shall in and of themselves be considered a restriction on the
ability of the applicable Subsidiary to transfer such agreement or assets, as
the case may be.
SECTION 4.11 LIMITATIONS ON TRANSACTIONS WITH AFFILIATES
The Company shall not, and shall not permit any of its
Subsidiaries on or after the Issue Date to enter into or suffer to exist any
contract, agreement, arrangement or transaction with any Affiliate (an
"Affiliate Transaction"), or any series of related Affiliate Transactions,
(other than Exempted Affiliate Transactions), (i) unless the Company reasonably
and in good faith determines that the terms of such Affiliate Transaction are
fair and reasonable to the Company, and no less favorable to the Company than
could have been obtained in an arm's length transaction with a non-Affiliate,
and (ii) if involving consideration to either party in excess of $1.0 million,
unless such Affiliate Transaction(s) is evidenced by an Officers' Certificate
addressed and delivered to the Trustee certifying that such Affiliate
Transaction (or Transactions) has been approved by a majority of the members of
the Board of Directors that are disinterested in such transaction and (iii) if
involving consideration to either party in excess of $5.0 million, unless in
addition the Company, prior to the consummation thereof, obtains a written
favorable opinion as to the fairness of such transaction to the Company from a
financial point of view from an independent investment banking firm of national
reputation or, if pertaining to a matter for which such investment banking firms
do not customarily render such opinions, an appraisal or valuation firm of
national reputation. Notwithstanding the foregoing, the Company and its
Subsidiaries shall be permitted to enter into transactions with Affiliates
pursuant to agreements or other documents entered into simultaneously herewith
on the Issue Date, including without limitation, the agreements and other
documents relating to the New Senior Secured Notes and the issuance of the
Company's Series C Preferred Stock.
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SECTION 4.12 FUTURE SUBSIDIARY GUARANTORS
All present and future Subsidiaries (other than Foreign
Subsidiaries) of the Company jointly and severally will guarantee irrevocably
and unconditionally all principal, premium, if any, and interest on the Notes on
a senior subordinated basis to the extent provided in Section 11 hereof;
provided that any Foreign Subsidiary that guarantees any Indebtedness of the
Company or any Subsidiary (other than a Foreign Subsidiary) and guarantees the
Indebtedness outstanding under the Note Purchase Agreement and the New Senior
Secured Notes, shall become a Guarantor, in each case by executing a counterpart
signature page hereof.
SECTION 4.13 RELEASE OF GUARANTORS
No Guarantor shall consolidate or merge with or into (whether or
not such Guarantor is the surviving Person), or shall sell all or substantially
all of its assets to, another Person unless (i) subject to the provisions of
this Section 4.13 and Section 5.01 of this Indenture (as if such Guarantor were
the Company), the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the obligations of such Guarantor
pursuant to a supplemental indenture in form reasonably satisfactory to the
Trustee, pursuant to which such person shall unconditionally guarantee, on a
senior subordinated basis, all of such Guarantor's obligations under such
Guarantor's guarantee, on the terms set forth in this Indenture; and (ii)
immediately before and immediately after giving effect to such transaction on a
pro forma basis, no Default or Event of Default shall have occurred or be
continuing.
SECTION 4.14 CORPORATE EXISTENCE
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its 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 of its Subsidiaries if the
Board of Directors shall reasonably and in good faith determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
SECTION 4.15 LIMITATION ON STATUS AS AN INVESTMENT COMPANY
The Company and its Subsidiaries shall not register as an
"investment company" (as that term is defined in the Investment Company Act of
1940, as amended), or otherwise become subject to regulation under the
Investment Company Act.
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ARTICLE 5
SUCCESSORS
SECTION 5.01 MERGER, SALE OR CONSOLIDATION
The Company will not consolidate with or merge with or into
another person or, directly or indirectly, sell, lease, convey or transfer all
or substantially all of its assets (computed on a consolidated basis), whether
in a single transaction or a series of related transactions, to another Person
or group of affiliated Persons unless (i) either (a) the Company is the
continuing entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes, by supplemental indenture in
form reasonably satisfactory to the Trustee, all of the obligations of the
Company in connection with the Notes and this Indenture; and (ii) no Default or
Event of Default shall exist or shall occur immediately after giving effect on a
pro forma basis to such transaction; and the Company or such entity shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, sale, lease, conveyance or
transfer and, if a supplemental indenture is required in connection with such a
transaction, such supplemental indenture comply with this provision of this
Indenture and all conditions precedent in this Indenture relating to such a
transaction have been satisfied.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.01
hereof, the successor corporation formed by such consolidation or into or with
which the Company is merged or to which such transfer is made shall succeed to
and (except in the case of a lease) be substituted for, and may exercise every
right and power of the Company under this Indenture with the same effect as if
such successor corporation had been named herein as the Company, and (except in
the case of a lease) the Company shall be released from the obligations under
the Notes and this Indenture except with respect to any obligations that arise
from, or are related to, such transaction.
For purposes of this Article 5, the transfer (by lease,
assignment, sale or otherwise) of all or substantially all of the properties and
assets of one or more Subsidiaries, the Company's interest in which constitutes
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT
An "Event of Default" is defined as:
(i) the failure by the Company to pay any installment of interest
on the Notes as and when the same becomes due and payable and the
continuance of any such failure for 30 days,
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(ii) the failure by the Company to pay all or any part of the
principal, or premium, if any, on the Notes when and as the same becomes
due and payable at maturity, redemption, by acceleration or otherwise,
including, without limitation, payment of the Change of Control Purchase
Price or otherwise,
(iii) the failure by the Company or any Subsidiary of the Company
to observe or perform any other covenant or agreement contained in the
Notes or this Indenture and, the continuance of such failure for a
period of 30 days after written notice is given to the Company by the
Trustee or to the Company and the Trustee by the holders of at least
33.3% in aggregate principal amount of the Notes outstanding, stating
that such notice is a "notice of default" under Section 6.01(iii) of
this Indenture,
(iv) the following events of bankruptcy, insolvency or
reorganization under applicable Bankruptcy Laws in respect of the
Company or any of its Significant Subsidiaries:
(a) the Company or any of its Significant Subsidiaries
pursuant to or within the meaning of any Bankruptcy Law (i)
commences a voluntary case, (ii) consents to the entry of an
order for relief against it in an involuntary case, (iii)
consents to the appointment of a custodian of it or for all or
substantially all of its property, (iv) makes a general
assignment for the benefit of its creditors, or generally is not
paying its debts as they become due; or
(b) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that (i) is for relief against
the Company or any Significant Subsidiary in an involuntary case,
(ii) appoints a custodian of the Company or any Significant
Subsidiary or for all or substantially all of the property of the
Company or a Significant Subsidiary, or (iii) orders the
liquidation of the Company or any Significant Subsidiary, and, in
each case of the preceding (i), (ii) or (iii), the order or
decree remains unstayed and in effect for 60 consecutive days.
(v) a default in any issue of Indebtedness of the Company or any
of its Subsidiaries with an aggregate principal amount in excess of $5.0
million (a) resulting from any payment default or (b) as a result of
which the maturity of such Indebtedness has been accelerated prior to
its stated maturity, and
(vi) final unsatisfied judgments not covered by insurance
aggregating in excess of $5.0 million, at any one time rendered against
the Company or any of its Subsidiaries and not stayed, bonded or
discharged within 60 days.
SECTION 6.02 ACCELERATION
If an Event of Default occurs and is continuing (other than an
Event of Default specified in Section 6.01(iv) relating to the Company or any of
its Significant Subsidiaries), then in every such case, unless the principal of
all of the Notes shall have already become due and payable, either the Trustee
or the Holders of at least 33.3% in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Company (and to the Trustee if given by
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Holders) (an "Acceleration Notice"), may declare all principal, determined as
set forth below, and accrued interest thereon to be due and payable immediately;
provided, however, that if any Bank Indebtedness is outstanding, upon a
declaration of such acceleration, such principal and interest shall be due and
payable upon the earlier of (x) the third Business Day after the sending to the
Company and the holders of such Bank Indebtedness or their representative of
such written notice, unless such Event of Default is cured or waived prior to
such date and (y) the date of acceleration of any Bank Indebtedness. If an Event
of Default specified in Section 6.01(iv) occurs, all principal and accrued
interest thereon will be immediately due and payable on all outstanding Notes
without any declaration or other act on the part of the Trustee or the Holders
of the Notes. The Holders of a majority in aggregate principal amount of Notes
are authorized to rescind such acceleration if all existing Events of Default,
other than the non-payment of the principal of, premium, if any, and interest on
the Notes which have become due solely by such acceleration and except on
default with respect to any provision requiring a supermajority approval to
amend, which default may only be waived by such a supermajority, have been cured
or waived.
SECTION 6.03 OTHER REMEDIES
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal, premium, if any, and interest on the Notes or to enforce
the performance of any provision of the Notes or this Indenture. Except as
provided in Section 6.06 below, the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request, order
or direction of any of the Holders of the Notes, unless such Holders have
offered to the Trustee reasonable security or, at the option of the Trustee, in
lieu of such security, reasonable indemnity.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note 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
Prior to the declaration of acceleration of the maturity of the
Notes, the Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may waive on behalf of all the Holders of the Notes any
default, except a default with respect to any provision requiring a
supermajority approval to amend, which default may only be waived by such a
supermajority, and except a default in the payment of principal of or interest
on any Note not yet cured or a default with respect to any covenant or provision
which cannot be modified or amended without the consent of the Holder of each
outstanding Note affected.
SECTION 6.05 CONTROL BY MAJORITY
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee
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may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee, in its reasonable discretion, determines may be unduly
prejudicial to the rights of other Holders of Notes, that may involve the
Trustee in personal liability or if the Trustee determines that it does not have
reasonable security or at the option of the Trustee, in lieu of such security,
reasonable indemnification against any loss or expense; provided, that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction. This Section 6.05 shall be in lieu of TIA ss.
315(d)(3) and said TIA section is hereby expressly excluded from this Indenture,
as permitted by the TIA.
SECTION 6.06 LIMITATION ON SUITS
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 33.3% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer and, if requested, provide to
the Trustee reasonable security or at the option of the Trustee, in lieu of such
security, reasonable indemnity against any loss, liability or expense;
(d) the Trustee does not comply with the request within 30 days
after receipt of the request and the offer and, if requested, the provision of
the security or, at the option of the Trustee, in lieu of such security, the
indemnity described in clause (c) above; and
(e) during such 30-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give the Trustee
a direction which, in the opinion of the Trustee, is 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.
SECTION 6.07 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal, premium, if any, and interest on
the Notes, on or after the respective due dates expressed in the Notes
(including in connection with an offer to purchase), or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE
If an Event of Default 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 the whole amount of principal of, premium, if any,
and interest remaining unpaid on the Notes and
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interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due to the
Trustee pursuant to Section 7.07.
SECTION 6.09 TRUSTEE MAY FILE PROOF OF CLAIM
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof 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 that 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 Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such 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, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all reasonable compensation,
expense and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
principal, premium, if any, and interest, 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 pursuant to this Section 6.10.
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SECTION 6.11 UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE 7
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default of which
the Trustee is charged with knowledge pursuant to Section 7.02(g):
(i) the duties of the Trustee 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 negligence, bad faith or willful
misconduct on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case
of an Officers' Certificate or Opinion of Counsel, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture. This subparagraph (b)(ii)
shall be in lieu of TIA ss. 315(d)(3) and said TIA section is hereby
expressly excluded from this Indenture, as permitted by the TIA.
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(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own bad faith or
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible 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
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) 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 the Company or any Holder, unless the Company or such Holder, as
the case may be, shall have offered to the Trustee security and indemnity
reasonably satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02 RIGHTS OF TRUSTEE
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both, which shall
conform to Section 10.05 hereof. 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 of its
selection as to legal matters and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon with respect to such legal matters.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by two Officers of the Company.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or reasonable indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
(g) Except with respect to Section 4.01 herein, 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(i) or 6.01(ii) and Section 4.01 or (ii) any Default or
Event of Default of which a Responsible Officer of the Trustee shall have
received written notification in accordance with Section 12.02 hereof from the
Company or any Holder.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate with the same rights it would have if it were not Trustee. However, in
the event that the Trustee acquires any conflicting interest, it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue as
Trustee or resign. Any Agent may do the same with like rights and duties.
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 Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05 NOTICE OF DEFAULTS
If a Default or Event of Default occurs and is continuing and if
the Trustee is charged with knowledge thereof pursuant to Section 7.02(g)
hereof, the Trustee shall mail to Holders of Notes a notice of the Default or
Event of Default within 90 days after it obtains actual knowledge of said
Default. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of at least two of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes. The second sentence of this Section 7.05
shall be in lieu of the proviso to TIA ss. 315(b) and said TIA section is hereby
expressly excluded from this Indenture, as permitted by the TIA.
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SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES
Within 60 days after each May 15, beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee in writing when the Notes are listed
on any stock exchange or national securities market.
SECTION 7.07 COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time
compensation for its acceptance of this Indenture and services hereunder in
accordance with a written agreement between the Trustee and the Company. 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 promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company shall indemnify the Trustee for, and hold the Trustee
harmless against, any and all losses, liabilities, claims, damages or expenses
(including, without limitation reasonable attorneys' fees and expenses) incurred
by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Company (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence, bad faith or willful
misconduct. 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 unless the Company is
materially prejudiced thereby. The Company shall defend the claim with counsel
designated by the Company, who may be outside counsel to the Company but shall
in all events be reasonably satisfactory to the Trustee, and the Trustee shall
cooperate in the defense. In addition, the Trustee may retain separate counsel
and, if the Trustee shall have been advised by such counsel that there may be
one or more legal defenses available to the Trustee which are different from or
in addition to those available to the Company and which the counsel designated
by the Company would be precluded from asserting or that the Trustee has one or
more interests that conflict with those of the Company, the Company shall pay
the reasonable fees and expenses of such separate counsel. The indemnification
herein extends to any settlement, provided that the Company will not be
37
liable for any settlement made without its written consent, provided, further,
that such consent will not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the resignation or removal of the Trustee and/or the satisfaction and
discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, premium,
if any, and interest on particular Notes. 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(iv) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2)
to the extent applicable.
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 in writing at any time 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 Notes may remove the
Trustee by so notifying the Trustee and the Company in writing, and may appoint
a successor Trustee with the Company's consent (which shall not be unreasonably
withheld, delayed or conditioned). The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof, unless
the Trustee's duty to resign is stayed as provided in TIA ss. 310(b);
(b) 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;
(c) a custodian or public officer takes charge of the Trustee or
its property; or
(d) 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. Within one year after the successor Trustee takes office, the
Holders of a majority in aggregate principal amount of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.
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If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee (at the expense
of the Company), the Company, or the Holders of at least 10% in aggregate
principal amount of the then outstanding 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, unless the
Trustee's duty to resign is stayed as provided in TIA ss. 310(b), any Holder,
who has been a bona fide Holder for at least six (6) months, may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
Subject to Section 7.10, 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. The provisions of TIA ss. 310 shall apply to
the Company as obligor on the Notes.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
Section 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein. The
provisions of TIA ss. 311 shall apply to the Company as obligor on the Notes.
39
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company and each of the Guarantors,
as applicable, shall, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes and Guarantees, as applicable, on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). Such
Legal Defeasance means that the Company shall be deemed to have paid and
discharged all amounts owed under the outstanding Notes and this Indenture shall
cease to be of further effect as to all outstanding Notes and Guarantees, except
as to (i) rights of Holders to receive payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due from the
trust funds described in Section 8.04 below; (ii) the Company's obligations with
respect to such Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes, and the maintenance of an office or
agency for payment and money for security payments held in trust; (iii) the
rights, powers, trust, duties, and immunities of the Trustee, and the Company's
obligations in connection therewith; and (iv) this Article 8. The Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
SECTION 8.03 COVENANT DEFEASANCE
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and each of the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from their respective obligations under the covenants
contained in Sections 4.03, 4.04, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and
4.15 hereof with respect to the outstanding Notes and the Guarantors shall be
released from their obligations under Section 11.03(b) hereof in each case, on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes and the Guarantees shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any breach thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes and
Guarantees shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company and the Guarantors may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by
40
reason of any reference in any such covenant to any other provision herein or in
any other document and such omission to comply shall not constitute a Default or
an Event of Default under Section 6.01 hereof, but, except as specified above,
the remainder of this Indenture and such Notes and Guarantees shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04, Section 6.01(iii)
hereof shall not constitute an Event of Default for all purposes hereunder.
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, U.S. legal tender, U.S.
Government Obligations or a combination thereof, in such amounts as will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if
any, and interest on such Notes on the stated date for payment thereof
or on the redemption date of such principal or installment of principal
of, premium, if any, or interest on such Notes, and the Holders must
have a valid, perfected, first priority exclusive security interest in
such trust;
(ii) in the case of Legal Defeasance only, the Company shall have
delivered to the Trustee an opinion of counsel of national standing with
respect to tax law in the United States reasonably acceptable to the
Trustee confirming that (A) the Company has received from, or there has
been published by the Internal Revenue Service, a ruling or (B) since
the date of the Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such opinion of counsel shall confirm that, the Holders will not
recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance only, the Company shall
have delivered to the Trustee an opinion of counsel of national standing
with respect to tax law in the United States reasonably acceptable to
such Trustee confirming that the Holders will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit and the Company shall have
delivered to the Trustee an Officer's Certificate, to the effect that,
assuming no intervening bankruptcy of the Company between the date of
deposit and a date that is one year plus one day following the deposit,
41
after the date that is one year plus one day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors rights generally (it being understood that this condition to
Legal Defeasance may not be satisfied until such date that is one year
plus one calendar day after the date of deposit);
(v) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under this
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the holders of such Notes over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;
(vii) the monies held in trust by the Trustee on behalf of the
Holders shall not be considered or required to register as an
"investment company" (as that term is defined in the Investment Company
Act of 1940, as amended), or otherwise become subject to regulation
under the Investment Company Act.; and
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an opinion of counsel, each stating that the
conditions precedent provided for in, in the case of the Officers'
Certificate, (i) through (vi) and, in the case of the opinion of
counsel, clauses (i) (with respect to the validity and perfection of the
security interest), and (ii), (iii), (iv), (v) and (vii) of this Section
8.04 have been complied with.
If the funds deposited with the Trustee to effect Covenant
Defeasance are insufficient to pay the principal of, premium, if any, and
interest on the Notes when due, then the obligations of the Company and the
Guarantors under this Indenture and the Collateral Agreement will be revived and
no such defeasance will be deemed to have occurred.
Legal Defeasance and Covenant Defeasance shall be deemed to occur
on the date all of the applicable conditions set forth in this Section 8.04 are
satisfied.
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS
Subject to Section 8.06 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
42
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the written
request of the Company any money or U.S. Government Obligations held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.06 REPAYMENT TO COMPANY
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its written request or (if then held by the Company)
shall be discharged from such trust; and the Holders of the Notes shall
thereafter, as a secured creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.
SECTION 8.07 REINSTATEMENT
If the Trustee or Paying Agent is unable to apply any United
States dollars or U.S. Government Obligations in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order requiring any Holder to
return or refund any amount paid to it pursuant to this Article 8, or directing
the repayment of the deposited money to the Company or otherwise making the
deposit unavailable to make payments on the Notes when due, or if any court or
other government authority enters an order or judgment enjoining, restraining or
otherwise prohibiting such application, or requiring any Holder to return or
refund any amount paid to it pursuant to this Article 8, then (for so long as
the insufficiency exists or the order remains in effect) the Company's and the
Guarantors' obligations under this Indenture, the Notes and the Guarantees shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the
case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
43
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01 WITHOUT CONSENT OF HOLDERS OF NOTES
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency in a manner
not adverse to any Holder;
(b) to provide for uncertificated Notes in addition to or in
place of Certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders in the case of a merger, sale or consolidation pursuant to Article 5
hereof;
(d) to provide for additional Guarantors as set forth in Section
4.11, successor Guarantors as set forth in Section 11.03 or for the release or
assumption of a Guarantee in compliance with this Indenture;
(e) to make any change that would provide any additional rights
or benefits to the Holders (including the addition of any Guarantors) or that
does not adversely affect the rights hereunder of any Holder;
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(g) to evidence, and provide for acceptance of, the appointment
of a successor Trustee hereunder.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture, 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 therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental indenture that affects its own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.02 WITH CONSENT OF HOLDERS OF NOTES
Except as provided below in this Section 9.02, the Company and
the Trustee may amend or supplement this Indenture and the Notes may be amended
or supplemented with the written consent of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange
44
offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Notes or the Guarantees
may be waived with the written consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes);
provided that no such amendment, supplement or waiver may, without the consent
of Holders of at least 66 2/3% in aggregate principal amount of Notes at the
time outstanding, modify the provisions (including the defined terms used
therein) of Section 4.07 hereof in a manner adverse to the Holders.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental indenture, and upon the filing with the Trustee of evidence
reasonably satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, 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 sole discretion, but shall 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 9.02 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof. The calculation of Holders of Notes so consenting shall be made
pursuant to Section 2.09 hereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes 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 affect the validity of any such amended or
supplemental indenture or waiver.
Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company or a Guarantor with any
provision of this Indenture or the Notes. However, without the written consent
of each Holder affected, an amendment or waiver may not (with respect to any
Notes held by a non-consenting Holder):
(i) change the Stated Maturity on any Note, or reduce the
principal amount thereof or the rate (or extend the time for payment) of
interest thereon or any premium, if any, payable upon the redemption at
the option of the Company thereof, or change the place of payment where,
or the coin or currency in which, any Note or any premium or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption at the option of the Company, on
or after the Redemption Date), or reduce the Change of Control Purchase
Price or alter the provisions (including the defined terms used therein)
requiring the Company to offer to repurchase the Notes upon a Change of
Control or
45
regarding the right of the Company to redeem the Notes in a manner
adverse to the holders of the Notes, or
(ii) reduce the percentage in principal amount of the outstanding
Notes, the consent of whose holders is required for any such amendment,
supplemental indenture or waiver provided for in the Indenture, or
(iii) change in any manner materially adverse to the Holders, the
provisions of Article 10 hereof (and the definitions relating thereto),
or
(iv) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder
of each outstanding Note affected thereby.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or 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 Note is a continuing consent by such Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be provided with and (subject to Section 7.01) shall be
46
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture and that such supplemental indenture
and this Indenture, as so amended or supplemented, constitute the valid and
binding obligations of the Company and the Guarantors, enforceable against each
of them in accordance with their respective terms (subject to customary and
necessary exceptions) and all conditions precedent have been complied with.
ARTICLE 10
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE
The Company agrees, and each Holder by accepting a Note agrees,
that the Indebtedness evidenced by the Note is subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment in full in cash or Cash Equivalents of all Obligations in respect of
Senior Indebtedness (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for the
benefit of the holders of Senior Indebtedness. This Article 10 shall constitute
a continuing offer to all Persons who become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness.
SECTION 10.02 LIQUIDATION; DISSOLUTION; BANKRUPTCY
Upon any distribution of assets of the Company or any Guarantor
upon any dissolution, winding up, total or partial liquidation or reorganization
of the Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities:
(i) the holders of all Senior Indebtedness of the Company or such
Guarantor, as applicable, will first be entitled to receive payment in
full in cash or Cash Equivalents (or have such payment duly provided
for) or otherwise to the extent such holders accept satisfaction of
amounts due by settlement in other than cash or Cash Equivalents before
the holders of the Notes are entitled to receive any payment on account
of any Obligation in respect of the Notes, including the principal of,
premium, if any, and interest on the Notes (other than Junior
Securities) and
(ii) any payment or distribution of assets of the Company or such
Guarantor of any kind or character from any source, whether in cash,
property or securities (other than Junior Securities) to which the
holders of the Notes or the Trustee on behalf of such holders would be
entitled (by set-off or otherwise), except for the subordination
provisions contained in this Indenture, will be paid by the liquidating
trustee or agent or other person making such a payment or distribution
directly to the holders of such Senior Indebtedness or their
representative to the extent necessary to make payment in full (or have
such payment duly provided for) on all such Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
47
SECTION 10.03 DEFAULT ON SENIOR INDEBTEDNESS
No payment (by set-off or otherwise) may be made by or on behalf
of the Company or a Guarantor, as applicable, on account of any Obligation in
respect of the Notes, including the principal of, premium, if any, or interest
on the Notes (including any repurchases of Notes), or on account of the
redemption provisions of the Notes for cash or property (other than Junior
Securities), (i) upon the maturity of any Senior Indebtedness of the Company or
such Guarantor by lapse of time, acceleration (unless waived) or otherwise,
unless and until all principal of, premium, if any, and the interest on such
Senior Indebtedness are first paid in full in cash or Cash Equivalents (or such
payment is duly provided for) or otherwise to the extent holders accept
satisfaction of amounts due by settlement in other than cash or Cash
Equivalents, or (ii) in the event of default in the payment of any principal of,
premium, if any, or interest on Senior Indebtedness of the Company or such
Guarantor when it becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise (a "Payment Default"),
unless and until such Payment Default has been cured or waived or otherwise has
ceased to exist.
Upon (i) the happening of an event of default other than a
Payment Default that permits the holders of Senior Indebtedness to declare such
Senior Indebtedness to be due and payable and (ii) written notice of such event
of default given to the Company and the Trustee by the holders of an aggregate
of at least $10.0 million principal amount outstanding of any Senior
Indebtedness or their Representative (a "Payment Notice"), then, unless and
until such event of default has been cured or waived or otherwise has ceased to
exist, no payment (by set-off or otherwise) may be made by or on behalf of the
Company or any Guarantor which is an obligor under such Senior Indebtedness on
account of any Obligation in respect of the Notes, including the principal of,
premium, if any, or interest on the Notes, (including any repurchases of any of
the Notes), or on account of the redemption provisions of the Notes, in any such
case, other than payments made with Junior Securities. Notwithstanding the
foregoing, unless the Senior Indebtedness in respect of which such event of
default exists has been declared due and payable in its entirety within 179 days
after the Payment Notice is delivered as set forth above (the "Payment Blockage
Period") (and such declaration has not been rescinded or waived), at the end of
the Payment Blockage Period, the Company and the Guarantors shall be required to
pay all sums not paid to the holders of the Notes during the Payment Blockage
Period due to the foregoing prohibitions and to resume all other payments as and
when due on the Notes. Any number of Payment Notices may be given; provided,
however, that (i) not more than one Payment Notice shall be given within a
period of any 360 consecutive days, and (ii) no default that existed upon the
date of such Payment Notice or the commencement of such Payment Blockage Period
(whether or not such event of default is on the same issue of Senior
Indebtedness) shall be made the basis for the commencement of any other Payment
Blockage Period (it being acknowledged that any subsequent action, or any
subsequent breach of any financial covenant for a period commencing after the
expiration of such Payment Blockage Period that, in either case, would give rise
to a new event of default, even though it is an event that would also have been
a separate breach pursuant to any provision under which a prior event of default
previously existed, shall constitute a new event of default for this purpose).
48
SECTION 10.04 ACCELERATION OF NOTES
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration.
SECTION 10.05 WHEN DISTRIBUTION MUST BE PAID OVER
In the event that the Trustee or any Holder receives any payment
or distribution of assets of the Company or any Guarantor (other than Junior
Securities) at a time when the Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by Section 10.03 hereof, such payment
or distribution shall be held in trust for the benefit of the holders of such
Senior Indebtedness, and shall be paid or delivered by the Trustee or the
Holders of the Notes, as the case may be, to the holders of such Senior
Indebtedness remaining unpaid or unprovided for or to their Representative or
Representatives ratably according to the aggregate principal amounts remaining
unpaid on account of such Senior Indebtedness held or represented by each, for
application to the payment of all such Senior Indebtedness remaining unpaid, to
the extent necessary to pay or to provide for the payment of all such Senior
Indebtedness in full in cash or Cash Equivalents or otherwise to the extent
holders accept satisfaction of amounts due by settlement in other than cash or
Cash Equivalents after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and shall not be liable
to any such holders if the Trustee shall pay over or distribute to or on behalf
of Holders or the Company or any other Person money or assets to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article 10,
except if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 10.06 NOTICE BY COMPANY
The Company shall promptly notify in writing the Trustee and the
Paying Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 10, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article 10.
SECTION 10.07 SUBROGATION
After all Senior Indebtedness is paid in full and until the Notes
are paid in full, Holders shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to the Holders have been applied to
the payment of Senior Indebtedness. A distribution made under this Article 10 to
holders of Senior Indebtedness that otherwise would have been made to Holders is
not, as between the Company and Holders, a payment by the Company on the Notes.
49
SECTION 10.08 RELATIVE RIGHTS
This Article 10 defines the relative rights of Holders and
holders of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company, the Guarantors and
Holders, the obligation of the Company and the Guarantors, which is
absolute and unconditional, to pay, when due, principal of, premium, if
any, and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of
the Company other than their rights in relation to holders of Senior
Indebtedness; or
(3) prevent the occurrence of any Default or Event of
Default under this Indenture or limit the Trustee or any Holder from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Indebtedness to
receive distributions and payments otherwise payable to Holders.
If the Company fails because of this Article 10 to pay principal
of or interest on a Note on the due date, the failure is still a Default or
Event of Default.
SECTION 10.09 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or a Guarantor, as applicable, or any Holder to comply with this
Indenture.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness, the distribution may be made and the notice
given to their Representative. The Company shall provide to the Trustee, in
writing, notice of the name and address of any Representative. In the absence of
such a notice, the Trustee may conclusively assume that no Representative
exists.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
10.
50
SECTION 10.11 RIGHTS OF TRUSTEE AND PAYING AGENT
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at the
Corporate Trust Administration Office of the Trustee at least five Business Days
prior to the date of such payment written notice (which may be via facsimile) of
facts that would cause the payment of any Obligations with respect to the Notes
to violate this Article 10. Only the Company or a Representative of Senior
Indebtedness previously identified by the Company to the Trustee pursuant to
Section 10.10 may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. Any Holder or any Affiliate of any
Holder may hold Senior Indebtedness with the same rights it would have if it
were not a Holder or an Affiliate of a Holder.
SECTION 10.12 AUTHORIZATION TO EFFECT SUBORDINATION
Each Holder of a Note by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 10, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the Representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Notes.
SECTION 10.13 AMENDMENTS
The provisions of this Article 10 shall not be amended or
modified in a manner materially adverse to the holders of Senior Indebtedness
without the written consent of the Representative or Representatives of all
holders of Senior Indebtedness.
ARTICLE 11
SUBSIDIARY GUARANTEES
SECTION 11.01 SUBSIDIARY GUARANTEES
Subject to the provisions of this Article 11, by its execution
hereof, each Guarantor, jointly and severally, hereby unconditionally guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, that: (a) the principal of, and premium,
if any, and interest on the Notes will be duly and punctually paid in full when
due, whether at maturity, by acceleration, upon a Change in Control or
otherwise, and interest on overdue principal of, and premium, if any, and (to
the extent permitted by law) interest on any interest, if any, on the Notes and
all other obligations of the Company to the Holders or the Trustee hereunder or
under the Notes (including fees, expenses or other) will be promptly paid in
full or performed, all in accordance with the terms hereof; and (b) in case of
51
any extension of time of payment or renewal of any Notes or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or failing performance of any other obligation of the Company to
the Holders, for whatever reason, each Guarantor will be obligated to pay, or to
perform or to cause the performance of, the same immediately. An Event of
Default under this Indenture or the Notes shall constitute an event of default
under this Subsidiary Guarantee, and shall entitle the Holders of Notes to
accelerate the obligations of each Guarantor hereunder in the same manner and to
the same extent as the obligations of the Company. Each Guarantor hereby agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any thereof, the entry of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives and relinquishes: (a) any right to require the
Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed
against the Company, the Subsidiaries or any other Person or to proceed against
or exhaust any security held by a Benefitted Party at any time or to pursue any
other remedy in any secured party's power before proceeding against the
Guarantors; (b) any defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other Person or Persons or the failure of
a Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person or
Persons; (c) demand, protest and notice of any kind (except as expressly
required by this Indenture), including but not limited to notice of the
existence, creation or incurring of any new or additional Indebtedness or
obligation or of any action or non-action on the part of the Guarantors, the
Company, the Subsidiaries, any Benefitted Party, any creditor of the Guarantors,
the Company or the Subsidiaries or on the part of any other Person whomsoever in
connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefitted Party,
including but not limited to an election to proceed against the Guarantors for
reimbursement; (e) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (f) any defense
arising because of a Benefitted Party's election, in any proceeding instituted
under Bankruptcy Law, of the application of Section 1111(b)(2) of the United
States Federal Bankruptcy Code; and (g) any defense based on any borrowing or
grant of a security interest under Section 364 of the Bankruptcy Code. The
Guarantors hereby covenant that the Subsidiary Guarantee will not be discharged
except by payment in full of all principal, premium, if any, and interest on the
Notes and all other costs provided for under this Indenture, or as provided in
Section 8.01.
If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or the Guarantors, or any trustee or
similar official acting in relation to either the Company or the Guarantors, any
amount paid by the Company or the Guarantors to the Trustee or such Holder, the
Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each of the Guarantors agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor agrees that, as between it, on the one hand,
and the Holders of Notes and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article 6
hereof
52
for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6 hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by such Guarantor for the
purpose of the Subsidiary Guarantee.
SECTION 11.02 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES
To evidence the Subsidiary Guarantees set forth in Section 11.01
hereof, each of the Guarantors agrees that a notation of the Subsidiary
Guarantees substantially in the form included in Exhibit B shall be endorsed on
each Note authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of each Guarantor by the Chairman of the Board, any
Vice Chairman, the President or one of the Vice Presidents of such Guarantor and
attested to by any other Officer thereof.
Each of the Guarantors agree that the Subsidiary Guarantees set
forth in this Article 11 will remain in full force and effect and apply to all
the Notes notwithstanding any failure to endorse on each Note a notation of the
Subsidiary Guarantees.
If an Officer whose facsimile signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note on which the
Subsidiary Guarantees are endorsed, the Subsidiary Guarantees shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees
set forth in this Indenture on behalf of the Guarantors.
SECTION 11.03 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Nothing contained in this Indenture or in the Notes shall
prevent any consolidation or merger of a Guarantor with or into the Company or
another Guarantor, or shall prevent the transfer of all of the assets of a
Guarantor to the Company or another Guarantor. Upon any such consolidation,
merger, transfer or sale, the Subsidiary Guarantee of such Guarantor shall no
longer have any force or effect.
(b) Except as set forth in paragraph (a) of this Section 11.03,
no Guarantor may consolidate or merge with or into (whether or not such
Guarantor is the surviving Person) another Person or, directly or indirectly,
sell, lease, convey or transfer all or substantially all of its assets (computed
on a consolidated basis), whether in a single transaction or a series of
transactions, to another Person or group of affiliated Persons unless (i) the
Person formed by or surviving any such consolidation or merger (if other than
such Guarantor) is a corporation organized under the laws of the United States,
any state thereof or the District of Columbia and expressly assumes all the
obligations of such Guarantor pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee pursuant to which such person shall
unconditionally assume all of such Guarantor's obligations under such
Guarantor's Guarantee, on the terms set forth under this Indenture; and (ii)
immediately before and immediately after giving effect to such transaction on a
pro forma basis, no Default or Event of Default shall have occurred or be
continuing. In case of any such consolidation, merger or transfer of assets and
upon the
53
assumption by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and reasonably satisfactory in form to the Trustee, of
the Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by such Guarantor, such successor corporation shall succeed to and be
substituted for such Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor corporation thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon all of the
Notes issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee. All the Subsidiary Guarantees so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of this Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.
(c) The Trustee, subject to the provisions of Section 12.04
hereof, shall be entitled to receive an Officers' Certificate as conclusive
evidence that any such consolidation, merger, sale or conveyance, and any such
assumption of Obligations, comply with the provisions of this Section 11.03.
Such certificate shall comply with the provisions of Section 12.05.
SECTION 11.04 RELEASES FOLLOWING SALE OF ASSETS
Upon the sale or disposition (whether by merger, stock purchase,
asset sale or otherwise) of a Guarantor of all of its assets to an entity which
is not a Guarantor, which transaction is otherwise in compliance with this
Indenture (including, without limitation, the provisions of Section 11.03), such
Guarantor shall be deemed released from its obligations under its Guarantee of
the Notes or Section 11.03 hereof, as the case may be; provided, however, that
any such termination shall occur only in the event that all obligations of such
Guarantor under all of its Guarantees of, and under all of its pledges of assets
or other security interests which secure, any Indebtedness of the Company or any
other Subsidiary of the Company shall also terminate upon such release, sale or
transfer. Upon delivery by the Company to the Trustee of an Officers'
Certificate and Opinion of Counsel, each to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, the Trustee shall execute any documents reasonably required in order
to evidence the release of any such Guarantor from its obligations under its
Subsidiary Guarantee. Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of,
premium, if any, and interest on the Notes and for the other obligations of any
Guarantor under this Indenture as provided in this Article 11.
SECTION 11.05 LIMITATION OF GUARANTOR'S LIABILITY
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law. To effectuate the foregoing intention, the Holders and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under this
Article 11 shall be limited to the maximum amount as will, after giving effect
to all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by
54
or on behalf of any other Guarantor in respect of the Obligations of such other
Guarantor under this Article 11, result in the Obligations of such Guarantor
under the Subsidiary Guarantee of such Guarantor not constituting a fraudulent
transfer or conveyance.
SECTION 11.06 APPLICATION OF CERTAIN TERMS AND PROVISIONS
TO THE GUARANTOR
(a) For purposes of any provision of this Indenture which
provides for the delivery by any Guarantor of an Officers' Certificate and/or an
Opinion of Counsel, the definitions of such terms in Section 1.01 shall apply to
such Guarantor as if references therein to the Company were references to such
Guarantor.
(b) Any request, direction, order or demand which by any
provision of this Indenture is to be made by any Guarantor, shall be sufficient
if evidenced as described in Section 12.02 as if references therein to the
Company were references to such Guarantor.
(c) Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
to or on any Guarantor may be given or served as described in Section 12.02 as
if references therein to the Company were references to such Guarantor.
(d) Upon any demand, request or application by any Guarantor to
the Trustee to take any action under this Indenture, such Guarantor shall
furnish to the Trustee such certificates and opinions as are required in Section
12.04 hereof as if all references therein to the Company were references to such
Guarantor.
SECTION 11.07 SUBORDINATION OF SUBSIDIARY GUARANTEES
The Obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 11 shall be junior and subordinated to all obligations
in respect of the Senior Indebtedness of such Guarantor on the same basis as the
Notes are junior and subordinated to all obligations in respect of the Senior
Indebtedness of the Company. For the purposes of the foregoing sentence, (a)
each Guarantor may make, and the Trustee and the Holders of the Notes shall have
the right to receive and/or retain, payments by any of the Guarantors only at
such times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article 10 hereof, and (b) the rights and
obligations of the relevant parties relative to the Subsidiary Guarantees shall
be the same as their respective rights and obligations relative to the Notes and
Senior Indebtedness of the Company pursuant to Article 10.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss. 318(c), the imposed duties shall control.
55
SECTION 12.02 NOTICES
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested, postage prepaid),
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company: Pacific Aerospace & Electronics, Inc.
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: President
If to the Trustee: U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
XX-XX-X0XX
Xx. Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx III
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; when receipt acknowledged, 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, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
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. If the Trustee
or an Agent mails a notice or communication to Holders, it shall mail a copy to
the Company at the same time.
56
SECTION 12.03 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other relevant Person shall have the
protection of TIA ss. 312(c).
SECTION 12.04 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 in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) 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 satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 12.05 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 TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
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 satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
SECTION 12.06 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.
57
SECTION 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND SHAREHOLDERS
No direct or indirect shareholder, employee, officer or director,
as such, past, present or future of the Company, the Guarantors or any successor
entity shall have any personal liability in respect of the Obligations of the
Company or the Guarantors under this Indenture or the Notes solely by reason of
his or its status as such shareholder, employee, officer or director, except
that this provision shall in no way limit the Obligation of any Guarantor
pursuant to any guarantee of the Notes.
SECTION 12.08 GOVERNING LAW
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. IF
ANY ACTION OR PROCEEDING SHALL BE BROUGHT BY A HOLDER OF ANY OF THE NOTES OR BY
THE TRUSTEE IN ORDER TO ENFORCE ANY RIGHT OR REMEDY UNDER THIS INDENTURE OR
UNDER THE NOTES, THE COMPANY AND THE GUARANTORS HEREBY CONSENT AND WILL SUBMIT
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN THE CITY
OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE CITY OF NEW YORK. THE COMPANY
AND THE GUARANTORS HEREBY AGREE TO ACCEPT SERVICE OF PROCESS BY NOTICE GIVEN TO
THE COMPANY PURSUANT TO THE PROVISIONS OF SECTION 12.02.
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 12.10 SUCCESSORS
All agreements of the Company in this Indenture and the Notes
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 12.11 SEVERABILITY
In case any provision in this Indenture or in the 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 12.12 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
58
SECTION 12.13 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 of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
59
IN WITNESS WHEREOF, each of the parties have executed this
Indenture as of the date first written above.
THE COMPANY:
PACIFIC AEROSPACE & ELECTRONICS, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Chief Executive Officer and President
THE GUARANTORS:
AEROMET AMERICA, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President
BALO PRECISION PARTS, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Executive Vice President
CASHMERE MANUFACTURING CO., INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Executive Vice President
CERAMIC DEVICES, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Executive Vice President
ELECTRONIC SPECIALTY CORPORATION
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Executive Vice President
NORTHWEST TECHNICAL INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Executive Vice President
PACIFIC COAST TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Executive Vice President
SEISMIC SAFETY PRODUCTS, INC.
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Xxxxxx Xxxxxx
Executive Vice President
PA&E INTERNATIONAL, INC.
By: /s/ Xxxxxx Xxxxxx
_______________________________________
Xxxxxx Xxxxxx
President
THE TRUSTEE:
U. S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxx, III
_______________________________________
Name: Xxxxx X. Xxxxxx, III
Title: Vice President
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08; 7.10; 12.02
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 12.03
(c) 12.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 7.06; 12.02
(d) 7.06
314(a) 4.08; 12.02
(b) N.A.
(c)(1) 12.04
(c)(2) 7.02; 12.04
(c)(3) N.A.
(d) N.A.
(e) 12.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 12.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 12.01
---------------------
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
SCHEDULE I
INVESTMENTS IN FOREIGN SUBSIDIARIES
Pacific Aerospace & Electronics, Inc.
Investments in Foreign Subsidiaries
as of January 31, 2001
Common Intercompany Total
Stock Investments Investment
---------- ------------ ----------
Subsidiary
PA&E International, Inc. 33,709,232 33,709,232
---------- ----------
Total investment in foreign subsidiaries 33,709,232 33,709,232
Intercompany investments change on a daily basis due to PA&E's cash
management system which transfers funds to and from subsidiaries as needed.
EXHIBIT A
FORM OF NOTE
[FILED SEPARATELY]
EXHIBIT B
FORM OF SUBSIDIARY GUARANTEE
[FILED SEPARATELY]
EXHIBIT C
EXCLUDED PERSONS
GSCP Recovery, Inc.
GSC Recovery II, L.P.
Xxxxxxx X. Xxxxx & Sons Special Situation Partners II, L.P.
M.W. Post Advisory Group L.L.C.
Alliance Capital Management L.P.
HBK Master Fund L.P.
