EXHIBIT 4.2
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SUN MEDIA CORPORATION
US$205,000,000
7-5/8% SENIOR NOTES DUE 2013
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INDENTURE
DATED AS OF FEBRUARY 7, 2003
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NATIONAL CITY BANK,
AS TRUSTEE
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TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE............................................1
Section 1.01. Definitions..................................................................1
Section 1.02. Other Definitions...........................................................21
Section 1.03. Incorporation by Reference of Trust Indenture Act...........................22
Section 1.04. Rules of Construction.......................................................22
ARTICLE 2. THE NOTES............................................................................23
Section 2.01. Form and Dating.............................................................23
Section 2.02. Execution and Authentication................................................24
Section 2.03. Registrar and Paying Agent..................................................24
Section 2.04. Paying Agent to Hold Money in Trust.........................................24
Section 2.05. Holder Lists................................................................25
Section 2.06. Transfer and Exchange.......................................................25
Section 2.07. Replacement Notes...........................................................35
Section 2.08. Outstanding Notes...........................................................35
Section 2.09. Treasury Notes..............................................................35
Section 2.10. Temporary Notes.............................................................36
Section 2.11. Cancellation................................................................36
Section 2.12. Defaulted Interest..........................................................36
Section 2.13. CUSIP or ISIN Numbers.......................................................36
Section 2.14. Special Interest............................................................36
Section 2.15. Issuance of Additional Notes................................................37
ARTICLE 3. REDEMPTION AND PREPAYMENT............................................................37
Section 3.01. Notices to Trustee..........................................................37
Section 3.02. Selection of Notes to Be Redeemed...........................................37
Section 3.03. Notice of Redemption........................................................38
Section 3.04. Effect of Notice of Redemption..............................................38
Section 3.05. Deposit of Redemption Price.................................................38
Section 3.06. Notes Redeemed in Part......................................................39
Section 3.07. Optional Redemption.........................................................39
Section 3.08. Mandatory Redemption........................................................40
Section 3.09. Offers To Purchase..........................................................40
ARTICLE 4. COVENANTS............................................................................42
Section 4.01. Payment of Notes............................................................42
Section 4.02. Maintenance of Office or Agency.............................................42
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Section 4.03. Reports.....................................................................42
Section 4.04. Compliance Certificate......................................................43
Section 4.05. Taxes.......................................................................43
Section 4.06. Stay, Extension and Usury Laws..............................................43
Section 4.07. Corporate Existence.........................................................44
Section 4.08. Payments for Consent........................................................44
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Shares.................44
Section 4.10. Restricted Payments.........................................................46
Section 4.11. Liens.......................................................................49
Section 4.12. Asset Sales.................................................................49
Section 4.13. Dividend and Other Payment Restrictions Affecting Subsidiaries..............51
Section 4.14. Transactions with Affiliates................................................53
Section 4.15. Sale and Leaseback Transactions.............................................54
Section 4.16. Issuances and Sales of Equity Interests in Subsidiaries.....................54
Section 4.17. Designation of Restricted and Unrestricted Subsidiaries.....................55
Section 4.18. Repurchase at the Option of Holders Upon a Change of Control................56
Section 4.19. Future Guarantors...........................................................56
Section 4.20. Additional Amounts..........................................................56
ARTICLE 5. SUCCESSORS...........................................................................57
Section 5.01. Merger, Consolidation and Sale of Assets of
the Company and Subsidiary Guarantors.......................................57
Section 5.02. Successor Corporation Substituted...........................................58
ARTICLE 6. DEFAULTS AND REMEDIES................................................................59
Section 6.01. Events of Default...........................................................59
Section 6.02. Acceleration................................................................60
Section 6.03. Other Remedies..............................................................61
Section 6.04. Waiver of Past Defaults.....................................................61
Section 6.05. Control by Majority.........................................................62
Section 6.06. Limitation on Suits.........................................................62
Section 6.07. Rights of Holders to Receive Payment........................................62
Section 6.08. Collection Suit by Trustee..................................................62
Section 6.09. Trustee May File Proofs of Claim............................................62
Section 6.10. Priorities..................................................................63
Section 6.11. Undertaking for Costs.......................................................63
ARTICLE 7. TRUSTEE..............................................................................63
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TABLE OF CONTENTS
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PAGE
Section 7.01. Duties of Trustee...........................................................63
Section 7.02. Rights of Trustee...........................................................64
Section 7.03. Individual Rights of Trustee................................................65
Section 7.04. Trustee's Disclaimer........................................................65
Section 7.05. Notice of Defaults..........................................................65
Section 7.06. Reports by Trustee to Holders...............................................65
Section 7.07. Compensation and Indemnity..................................................66
Section 7.08. Replacement of Trustee......................................................66
Section 7.09. Successor Trustee by Merger, etc............................................67
Section 7.10. Eligibility; Disqualification...............................................67
Section 7.11. Preferential Collection of Claims Against Company...........................67
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.............................................68
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance....................68
Section 8.02. Legal Defeasance and Discharge..............................................68
Section 8.03. Covenant Defeasance.........................................................68
Section 8.04. Conditions to Legal or Covenant Defeasance..................................69
Section 8.05. Deposited Cash and Government Securities to be Held in Trust;
Other Miscellaneous Provisions..............................................70
Section 8.06. Repayment to Company........................................................70
Section 8.07. Reinstatement...............................................................70
ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER.....................................................71
Section 9.01. Without Consent of Holders of Notes.........................................71
Section 9.02. With Consent of Holders of Notes............................................71
Section 9.03. Compliance with Trust Indenture Act.........................................73
Section 9.04. Revocation and Effect of Consents...........................................73
Section 9.05. Notation on or Exchange of Notes............................................73
Section 9.06. Trustee to Sign Amendments, etc.............................................73
ARTICLE 10. SUBSIDIARY GUARANTEES................................................................73
Section 10.01. Guarantee...................................................................73
Section 10.02. Limitation on Subsidiary Guarantor Liability................................75
Section 10.03. Execution and Delivery of Subsidiary Guarantee..............................75
Section 10.04. Subsidiary Guarantors May Consolidate, etc., on Certain Terms...............75
Section 10.05. Releases Following Sale of Assets...........................................76
ARTICLE 11. SATISFACTION AND DISCHARGE...........................................................76
Section 11.01. Satisfaction and Discharge..................................................76
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TABLE OF CONTENTS
(CONTINUED)
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Section 11.02. Deposited Cash and Government Securities to be Held in Trust;
Other Miscellaneous Provisions..............................................77
Section 11.03. Repayment to Company........................................................77
ARTICLE 12. MISCELLANEOUS........................................................................77
Section 12.01. Trust Indenture Act Controls................................................77
Section 12.02. Notices.....................................................................78
Section 12.03. Communication by Holders of Notes with Other Holders of Notes...............79
Section 12.04. Certificate and Opinion as to Conditions Precedent..........................79
Section 12.05. Statements Required in Certificate or Opinion...............................79
Section 12.06. Rules by Trustee and Agents.................................................79
Section 12.07. No Personal Liability of Directors, Officers, Employees and Shareholders....80
Section 12.08. Governing Law...............................................................80
Section 12.09. No Adverse Interpretation of Other Agreements...............................80
Section 12.10. Successors..................................................................80
Section 12.11. Severability................................................................80
Section 12.12. Consent to Jurisdiction and Service of Process..............................80
Section 12.13. Conversion of Currency......................................................81
Section 12.14. Currency Equivalent.........................................................81
Section 12.15. Counterpart Originals.......................................................82
Section 12.16. Table of Contents, Headings, etc............................................82
Section 12.17. Qualification of this Indenture.............................................82
EXHIBIT A: FORM OF GLOBAL NOTE
EXHIBIT B: FORM OF CERTIFICATE OF TRANSFER
EXHIBIT C: FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D: FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
EXHIBIT E: FORM OF NOTATION OF GUARANTEE
EXHIBIT F: FORM OF SUBORDINATION AGREEMENT
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CROSS-REFERENCE TABLE
TIA SECTION REFERENCE INDENTURE
SECTION
310(a)(1)......................................... 7.10
(a)(2)............................................ 7.10
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(a)(5)............................................ 7.10
(b)............................................... 7.08, 7.10
(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, 7.07
(c)............................................... 7.06, 12.02
(d)............................................... 7.06
314(a)............................................ 4.03, 4.04, 12.02
(b)............................................... N.A.
(c)(1)............................................ 12.04
(c)(2)............................................ 12.04
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 12.05
315(a)............................................ 7.01
(b)............................................... 7.05, 12.02
(c)............................................... 7.01
(d)............................................... 7.01
(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.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
EXECUTION COPY
This INDENTURE, dated as of February 7, 2003, is by and among
SUN MEDIA CORPORATION, a company continued under the laws of the Province of
British Columbia, each Subsidiary Guarantor listed on the signature pages
hereto, and NATIONAL CITY BANK, as trustee (the "TRUSTEE").
The Company, each Subsidiary Guarantor and the Trustee agree
as follows for the benefit of each other and for the equal and ratable benefit
of the Holders of the 7-5/8% Senior Notes due 2013 (the "NOTES"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
"144A GLOBAL NOTE" means a Global Note in the form of Exhibit
A hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold for initial resale in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or becomes a Subsidiary of
such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such
other Person merging with or into, or becoming a Subsidiary of
such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"ADDITIONAL NOTES" means any Notes (other than Initial Notes
and Exchange Notes and Notes issued under Sections 2.06, 2.07, 2.10 and 3.06
hereof) issued under this Indenture in accordance with Sections 2.02, 2.15 and
4.09 hereof, as part of the same series as the Initial Notes or as an additional
series.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; PROVIDED, HOWEVER, that beneficial
ownership of more than 10% of the Voting Stock of a Person shall be deemed to be
control. For purposes of this definition, the terms "controlling," "controlled
by" and "under common control with" shall have correlative meanings.
"AGENT" means any Registrar, co-registrar, Paying Agent or
additional paying agent.
"APPLICABLE PROCEDURES" means, with respect to any transfer,
redemption or exchange of or for beneficial interests in any Global Note, the
rules and procedures of the Depositary, Euroclear and Clearstream that apply to
such transfer, redemption or exchange.
"ASSET ACQUISITION" means (a) an Investment by the Company or
any Restricted Subsidiary in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be consolidated or merged with or
into the Company or any Restricted Subsidiary or (b) any acquisition by the
Company or any Restricted Subsidiary of the assets of any Person that constitute
substantially all of an operating unit, a division or line of business of such
Person or that is otherwise outside of the ordinary course of business.
"ASSET SALE" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights, other than sales of inventory in the ordinary course
of business; PROVIDED, HOWEVER, that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company
and its Subsidiaries, taken as a whole, shall be governed by the
provisions of Sections 4.18 and 5.01 hereof and not by the provisions
of Section 4.12 hereof; and
(2) the issuance of Equity Interests of any Restricted
Subsidiary or the sale of Equity Interests in any Restricted
Subsidiary.
Notwithstanding the preceding, the following items shall not
be deemed to be Asset Sales:
(1) any single transaction or series of related transactions
that involves assets having a fair market value (as determined by the
Board of Directors of the Company and evidenced by a resolution of the
Board of Directors of the Company set forth in an Officers' Certificate
and delivered to the Trustee) of less than US$1.0 million;
(2) a sale, lease, conveyance or other disposition of assets
between or among the Company and the Subsidiary Guarantors;
(3) an issuance of Equity Interests by a Restricted Subsidiary
to the Company or to another Restricted Subsidiary;
(4) the sale, lease, conveyance or other disposition of
equipment, inventory, accounts receivable or other assets in the
ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) any Tax Benefit Transaction; and
(7) a Restricted Payment or Permitted Investment that is
permitted by Section 4.10 hereof.
"ASSET SWAP" means an exchange of assets by the Company or a
Restricted Subsidiary for:
(1) one or more Permitted Businesses;
(2) a controlling equity interest in any Person whose assets
consist primarily of one or more Permitted Businesses; and/or
(3) long-term assets that are used in a Permitted Business in
a like-kind exchange or transfer pursuant to Section 1031 of the Code
or any similar or successor provision of the Code or Sections 51, 85,
85.1, 86, 87 or 88(1) of the INCOME TAX ACT (Canada) or any similar or
successor provisions of the INCOME TAX ACT (Canada).
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.
"BACK-TO-BACK DEBT" means any loans made or debt instruments
issued as part of a Back-to-Back Transaction and in which each party to such
Back-to-Back Transaction, other than a Sun Media Entity, executes a
subordination agreement in favor of the Holders in substantially the form
attached hereto as Exhibit F.
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"BACK-TO-BACK PREFERRED SHARES" means Preferred Shares issued:
(1) to a Sun Media Entity by an Affiliate of the Company in
circumstances where, immediately prior to or after, as the case may be,
the issuance of such Preferred Shares, an Affiliate of such Sun Media
Entity has loaned on an unsecured basis to such Sun Media Entity, or an
Affiliate of such Sun Media Entity has subscribed for Preferred Shares
of such Sun Media Entity in, an amount equal to the requisite
subscription price for such Preferred Shares;
(2) by a Sun Media Entity to one of its Affiliates in
circumstances where, immediately prior to or after, as the case may be,
the issuance of such Preferred Shares, such Sun Media Entity has loaned
an amount equal to the proceeds of such issuance to an Affiliate on an
unsecured basis; or
(3) by a Sun Media Entity to one of its Affiliates in
circumstances where, immediately prior to or after, as the case may be,
the issuance of such Preferred Shares, such Sun Media Entity has used
the proceeds of such issuance to subscribe for Preferred Shares issued
by an Affiliate;
in each case on terms whereby:
(i) the aggregate redemption amount applicable to the
Preferred Shares issued to or by such Sun Media Entity is identical:
(A) in the case of (1) above, to the principal amount of
the loan made or the aggregate redemption amount of
the Preferred Shares subscribed for by such
Affiliate;
(B) in the case of (2) above, to the principal amount of
the loan made to such Affiliate; or
(C) in the case of (3) above, to the aggregate redemption
amount of the Preferred Shares issued by such
Affiliate;
(ii) the dividend payment date applicable to the Preferred
Shares issued to or by such Sun Media Entity shall:
(A) in the case of (1) above, be immediately prior to, or
on the same date as, the interest payment date
relevant to the loan made or the dividend payment
date on the Preferred Shares subscribed for by such
Affiliate;
(B) in the case of (2) above, be immediately after, or on
the same date as, the interest payment date relevant
to the loan made to such Affiliate; or
(C) in the case of (3) above, be immediately after, or on
the same date as, the dividend payment date on the
Preferred Shares issued by such Affiliate;
(iii) the amount of dividends provided for on any payment
date in the share conditions attaching to the Preferred Shares issued:
(A) to a Sun Media Entity in the case of (1) above, shall
be equal to or in excess of the amount of interest
payable in respect of the loan made or the amount of
dividends provided for in respect of the Preferred
Shares subscribed for by such Affiliate;
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(B) by a Sun Media Entity in the case of (2) above, shall
be less than or equal to the amount of interest
payable in respect of the loan made to such
Affiliate; or
(C) by a Sun Media Entity in the case of (3) above, shall
be equal to the amount of dividends in respect of the
Preferred Shares issued by such Affiliate.
"BACK-TO-BACK SECURITIES" means Back-to-Back Preferred Shares
or Back-to-Back Debt or both, as the context requires.
"BACK-TO-BACK TRANSACTION" means any of the transactions
described under the definition of Back-to-Back Preferred Shares.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors, the BANKRUPTCY AND INSOLVENCY
ACT (Canada), the COMPANIES' CREDITORS ARRANGEMENT ACT (Canada) or any other
Canadian federal or provincial law or the law of any other jurisdiction relating
to bankruptcy, insolvency, winding up, liquidation, reorganization or relief of
debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as such term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition.
"BOARD OF DIRECTORS" means:
(1) with respect to a corporation, the board of directors of
the corporation;
(2) with respect to a partnership, the board of directors of
the general partner of the partnership; and
(3) with respect to any other Person, the board or committee
of such Person serving a similar function.
"BOARD RESOLUTION" means a copy of a resolution certified by
the secretary or an assistant secretary (or individual performing comparable
duties) of the applicable Person to have been duly adopted by the Board of
Directors of such Person and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CANADIAN TAXING AUTHORITY" means any federal, provincial,
territorial or other Canadian government or any authority or agency thereof
having the power to tax.
"CAPITAL LEASE OBLIGATION" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a balance
sheet in accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
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(2) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CAPITAL STOCK SALE PROCEEDS" means the aggregate net cash
proceeds received by the Company after the Issue Date:
(1) as a contribution to the common equity capital or from the
issue or sale of Equity Interests of the Company (other than
Disqualified Stock or Back-to-Back Securities); or
(2) from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities of
the Company that have been converted into or exchanged for such Equity
Interests,
other than, in either (1) or (2), Equity Interests (or convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities)
sold to a Subsidiary of the Company.
"CASH EQUIVALENTS" means:
(1) United States dollars or Canadian dollars;
(2) investments in securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth, territory or province of the United States of
America or Canada, or by any political subdivision or taxing authority
thereof, and rated in the "R-1" category by the Dominion Bond Rating
Service Limited;
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any domestic commercial bank having
capital and surplus in excess of US$500.0 million;
(4) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2)
and (3) above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Xxxxx'x Investors Service, Inc. or Standard & Poor's Rating Services
and in each case maturing within one year after the date of acquisition
or with respect to commercial paper in Canada, a rating in the "R-1"
category by the Dominion Bond Rating Service Limited; and
(6) money market funds at least 90% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
"CHANGE OF CONTROL" means the occurrence of any of the
following:
5
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of the Company and the Restricted Subsidiaries,
taken as a whole, to any "person" (as that term is used in Section
13(d)(3) of the Exchange Act) other than a Permitted Holder or a
Related Party;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any Person, other than a Permitted Holder or a Related Party, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the
Voting Stock of the Company, measured by voting power rather than
number of shares; or
(4) during any consecutive two year period, the first day on
which individuals who constituted the Board of Directors of the Company
as of the beginning of such two year period (together with any new
directors who were nominated for election or elected to such Board of
Directors with the approval of a majority of the individuals who were
members of such Board of Directors, or whose nomination or election was
previously so approved at the beginning of such two-year period) cease
to constitute a majority of the Board of Directors of the Company.
"CLEARSTREAM" means Clearstream Banking S.A. and any successor
thereto.
"CODE" means the U.S. Internal Revenue Code of 1986, as
amended.
"COMMISSION" means the U.S. Securities and Exchange Commission
and any successor entity thereto.
"COMMON STOCK" of any Person means all Capital Stock of such
Person that is generally entitled to (i) vote in the election of directors of
such Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"COMPANY" means
Sun Media Corporation and any successor
thereto.
"CONSOLIDATED CASH FLOW" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period plus:
(1) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were deducted
in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) Consolidated Interest Expense of such Person and its
Restricted Subsidiaries for such period to the extent that any such
expense was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of
goodwill and other intangibles) and other non-cash expenses (excluding
any such non-cash expense to the extent that it represents an accrual
of or reserve for cash expenses in any future
6
period) of such Person and its Restricted Subsidiaries for such period,
to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; minus
(5) any interest and other payments made to Persons other than
any Sun Media Entity in respect of Back-to-Back Securities or the
Existing Back-to-Back Debt to the extent such interest and other
payments were not deducted in computing such Consolidated Net Income;
minus
(6) non-cash items increasing such Consolidated Net Income for
such period, other than the accrual of revenue in the ordinary course
of business,
in each case, on a consolidated basis and determined in accordance with
GAAP.
Notwithstanding the foregoing, the provision for taxes based
on the income or profits of, and the depreciation and amortization and other
non-cash charges of a Restricted Subsidiary shall be added to Consolidated Net
Income to compute Consolidated Cash Flow of the Company only to the extent that
a corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
governmental approval (unless such approval has been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
shareholders.
"CONSOLIDATED INDEBTEDNESS" means, with respect to any Person
as of any date of determination, the sum, without duplication, of (i) the total
amount of Indebtedness of such Person and its Restricted Subsidiaries, plus (ii)
the total amount of Indebtedness of any other Person, to the extent that such
Indebtedness has been guaranteed by the referent Person or one or more of its
Restricted Subsidiaries, plus (iii) the aggregate liquidation value of all
Disqualified Stock of such Person and all Preferred Shares of Restricted
Subsidiaries of such Person, in each case, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any
Person, for any period, without duplication, the sum of (i) the consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued (including, without limitation, amortization of original
issue discount, non-cash interest payments, the interest component of any
deferred payment Obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts, and other fees, and charges incurred in respect of
letter of credit or bankers' acceptance financings), all calculated after taking
into account the effect of all Hedging Obligations, (ii) the consolidated
interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period, (iii) any interest expense on Indebtedness of
another Person that is guaranteed by such Person or any of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or any of its
Restricted Subsidiaries (whether or not such guarantee or Lien is called upon),
(iv) the product of (a) all dividend payments on any series of Preferred Shares
of such Person or any of its Restricted Subsidiaries, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state, provincial, territorial and local statutory tax
rate of such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP, and (v) to the extent not included in clause
(iv) above for purposes of GAAP, the product of (a) all dividend payments on any
series of Disqualified Stock of such Person or any of its Restricted
Subsidiaries, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state,
provincial, territorial and local statutory tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with GAAP.
Interest and other payments on Back-to-Back Securities or the Existing
Back-to-Back Debt shall not be included as Consolidated Interest Expense.
"CONSOLIDATED NET INCOME" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED, HOWEVER, that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary (other than an Unrestricted Subsidiary) or that
is accounted for by the equity
7
method of accounting shall be included; PROVIDED, that the Net Income
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted
Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (unless such approval has been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its
shareholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
(4) the cumulative effect of a change in accounting
principles shall be excluded;
(5) the Net Income (but not loss) of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the
specified Person or one of its Subsidiaries; PROVIDED, HOWEVER, that
for purposes of Sections 4.09 and 4.10 hereof, the Net Income of any
Unrestricted Subsidiary shall be included to the extent it would
otherwise be included under clause (1) of this definition; and
(6) any non-cash compensation expense realized for grants of
performance shares, stock options or other rights officers, directors
and employees of the Company or any Restricted Subsidiary shall be
excluded, PROVIDED that such shares, options or other rights can be
redeemed at the option of the holders thereof for Capital Stock of the
Company (other than Disqualified Stock).
"CONSOLIDATED REVENUES" means the gross revenues of the
Company and the Restricted Subsidiaries determined on a consolidated basis in
accordance with GAAP; PROVIDED that (1) any portion of gross revenues derived
directly or indirectly from Unrestricted Subsidiaries, including dividends or
distributions from Unrestricted Subsidiaries, shall be excluded from such
calculation, and (2) any portion of gross revenues derived directly or
indirectly from a Person (other than a Subsidiary of the Company or a Restricted
Subsidiary) accounted for by the equity method of accounting shall be included
in such calculation only to the extent of the amount of dividends or
distributions actually paid to the Company or a Restricted Subsidiary by such
Person.
"CORPORATE TRUST 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 FACILITIES" means, one or more debt facilities
(including, without limitation, the New Credit Facility) or commercial paper
facilities, in each case with banks or other institutional lenders providing for
revolving credit loans, term loans, receivables financing (including through the
sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time.
"CURRENCY EXCHANGE PROTECTION AGREEMENT" means, in respect of
a Person, any foreign exchange contract, currency swap agreement, currency
option or other similar agreement or arrangement designed to protect such Person
against fluctuations in currency exchange rates entered into with any commercial
bank or other financial institutions having capital and surplus in excess of
US$500.0 million.
"CUSTODIAN" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section
2.03(c) hereof as Custodian with respect to the Notes, and any and all
successors
8
thereto appointed as custodian hereunder and having become such pursuant to the
applicable provisions of this Indenture.
"DEBT TO CASH FLOW RATIO" means, as of any date of
determination (the "Determination Date"), the ratio of (a) the Consolidated
Indebtedness of the Company as of such Determination Date to (b) the
Consolidated Cash Flow of the Company for the most recently ended four full
fiscal quarters ending immediately prior to such Determination Date for which
interim financial statements are available (each, a "Measurement Period" and,
together, the "Measurement Periods"), determined on a PRO FORMA basis after
giving effect to all acquisitions or dispositions of assets made by the Company
and the Restricted Subsidiaries from the beginning of the first of such quarters
through and including such Determination Date (including any related financing
transactions) as if such acquisitions and dispositions had occurred at the
beginning of such quarter. For purposes of calculating Consolidated Cash Flow
for each Measurement Period immediately prior to the relevant Determination
Date, (i) any Person that is a Restricted Subsidiary on the Determination Date
(or would become a Restricted Subsidiary on such Determination Date in
connection with the transaction that requires the determination of such
Consolidated Cash Flow) shall be deemed to have been a Restricted Subsidiary at
all times during the applicable Measurement Period; (ii) any Person that is not
a Restricted Subsidiary on such Determination Date (or would cease to be a
Restricted Subsidiary on such Determination Date in connection with the
transaction that requires the determination of such Consolidated Cash Flow)
shall be deemed not to have been a Restricted Subsidiary at any time during the
applicable Measurement Period; (iii) if the Company or any Restricted Subsidiary
shall have in any manner (x) acquired (including through an Asset Acquisition or
the commencement of activities constituting such operating business) or (y)
disposed of (including by way of an Asset Sale or the termination or
discontinuance of activities constituting such operating business) any operating
business during the applicable Measurement Period or after the end of such
period and on or prior to such Determination Date, such calculation shall be
made on a PRO FORMA basis in accordance with GAAP, as if, in the case of an
Asset Acquisition or the commencement of activities constituting such operating
business, all such transactions had been consummated on the first day of the
applicable Measurement Period, and, in the case of an Asset Sale or termination
or discontinuance of activities constituting such operating business, all such
transactions had been consummated prior to the first day of the applicable
Measurement Period; (iv) if (A) since the beginning of the applicable
Measurement Period, the Company or any Restricted Subsidiary has incurred any
Indebtedness that remains outstanding or has repaid any Indebtedness, or (B) the
transaction giving rise to the need to calculate the Debt to Cash Flow Ratio is
an incurrence or repayment of Indebtedness, Consolidated Interest Expense for
such Measurement Period shall be calculated after giving effect on a PRO FORMA
basis to such incurrence or repayment as if such Indebtedness was incurred or
repaid on the first day of such period, PROVIDED that, in the event of any such
repayment of Indebtedness, Consolidated Cash Flow for such period shall be
calculated as if the Company or such Restricted Subsidiary had not earned any
interest income actually earned during such period in respect of the funds used
to repay such Indebtedness; and (v) if any Indebtedness bears a floating rate of
interest and is being given PRO FORMA effect, the interest expense on such
Indebtedness shall be calculated as if the base interest rate in effect for such
floating rate of interest on the Determination Date had been the applicable base
interest rate for the entire Measurement Period (taking into account any
Interest Rate Agreement applicable to such Indebtedness if such Interest Rate
Agreement has a remaining term in excess of twelve months).
"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.
"DEFERRED MANAGEMENT FEES" means, for any period, any
Management Fees that were payable during any prior period, the payment of which
was not effected when due.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 or 2.10
hereof, in substantially the form of Exhibit A hereto except that such Note
shall not bear the Global Note Legend and shall not have the "Schedule of
Exchanges of Interests in the Global Note" attached thereto.
"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(b) hereof as the Depositary with respect to the Notes, and any and all
successors thereto appointed as depositary hereunder and having become such
pursuant to the applicable provisions of this Indenture
9
"DISQUALIFIED STOCK" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder thereof), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder thereof, in whole or in part, on or prior to the date that is 91 days
after the date on which the Notes mature. Notwithstanding the preceding
sentence, (i) Back-to-Back Preferred Shares shall not constitute Disqualified
Stock and (ii) any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
shall not constitute Disqualified Stock if the terms of such Capital Stock
provide that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies with
the provisions of Section 4.10 hereof.
"DISTRIBUTION COMPLIANCE PERIOD" means the 40-day distribution
compliance period as defined in Regulation S.
"EQUITY INTERESTS" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"EQUITY OFFERING" means an offering by the Company of Equity
Interests (other than Disqualified Stock or Back-to-Back Securities) however
designated and whether voting or non-voting or an equity contribution by a
direct or indirect parent company to the common equity of the Company.
"EUROCLEAR" means Euroclear Bank, S.A./N.V., as operator of
the Euroclear systems, and any successor thereto.
"EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including any successor
legislation and rules and regulations.
"EXCHANGE NOTES" means Notes registered under the Securities
Act to be exchanged for Notes not so registered, pursuant to and as set forth in
a Registration Rights Agreement relating to such an exchange.
"EXCHANGE OFFER" has the meaning set forth in a Registration
Rights Agreement relating to an exchange of Notes registered under the
Securities Act for Notes not so registered.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set
forth in a Registration Rights Agreement.
"EXISTING BACK-TO-BACK DEBT" means each of the 12.15%
Convertible Obligation due July 14, 2007 and 12.15% Convertible Obligation due
November 28, 2008 of the Company; the 12.25% Convertible Obligation due July 14,
2007 of Xxxxx Publishers Limited; and the 12.25% Convertible Obligation due
November 28, 2008 of Sun Media (Toronto) Corporation, in each case in aggregate
principal amount outstanding on the Issue Date and with respect to which each
party thereto, other than a Sun Media Entity, has executed a
subordination
agreement in favor of the Holders in substantially the form attached hereto as
Exhibit F.
"EXISTING BACK-TO-BACK SECURITIES" means the Existing
Back-to-Back Debt and the Existing Quebecor Preferred Shares.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and
the Restricted Subsidiaries (other than Indebtedness under the New Credit
Facility) in existence on the Issue Date, until such amounts are repaid.
"EXISTING QUEBECOR PREFERRED SHARES" means the 12.50%
Cumulative First Preferred Shares, Series A, of Quebecor Media in aggregate
liquidation amount outstanding on the Issue Date.
"GAAP" means generally accepted accounting principles
consistently applied as in effect in Canada from time to time.
10
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii) hereof, which is required to be placed on all Global Notes issued
under this Indenture.
"GLOBAL NOTES" means the global Notes in the form of Exhibit A
hereto issued in accordance with Article 2 hereof.
"GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, either the United States of America or Canada, and
the payment for which either the United States of America or Canada pledges its
full faith and credit.
"GUARANTEE" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any specified
Person, the obligations of such Person pursuant to any Interest Rate Agreement
or Currency Exchange Protection Agreement.
"HOLDER" means a Person in whose name a Note is registered.
"IAI GLOBAL NOTE" means a Global Note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with and registered in the name of the Depositary or its nominee that
will be issued in a denomination equal to the outstanding principal amount of
the Notes sold to Institutional Accredited Investors, if any, to the extent
required by Applicable Procedures.
"INCUR" means, with respect to any Indebtedness or other
Obligation of any Person, to create, incur, issue, assume, guarantee or
otherwise become indirectly or directly liable, contingently or otherwise, with
respect of such Indebtedness or other Obligation.
"INDEBTEDNESS" means, with respect to any specified Person,
any indebtedness of such Person, whether or not contingent:
(1) representing principal of and premium, if any, in respect
of borrowed money;
(2) representing principal of and premium, if any, evidenced
by bonds, notes, debentures or similar instruments or letters of credit
(or reimbursement agreements in respect thereof);
(3) in respect of bankers' acceptances;
(4) representing Capital Lease Obligations of such Person and
all Attributable Debt in respect of sale and leaseback transactions
entered into by such Person;
(5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable;
(6) representing the amount of all obligations of such Person
with respect to the repayment of any Disqualified Stock or, with
respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends); or
(7) representing any Hedging Obligations,
11
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the guarantee
by the specified Person of any indebtedness of any other Person. The term
"Indebtedness" shall not include Back-to-Back Securities or the Existing
Back-to-Back Securities.
The amount of any Indebtedness outstanding as of any date
shall be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount, and
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness;
PROVIDED, HOWEVER, that the amount of any Indebtedness denominated in a currency
other than Canadian dollars shall be adjusted to the extent of any positive or
negative (to the extent the Obligation under such Currency Exchange Protection
Agreement is not otherwise included as Indebtedness of such Person) value of any
Currency Exchange Protection Agreement relating to any such Indebtedness.
"INDENTURE" means this instrument, as originally executed or
as it may from time to time be supplemented or amended in accordance with
Article 9 hereof.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INITIAL NOTES" means US$205.0 million aggregate principal
amount of Notes issued under this Indenture on the date hereof.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
"INTEREST PAYMENT DATES" shall have the meaning set forth in
paragraph 1 of each Note.
"INTEREST RATE AGREEMENT" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement designed to protect against
fluctuations in interest rates entered into with any commercial bank or other
financial institution having capital and surplus in excess of US$500.0 million.
"INVESTMENTS" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including guarantees or other Obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP and include the
designation of a Restricted Subsidiary as an Unrestricted Subsidiary. If the
Company or any Restricted Subsidiary sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of the Company, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Equity Interests of such Subsidiary so sold or disposed of in an
amount determined as provided in Section 4.10(c) hereof. The acquisition by the
Company or any Restricted Subsidiary of a Person that holds an Investment in a
third Person shall be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person in an amount equal to the fair market
value of the Investment held by the acquired Person in such third Person in an
amount determined as provided in Section 4.10(c) hereof.
12
"ISSUE DATE" means February 7, 2003.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in each of the City of
New York, Toronto, the city in which
the Corporate Trust Office of the Trustee is located or any other place of
payment on the Notes are authorized by law, regulation or executive order to
remain closed.
"LIEN" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest, hypothecation, assignment for security or
encumbrance of any kind in respect of such asset, whether or not filed, recorded
or otherwise perfected under applicable law, including any conditional sale or
capital lease or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.
"LETTER OF TRANSMITTAL" means the letter of transmittal, or
its electronic equivalent in accordance with the Applicable Procedures, to be
prepared by the Company and sent to all Holders of the Initial Notes or any
Additional Notes for use by such Holders in connection with an Exchange Offer.
"MANAGEMENT FEES" means any amounts payable by the Company or
any Restricted Subsidiary in respect of management or similar services.
"NET INCOME" means, with respect to any specified Person, the
net income (loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of Preferred Shares dividends, excluding, however:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with: (a) any Asset Sale or (b) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the extinguishment
of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any
related provision for taxes on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by
the Company or any Restricted Subsidiary in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(a) the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, (b) any
relocation expenses incurred as a result of the Asset Sale, (c) taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, (d)
amounts required to be applied to the repayment of Indebtedness, other than
Indebtedness under a Credit Facility, secured by a Lien on the asset or assets
that were the subject of such Asset Sale, (e) any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP, and (f) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures of the Company or
such Restricted Subsidiary as a result of such Asset Sale; PROVIDED, HOWEVER,
that the proceeds from the sale, transfer or other disposition of all of the
outstanding Capital Stock or all or substantially all of the assets of Toronto
Sun International, Inc. within 180 days of the Issue Date shall not constitute
Net Proceeds.
"NEW CREDIT FACILITY" means the credit facility between the
Company, Bank of America, N.A., Banc of America Securities LLC and Credit Suisse
First Boston Corporation, as lead arrangers, Bank of America, N.A., as
administrative agent, and the lenders thereto to be entered into on or prior to
the Issue Date.
"NON-RECOURSE DEBT" means Indebtedness:
(1) as to which neither the Company nor any Restricted
Subsidiary (a) provides credit support of any kind (including any
undertaking, agreement or
13
instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise or (c) constitutes the
lender;
(2) no default with respect to which (including any rights
that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or
both any holder of any other Indebtedness (other than the Notes ) of
the Company or any Restricted Subsidiary to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company
or any Restricted Subsidiary.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Vice President of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Officers of the Company, at least one of whom shall be the principal executive
officer, principal financial officer or the principal accounting officer of the
Company, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company, an Affiliate of the Company or the
Trustee.
"PARTICIPANT" means, with respect to the Depositary, Euroclear
or Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively, and, with respect to DTC, shall include Euroclear and
Clearstream.
"PERMITTED BUSINESS" means the business conducted by the
Company and its Subsidiaries on the Issue Date or anything related or ancillary
thereto.
"PERMITTED HOLDERS" means one or more of the following persons
or entities:
(1) Quebecor Inc.;
(2) Quebecor Media;
(3) any issue of the late Xxxxxx Xxxxxxxx;
(4) any trust having as its sole beneficiaries one or more of
the persons listed in clause (3) above;
(5) any corporation, partnership or other entity controlled by
one or more of the persons or trusts referred to in clause (3) or (4)
above or in this clause (5); and
(6) Capital Communications CDPQ Inc.
"PERMITTED INVESTMENTS" means:
(1) any Investment in the Company or in a Restricted
Subsidiary;
14
(2) any Investment in cash or Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary
in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary; or
(b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or any Restricted Subsidiary,
PROVIDED that, in each case, such Person's primary business is
a Permitted Business;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the provisions of Section 4.12 hereof;
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock or
Back-to-Back Securities) of the Company;
(6) Hedging Obligations entered into in the ordinary course of
business of the Company or any Restricted Subsidiary and not for
speculative purposes;
(7) loans and advances to officers, directors and employees of
the Company and the Restricted Subsidiaries for business related travel
expenses, moving expenses and other similar expenses in each case
incurred in the ordinary course of business not to exceed US$2.5
million outstanding at any time;
(8) any Investment in connection with Back-to-Back
Transactions;
(9) any Investment existing on the Issue Date;
(10) other Investments in any Person engaged in a Permitted
Business having an aggregate fair market value (measured on the date
each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made
pursuant to this clause (10) since the Issue Date not to exceed US$25.0
million; and
(11) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (11)
since the Issue Date not to exceed US$10.0 million.
"PERMITTED LIENS" means:
(1) Liens of Restricted Subsidiaries securing Indebtedness and
other Obligations of Restricted Subsidiaries under Credit Facilities,
which Indebtedness was permitted by the terms of this Indenture to be
incurred, PROVIDED, HOWEVER, that the aggregate principal amount of
such Indebtedness secured by such Liens shall not exceed an aggregate
of (a) US$230.0 million and (b) Cdn$75.0 million at any one time
outstanding;
(2) Liens in favor of the Company or a Restricted Subsidiary;
15
(3) Liens on property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or any
Restricted Subsidiary, PROVIDED that such Liens were in existence prior
to the contemplation of such merger or consolidation and do not extend
to any assets other than those of the Person merged into or
consolidated with the Company or the Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary, PROVIDED that such
Liens were in existence prior to the contemplation of such acquisition
and do not extend to any assets other than such property;
(5) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(4) hereof covering only the
assets acquired with such Indebtedness;
(7) Liens existing on the Issue Date;
(8) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded, PROVIDED that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(9) Liens securing Permitted Refinancing Indebtedness,
PROVIDED that any such Lien does not extend to or cover any property,
Capital Stock or Indebtedness other than the property, shares or debt
securing the Indebtedness so refunded, refinanced or extended;
(10) attachment or judgment Liens not giving rise to a Default
or an Event of Default;
(11) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security;
(12) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptance, surety and appeal bonds, government contracts, performance
and return-of-money bonds and other obligations of a similar nature
incurred in the ordinary course of business, exclusive of Obligations
for the payment of borrowed money;
(13) Liens of franchisors or other regulatory bodies arising
in the ordinary course of business;
(14) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating
to such letters of credit and the products and proceeds thereof;
(15) Liens encumbering customary initial deposits and margin
deposits, and other Liens that are within the general parameters
customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Hedging
16
Obligations and forward contracts, options, future contracts, future
options or similar agreements or arrangements, including xxxx-to-market
transactions designed solely to protect the Company or any Restricted
Subsidiary from fluctuations in interest rates, currencies or the price
of commodities;
(16) Liens consisting of any interest or title of licensor in
the property subject to a license;
(17) Liens on the Capital Stock of Unrestricted Subsidiaries;
(18) Liens arising from sales or other transfers of accounts
receivable which are past due or otherwise doubtful of collection in
the ordinary course of business;
(19) Liens securing Indebtedness permitted to be incurred
under Section 4.09(b)(12) hereof;
(20) any extensions, substitutions, replacements or renewals
of the foregoing clauses (1) through (19); and
(21) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary with respect to Obligations that
do not exceed US$25 million at any one time outstanding.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of
the Company or any Restricted Subsidiary issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any Subsidiary Guarantor (other than
intercompany Indebtedness); PROVIDED, HOWEVER, that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus all
accrued interest thereon and the amount of all expenses and premiums
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness is subordinated in
right of payment to, the Notes on terms at least as favorable to the
Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"PREDECESSOR NOTE" of any particular Note means every previous
Note evidencing all or a portion of the same Indebtedness as that evidenced by
such particular Note; and any Note authenticated and delivered under
17
Section 2.07 in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same Indebtedness as the lost, destroyed or stolen Note.
"PREFERRED SHARES" means any Capital Stock of a Person,
however designated, which entitles the holder thereof to a preference with
respect to the payment of dividends, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over
shares of any other class of Capital Stock issued by such Person.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in
Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture
except as otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"QUEBECOR MEDIA" means Quebecor Media Inc., the indirect
parent of the Company.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Issue Date, among the Company, each Subsidiary
Guarantor and the initial purchasers named therein, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements between the Company
and the other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes, or exchange
such Additional Notes for registered notes, under the Securities Act.
"REGULAR RECORD DATE" for the interest payable on any Interest
Payment Date means the applicable date specified as a "Record Date" on the face
of the Note.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
"REGULATION S GLOBAL NOTE" means a Global Note in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold for initial resale in reliance on Rule 904.
"RELATED PARTY" means:
(1) any controlling shareholder, 80% (or more) owned
Subsidiary, or immediate family member (in the case of an individual)
of any Permitted Holder, or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, shareholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of any one
or more Permitted Holder and/or such other Persons referred to in the
immediately preceding clause (1).
"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) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his or her knowledge of and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means one or more Definitive
Notes bearing the Private Placement Legend.
"RESTRICTED GLOBAL NOTES" means 144A Global Notes, IAI Global
Notes and Regulation S Global Notes.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
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"RESTRICTED PAYMENT" means:
(1) the declaration or payment of any dividend or making any
other payment or distribution on account of the Company's or any
Restricted Subsidiary's Equity Interests, including, without
limitation, any payment in connection with any merger or consolidation
involving the Company or any Restricted Subsidiary, or to the direct or
indirect holders of the Company's or any Restricted Subsidiary's Equity
Interests in their capacity as such, other than dividends or
distributions payable in Equity Interests (other than Disqualified
Stock) of the Company or to the Company or a Restricted Subsidiary
(and, if such Restricted Subsidiary is not a Wholly Owned Restricted
Subsidiary, to the other shareholders of such Restricted Subsidiary on
a PRO RATA basis or on a basis that results in the receipt by the
Company or a Restricted Subsidiary of dividends or distributions of
greater value than it would receive on a PRO RATA basis);
(2) the purchase, redemption or other acquisition or
retirement for value, including, without limitation, in connection with
any merger or consolidation involving the Company, any Equity Interests
of the Company, other than such Equity Interests of the Company held by
the Company or any of its Affiliates, including any Restricted
Subsidiary;
(3) any payment on or with respect to, or purchase,
redemption, defeasance or other acquisition or retirement for value any
Back-to-Back Securities, Existing Back-to-Back Securities or
Indebtedness that is subordinated to the Notes, except, in the case of
Indebtedness that is subordinated to the Notes, a payment of interest
at the Stated Maturity of such interest or principal at or within one
year of the Stated Maturity of principal of such Indebtedness;
(4) any Restricted Investment; or
(5) the payment of any amount of Management Fees (including
Deferred Management Fees) to a Person other than the Company or a
Restricted Subsidiary.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities
Act.
"RULE 144A" means Rule 144A promulgated under the Securities
Act.
"RULE 903" means Rule 903 promulgated under the Securities
Act.
"RULE 904" means Rule 904 promulgated under the Securities
Act.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as
amended, and the rules and regulations thereunder, including any successor
legislation and rules and regulations.
"SHELF REGISTRATION STATEMENT" has the meaning set forth in
any Registration Rights Agreement relating to registering Notes under the
Securities Act.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issue Date.
"SPECIAL INTEREST" has the meaning set forth in any
Registration Rights Agreement and relating to amounts to be paid in the event
the Company fails to satisfy certain conditions set forth therein. For all
purposes of this Indenture, the term "interest" shall include Special Interest,
if any, with respect to the Notes.
19
"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the
Company or its Subsidiaries (whether outstanding on the Issue Date or thereafter
incurred) that is subordinate or junior in right of payment to the Notes
pursuant to a written agreement to that effect.
"SUBSIDIARY" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such Person
or one or more Subsidiaries of such Person (or any combination
thereof).
"SUBSIDIARY GUARANTEE" means a guarantee on the terms set
forth in this Indenture by a Subsidiary Guarantor of the Company's obligations
with respect to the Notes.
"SUBSIDIARY GUARANTOR" means each Restricted Subsidiary and
any other Person that becomes a Subsidiary Guarantor pursuant to the provisions
of Section 4.19 hereof or who otherwise executes and delivers a supplemental
indenture to the Trustee providing for a Subsidiary Guarantee.
"SUN MEDIA ENTITY" means any of the Company or any Subsidiary
Guarantor.
"TAX" means any tax, duty, levy, impost, assessment or other
governmental charge (including penalties, interest and any other liabilities
related thereto).
"TAX BENEFIT TRANSACTION" means, for so long as the Company is
a direct or indirect Subsidiary of Quebecor Inc., any transaction between a Sun
Media Entity and Quebecor Inc. or any of its Affiliates, the primary purpose of
which is to create tax benefits for any Sun Media Entity or for Quebecor Inc. or
any of its Affiliates; PROVIDED, HOWEVER, that (1) the Sun Media Entity involved
in the transaction obtains a favorable tax ruling from a competent tax authority
or a favorable tax opinion from a nationally recognized Canadian law or
accounting firm having a tax practice of national standing as to the tax
efficiency of the transaction for such Sun Media Entity; (2) the Company
delivers to the Trustee (a) a resolution of the Board of Directors of the
Company to the effect the transaction will not prejudice the noteholders and
certifying that such transaction has been approved by a majority of the
disinterested members of such Board of Directors and (b) an opinion as to the
fairness to such Sun Media Entity of such transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing in the United States or Canada; (3) such transaction is set forth
writing; and (4) the Consolidated Cash Flow of the Company is not reduced after
giving PRO FORMA effect to the transaction as if the same had occurred at the
beginning of the most recently ended four fiscal quarter period of the Company
for which internal financial statements are available; PROVIDED, HOWEVER, that
if such transaction shall thereafter cease to satisfy the preceding requirements
as a Tax Benefit Transaction, it shall thereafter cease to be a Tax Benefit
Transaction for purposes of this Indenture and shall be deemed to have been
effected as of such date and, if the transaction is not otherwise permitted by
this Indenture as of such date, the Company shall be in default under this
Indenture if such transaction does not comply with the preceding requirements or
is not otherwise unwound within 30 days of that date.
20
"TIA" means the U.S. Trust Indenture Act of 1939, as amended,
and the rules and regulations thereunder, including any successor legislation
and rules and regulations.
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"UNRESTRICTED DEFINITIVE NOTES" means one or more Definitive
Notes that do not and are not required to bear the Private Placement Legend.
"UNRESTRICTED GLOBAL NOTES" means one or more Global Notes
that do not and are not required to bear the Private Placement Legend and are
deposited with and registered in the name of the Depositary or its nominee.
"UNRESTRICTED SUBSIDIARY" means:
(1) any Subsidiary of the Company that is designated after the
Issue Date as an Unrestricted Subsidiary as permitted or required
pursuant to the provisions of Section 4.17 hereof and is not thereafter
redesignated as a Restricted Subsidiary as permitted pursuant thereto;
and
(2) any Subsidiary of an Unrestricted Subsidiary.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such
date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any specified Person
means a Restricted Subsidiary of such Person all of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) will at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- -------
"Acceleration Notice"......................................... 6.02
"Additional Amounts".......................................... 4.20(a)(3)
"Affiliate Transaction"....................................... 4.14(a)
"Allocable Excess Proceeds"................................... 4.12(e)
"Asset Sale Offer"............................................ 4.12(e)
"Authentication Order"........................................ 2.02(d)
"Base Currency"............................................... 12.13(a)
"Benefited Party"............................................. 10.01
"Change of Control Offer"..................................... 4.18(a)
"Change of Control Amount".................................... 4.18(a)
21
"Covenant Defeasance"......................................... 8.03
"DTC"......................................................... 2.03(b)
"Event of Default"............................................ 6.01
"Excess Proceeds"............................................. 4.12
"Excluded Holder"............................................. 4.20(b)
"First Currency".............................................. 12.14
"judgment currency"........................................... 12.13(a)
"Legal Defeasance"............................................ 8.02
"losses" ..................................................... 7.07
"Offer Amount"................................................ 3.09(b)(ii)
"Offer Period"................................................ 3.09(c)
"Offer to Purchase"........................................... 3.09(a)
"Paying Agent"................................................ 2.03(a)
"Payment Default"............................................. 6.01(v)(a)
"Permitted Debt".............................................. 4.09(b)
"Purchase Date"............................................... 3.09(c)
"rate(s) of exchange"......................................... 12.13
"Registrar"................................................... 2.03(a)
"Security Register"........................................... 3.03
"Surviving Company"........................................... 5.01(a)(1)
"Surviving Guarantor"......................................... 5.01(b)(1)
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
(a) Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this Indenture.
(b) 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; and
"OBLIGOR" on the Notes means the Company and any successor
obligor upon the Notes.
(c) All other terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule under the TIA and not otherwise defined herein have the meanings so
assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
(a) Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined herein has
the meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
22
(iv) words in the singular include the plural, and in the
plural include the singular;
(v) all references in this instrument to "Articles,"
"Sections" and other subdivisions are to the designated Articles,
Sections and subdivisions of this instrument as originally executed;
(vi) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not
to any particular Article, Section or other subdivision.
(vii) "including" means "including without limitation;"
(viii) provisions apply to successive events and
transactions; and
(ix) references to sections of or rules under the
Securities Act, the Exchange Act or the TIA shall be deemed to include
substitute, replacement or successor sections or rules adopted by the
Commission from time to time thereunder.
ARTICLE 2.
THE NOTES
SECTION 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of authentication
shall be substantially in the form included in Exhibit A hereto, which is hereby
incorporated in and expressly made part of this Indenture. The Notes may have
notations, legends or endorsements required by law, exchange rule or usage in
addition to those set forth on Exhibit A. Each Note shall be dated the date of
its authentication. The Notes shall be in denominations of US$1,000 and integral
multiples thereof. The terms and provisions contained in the Notes shall
constitute a part of this Indenture, and the Company, the Subsidiary Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. To the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) FORM OF NOTES. Notes shall be issued initially in global form and
shall be substantially in the form of Exhibit A attached hereto (including the
Global Note Legend thereon and the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Notes issued in definitive form shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Note Legend thereon and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note shall represent such aggregate
principal amount of the outstanding Notes as shall be specified therein and each
shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions
and transfers of interests therein. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
(c) BOOK-ENTRY PROVISIONS. This Section 2.01(c) shall apply only to
Global Notes deposited with the Trustee, as custodian for the Depositary.
Participants and Indirect Participants shall have no rights under this Indenture
or any Global Note with respect to any Global Note held on their behalf by the
Depositary or by the Trustee as custodian for the Depositary, and the Depositary
shall be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Participants or Indirect
Participants, the Applicable Procedures or the operation of customary practices
of the Depositary governing the exercise of the rights of a holder of a
beneficial interest in any Global Note.
23
(d) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of
Clearstream" and "Customer Handbook" of Clearstream shall be applicable to
transfers of beneficial interests in Global Notes that are held by Participants
through Euroclear or Clearstream.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
(a) One Officer shall execute the Notes on behalf of the Company by
manual or facsimile signature.
(b) If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated by the Trustee, the Note shall
nevertheless be valid.
(c) 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.
(d) The Trustee shall, upon a written order of the Company signed by an
Officer (an "AUTHENTICATION ORDER"), authenticate Notes for original issue.
(e) The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless otherwise provided in such appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent shall have the same rights
as an Agent with respect to Holders.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
(a) 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.
(b) The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
(c) The Company initially appoints the Trustee to act as Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes, and the
Trustee hereby agrees so to initially act.
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 shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all funds held
by it relating to the Notes to the Trustee. The Company at any time may require
a Paying Agent to pay all funds held by it relating to the Notes to the Trustee.
Upon payment over to the Trustee, the Paying Agent (if other than the Company or
a Subsidiary) shall have no further liability for such funds. If the Company or
a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all funds held by it as Paying Agent.
Upon any Event of Default under Sections 6.01(viii) and (ix) hereof relating to
the Company, the Trustee shall serve as Paying Agent for the Notes.
24
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 Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date or such
shorter time as the Trustee may allow, as the Trustee may reasonably require of
the names and addresses of the Holders and the Company shall otherwise comply
with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. The Company shall exchange Global
Notes for Definitive Notes if: (1) the Company delivers to the Trustee a notice
from the Depositary that the Depositary is unwilling or unable to continue to
act as Depositary for the Global Notes or that it has ceased to be a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary; (2) the Company at its option determines that
the Global Notes shall be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee; or (3) a Default or Event of Default shall
have occurred and be continuing. Upon the occurrence of any of the preceding
events in clauses (1), (2) or (3) above, Definitive Notes shall be issued in
denominations of US$1,000 or integral multiples thereof and in such names as the
Depositary shall instruct the Trustee in writing. Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 hereof. Except as provided above, every Note authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to
this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a), and
beneficial interests in a Global Note may not be transferred and exchanged other
than as provided in Section 2.06(b), (c) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES.
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in Global Notes also shall require compliance with either
clause (i) or (ii) below, as applicable, as well as one or more of the other
following clauses, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend and any Applicable
Procedures; PROVIDED, HOWEVER, that prior to the expiration of the
Distribution Compliance Period, transfers of beneficial interests in
Regulation S Global Note may not be made to or for the account or benefit
of a "U.S. Person" (as defined in Rule 902(k) of Regulation S) (other than
a "distributor" (as defined in Rule 902(d) of Regulation S)). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. Except as may be required by any Applicable
Procedures, no written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.06(b)(i).
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN
GLOBAL NOTES. In connection with all transfers and exchanges of beneficial
interests that are not subject to Section 2.06(b)(i) above, the transferor
of such beneficial interest must deliver to the Registrar either (A)(1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be
25
credited with such increase or (B) if permitted under Section 2.06(a)
hereof, (1) a written order from a Participant or an Indirect Participant
given to the Depositary in accordance with the Applicable Procedures
directing the Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall
be registered to effect the transfer or exchange referred to in (B)(1)
above. Upon consummation of an Exchange Offer by the Company in accordance
with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii)
shall be deemed to have been satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal delivered by the Holder
of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the
Notes or otherwise applicable under the Securities Act, the Trustee shall
adjust the principal amount of the relevant Global Note(s) pursuant to
Section 2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE
TO ANOTHER RESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery thereof in
the form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(ii) above and
the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in a 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof or, if permitted by Applicable
Procedures, item (3) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in a Regulation S Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including
the certifications in item (2) thereof; and
(C) if the transferee is required by Applicable Procedures to
take delivery in the form of a beneficial interest in an IAI Global
Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications and certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED
GLOBAL NOTE FOR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note only if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to an
Exchange Offer in accordance with a Registration Rights Agreement and
the holder of the beneficial interest to be transferred, in the case of
an exchange, or the transferee, in the case of a transfer, makes any
and all certifications in the applicable Letter of Transmittal (or is
deemed to have made such certifications if delivery is made through the
Applicable Procedures) as may be required by such Registration Rights
Agreement;
(B) such transfer is effected pursuant to a Shelf
Registration Statement in accordance with a Registration Rights
Agreement;
(C) such transfer is effected by a broker-dealer pursuant to
an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
26
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this clause (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect
that such exchange or transfer shall be effected in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend shall no longer be required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to clause (B) or (D) above at
a time when an Unrestricted Global Note has not yet been issued, the Company
shall execute and, upon receipt of an Authentication Order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to clause (B) or (D) above.
(v) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS IN UNRESTRICTED
GLOBAL NOTES FOR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
PROHIBITED. Beneficial interests in an Unrestricted Global Note may not be
exchanged for, or transferred to Persons who take delivery thereof in the
form of, beneficial interests in a Restricted Global Note.
(c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES.
(i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO RESTRICTED
DEFINITIVE NOTES. Subject to Section 2.06(a) hereof, if any holder of a
beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being transferred to a QIB
in accordance with Rule 144A, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
"non-U.S. Person" (as defined in Rule 902(k) of Regulation S) in an
offshore transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant
to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
27
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed
in clauses (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3)(d) thereof, as applicable; or
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(b)
thereof,
the Trustee shall reduce or cause to be reduced in a corresponding amount
pursuant to Section 2.06(h) hereof the aggregate principal amount of the
applicable Restricted Global Note, and the Company shall execute and, upon
receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate and deliver a Restricted Definitive Note in
the appropriate principal amount to the Person designated by the holder of
such beneficial interest in instructions delivered to the Registrar by the
Depositary and the applicable Participant or Indirect Participant on behalf
of such holder. Any Restricted Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
shall designate in such instructions. The Trustee shall deliver such
Restricted Definitive Notes to the Persons in whose names such Notes are so
registered. Any Restricted Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this Section
2.06(c)(i) shall bear the Private Placement Legend and shall be subject to
all restrictions on transfer contained therein.
(ii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a) hereof, a holder
of a beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer
such beneficial interest to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to an
Exchange Offer in accordance with a Registration Rights Agreement and
the holder of such beneficial interest, in the case of an exchange, or
the transferee, in the case of a transfer, makes any and all
certifications in the applicable Letter of Transmittal (or is deemed to
have made such certifications if delivery is made through the
Applicable Procedures) as may be required by such Registration Rights
Agreement;
(B) such transfer is effected pursuant to a Shelf
Registration Statement in accordance with a Registration Rights
Agreement;
(C) such transfer is effected by a broker-dealer pursuant to
an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form
28
of an Unrestricted Definitive Note, a certificate from such holder in
the form of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this clause (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the effect
that such exchange or transfer shall be effected in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend shall no longer be required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the clauses of this
Section 2.06(c)(ii) the Company shall execute, and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate and deliver an Unrestricted Definitive Note in the
appropriate principal amount to the Person designated by the holder of such
beneficial interest in instructions delivered to the Registrar by the
Depositary and the applicable Participant or Indirect Participant on behalf
of such holder, and the Trustee shall reduce or cause to be reduced in a
corresponding amount pursuant to Section 2.06(h) hereof the aggregate
principal amount of the applicable Restricted Global Note.
(iii) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO
UNRESTRICTED DEFINITIVE NOTES. Subject to Section 2.06(a) hereof, if any
holder of a beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for an Unrestricted Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in
the form of an Unrestricted Definitive Note, then, upon satisfaction of the
applicable conditions set forth in Section 2.06(b)(ii) hereof, the Trustee
shall reduce or cause to be reduced in a corresponding amount pursuant to
Section 2.06(h) hereof the aggregate principal amount of the applicable
Unrestricted Global Note, and the Company shall execute and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate and deliver an Unrestricted Definitive Note in
the appropriate principal amount to the Person designated by the holder of
such beneficial interest in instructions delivered to the Registrar by the
Depositary and the applicable Participant or Indirect Participant on behalf
of such holder. Any Unrestricted Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall designate in
such instructions. The Trustee shall deliver such Unrestricted Definitive
Notes to the Persons in whose names such Notes are so registered. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement
Legend.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any holder of a Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted
Global Note or to transfer such Restricted Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (1)
thereof;
(C) if such Restricted Definitive Note is being transferred
to a "non-U.S. Person" (as defined in Rule 902(k) of Regulation S) in
an offshore transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
29
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than
those listed in clauses (B) through (D) above, a certificate to the
effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof, if
applicable; or
(F) if such Restricted Definitive Note is being transferred
to the Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in item
(3)(b) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased in a corresponding amount pursuant to Section 2.06(h)
hereof the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, a
144A Global Note, in the case of clause (C) above, a Regulation S Global
Note, and in all other cases, an IAI Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A holder of a Restricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Restricted Definitive Note to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
(A) such exchange or transfer is effected pursuant to a
Exchange Offer in accordance with a Registration Rights Agreement and
the holder of such beneficial interest, in the case of an exchange, or
the transferee, in the case of a transfer, makes such certifications in
the applicable Letter of Transmittal (or is deemed to have made such
certifications if delivery is made through the Applicable Procedures)
as may be required by such Registration Rights Agreement;
(B) such transfer is effected pursuant to a Shelf
Registration Statement in accordance with a Registration Rights
Agreement;
(C) such transfer is effected by a broker-dealer pursuant to
an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in an Unrestricted
Global Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or
(2) if the holder of such Restricted Definitive Note proposes
to transfer such Note to a Person who shall take delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof;
and, in each such case set forth in this clause (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Registrar to the
30
effect that such exchange or transfer shall be effected in compliance
with the Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend shall no longer be required
in order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the clauses in this
Section 2.06(d)(ii), the Trustee shall cancel such Restricted Definitive Note
and increase or cause to be increased in a corresponding amount pursuant to
Section 2.06(h) hereof the aggregate principal amount of the Unrestricted Global
Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Unrestricted Definitive Note to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased in a corresponding amount
pursuant to Section 2.06(h) hereof the aggregate principal amount of one of
the Unrestricted Global Notes.
(iv) TRANSFER OR EXCHANGE OF UNRESTRICTED DEFINITIVE NOTES TO
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES PROHIBITED. An Unrestricted
Definitive Note may not be exchanged for, or transferred to Persons who
take delivery thereof in the form of, beneficial interests in a Restricted
Global Note.
(v) ISSUANCE OF UNRESTRICTED GLOBAL NOTES. If any such exchange or
transfer of a Definitive Note for a beneficial interest in an Unrestricted
Global Note is effected pursuant to clause (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES.
Upon request by a holder of Definitive Notes and such holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such holder. In
addition, the requesting holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE NOTES. Any
Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive
Note if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A, a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act, a
certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES.
Any Restricted Definitive Note may be exchanged by the holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note only
if:
31
(A) such exchange or transfer is effected pursuant to an
Exchange Offer in accordance with a Registration Rights Agreement and
the holder of such beneficial interest, in the case of an exchange, or
the transferee, in the case of a transfer, makes such certifications in
the applicable Letter of Transmittal (or is deemed to have made such
certifications if delivery is made through the Applicable Procedures)
as may be required by such Registration Rights Agreement;
(B) any such transfer is effected pursuant to a Shelf
Registration Statement in accordance with a Registration Rights
Agreement;
(C) any such transfer is effected by a broker-dealer pursuant
to an Exchange Offer Registration Statement in accordance with a
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (1)(d) thereof; or
(2) if the holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted Definitive Note, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this clause (D), if the Registrar
so requests, an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer shall be
effected in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private Placement
Legend shall no longer be required in order to maintain compliance with
the Securities Act.
Upon satisfaction of the conditions of any of the clauses of Section
2.06(e)(ii) the Trustee shall cancel the prior Restricted Definitive
Note and the Company shall execute, and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee shall authenticate and deliver an Unrestricted Definitive Note
in the appropriate principal amount to the Person designated by the
holder of such prior Restricted Definitive Note in instructions
delivered to the Registrar by such holder.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. A holder of Unrestricted Definitive Notes may transfer such Notes to
a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holders thereof.
(f) EXCHANGE OFFER. Upon the occurrence of an Exchange Offer in
accordance with a Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the applicable Restricted Global Notes (A) tendered for acceptance
by Persons that make any and all certifications in the applicable Letters of
Transmittal (or are deemed to have made such certifications if delivery is made
through the Applicable Procedures) as may be required by such Registration
Rights Agreement, and (B) accepted for exchange in the Exchange Offer and (ii)
Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes tendered for acceptance by
Persons who made the foregoing certification and accepted for exchange in the
Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall
reduce or cause to be reduced in a corresponding amount the aggregate principal
amount of the applicable Restricted Global Notes, and
32
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the holders of Restricted Definitive Notes so accepted
Unrestricted Definitive Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by clause (B) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the
following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL, ASSIGN, TRANSFER, PLEDGE, ENCUMBER OR OTHERWISE DISPOSE OF SUCH SECURITY,
PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
SUN
MEDIA CORPORATION (THE "COMPANY") OR ANY OF ITS AFFILIATES WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE OF THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN
A MINIMUM PRINCIPAL AMOUNT OF US$250,000, FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION OF THE
SECURITIES IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE,
ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE OR OTHER DISPOSITION PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to clauses (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend in
substantially the following form:
33
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE 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
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note 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 or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, 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 by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) No service charge shall be made to a Holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 4.12, 4.18 and 9.05 hereof).
(ii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same
Indebtedness, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes
duly issued hereunder.
(iii) Neither the Registrar nor the Company shall be required (A)
to issue, to register the transfer of or to exchange any 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 date of selection, (B) to register the
transfer of or to exchange any Note so selected for redemption in whole
34
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 (including a Regular Record Date) and the next succeeding
Interest Payment Date.
(iv) 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 Note and for all other purposes, in each case regardless of any notice
to the contrary.
(v) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
(vi) The Trustee is hereby authorized and directed to enter into a
letter of representation with the Depositary in the form provided by the
Company and to act in accordance with such letter.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, shall authenticate
a replacement Note. If required by the Trustee or the Company, the Holder of
such Note shall provide indemnity sufficient, in the judgment of the Trustee or
the Company, as applicable, to protect the Company, the Trustee, any Agent and
any authenticating agent from any loss that any of them may suffer in connection
with such replacement. If required by the Company, such Holder shall reimburse
the Company for its reasonable expenses in connection with such replacement.
Every replacement Note issued in accordance with this Section 2.07
shall be the valid obligation of the Company evidencing the same Indebtedness as
the destroyed, lost or stolen Note and shall be entitled to all of the benefits
of this Indenture equally and proportionately with all other Notes duly issued
hereunder.
SECTION 2.08. OUTSTANDING NOTES.
(a) The Notes outstanding at any time shall be the entire principal
amount of Notes represented by all the Global Notes and Definitive Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those subject to reductions in beneficial interests
effected by the Trustee in accordance with Section 2.06 hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in
Section 2.09 hereof, a Note shall not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note; PROVIDED, HOWEVER, that
Notes held by the Company or a Subsidiary of the Company shall be deemed not to
be outstanding for purposes of Section 3.07(c) hereof.
(b) If a Note is replaced pursuant to Section 2.07 hereof, it shall
cease to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
(c) If the principal amount of any Note is considered paid under
Section 4.01 hereof, it shall cease to be outstanding and interest on it shall
cease to accrue.
(d) If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date, a Purchase Date or
maturity date, funds 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, waiver or consent, Notes owned by the
Company, or by any Affiliate of the Company, shall be
35
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that the Trustee knows are so owned
shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of Definitive 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 authenticate Global Notes or
Definitive Notes in exchange for temporary Notes, as applicable.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture equally and proportionately with all other Notes duly issued
hereunder.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
Upon sole direction of the Company, the Trustee shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirements of the Exchange Act or other applicable laws). Certification of the
destruction of all cancelled Notes shall be delivered to the Company from time
to time upon request. 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 plus, to the extent lawful,
interest payable on the defaulted interest, 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 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.
SECTION 2.13. CUSIP OR ISIN NUMBERS.
The Company in issuing the Notes may use "CUSIP" or "ISIN" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" or "ISIN"
numbers in notices of redemption as a convenience to Holders; PROVIDED, HOWEVER,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption or notice of an Offer to Purchase and that reliance
may be placed only on the other identification numbers printed on the Notes, and
any such redemption or Offer to Purchase shall not be affected by any defect in
or omission of such numbers. The Company shall promptly notify the Trustee of
any change in the "CUSIP" or "ISIN" numbers.
SECTION 2.14. SPECIAL INTEREST
If Special Interest is payable by the Company pursuant to a
Registration Rights Agreement and paragraph 1 of the Notes, the Company shall
deliver to the Trustee a certificate to that effect stating (i) the amount of
such Special Interest that is payable and (ii) the date on which such interest
is payable pursuant to Section 4.01 hereof. Unless and until a Responsible
Officer of the Trustee receives such a certificate or instruction or direction
36
from the Holders in accordance with the terms of this Indenture, the Trustee may
assume without inquiry that no Special Interest is payable. The foregoing shall
not prejudice the rights of the Holders with respect to their entitlement to
Special Interest as otherwise set forth in this Indenture or the Notes and
pursuing any action against the Company directly or otherwise directing the
Trustee to take any such action in accordance with the terms of this Indenture
and the Notes. If the Company has paid Special Interest directly to the Persons
entitled to it, the Company shall deliver to the Trustee an Officers'
Certificate setting forth the details of such payment.
SECTION 2.15. ISSUANCE OF ADDITIONAL NOTES
The Company shall be entitled, subject to its compliance with Section
4.09 hereof, to issue Additional Notes under this Indenture which shall have
identical terms as the Initial Notes issued on the date hereof, other than with
respect to the date of issuance, issue price and rights under a related
Registration Rights Agreement, if any. The Initial Notes issued on the date
hereof, any Additional Notes and all Exchange Notes issued in exchange therefor
shall be treated as a single class for all purposes under this Indenture,
including without limitation, directions, waivers, consents, redemptions and
Offers to Purchase.
With respect to any Additional Notes, the Company shall set forth in a
Board Resolution and an Officers' Certificate, a copy of each of which shall be
delivered to the Trustee, the following information:
(a) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;
(b) the issue price, the issue date and the CUSIP and/or ISIN number of
such Additional Notes; PROVIDED, HOWEVER, that no Additional Notes may be issued
at a price that would cause such Additional Notes to have "original issue
discount" within the meaning of Section 1273 of the Code; and
(c) whether such Additional Notes shall be subject to the restrictions
on transfer set forth in Section 2.06 hereof relating to Restricted Global Notes
and Restricted Definitive Notes.
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 45 days but not more than 60 days before a redemption date (or such
shorter period as allowed by the Trustee), an Officers' Certificate setting
forth (i) the applicable section of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) 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 securities 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 30 nor more than 60 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 for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of US$1,000 or integral multiples of
US$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
37
an integral multiple of US$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.
At least 30 days but not more than 60 days prior to 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 such Holder's
address appearing in the securities register maintained in respect of the Notes
by the Registrar (the "SECURITY REGISTER").
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price or if the redemption is made pursuant to
Section 3.07(b) hereof a calculation of the redemption price;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed 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) the applicable section of this Indenture pursuant to which the
Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness of the CUSIP
or ISIN numbers, 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 (or such shorter
period allowed by the Trustee) prior to the redemption date, an Officers'
Certificate requesting that the Trustee give such notice (in the name and at the
expense of the Company) and setting forth the information to be stated in such
notice as provided in this Section 3.03.
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 shall 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 11:00 a.m. Eastern time on the Business Day prior to any
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued and unpaid
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 and unpaid interest on, all Notes to be
redeemed.
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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 in accordance with Section 2.08(d)
hereof. If a Note is redeemed on or after a Regular 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 Regular Record Date. If any Note called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest 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, upon the Company's written request, the Trustee shall 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) Except as set forth in clauses (b) and (c) of this Section 3.07,
the Notes shall not be redeemable at the option of the Company prior to February
15, 2008. Beginning on February 15, 2008, the Company may redeem all or a part
of the Notes, at once or over time, in accordance with Section 3.03 hereof, at
the redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest thereon on the Notes redeemed, to the
applicable redemption date (subject to the right of Holders of record on the
relevant Regular Record Date to receive interest due on the relevant Interest
Payment Date), if redeemed during the twelve-month period commencing on February
15 of the years indicated below:
REDEMPTION YEAR PERCENTAGE
2008................................................................. 103.813%
2009................................................................. 102.542%
2010................................................................. 101.271%
2011 and thereafter.................................................. 100.000%
(b) At any time and from time to time prior to February 15, 2006, the
Company may on one or more occasions redeem up to 35% of the aggregate principal
amount of the Notes issued under this Indenture at a redemption price (expressed
as a percentage of principal amount) equal to 107.625% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on the relevant Interest Payment Date) with the net cash
proceeds of one or more Equity Offerings; PROVIDED, HOWEVER, that (i) at least
65% of the aggregate principal amount of the Notes issued under this Indenture
(excluding Notes held by the Company and its Subsidiaries) remain outstanding
immediately following such redemption and (ii) any such redemption shall be made
within 90 days of the date of closing of any such Equity Offering.
(c) If the Company becomes obligated to pay any Additional Amounts
because of a change in the laws or regulations of Canada or any Canadian Taxing
Authority, or a change in any official position regarding the application or
interpretation thereof, in either case that is publicly announced or becomes
effective on or after the Issue Date, the Company may, at any time, redeem all,
but not part, of the Notes at a price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest to the redemption date, PROVIDED that
at any time that the aggregate principal amount of the Notes outstanding is
greater than US$20.0 million, any Holder of the Notes may, to the extent that it
does not adversely affect the Company's after-tax position, at its option, waive
the Company's compliance with the provisions of Section 4.20 hereof; PROVIDED,
FURTHER, that if any Holder waives such compliance, the Company may not redeem
that Holder's Notes pursuant to this Section 3.07(c).
(d) Any prepayment pursuant to this Section 3.07 shall be made pursuant
to the provisions of Sections 3.01 through 3.06 hereof.
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SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth in Sections 4.12 and 4.18 hereof, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to, or offers to purchase, the Notes.
SECTION 3.09. OFFERS TO PURCHASE.
(a) In the event that, pursuant to Section 4.12 or 4.18 hereof, the
Company shall be required to commence an Asset Sale Offer or Change of Control
Offer (each, an "OFFER TO PURCHASE"), it shall follow the procedures specified
below.
(b) The Company shall commence the Offer to Purchase by sending, by
first-class mail, with a copy to the Trustee, to each Holder, at such Holder's
address appearing in the Security Register a notice, the terms of which shall
govern the Offer to Purchase, stating:
(i) that the Offer to Purchase is being made pursuant to this
Section 3.09 and Section 4.12 or 4.18, as the case may be, and, in the case
of a Change of Control Offer, that a Change of Control has occurred, the
transaction or transactions that constitute the Change of Control, and that
a Change of Control Offer is being made pursuant to Section 4.18 hereof;
(ii) the principal amount of Notes required to be purchased
pursuant to Section 4.12 or 4.18 hereof (the "OFFER AMOUNT"), the purchase
price, the Offer Period and the Purchase Date (each as defined below);
(iii) except as provided in clause (ix), that all Notes timely
tendered and not withdrawn shall be accepted for payment;
(iv) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(v) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Offer to Purchase shall cease to
accrue interest after the Purchase Date;
(vi) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase may elect to have Notes purchased in integral multiples
of US$1,000 only;
(vii) that Holders electing to have a Note purchased pursuant to
the Offer to Purchase shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(viii) that Holders shall be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note (or portions thereof) the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
(ix) that, in the case of an Asset Sale Offer, if the aggregate
principal amount of Notes surrendered by Holders exceeds the Offer Amount,
the Company shall select the Notes to be purchased on a PRO RATA basis
(with such adjustments as may be deemed appropriate by the Company so that
only Notes in denominations of US$1,000 or integral multiples thereof shall
be purchased);
(x) that Holders whose Notes were purchased in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer)
40
(xi) any other procedures that Holders must follow in order to
tender their Notes (or portions thereof) for payment.
(c) The Offer to Purchase shall remain open for a period of at least 30
days but no more than 60 days following its commencement, except to the extent
that a longer period is required by applicable law (the "OFFER PERIOD"). No
later than five Business Days after the termination of the Offer Period (the
"PURCHASE DATE"), the Company shall purchase the Offer Amount or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Offer
to Purchase. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
(d) On or prior to the Purchase Date, the Company shall, to the extent
lawful:
(i) accept for payment (on a PRO RATA basis to the extent necessary
in connection with an Asset Sale Offer) the Offer Amount of Notes or
portions of Notes properly tendered pursuant to the Offer to Purchase, or
if less than the Offer Amount has been tendered, all Notes tendered;
(ii) deposit with the Paying Agent an amount equal to the Offer
Amount in respect of all Notes or portions of Notes properly tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Company and that such Notes or portions thereof were accepted for payment
by the Company in accordance with the terms of this Section 3.09.
(e) The Company, the Depositary or the Paying Agent, as the case may
be, shall promptly (but in any event not later than five Business Days after the
Purchase Date) deliver to each tendering Holder of Notes properly tendered and
accepted by the Company for purchase the Purchase Amount for such Notes, and the
Company shall promptly execute and issue a new Note, and the Trustee, upon
receipt of an Authentication Order shall authenticate and deliver (or cause to
be transferred by book-entry) such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered PROVIDED,
HOWEVER, that each such new Note shall be in a principal amount of US$1,000 or
an integral multiple of US$1,000. Any Note not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company shall
publicly announce the results of the Offer to Purchase on the Purchase Date.
(f) If the Purchase Date is on or after a Regular Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such Regular Record Date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Offer to Purchase.
(g) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the Offer to
Purchase. To the extent that the provisions of any securities laws or
regulations conflict with Section 4.12 or 4.18, as applicable, this Section 3.09
or other provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under Section 4.12 or 4.18, as applicable, this Section
3.09 or such other provision by virtue of such conflict.
(h) Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made in accordance with the
provisions of Section 3.01 through 3.06 hereof.
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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 the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 11:00 a.m. Eastern 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
Special Interest, if any, in the same manner, on the dates and in the amounts
set forth in a Registration Rights Agreement, the Notes and this Indenture. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods), from time to time on demand at
the same rate to the extent lawful.
Interest shall be computed on the basis of a 360-day year of twelve
30-day months. For the purposes of the INTEREST ACT (Canada), the yearly rate of
interest which is equivalent to the rate payable hereunder is the rate payable
multiplied by the actual number of days in the year and divided by 360.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
(a) The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office or drop facility of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes
may be presented or 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 hereby initially designates the
Transfer Agent Drop Services, the Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, which is a drop facility of the Trustee or an affiliate of
the Trustee, as such an office or agency. The Company shall give prompt written
notice to the Trustee of any change in the location of such office or agency. If
at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
(b) 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. 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.
(c) The Company hereby designates the Corporate Trust Office of the
Trustee, as one such office, drop facility or agency of the Company in
accordance with Section 2.03 hereof.
SECTION 4.03. REPORTS.
(a) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, so long as
any Notes are outstanding the Company shall file with the Commission, and shall
furnish to the Holders and the Trustee:
42
(1) within 90 days after the end of each fiscal year of the
Company, annual reports on Form 20-F or 40-F, as applicable, or any
successor form; and
(2) (a) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of the Company, reports on
Form 10-Q or any successor form, or (b) within 60 days after the end of
each of the first three fiscal quarters of each fiscal year of the
Company, reports on Form 6-K, or any successor form, which, regardless
of applicable requirements, shall, at a minimum, contain a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," and, with respect to any such reports, a
reconciliation to U.S. GAAP as permitted by the Commission for foreign
private issuers.
(b) For so long as any Notes remain outstanding, the Company shall
furnish to the Holders, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(c) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by this Section shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the Company
and the Restricted Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Company.
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 and its Subsidiaries have kept, observed,
performed and fulfilled their 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 and its Subsidiaries have 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, 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) The Company shall otherwise comply with TIA Section 314(a)(2).
(c) The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default, its status and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies,
except such as are being 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.
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
43
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, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
SECTION 4.07. 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
Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and the Restricted Subsidiaries; PROVIDED,
HOWEVER, that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any
Restricted Subsidiary, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Restricted Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the Holders of
the Notes, or that such preservation is not necessary in connection with any
transaction not prohibited by this Indenture.
SECTION 4.08. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, pay or cause to be paid any consideration, to or for
the benefit of any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders that
consent, waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or agreement.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED SHARES.
(a) The Company shall not, and shall not permit any of its Subsidiaries
to, Incur, directly or indirectly, any Indebtedness, including Acquired Debt,
and the Company shall not issue any Disqualified Stock and shall not permit any
of its Subsidiaries to issue any Preferred Shares; PROVIDED, HOWEVER, that the
Company may Incur Indebtedness, including Acquired Debt, or issue Disqualified
Stock, and the Subsidiary Guarantors may Incur Indebtedness, including Acquired
Debt, or issue Preferred Shares if the Company's Debt to Cash Flow Ratio at the
time of Incurrence of such Indebtedness or the issuance of such Disqualified
Stock or Preferred Shares, after giving PRO FORMA effect to such Incurrence or
issuance as of such date and to the use of proceeds therefrom, taking into
account any substantially concurrent transactions related to such Incurrence, as
if the same had occurred at the beginning of the most recently ended four fiscal
quarter period of the Company for which internal financial statements are
available, would have been no greater than 5.0 to 1.0.
(b) Paragraph (a) of this Section 4.09 shall not prohibit the
Incurrence of any of the following items of Indebtedness or issuances of
Preferred Shares (each such item being referred to herein as "PERMITTED DEBT"):
(1) the Incurrence by the Company or a Subsidiary Guarantor of
Indebtedness and letters of credit under Credit Facilities in an
aggregate principal amount at any one time outstanding under this
clause (1) (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Company and the Subsidiary Guarantors thereunder) not to exceed
an aggregate of (a) US$230.0 million and (b) Cdn$75.0 million,
LESS the aggregate amount of all Net Proceeds of Asset Sales
applied by the Company or any Subsidiary Guarantors subsequent to
the Issue Date to permanently repay Indebtedness under a Credit
Facility pursuant to the provisions of Section 4.12 hereof;
(2) the Incurrence by the Company and the Restricted Subsidiaries of
the Existing Indebtedness;
44
(3) the Incurrence by (a) the Company of Indebtedness represented by
the Initial Notes and the Exchange Notes to be issued in exchange
for such Initial Notes and in exchange for any Additional Notes,
and (b) the Subsidiary Guarantors of Indebtedness represented by
the Subsidiary Guarantees relating to the Initial Notes and the
guarantees issued in exchange for such Subsidiary Guarantees and
in exchange for the Subsidiary Guarantees relating to any
Additional Notes;
(4) the Incurrence by the Company or a Subsidiary Guarantor of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, Incurred
for the purpose of financing all or any part of the purchase
price or cost of construction or improvement of property, plant
or equipment used in the business of the Company or such
Subsidiary Guarantor, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness Incurred pursuant to this
clause (4), not to exceed US$25.0 million at any time
outstanding;
(5) the Incurrence by the Company or any Subsidiary Guarantor of
Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace
Indebtedness, other than intercompany Indebtedness, that was
permitted by this Indenture to be incurred under paragraph (a) or
clauses (b)(2), (b)(3) and (b)(4) of this Section 4.09;
(6) the Incurrence by the Company or any Subsidiary Guarantor of
intercompany Indebtedness between or among the Company and any
Restricted Subsidiary; PROVIDED, HOWEVER, that:
(i) if the Company is the obligor on such Indebtedness, such
Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect
to the Notes, and
(ii) (a) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being
held by a Person other than the Company or a Restricted
Subsidiary and (b) any sale or other transfer of any
such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary shall be deemed, in
each case, to constitute an Incurrence of such
Indebtedness by the Company or such Restricted
Subsidiary, as the case may be, that was not permitted
by this clause (6);
(7) the issuance by the Company or any Restricted Subsidiary of
Preferred Shares solely to or among the Company and any
Restricted Subsidiaries; PROVIDED, HOWEVER, that (a) any
subsequent issuance or transfer of Equity Interests that results
in any such Preferred Shares being held by a Person other than
the Company or a Restricted Subsidiary and (b) any sale or other
transfer of any such Preferred Shares to a Person that is not
either the Company or a Restricted Subsidiary shall be deemed, in
each case, to constitute an issuance of such Preferred Shares by
the Company or a Restricted Subsidiary, as the case may be, that
was not permitted by this clause (7);
(8) the Incurrence by the Company or any Subsidiary Guarantor of
Hedging Obligations that are Incurred in the ordinary course of
business of the Company or such Subsidiary Guarantor and not for
speculative purposes; PROVIDED, HOWEVER, that, in the case of:
(i) any Interest Rate Agreement, the notional principal
amount of such Hedging Obligation does not exceed the
principal amount of the Indebtedness to which such
Hedging Obligation relates; and
45
(ii) any Currency Exchange Protection Agreement, such Hedging
Obligation does not increase the principal amount of
Indebtedness of the Company and Subsidiary Guarantor
outstanding other than as a result of fluctuations in
foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(9) the guarantee by the Company or a Subsidiary Guarantor of
Indebtedness of the Company or a Subsidiary Guarantor that was
permitted to be Incurred by another provision of this Section
4.09;
(10) the Incurrence by the Company or any Restricted Subsidiary of
Indebtedness in an aggregate principal amount, or accreted value,
as applicable, at any time outstanding, including all Permitted
Refinancing Indebtedness Incurred to refund, refinance or replace
any Indebtedness Incurred pursuant to this clause (10), not to
exceed US$25.0 million;
(11) the issuance of Preferred Shares by the Company's Unrestricted
Subsidiaries or the Incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt; PROVIDED, HOWEVER, that if any
such Indebtedness ceases to be Non-Recourse Debt of an
Unrestricted Subsidiary, that event shall be deemed to constitute
an Incurrence of Indebtedness by a Restricted Subsidiary that was
not permitted by this clause (11);
(12) Indebtedness of the Company or any Subsidiary Guarantor in
respect of bank overdrafts (and letters of credit in respect
thereof) in the ordinary course of business not to exceed an
aggregate amount of US$10.0 million; and
(13) the issuance of Indebtedness or Preferred Shares in connection
with a Tax Benefit Transaction.
(c) The accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, and the payment of dividends on
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock shall not be deemed to be an Incurrence of Indebtedness or an
issuance of Disqualified Stock for purposes of this Section 4.09.
(d) Neither the Company nor any Subsidiary Guarantor shall Incur any
Indebtedness, including Permitted Debt, that is contractually subordinated in
right of payment to any other Indebtedness of the Company or such Subsidiary
Guarantor, as applicable, unless such Indebtedness is also contractually
subordinated in right of payment to the Notes or the Subsidiary Guarantee, as
applicable, on substantially identical terms; PROVIDED, HOWEVER, that no
Indebtedness of the Company or a Subsidiary Guarantor shall be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company or such Subsidiary Guarantor, as applicable, solely by virtue of being
unsecured.
(e) For purposes of determining compliance with this Section 4.09, in
the event that an item of proposed Indebtedness meets the criteria of more than
one of the categories of Permitted Debt described in clauses (b)(1) through (13)
above, or is entitled to be Incurred pursuant to paragraph (a) of this Section
4.09, the Company shall be permitted to classify such item of Indebtedness on
the date of its Incurrence or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with this Section. Indebtedness under
Credit Facilities outstanding on the date on which Notes are first issued and
authenticated under this Indenture shall be deemed to have been Incurred on such
date in reliance on the exception provided by either clause (1) or (2) of
paragraph (b) of this Section 4.09, as applicable.
SECTION 4.10. RESTRICTED PAYMENTS.
(a) The Company shall not make, and shall not permit any Restricted
Subsidiary to make, directly or indirectly, any Restricted Payment, unless, if
at the time of and after giving effect to such Restricted Payment,
46
(1) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment; and
(2) the Company would have been permitted to Incur at least US$1.00
of additional Indebtedness, other than Permitted Debt, pursuant
to the Debt to Cash Flow Ratio test set forth in Section 4.09(a)
hereof; and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments declared or made after the Issue
Date, excluding Restricted Payments made pursuant to clauses (2),
(3), (4), (6), (7), (8), (9), (10), (11) and (12) of paragraph
(b) below, shall not exceed, at the date of determination, the
sum, without duplication, of:
(a) an amount equal to the Company's Consolidated Cash Flow
from the first date of the fiscal quarter in which the
Issue Date occurs to the end of the Company's most
recently ended full fiscal quarter for which internal
financial statements are available, taken as a single
accounting period, less the sum of 1.6 times the
Company's Consolidated Interest Expense from the first
date of the fiscal quarter in which the Issue Date
occurs to the end of the Company's most recently ended
full fiscal quarter for which internal financial
statements are available, taken as a single accounting
period; plus
(b) an amount equal to 100% of Capital Stock Sale Proceeds,
less any such Capital Stock Sale Proceeds used in
connection with:
(i) an Investment made pursuant to clause (6) of the
definition of "Permitted Investments;" or
(ii) an Incurrence of Indebtedness pursuant
to Section 4.09(b)(4) hereof; plus
(c) to the extent that any Restricted Investment that was
made after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (i) the
cash return of capital with respect to such Restricted
Investment, less the cost of disposition, if any, and
(ii) the initial amount of such Restricted Investment;
plus
(d) to the extent that the Board of Directors designates any
Unrestricted Subsidiary that was designated as such
after the Issue Date as a Restricted Subsidiary, the
lesser of (i) the aggregate fair market value of all
Investments owned by the Company and the Restricted
Subsidiaries in such Subsidiary at the time such
Subsidiary was designated as an Unrestricted Subsidiary
and (ii) the then aggregate fair market value of all
Investments owned by the Company and the Restricted
Subsidiaries in such Unrestricted Subsidiary.
(b) The provisions of paragraph (a) above shall not prohibit:
(1) so long as no Default has occurred and is continuing or would be
caused thereby, the payment of any dividend within 60 days after
the date the dividend is declared, if at that date of declaration
such payment would have complied with the provisions of this
Indenture; PROVIDED, HOWEVER, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(2) so long as no Default has occurred and is continuing or would be
caused thereby, the redemption, repurchase, retirement,
defeasance or other acquisition of any Subordinated Indebtedness
of the Company or of any Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the
substantially concurrent sale, other than to a
47
Subsidiary of the Company or an employee stock ownership plan or
to a trust established by the Company or any Subsidiary of the
Company for the benefit of its employees, of, Equity Interests
(other than Disqualified Stock or Back-to-Back Securities);
(3) so long as no Default has occurred and is continuing or would be
caused thereby, the defeasance, redemption, repurchase or other
acquisition of Subordinated Indebtedness of the Company or any
Restricted Subsidiary with the net cash proceeds from an
Incurrence of Permitted Refinancing Indebtedness;
(4) so long as no Default has occurred and is continuing or would be
caused thereby, regardless of whether any Default then exists,
any payment by the Company or a Restricted Subsidiary to any one
of the other of them;
(5) so long as no Default has occurred and is continuing or would be
caused thereby, the repurchase, redemption or other acquisition
or retirement for value by the Company of any Equity Interests of
the Company held by any member of the management of the Company
or any of its Subsidiaries pursuant to any management equity
subscription agreement or stock option agreement in effect as of
the Issue Date; PROVIDED, HOWEVER, that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed US$2.0 million in any twelve-month
period;
(6) payments of any kind made in connection with or in respect of
Back-to-Back Securities or the Existing Back-to-Back Securities;
PROVIDED, HOWEVER, that to the extent such payments shall be made
to Affiliates of the Company (other than its Subsidiaries), all
corresponding payments required to be paid by such Affiliates
pursuant to the related Back-to-Back Securities or Existing
Back-to-Back Securities shall be received, immediately prior to
or concurrently with any such payments, by all applicable Sun
Media Entities;
(7) so long as no Default has occurred and is continuing or would be
caused thereby, the payment of dividends and other shares of
Capital Stock of the Company in the form of Capital Stock (other
than Disqualified Stock or Back-to-Back Securities);
(8) so long as no Default has occurred and is continuing or would be
caused thereby, any Tax Benefit Transaction;
(9) so long as no Default has occurred and is continuing or would be
caused thereby, the payment of any Management Fees or other
similar expenses by the Company to its direct or indirect parent
company for bona fide services (including reimbursement for
expenses Incurred in connection with, or allocation of corporate
expenses in relation to, providing such services) provided to,
and directly related to the operations of, the Company and the
Restricted Subsidiaries, in an aggregate amount not to exceed
1.5% of Consolidated Revenues in any twelve-month period;
(10) so long as no Default has occurred and is continuing or would be
caused thereby, Restricted Payments in an amount equal to the
amount of income tax refunds received by the Company or any
Restricted Subsidiary in respect of fiscal years ended prior to
the Issue Date not to exceed an aggregate of $30.0 million;
(11) so long as no Default has occurred and is continuing or would be
caused thereby, other Restricted Payments in an aggregate amount
not to exceed US$30.0 million; and
(12) the payment of dividends to 3351611 Canada Inc. on the Issue Date
in an aggregate amount not to exceed Cdn$260.0 million.
48
(c) The amount of any Restricted Payment, other than those effected in
cash, shall be the fair market value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued to or by the
Company or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. The fair market value of any assets or securities that are
required to be valued pursuant to this Section 4.10 shall be determined by the
Board of Directors whose resolution with respect thereto shall be delivered to
the Trustee. The determination of the Board of Directors shall be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing in the United States or Canada if the fair market
value exceeds US$25.0 million; PROVIDED, that the Board of Directors shall not
be required to obtain such an opinion or appraisal in connection with the
payment of interest on Existing Back-to-Back Debt or any payments with respect
to Back-to-Back Securities to the extent such Back-to-Back Transactions were
approved in accordance with the provisions of Section 4.14 hereof. Not later
than the date of making any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.10 were computed, together with a copy of any fairness opinion or
appraisal required by this Indenture.
(d) For purposes of this Section 4.10, if (i) any Sun Media Entity
ceases to be the obligor under or issuer of any Back-to-Back Securities or
Existing Back-to-Back Debt and a Person other than a Sun Media Entity becomes
the obligor thereunder (or the issuer of any Back-to-Back Preferred Shares) or
(ii) any Subsidiary Guarantor that is an obligor under or issuer of any
Back-to-Back Securities or the obligor under any Existing Back-to-Back Debt
ceases to be a Subsidiary Guarantor other than by consolidation or merger with
the Company or another Subsidiary Guarantor, then the Company or such Subsidiary
Guarantor shall be deemed to have made a Restricted Payment in an amount equal
to the accreted value of such Back-to-Back Debt or Existing Back-to-Back Debt
(or the subscription price of any Back-to-Back Preferred Shares) at the time of
the assumption thereof by such other Person or at the time such Subsidiary
Guarantor ceases to be a Subsidiary Guarantor.
SECTION 4.11. LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Lien of
any kind on any asset owned at the Issue Date or thereafter acquired, except
Permitted Liens, unless the Company or such Restricted Subsidiary has made or
will make effective provision to secure the Notes and any applicable Subsidiary
Guarantees by such Lien equally and ratably with all other Indebtedness of the
Company or such Restricted Subsidiary secured by such Lien for so long as such
other Indebtedness is secured by such Lien.
SECTION 4.12. ASSET SALES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, consummate an Asset Sale unless:
(1) the Company, or the Restricted Subsidiary, as the case may be,
receives consideration at the time of the Asset Sale at least
equal to the fair market value of the assets or Equity Interests
issued or sold or otherwise disposed of;
(2) such fair market value is determined by the Company's Board of
Directors and evidenced by a Board Resolution set forth in an
Officers' Certificate delivered to the Trustee; and
(3) at least 75% of the consideration received in such Asset Sale by
the Company or such Restricted Subsidiary is in the form of cash
or Cash Equivalents. For purposes of this clause (3), each of the
following shall be deemed to be cash:
(a) any Indebtedness or other liabilities, as shown on the
Company's or such Restricted Subsidiary's most recent
balance sheet, of the Company or any Restricted
Subsidiary, other than contingent liabilities and
Indebtedness that are by their terms subordinated to the
Notes, that are assumed by the transferee of any such
assets pursuant to an agreement that releases the
Company or such
49
Restricted Subsidiary from further liability with
respect to such Indebtedness or liabilities; and
(b) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such
transferee that are converted within 60 days of the
applicable Asset Sale by the Company or such Restricted
Subsidiary into cash, to the extent of the cash received
in such conversion.
(b) Notwithstanding the terms of paragraph (a) above, the Company and
the Restricted Subsidiaries may engage in Asset Swaps if (i) immediately after
giving effect to any such Asset Swap, the Company would be permitted to Incur at
least US$1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio
test set forth in Section 4.09(a), and (ii) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset Swap at least equal
to the fair market value of the assets disposed of, which fair market value
shall be determined by the Board of Directors of the Company or the Restricted
Subsidiary, as the case may be, and evidenced by a Board Resolution set forth in
an Officers' Certificate delivered to the Trustee; PROVIDED, HOWEVER, that the
determination of the Board of Directors shall be based upon an opinion or
appraisal issued by an accounting, appraisal or investment banking firm of
national standing in the United States or Canada if the fair market value
exceeds US$25.0 million.
(c) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply those Net Proceeds at its option:
(1) to permanently repay or reduce Indebtedness, other than
Subordinated Indebtedness, of the Company or a Subsidiary
Guarantor and, if the Indebtedness repaid is revolving credit
Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire, or enter into a binding agreement to acquire, all or
substantially all of the assets (other than cash, Cash
Equivalents and securities) of any Person engaged in a Permitted
Business; PROVIDED, HOWEVER, that any such commitment shall be
subject only to customary conditions (other than financing), and
such acquisition shall be consummated no later than 180 days
after the end of such 360-day period;
(3) to acquire, or enter into a binding agreement to acquire, Voting
Stock of a Person engaged in a Permitted Business from a Person
that is not an Affiliate of the Company; PROVIDED, HOWEVER, that
such commitment shall be subject only to customary conditions
(other than financing) and such acquisition shall be consummated
no later than 180 days after the end of such 360-day period; and
PROVIDED, FURTHER, HOWEVER, that (a) after giving effect thereto,
the Person so acquired is a Restricted Subsidiary and (b) such
acquisition is otherwise made in accordance with this Indenture,
including, without limitation, Section 4.10 hereof; or
(4) to acquire, or enter into a binding agreement to acquire, other
long-term assets (other than securities) that are used or useful
in a Permitted Business; PROVIDED, HOWEVER, that such commitment
shall be subject only to customary conditions (other than
financing) and such acquisition shall be consummated no later
than 180 days after the end of such 360-day period.
Pending the final application of any Net Proceeds, the Company may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by this Indenture.
(d) Any Net Proceeds from Asset Sales that are not applied, invested or
segregated from the general funds of the Company for investment in identified
assets pursuant to a binding agreement, in each case as provided in paragraph
(c) above shall constitute Excess Proceeds; PROVIDED, HOWEVER, that the amount
of any Net Proceeds that ceases to be so segregated as contemplated in paragraph
(c) above shall also constitute "Excess Proceeds" at the time any such Net
Proceeds cease to be so segregated; PROVIDED FURTHER, HOWEVER, that the amount
50
of any Net Proceeds that continues to be segregated for investment and that is
not actually reinvested within twenty-four months from the date of the receipt
of such Net Proceeds shall also constitute "Excess Proceeds."
(e) When the aggregate amount of Excess Proceeds exceeds US$20.0
million, the Company shall make an offer (and "ASSET SALE OFFER") to all Holders
of Notes and all holders of other Indebtedness that is PARI PASSU in right of
payment with the Notes subject to terms and conditions similar to those set
forth in this Indenture with respect to offers to purchase or redeem with the
proceeds of sales of assets to purchase the maximum principal amount of Notes
that may be purchased with the Allocable Excess Proceeds (as defined below) in
accordance with the procedures set forth in Section 3.09 hereof. The offer price
in any Asset Sale Offer shall be equal to 100% of principal amount plus accrued
and unpaid interest to the date of purchase, and shall be payable in cash. If
any Excess Proceeds remain after consummation of an Asset Sale Offer and all
Holders of Notes have been given the opportunity to tender their Notes for
purchase in accordance with such Asset Sale Offer and this Indenture, the
Company may use such Excess Proceeds for any purpose not otherwise prohibited by
this Indenture. If the aggregate principal amount of Notes and such other PARI
PASSU Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes and such other PARI PASSU
Indebtedness to be purchased on a PRO RATA basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The term "ALLOCABLE EXCESS PROCEEDS" shall mean the product of:
(i) the Excess Proceeds and
(ii) a fraction,
(a) the numerator of which is the aggregate principal amount
of the Notes outstanding on the date of the Asset Sale
Offer, and
(b) the denominator of which is the sum of the aggregate
principal amount of the Notes outstanding on the date of
the Asset Sale Offer and the aggregate principal amount
of other Indebtedness of the Company outstanding on the
date of the Asset Sale Offer that is PARI PASSU in right
of payment with the Notes and subject to terms and
conditions in respect of Asset Sales similar in all
material respects to this Section 4.12 and requiring the
Company to make an offer to repurchase such Indebtedness
at substantially the same time as the Asset Sale Offer.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
SECTION 4.13. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its Equity
Interests to the Company or any other Restricted Subsidiary, or
with respect to any other interest or participation in, or
measured by, its profits, or pay any Indebtedness owed to the
Company or any other Restricted Subsidiary;
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(2) make loans or advances, or guarantee any such loans or advances,
to the Company or any other Restricted Subsidiary; or
(3) transfer any of its properties or assets to the Company or any
other Restricted Subsidiary.
(b) The restrictions set forth in paragraph (a) above shall not apply
to encumbrances or restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities
as in effect on the Issue Date and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof; PROVIDED, HOWEVER, that
such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacement or refinancings
are no more restrictive, taken as a whole, with respect to such
dividend and other payment restrictions than those contained in
such Existing Indebtedness and Credit Facilities, as in effect on
the Issue Date;
(2) this Indenture and the Notes;
(3) applicable law or any applicable rule, regulation or order;
(4) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any Restricted Subsidiary as in
effect at the time of such acquisition (except to the extent such
Indebtedness or Capital Stock was Incurred or issued in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired; PROVIDED,
HOWEVER, that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be Incurred at the
time of such acquisition;
(5) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions on the property so
acquired of the nature described in clause (3) of paragraph (a)
above;
(7) any agreement for the sale or other disposition of a Restricted
Subsidiary that restricts distributions by such Restricted
Subsidiary pending its sale or other disposition;
(8) Permitted Refinancing Indebtedness; PROVIDED, HOWEVER, that any
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness shall be no more restrictive, taken as a
whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(9) Liens securing Indebtedness that is permitted to be secured
without also securing the Notes or the applicable Subsidiary
Guarantee pursuant to Section 4.11 hereof that limit the right of
the debtor to dispose of the assets subject to any such Lien;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale
agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
(11) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business; and
52
(12) any Indebtedness or any agreement pursuant to which such
Indebtedness was issued if the encumbrance or restriction applies
only upon a payment or financial covenant default or event of
default contained in such Indebtedness or agreement and (A) such
encumbrance or restriction is not materially more disadvantageous
to the Holders than is customary in comparable financings (as
determined in good faith by the Board of Directors of the
Company) or (B) management of the Company delivers to the Trustee
an Officers' Certificate evidencing its determination at the time
such agreement is entered into, that such encumbrance or
restriction will not materially impair the Company's ability to
make payments on the Notes.
SECTION 4.14. TRANSACTIONS WITH AFFILIATES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any payment to, or sell, lease,
transfer, exchange or otherwise dispose of any of its properties or assets to,
or purchase any property or assets from, or enter into or make or amend any
transaction or series of transactions, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate, officer or
director of the Company (each, an "AFFILIATE TRANSACTION") unless:
(1) such Affiliate Transaction is (a) set forth in writing and (b) on
terms that are no less favorable to the Company or the relevant
Restricted Subsidiary than those that would have been obtained in
a comparable arm's length transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(i) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess of US$10.0 million, a Board
Resolution set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with
this Section 4.14 and that such Affiliate Transaction
has been approved by a majority of the disinterested
members of the Board of Directors; and
(ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess of US$25.0 million, an opinion
as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction from a
financial point of view issued by an accounting,
appraisal or investment banking firm of national
standing in the United States or Canada.
(b) The following items shall be deemed not to constitute Affiliate
Transactions and, therefore, shall not be subject to the provisions of paragraph
(a) above:
(1) any employment agreement entered into by the Company or any
Restricted Subsidiary in the ordinary course of business and
consistent with the past practice of the Company or such
Restricted Subsidiary;
(2) transactions between or among the Company and/or the Restricted
Subsidiaries;
(3) transactions with a Person that is an Affiliate of the Company
solely because the Company owns an Equity Interest in such
Person;
(4) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Company;
(5) sales of Equity Interests, other than Disqualified Stock, to
Affiliates of the Company;
53
(6) any agreement or arrangement as in effect on the Issue Date or
any amendment thereto or any transaction contemplated thereby,
including pursuant to any amendment thereto, in any replacement
agreement or arrangement thereto so long as any such amendment or
replacement agreement or arrangement is not more disadvantageous
to the Company or the Restricted Subsidiaries, as the case may
be, in any material respect than the original agreement as in
effect on the Issue Date;
(7) Restricted Payments that are permitted by the provisions of
Section 4.10 hereof;
(8) Permitted Investments;
(9) any transaction permitted by the provisions of Section 5.01
hereof; and
(10) any Tax Benefit Transaction.
SECTION 4.15. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into any sale and leaseback transaction; PROVIDED, HOWEVER, that the
Company or any Restricted Subsidiary may enter into a sale and leaseback
transaction if:
(a) the Company or that Restricted Subsidiary, as applicable, could
have (i) Incurred Indebtedness in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction
under the Debt to Cash Flow Ratio test set forth in Section
4.09(a) hereof and (ii) created a Lien on such property securing
Attributable Debt pursuant to the provisions of Section 4.11
hereof;
(b) the net cash proceeds of such sale and leaseback transaction are
at least equal to the fair market value, as determined in good
faith by the Board of Directors and set forth in an Officers'
Certificate delivered to the Trustee, of the property that is the
subject of that sale and leaseback transaction; and
(c) the transfer of assets in such sale and leaseback transaction is
permitted by, and the Company or such Restricted Subsidiary
applies the proceeds of such transaction in compliance with, the
provisions of Section 4.12 hereof.
SECTION 4.16. ISSUANCES AND SALES OF EQUITY INTERESTS IN SUBSIDIARIES.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, transfer, convey, sell, lease or otherwise dispose of (including,
without limitation, by way of merger, amalgamation or otherwise) any Equity
Interests in any direct or indirect Restricted Subsidiary that is a Significant
Subsidiary of the Company or any group of Restricted Subsidiaries which, when
taken as a whole, would constitute a Significant Subsidiary, to any Person
(other than the Company or a Wholly Owned Restricted Subsidiary thereof or to
Quebecor Inc. or a direct or indirect Subsidiary of Quebecor Inc. in connection
with a Tax Benefit Transaction), unless:
(1) such transfer, conveyance, sale, lease or other disposition
(whether by way of merger, amalgamation or otherwise) is of all
the Equity Interests of such Restricted Subsidiary; and
(2) the Net Proceeds from such transfer, conveyance, sale, lease or
other disposition (whether by way of merger, amalgamation or
otherwise) are applied in accordance with the provisions of
Section 4.12 hereof.
(b) The Company shall not permit any direct or indirect Restricted
Subsidiary that constitutes a Significant Subsidiary or any group of Restricted
Subsidiaries which, when taken as a whole, would constitute a
54
Significant Subsidiary, to issue any Equity Interests to any Person, other than,
(1) if necessary, shares of Capital Stock constituting directors' qualifying
shares or (2) to the Company or a Wholly Owned Restricted Subsidiary thereof.
SECTION 4.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
(a) The Board of Directors may designate any Subsidiary to be an
Unrestricted Subsidiary if such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any
Restricted Subsidiary has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain
or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results;
(4) except in the case of a Subsidiary Guarantor that is designated
as an Unrestricted Subsidiary in accordance with this Indenture,
has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of the Company or any
Restricted Subsidiary;
(5) has at least one director on its Board of Directors that is not a
director or executive officer of the Company or any Restricted
Subsidiary and has at least one executive officer that is not a
director or executive officer of the Company or any Restricted
Subsidiary; and
(6) such designation would not cause a Default or Event of Default.
(b) Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
provisions of paragraph (a) above and was permitted by the provisions of Section
4.10 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
requirements of the provisions of paragraph (a) above, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Preferred Shares of such Subsidiary shall be deemed to be issued and any
Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted
Subsidiary as of such date and, if such Preferred Shares are not permitted to be
issued or such Indebtedness is not permitted to be Incurred as of such date
under the provisions of Section 4.09 hereof, the Company shall be in default of
such Section.
(c) If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Company and the Restricted Subsidiaries in the Subsidiary so designated
shall be deemed to be an Investment made as of the time of such designation and
shall either reduce the amount available for Restricted Payments under Section
4.10(a) hereof or reduce the amount available for future Investments under one
or more clauses of the definition of Permitted Investments, as the Company shall
determine. Such designation shall be permitted only if such Investment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
requirements of the provisions of paragraph (a) above. Upon designation of a
Restricted Subsidiary as an Unrestricted Subsidiary in compliance with this
Section 4.17, such Subsidiary shall, by execution and delivery of a supplemental
indenture in form satisfactory to the Trustee, be released from any Subsidiary
Guarantee previously made by such Subsidiary in accordance with the provisions
of Section 10.05 hereof.
55
(d) The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED, HOWEVER, that
such designation shall be deemed to be an Incurrence of Indebtedness by a
Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall be permitted only if (i) such Indebtedness
is permitted under the provisions of Section 4.09 hereof, calculated on a PRO
FORMA basis as if such designation had occurred at the beginning of the
four-quarter reference period; and (ii) no Default or Event of Default would be
in existence following such designation.
SECTION 4.18. REPURCHASE AT THE OPTION OF HOLDERS UPON A CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall,
within 30 days of a Change of Control, make an offer (the "CHANGE OF CONTROL
OFFER") pursuant to the procedures set forth in Section 3.09 hereof. Each Holder
shall have the right to accept such offer and require the Company to repurchase
all or any part (equal to US$1,000 or an integral multiple of US$1,000) of such
Holder's Notes pursuant to the Change of Control Offer at a purchase price, in
cash (the "CHANGE OF CONTROL AMOUNT"), equal to 101% of the aggregate principal
amount of Notes repurchased, plus accrued and unpaid interest on the Notes
repurchased to the purchase date.
(b) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes a Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Indenture applicable to a Change of Control Offer made by the Company
and purchases all Notes or portions of Notes properly tendered and not withdrawn
under the Change of Control Offer.
SECTION 4.19. FUTURE GUARANTORS.
The Company shall cause each Person that (a) becomes a Restricted
Subsidiary following the Issue Date and (b) guarantees any Indebtedness
(including any Back-to-Back Debt or the Existing Back-to-Back Debt) of the
Company or any Subsidiary thereof to execute and deliver to the Trustee a
Subsidiary Guarantee at the time such Person becomes obligated under any such
guarantee.
SECTION 4.20. ADDITIONAL AMOUNTS.
(a) All payments made by or on behalf of the Company on or with respect
to the Notes shall be made without withholding or deduction for any Taxes
imposed by any Canadian Taxing Authority, unless required by law or the
interpretation or administration thereof by the relevant Taxing Authority. If
the Company or any other payor is required to withhold or deduct any amount on
account of Taxes from any payment made under or with respect to any Notes that
are outstanding on the date of the required payment, the Company shall:
(1) make such withholding or deduction;
(2) remit the full amount deducted or withheld to the relevant
government authority in accordance with applicable law;
(3) pay the additional amounts ("ADDITIONAL AMOUNTS") as may be
necessary so that the net amount received by each holder
(including Additional Amounts) after such withholding or
deduction will not be less than the amount the holder would have
received if such Taxes had not been withheld or deducted;
(4) furnish to the Holders, within 30 days after the date the payment
of any Taxes is due, certified copies of tax receipts evidencing
such payment by the Company;
(5) indemnify and hold harmless each Holder (other than an Excluded
Holder, as defined in paragraph (b) below) for the amount of (a)
any Taxes paid by such Holder as a result of payments made on or
with respect to the Notes, (b) any liability (including
penalties, interest and expenses) arising from or with respect to
such payments and (c) any Taxes imposed with respect to any
reimbursement under the foregoing clauses (a) or (b), but
56
excluding any such Taxes that are in the nature of Taxes on net
income, taxes on capital, franchise taxes, net worth taxes and
similar taxes; and
(6) at least 30 days prior to each date on which any payment under or
with respect to the Notes is due and payable, if the Company
becomes obligated to pay Additional Amounts with respect to such
payment, deliver to the Trustee an Officers' Certificate stating
the amounts so payable and such other information necessary to
enable the Trustee to pay such Additional Amounts to Holders on
the payment date.
(b) Notwithstanding the provisions of paragraph (a) above, no
Additional Amounts shall be payable to a Holder in respect of beneficial
ownership of a Note (an "EXCLUDED HOLDER"):
(1) with which the Company does not deal at arm's-length, within the
meaning of the INCOME TAX ACT (Canada), at the time of making
such payment;
(2) which is subject to such Taxes by reason of its being connected
with Canada or any province or territory thereof otherwise than
by the mere acquisition, holding or disposition of Notes or the
receipt of payments thereunder; or
(3) if such Holder waives its right to receive Additional Amounts.
Any reference, in any context in this Indenture, to the payment of
principal, premium, if any, redemption price, Change of Control Amount, offer
price and interest or any other amount payable under or with respect to any
Note, shall be deemed to include the payment of Additional Amounts to the extent
that, in such context, Additional Amounts are, were or would be payable.
ARTICLE 5.
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION AND SALE OF ASSETS OF THE COMPANY AND
SUBSIDIARY GUARANTORS.
(a) The Company may not directly or indirectly, (i) consolidate, merge
or amalgamate with or into another Person, whether or not the Company is the
surviving corporation, or (ii) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
and the Restricted Subsidiaries, taken as a whole, in one or more related
transactions, to another Person, unless, in either case,
(1) either (a) the Company is the surviving corporation, or (b) the
Person formed by or surviving any such consolidation, merger or
amalgamation (if other than the Company) or to which such sale,
assignment, transfer, conveyance or other disposition shall have
been made (the "SURVIVING COMPANY") is a corporation, limited
liability company or limited partnership organized or existing
under the laws of the United States, any state of the United
States, the District of Columbia, Canada or any province or
territory of Canada;
(2) the Surviving Company expressly assumes all the obligations of
the Company under the Notes, this Indenture and, if applicable,
any Registration Rights Agreements, pursuant to agreements
reasonably satisfactory to the Trustee;
(3) immediately after giving effect to such transaction no Default or
Event of Default exists; and
(4) the Company or the Surviving Company shall, on the date of such
transaction after giving PRO FORMA effect thereto and any related
financing transactions as if the same had occurred at the
beginning of the applicable fiscal quarter, be permitted to Incur
at least
57
US$1.00 of additional Indebtedness pursuant to the Debt to Cash
Flow Ratio test set forth in Section 4.09(a) hereof.
(b) Unless in connection with a disposition by the Company or a
Subsidiary Guarantor of its entire ownership interest in a Subsidiary Guarantor
or all or substantially all the assets of a Subsidiary Guarantor permitted by,
and in accordance with the applicable provisions of, this Indenture, the Company
shall cause each Subsidiary Guarantor not to directly or indirectly, (i)
consolidate, merge or amalgamate with or into another Person, whether or not
such Subsidiary Guarantor is the surviving corporation, or (ii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of such Subsidiary Guarantor, in one or more related
transactions, to another Person, unless, in either case,
(1) either (a) such Subsidiary Guarantor is the surviving
corporation, or (b) the Person formed by or surviving any such
consolidation, merger or amalgamation (if other than such
Subsidiary Guarantor) or to which such sale, assignment,
transfer, conveyance or other disposition shall have been made
(the "SURVIVING GUARANTOR") is a corporation, limited liability
company or limited partnership organized or existing under the
laws of the United States, any state of the United States, the
District of Columbia, Canada or any province or territory of
Canada;
(2) the Surviving Guarantor expressly assumes all the obligations of
such Subsidiary Guarantor under its Subsidiary Guarantee, this
Indenture and, if applicable, any Registration Rights Agreements,
pursuant to agreements reasonably satisfactory to the Trustee;
(3) immediately after giving effect to such transaction no Default or
Event of Default exists; and
(4) such Subsidiary Guarantor or the Surviving Guarantor shall, on
the date of such transaction after giving PRO FORMA effect
thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable fiscal quarter, be
permitted to Incur at least US$1.00 of additional Indebtedness
pursuant to the Debt to Cash Flow Ratio test set forth in Section
4.09(a) hereof.
(c) In addition, the Company shall not, and shall cause each Subsidiary
Guarantor not to, directly or indirectly, lease all or substantially all of its
properties or assets, in one or more related transactions, to any other Person.
This Section 5.01 shall not apply to a merger, consolidation or amalgamation, or
a sale, assignment, transfer, conveyance or other disposition of assets, between
or among the Company and any Restricted Subsidiary.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Each Surviving Company and Surviving Guarantor shall succeed to, and be
substituted for, and may exercise every right and power of the Company or a
Subsidiary Guarantor, as applicable, under this Indenture; PROVIDED, HOWEVER,
that in the case of:
(a) a sale, transfer, assignment, conveyance or other disposition
(unless such sale, transfer, assignment, conveyance or other disposition is of
all or substantially all of the assets of the Company and the Restricted
Subsidiaries, taken as a whole, or in the case of a Subsidiary Guarantor, such
sale, transfer, assignment, conveyance or other disposition is of all or
substantially all of the assets of such Subsidiary Guarantor or all of the
Capital Stock of such Subsidiary Guarantor to a Person that is not (either
before or after giving effect to such transactions) a Subsidiary of the
Company), or
(b) a lease,
the predecessor company shall not be released from any of the obligations or
covenants under this Indenture, including with respect to the payment of the
Notes and obligations under the Subsidiary Guarantees.
58
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following is an "Event of Default:"
(i) default for 30 days in the payment when due of interest on,
including Additional Amounts or Special Interest, if any, or with respect
to, the Notes;
(ii) default in payment, when due at Stated Maturity, upon
acceleration, redemption, required repurchase or otherwise, of the
principal of, or premium, if any, on the Notes;
(iii) failure by the Company or any Restricted Subsidiary to comply
with the provisions of Section 4.09, 4.10, 4.12, 4.18 or 5.01 hereof;
(iv) failure by the Company or any Restricted Subsidiary for 30
days after written notice thereof has been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% of
the aggregate principal amount of the Notes outstanding to comply with any
of its other covenants or agreements in this Indenture;
(v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness by the Company or any Restricted Subsidiary, or the payment of
which is guaranteed by the Company or any Restricted Subsidiary, whether
such Indebtedness or guarantee now exists, or is created after the Issue
Date, if that default:
(a) is caused by a failure to pay principal of, or interest
or premium, if any, on, such Indebtedness prior to the
expiration of the grace period provided in such
Indebtedness on the date of such default (a "PAYMENT
DEFAULT"); or
(b) results in the acceleration of such Indebtedness prior
to its Stated Maturity,
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates US$25.0 million or more;
(vi) failure by the Company or any Restricted Subsidiary to pay
final, non-appealable judgments aggregating in excess of US$25.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days;
(vii) any Subsidiary Guarantee of a Significant Subsidiary ceases,
or the Subsidiary Guarantees of any group of Subsidiaries that, when taken
together, would constitute a Significant Subsidiary cease, to be in full
force and effect (other than in accordance with the terms of any such
Subsidiary Guarantee) or any Subsidiary Guarantor that is a Significant
Subsidiary denies or disaffirms its obligations under its Subsidiary
Guarantee, or a group of Subsidiary Guarantors that, when taken together,
would constitute a Significant Subsidiary deny or disaffirm their
obligations under their respective Subsidiary Guarantees;
(viii) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, when taken together, would constitute a
Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or gives notice of intention to
make a proposal under any Bankruptcy Law;
59
(B) consents to the entry of an order for relief against it in
an involuntary case or consents to its dissolution or winding up;
(C) consents to the appointment of a receiver, interim
receiver, receiver and manager, liquidator, trustee or custodian of
it or for all or substantially all of its property;
(D) makes a general assignment for the benefit of its
creditors;
(E) admits in writing its inability to pay its debts as they
become due or otherwise admits its insolvency; or
(F) seeks a stay of proceedings against it or proposes or
gives notice or intention to propose a compromise, arrangement or
reorganization of any of its debts or obligations under any
Bankruptcy Law; and
(ix) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, when
taken together, would constitute a Significant Subsidiary, in an
involuntary case; or
(B) appoints a receiver, interim receiver, receiver and
manager, liquidator, trustee or custodian of the Company or any of
its Significant Subsidiaries or any group of Subsidiaries that,
when taken together, would constitute a Significant Subsidiary, or
for all or substantially all of the property of the Company or any
of its Significant Subsidiaries or any group of Subsidiaries that,
when taken together, would constitute a Significant Subsidiary;
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, when
taken together, would constitute a Significant Subsidiary; or
(D) orders the presentation of any plan or arrangement,
compromise or reorganization of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, when
taken together, would constitute a Significant Subsidiary;
and such order or decree remains unstayed and in effect for
60 consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than those of the type described in
Section 6.01(viii) or (ix) occurs and is continuing, the Trustee may, and the
Trustee upon the request of Holders of 25% in principal amount of the
outstanding Notes shall, or the Holders of at least 25% in principal amount of
outstanding Notes may, declare the principal of all the Notes, together with all
accrued and unpaid interest, premium, if any, to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that such notice is a notice of acceleration (the "ACCELERATION
NOTICE"), and the same shall become immediately due and payable.
In the case of an Event of Default specified in Section 6.01(viii) or
(ix) hereof, all outstanding Notes shall become due and payable immediately
without further action or notice by the Trustee or the Holders. Holders may not
enforce this Indenture or the Notes except as provided in this Indenture.
At any time after a declaration of acceleration with respect to the
Notes, the Holders of a majority
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in principal amount of the Notes then outstanding (by notice to the Trustee) may
rescind and cancel such declaration and its consequences if:
(a) the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction;
(b) all existing Defaults and Events of Default have been cured or
waived except nonpayment of principal of or interest on the Notes that has
become due solely by such declaration of acceleration;
(c) to the extent the payment of such interest is lawful, interest (at
the same rate specified in the Notes) on overdue installments of interest and
overdue payments of principal which has become due otherwise than by such
declaration of acceleration has been paid;
(d) the Company has paid the Trustee its reasonable compensation and
reimbursed the Trustee for its reasonable expenses, disbursements and advances;
and
(e) in the event of the cure or waiver of an Event of Default of the
type described in Section 6.01(viii) or (ix), the Trustee has received an
Officers' Certificate and Opinion of Counsel that such Event of Default has been
cured or waived.
In the case of an Event of Default with respect to the Notes occurring
by reason of any willful action or inaction taken or not taken by the Company or
on the Company's behalf with the intention of avoiding payment of the premium
that the Company would have been required to pay if the Company had then elected
to redeem the Notes pursuant to Section 3.07 hereof, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
February 15, 2008, by reason of any willful action or inaction taken or not
taken by the Company or on the Company's behalf with the intention of avoiding
the prohibition on redemption of the Notes prior to February 15, 2008, then the
premium specified in Section 3.07 hereof shall also become immediately due and
payable to the extent permitted by law upon acceleration of the Notes.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies shall be
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of at least a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default, and its
consequences, except a continuing Default or Event of Default (i) in the payment
of the principal of or interest on the Notes and (ii) in respect of a covenant
or provision which under this Indenture cannot be modified or amended without
the consent of the Holder of each Note affected by such modification or
amendment. Upon any waiver of a Default or Event of Default such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed cured
for every purpose of this Indenture, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
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SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 7.01, Section 7.02(f) (including the Trustee's
receipt of the security or indemnification described therein) and Section 7.07
hereof, in case an Event of Default shall occur and be continuing, the Holders
of a majority in aggregate principal amount of the Notes then outstanding shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Notes.
SECTION 6.06. LIMITATION ON SUITS.
No Holder shall have any right to institute any proceeding with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
remedy thereunder, unless:
(a) such Holder has previously given to the Trustee written notice of a
continuing Event of Default,
(b) Holders of at least 25% in aggregate principal amount of the Notes
then outstanding have made written request and offered reasonable indemnity to
the Trustee to institute such proceeding as trustee, and
(c) the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the Notes then outstanding a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days.
The preceding limitations shall not apply to a suit instituted by a
Holder for enforcement of payment of principal of, and premium, if any, or
interest on, a Note on or after the respective due dates for such payments set
forth in such Note.
A Holder may not use this Indenture to affect, disturb or prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture (including,
without limitation, Section 6.06 hereof), the right of any Holder to receive
payment of principal, premium, if any, and interest on the Notes held by such
Holder, 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 specified in Section 6.01 (i) or (ii) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest then due and owing (together with
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.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee shall be 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
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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 and 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, moneys, securities and any 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 6, 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 compensation, expenses 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.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 shall 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.
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 such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) 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
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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
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) 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 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money 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 any such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written 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.
(c) 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.
(d) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(e) 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 indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(f) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
Default or Event of Default is received by a Responsible Officer of the Trustee
at the Corporate Trust Office of the Trustee from the Company or the Holders of
25% in aggregate principal amount of the outstanding Notes, and such notice
references the specific Default or Event of Default, the Notes and this
Indenture.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its power and duties hereunder.
(h) The Trustee shall have no duty to inquire as to the performance of
the Company's covenants herein.
(i) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
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 of the Company 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 Commission
for permission to continue as Trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee shall also be subject to Sections 7.10 and
7.11 hereof.
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 it is
known to the Trustee, the Trustee shall mail to Holders a notice of the Default
or Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
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 a brief report dated as of such reporting date
that complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA Section
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA Section 313(c).
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A copy of each report at the time of its mailing to the Holders shall
be mailed to the Company and filed with the Commission and each stock exchange
on which the Notes are listed in accordance with TIA Section 313(d). The Company
shall promptly notify the Trustee when the Notes are listed on any stock
exchange and any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee 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 and counsel.
The Company shall indemnify the Trustee (in its capacity as Trustee) or
any predecessor Trustee (in its capacity as Trustee) against any and all losses,
claims, damages, penalties, fines, liabilities or expenses, including incidental
and out-of-pocket expenses and reasonable attorneys fees (for purposes of this
Article 7, "LOSSES") 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 such losses may be attributable to its negligence or bad faith. The
Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim, and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel if the Trustee has been reasonably advised by counsel that there may be
one or more legal defenses available to it that are different from or additional
to those available to the Company and in the reasonable judgment of such counsel
it is advisable for the Trustee to engage separate counsel, and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld. The Company need not reimburse any expense or indemnify
against any loss incurred by the Trustee through the Trustee's own negligence or
bad faith.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture, the resignation or removal of
the Trustee and payment in full of the Notes.
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(viii) or (ix) 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.
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 7.08.
The Trustee may resign in writing at any time upon 30 days' prior
notice to the Company 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. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
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(b) the Trustee is adjudged bankrupt or 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 Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. Subject to the Lien provided for in Section 7.07 hereof,
the retiring Trustee shall promptly transfer all property held by it as Trustee
to the successor Trustee PROVIDED, HOWEVER; that all sums owing to the Trustee
hereunder shall have been paid. 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.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation or
banking association, the successor corporation or banking association without
any further act shall, if such successor corporation or banking association is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a Person
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 US$50.0
million (or a wholly-owned subsidiary of a bank or trust company, or of a bank
holding company, the principal subsidiary of which is a bank or trust company
having a combined capital and surplus of at least US$50.0 million) 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 Section 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 Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option and 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 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 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 on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE") and each Subsidiary Guarantor shall be released from all of its
obligations under its Subsidiary Guarantee. For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the
other Sections of this Indenture referred to in (a), (b) and (d) below, and to
have satisfied all its other obligations under the Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder: (a) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in Section 8.04 hereof, and as more fully set forth in such Section,
payments in respect of the principal of, premium, if any, or interest and
Additional Amounts on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 and Sections 4.01 and
4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's obligations in connection therewith and (d)
this Article 8. If the Company exercises under Section 8.01 hereof the option
applicable to this Section 8.02, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, payment of the Notes may not be accelerated
because of an Event of Default. Subject to compliance with 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 shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.05 and 4.06 and 4.09
through 4.19 hereof, and the operation of Sections 5.01(a)(4) and (b)(4) hereof,
with respect to the outstanding Notes on and after the date the conditions set
forth in Section 8.04 hereof are satisfied (hereinafter, "COVENANT DEFEASANCE")
and each Subsidiary Guarantor shall be released from all of its obligations
under its Subsidiary Guarantee with respect to such covenants in connection with
such outstanding Notes and the Notes 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 thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. If the Company exercises
under Section 8.01 hereof the option applicable to this Section 8.03, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, payment of
the Notes may not be accelerated because of an Event of Default specified in
clause (iii) (with respect to the covenants contained in Sections 4.09, 4.10,
4.12 or 4.18 or Section 5.01(a)(4) or (b)(4) hereof), (iv) (with respect to
Sections 4.05, 4.06, 4.11, 4.13 through 4.17, and 4.19 hereof), (v), (vi),
(vii), (viii) and (ix) of such Section 6.01 (but in the case of (viii) and (ix)
of Section 6.01 hereof, with respect to Significant Subsidiaries only) or
because of the Company's failure to comply with Section 5.01(a)(4) or (b)(4)
hereof.
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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 Legal Defeasance or Covenant Defeasance:
(a) the Company shall irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders cash in U.S. dollars, non-callable Government
Securities, 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, or interest and premium, if any, on the outstanding
notes on the Stated Maturity or on the applicable date of redemption, as the
case may be, and the Company shall specify whether the Notes are being defeased
to maturity or to a particular date of redemption;
(b) in the case of Legal Defeasance, the Company shall deliver to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming
that (i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (ii) subsequent to the Issue Date, 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 of the outstanding Notes 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
and the Company shall have delivered to the Trustee an Opinion of Counsel in
Canada reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for Canadian federal,
provincial or territorial income tax purposes as a result of such Legal
Defeasance and will be subject to Canadian federal, provincial or territorial
income tax (including withholding 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;
(c) in the case of Covenant Defeasance, the Company shall deliver to
the Trustee an Opinion of Counsel reasonably acceptable to the Trustee
confirming that Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred and the Company shall have delivered to the Trustee
an Opinion of Counsel in Canada reasonably acceptable to the Trustee confirming
that Holders of the outstanding Notes will not recognize income, gain or loss
for Canadian federal, provincial or territorial income tax purposes as a result
of such Covenant Defeasance and will be subject to Canadian federal, provincial
or territorial income tax (including withholding tax) on the same amounts, in
the same manner and at the same time as would have been the case if such
Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit, other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under any material agreement or
instrument, other than this Indenture, to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall deliver to the Trustee an Opinion of Counsel to
the effect that, assuming no intervening bankruptcy of the Company between the
date of deposit and the 91st day following such deposit and assuming that no
Holder is an "insider" of the Company under applicable Bankruptcy Law, after the
91st day following such deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall deliver to the Trustee an Officers' Certificate
stating that such deposit was not made by the Company with the intent of
preferring the Holders of Notes over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others; and
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(h) the Company shall deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED CASH AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all cash and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, 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 all sums due and to become due thereon
in respect of principal, premium, if any, and interest but such cash and
securities need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities 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 of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any cash or non-callable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent certified public accountants of recognized international standing
expressed in a written certification thereof delivered to the Trustee (which may
be the certification delivered under Section 8.04(a) hereof), 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 cash or non-callable Government Securities deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal, premium, if any, or interest on any Note and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) shall be discharged from such trust; and the Holder shall
thereafter, as an unsecured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such cash and securities, and all liability of the Company as trustee thereof,
shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in THE
NEW YORK TIMES and THE WALL STREET
JOURNAL (national edition), notice that such cash and securities remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such cash and securities then remaining shall be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any cash or
non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
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 cash and securities 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 to receive such payment from the cash and
securities held by the Trustee or Paying Agent.
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ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder to:
(a) cure any ambiguity, defect or inconsistency;
(b) provide for uncertificated Notes in addition to or in place of
certificated Notes (PROVIDED that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code);
(c) provide for the assumption of the obligations of the Company and/or
a Subsidiary Guarantor to Holders in the case of a merger, consolidation, or
amalgamation or sale of all or substantially all of the assets of the Company
and/or a Subsidiary Guarantor; PROVIDED, HOWEVER, that the Company shall deliver
to the Trustee:
(i) an Opinion of Counsel to the effect that Holders will not
recognize income, gain or loss for U.S. Federal income tax purposes as a
result of such assumption by a successor corporation and will be subject to
U.S. federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such assumption had not
occurred, and
(ii) an Opinion of Counsel in Canada to the effect that Holders
will not recognize income, gain or loss for Canadian federal, provincial or
territorial tax purposes as a result of such assumption by a successor
corporation and will be subject to Canadian federal, provincial or
territorial taxes (including withholding taxes) on the same amounts, in the
same manner and at the same times as would have been the case if such
assumption had not occurred;
(d) make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights under
this Indenture of any such Holder;
(e) add additional Guarantees with respect to the Notes or release
Subsidiary Guarantors from Subsidiary Guarantees as provided or permitted by the
terms of this Indenture;
(f) provide for the issuance of Additional Notes in accordance with
this Indenture; or
(g) comply with requirements of the SEC in order to effect or maintain
the qualification of this Indenture under the TIA.
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 with the consent of
the Holders of at least a majority in principal amount of the Notes, including
Additional Notes, if any, then outstanding voting as a single class (including
consents obtained in connection with a purchase of or tender offer or exchange
offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (except a continuing Default or Event of
Default (i) in the payment of principal, premium, if any, or interest on the
Notes and (ii) in respect of a covenant or provision which under this Indenture
cannot be modified or amended without the consent of the Holder of each Note
affected by such modification or amendment) or compliance with any provision of
this Indenture or the Notes may be waived with the consent of the Holders of at
least a majority in principal amount of the Notes, including Additional Notes,
if any, then outstanding voting as a single class (including consents obtained
in connection with a purchase of or tender offer or exchange offer for the
Notes).
71
Without the consent of each Holder, an amendment or waiver under this
Section 9.02 may not (with respect to any Notes held by a non-consenting
Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the Stated Maturity of any Note
or alter the provisions with respect to the redemption of the Notes, other than
provisions under Sections 4.12 and 4.18 hereof;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of,
or interest or premium, if any, on the Notes, except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the Notes and a waiver of the payment default that resulted
from such acceleration;
(e) make any Note payable in money other than that stated in the Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of, or interest or premium, if any, on the Notes, or to the
institute suit for the enforcement of any payment on or with respect to such
Holders' Notes or any Subsidiary Guarantee;
(g) waive a redemption payment with respect to any Note, other than a
payment required by the provisions of Section 4.12 or 4.18 hereof;
(h) subordinate the Notes or any Subsidiary Guarantee to any other
obligation of Sun Media or the applicable Subsidiary Guarantor;
(i) amend or modify the provisions of Section 4.20 hereof;
(j) amend or modify any Subsidiary Guarantee in a manner that would
adversely affect the Holders of the Notes; or
(k) make any change in the preceding amendment and waiver provisions.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any supplemental
indenture. If a record date is fixed, the Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to consent to
such supplemental indenture, whether or not such Holders remain Holders after
such record date; PROVIDED that unless such consent shall have become effective
by virtue of the requisite percentage having been obtained prior to the date
which is 120 days after such record date, any such consent previously given
shall automatically and without further action by any Holder be cancelled and of
no further effect.
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.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holder of each Note affected
thereby to such Holder's address appearing in the Security Register 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.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an 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 is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion thereof 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 or subsequent Holder may revoke the consent as to
its Note or portion thereof if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver shall become effective in accordance with its
terms and thereafter shall bind 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, upon receipt of an
Authentication Order, 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 entitled to receive and (subject to Section 7.01 hereof) shall be 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 amended or supplemental
indenture is the legal, valid and binding obligations of the Company enforceable
against it in accordance with its terms, subject to customary exceptions and
that such amended or supplemental indenture complies with the provisions hereof
(including Section 9.03 hereof).
ARTICLE 10.
SUBSIDIARY GUARANTEES
SECTION 10.01. GUARANTEE.
Subject to this Article 10, each of the Subsidiary Guarantors hereby
unconditionally guarantees to each Holder of a Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns (a) the due and
punctual payment of the principal of, premium, if any, and interest on the
Notes, subject to any applicable grace period, whether at maturity, by
acceleration, redemption or otherwise, the due and punctual payment of interest
on the overdue principal and premium, if any, and to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee hereunder or thereunder, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations,
that same shall be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at maturity, by acceleration
pursuant to Section 6.02 hereof, redemption or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Subsidiary Guarantors shall be jointly and severally obligated to
pay the same immediately. Each Subsidiary Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
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Each Subsidiary Guarantor hereby agrees that its obligations with
regard to its Subsidiary Guarantee shall be joint and several, unconditional,
irrespective of the validity or enforceability of the Notes or the obligations
of the Company under this Indenture, the absence of any action to enforce the
same, the recovery of any judgment against the Company or any other obligor with
respect to this Indenture, the Notes or the Obligations of the Company under
this Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) which might otherwise constitute
a legal or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor further, to the extent permitted by law, waives and
relinquishes all claims, rights and remedies accorded by applicable law to
guarantors and agrees not to assert or take advantage of any such claims, rights
or remedies, including but not limited to: (a) any right to require any of the
Trustee, the Holders or the Company (each a "BENEFITED PARTY"), as a condition
of payment or performance by such Subsidiary Guarantor, to (1) proceed against
the Company, any other guarantor (including any other Subsidiary Guarantor) of
the Obligations under the Guarantees or any other Person, (2) proceed against or
exhaust any security held from the Company, any such other guarantor or any
other Person, (3) proceed against or have resort to any balance of any deposit
account or credit on the books of any Benefited Party in favor of the Company or
any other Person, or (4) pursue any other remedy in the power of any Benefited
Party whatsoever; (b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Company including any
defense based on or arising out of the lack of validity or the unenforceability
of the Obligations under the Subsidiary Guarantees or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
the Company from any cause other than payment in full of the Obligations under
the Subsidiary Guarantees; (c) 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; (d) any
defense based upon any Benefited Party's errors or omissions in the
administration of the Obligations under the Subsidiary Guarantees, except
behavior which amounts to bad faith; (e)(1) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of the
Subsidiary Guarantees and any legal or equitable discharge of such Subsidiary
Guarantor's obligations hereunder, (2) the benefit of any statute of limitations
affecting such Subsidiary Guarantor's liability hereunder or the enforcement
hereof, (3) any rights to set-offs, recoupments and counterclaims and (4)
promptness, diligence and any requirement that any Benefited Party protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentations, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
of the Subsidiary Guarantees, notices of default under the Notes or any
agreement or instrument related thereto, notices of any renewal, extension or
modification of the Obligations under the Subsidiary Guarantees or any agreement
related thereto, and notices of any extension of credit to the Company and any
right to consent to any thereof; (g) to the extent permitted under applicable
law, the benefits of any "One Action" rule and (h) any defenses or benefits that
may be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms of the Subsidiary
Guarantees. Except to the extent expressly provided herein, including Sections
8.02, 8.03 and 10.05 hereof, each Subsidiary Guarantor hereby covenants that its
Subsidiary Guarantee shall not be discharged except by complete performance of
the obligations contained in its Subsidiary Guarantee and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Subsidiary Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Subsidiary Guarantors, any amount paid by either to the Trustee or such
Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall
be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it shall 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 Subsidiary Guarantor further agrees that, as between the Subsidiary
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.02 hereof for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby and (y) in the
event of any declaration of acceleration of such obligations as provided in
Section 6.02 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary Guarantee. The Subsidiary Guarantors shall have the right to seek
contribution from any non-paying Subsidiary Guarantor so long as the exercise of
such right does not impair the rights of the Holders under the Subsidiary
Guarantee.
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SECTION 10.02. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Subsidiary Guarantor 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
the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Subsidiary Guarantors hereby
irrevocably agree that the obligations of such Subsidiary Guarantor under this
Article 10 shall be limited to the maximum amount as shall, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Subsidiary Guarantor that are relevant under such laws, including, if
applicable, its guarantee of all obligations under the New Credit Facility, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under this Article 10, result
in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee
not constituting a fraudulent transfer or conveyance.
SECTION 10.03. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof,
each Subsidiary Guarantor hereby agrees that a notation of such Subsidiary
Guarantee in substantially the form included in Exhibit E attached hereto shall
be endorsed by an Officer of such Subsidiary Guarantor on each Note
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Subsidiary Guarantor by its President or one of its
Vice Presidents.
Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee
set forth in Section 10.01 hereof shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Subsidiary Guarantors.
SECTION 10.04. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Except as otherwise provided in Section 10.05 hereof, no Subsidiary
Guarantor may consolidate with or merge with or into (whether or not such
Subsidiary Guarantor is the Surviving Guarantor) another Person whether or not
affiliated with such Subsidiary Guarantor unless:
(a) subject to Section 10.05 hereof, the Person formed by or surviving
any such consolidation or merger (if other than a Subsidiary Guarantor or the
Company) unconditionally assumes all the obligations of such Subsidiary
Guarantor, pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under this Indenture, the Subsidiary Guarantee and
any Registration Rights Agreements on the terms set forth herein or therein; and
(b) the Subsidiary Guarantor complies with the requirements of Article
5 hereof.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and 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 the Subsidiary Guarantor, such successor Person shall succeed to
and be substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary Guarantor. Such successor Person 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
75
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.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Subsidiary Guarantor with
or into the Company or another Subsidiary Guarantor, or shall prevent any sale
or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company or another Subsidiary Guarantor.
SECTION 10.05. RELEASES FOLLOWING SALE OF ASSETS.
In the event of a sale or other disposition of all or substantially all
of the assets of any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) a Subsidiary of the Company, then such
Subsidiary Guarantor (in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the Capital Stock of such
Subsidiary Guarantor) or the corporation acquiring the property (in the event of
a sale or other disposition of all or substantially all of the assets of such
Subsidiary Guarantor) shall be released and relieved of any obligations under
its Subsidiary Guarantee; PROVIDED that the net proceeds of such sale or other
disposition shall be subject to all applicable provisions of this Indenture,
including without limitation Section 4.12 hereof. If a Restricted Subsidiary is
designated as an Unrestricted Subsidiary in accordance with the provisions of
Section 4.17 hereof, such Subsidiary shall be released and relieved of any
obligations under its Subsidiary Guarantee. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition or designation was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.12 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Subsidiary Guarantor from its
obligations under its Subsidiary Guarantee.
Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Subsidiary Guarantor
under this Indenture.
ARTICLE 11.
SATISFACTION AND DISCHARGE
SECTION 11.01. SATISFACTION AND DISCHARGE.
This Indenture shall be discharged and shall cease to be of further
effect, except as to surviving rights of registration of transfer or exchange of
the Notes, as to all Notes issued hereunder, when:
(a) either:
(i) all Notes that have been previously authenticated (except lost,
stolen or destroyed Notes that have been replaced or paid and Notes for
whose payment money has previously been deposited in trust or segregated
and held in trust by the Company and is thereafter repaid to the Company or
discharged from the trust) have been delivered to the Trustee for
cancellation; or
(ii) all Notes that have not been previously delivered to the
Trustee for cancellation (A) have become due and payable by reason of a
making of a notice of redemption or otherwise or (B) will become due and
payable within one year, and the Company has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and discharge
the entire Indebtedness on the Notes not
76
previously delivered to the Trustee for cancellation for principal,
premium, if any, and interest on the Notes to the date of deposit, in the
case of Notes that have become due and payable, or to the Stated Maturity
or redemption date, as the case may be;
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company is a party
or by which the Company is bound;
(c) the Company has paid or caused to be paid all other sums payable by
it under this Indenture;
(d) the Company shall have delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of the Notes at maturity
or the date of redemption, as the case may be; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and Opinion of Counsel stating that all conditions precedent under
this Indenture relating to the satisfaction and discharge of this Indenture have
been satisfied.
SECTION 11.02. DEPOSITED CASH AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 11.03 hereof, all cash and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 11.02, the
"TRUSTEE") pursuant to Section 11.01 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 cash and securities need not be segregated from other funds except to the
extent required by law.
SECTION 11.03. REPAYMENT TO COMPANY.
Any cash or non-callable Government Securities 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 request
or (if then held by the Company) shall be discharged from such trust; and the
Holder shall thereafter, as an unsecured creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such cash and securities, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in THE
NEW YORK TIMES and THE
WALL STREET JOURNAL (national edition), notice that such cash and securities
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such cash and securities then remaining shall be repaid to
the Company.
ARTICLE 12.
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the provision required by the TIA shall control.
77
SECTION 12.02. NOTICES.
Any notice or communication by the Company and/or a Subsidiary
Guarantor 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), facsimile transmission or overnight air courier guaranteeing
next-day delivery, to the other's address:
If to the Company or a Subsidiary Guarantor:
Sun Media Corporation
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, X0X 0X0
Xxxxxx
Attention: Vice President, Corporate Controller
Facsimile No.: (000) 000-0000
With a copy to:
Quebecor Media Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx X0X 0X0
Xxxxxx
Attention: Vice President and Treasurer
Facsimile No.: (000) 000-0000
And a copy to:
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Trustee:
National City Bank
Corporate Trust Department, Locator 01-3116
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to the Trustee)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if sent by facsimile
transmission; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next-day delivery. All notices and
communications to the Trustee shall be deemed duly given and effective only upon
receipt.
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 Security
Register. Any notice or communication shall also be so mailed to any Person
described in TIA Section 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.
78
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 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 any provision of 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 complied with; and
(b) an Opinion of Counsel 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 such counsel, all such conditions
precedent and covenants have been complied with.
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 Section 314(a)(4)) shall comply with the provisions of TIA
Section 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 such Person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
With respect to matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate, certificates of public officials or reports or opinions of experts.
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.
79
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or of the Guarantors under the Notes, this
Indenture, the Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance 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 AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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 covenants and agreements of the Company in this Indenture and the
Notes shall bind its successors. All covenants and 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. CONSENT TO JURISDICTION AND SERVICE OF PROCESS
(a) Each of the Company and each of the Subsidiary Guarantors
irrevocably consents to the non-exclusive jurisdiction of the courts of the
State of
New York and the courts of the United States of America located in the
Borough of Manhattan, City and State of
New York over any suit, action or
proceeding with respect to this Indenture or the transactions contemplated
hereby. Each of the Company and each of the Subsidiary Guarantors waives any
objection that it may have to the venue of any suit, action or proceeding with
respect to this Indenture or the transactions contemplated hereby in the courts
of the State of
New York or the courts of the United States of America, in each
case, located in the Borough of Manhattan, City and State of
New York, or that
such suit, action or proceeding brought in the courts of the State of
New York
or the United States of America, in each case, located in the Borough of
Manhattan, City and State of New York was brought in an inconvenient court and
agrees not to plead or claim the same.
(b) Each of the Company and each of the Subsidiary Guarantors
irrevocably appoints CT Corporation System, as its authorized agent in the State
of New York upon which process may be served in any such suit or proceedings,
and agrees that service of process upon such agent, and written notice of said
service to CT Corporation System, by the person serving the same to the address
provided in Section 12.02 hereof, shall be deemed in every respect effective
service of process upon the Company or any Subsidiary Guarantor in any such suit
or proceeding. Each of the Company and each of the Subsidiary Guarantors further
agrees to take any and all action as may be necessary to maintain such
designation and appointment of such agent in full force and effect for a period
of ten years from the date of this Indenture.
80
SECTION 12.13. CONVERSION OF CURRENCY.
The Company covenants and agrees that the following provisions shall
apply to conversion of currency in the case of the Notes and this Indenture.
(a) (i) If, for the purpose of obtaining judgment in, or enforcing the
judgment of, any court in any country, it becomes necessary to convert into
a currency (the "JUDGMENT CURRENCY") an amount due in any other currency
(the "BASE CURRENCY"), then the conversion shall be made at the rate of
exchange prevailing on the Business Day before the day on which the
judgment is given or the order of enforcement is made, as the case may be
(unless a court shall otherwise determine).
(ii) If there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment is given or
an order of enforcement is made, as the case may be (or such other date as
a court shall determine), and the date of receipt of the amount due, the
Company shall pay such additional (or, as the case may be, such lesser)
amount, if any, as may be necessary so that the amount paid in the judgment
currency when converted at the rate of exchange prevailing on the date of
receipt will produce the amount in the Base Currency originally due.
(b) In the event of the winding-up of the Company at any time while any
amount or damages owing under the Notes and this Indenture, or any judgment or
order rendered in respect thereof, shall remain outstanding, the Company shall
indemnify and hold the Holders and the Trustee harmless against any deficiency
arising or resulting from any variation in rates of exchange between (1) the
date as of which the equivalent of the amount in U.S. Dollars or Canadian
Dollars, as the case may be, due or contingently due under the Notes and this
Indenture (other than under this paragraph (b)) is calculated for the purposes
of such winding-up and (2) the final date for the filing of proofs of claim in
such winding-up. For the purpose of this paragraph (b), the final date for the
filing of proofs of claim in the winding-up of the Company shall be the date
fixed by the liquidator or otherwise in accordance with the relevant provisions
of applicable law as being the latest practicable date as at which liabilities
of the Company may be ascertained for such winding-up prior to payment by the
liquidator or otherwise in respect thereto.
(c) The obligations contained in paragraph (a)(ii) and (b) of this
Section 12.13 shall constitute obligations of the Company separate and
independent from its other respective obligations under the Notes and this
Indenture, shall give rise to separate and independent causes of action against
the Company, shall apply irrespective of any waiver or extension granted by any
Holder or the Trustee or any of them from time to time and shall continue in
full force and effect notwithstanding any judgment or order or the filing of any
proof of claim in the winding-up of the Company for a liquidated sum in respect
of amounts due hereunder (other than under paragraph (b) above) or under any
such judgment or order. Any such deficiency as aforesaid shall be deemed to
constitute a loss suffered by the Holders or the Trustee, as the case may be,
and no proof or evidence of any actual loss shall be required by the Company or
the liquidator or otherwise or any of them. In the case of paragraph (b) above,
the amount of such deficiency shall not be deemed to be reduced by any variation
in rates of exchange occurring between the said final date and the date of any
liquidating distribution.
(d) The term "rate(s) of exchange" shall mean the rate of exchange
quoted by Royal Bank of Canada at its central foreign exchange desk in its head
office in Toronto at 12:00 noon (Toronto, Ontario time) for purchases of the
Base Currency with the judgment currency other than the Base Currency referred
to in Subsections (a) and (b) above and includes any premiums and costs of
exchange payable.
(e) The Trustee shall have no duty or liability with respect to
monitoring or enforcing the Section 12.13.
SECTION 12.14. CURRENCY EQUIVALENT.
Except as provided in Section 12.13, for purposes of the construction
of the terms of this Indenture or of the Notes, in the event that any amount is
stated herein in the currency of one nation (the "FIRST CURRENCY"), as of any
date such amount shall also be deemed to represent the amount in the currency of
any other relevant nation
81
which is required to purchase such amount in the First Currency at the rate of
exchange quoted by Royal Bank of Canada at its central foreign exchange desk in
its head office in Toronto at 12:00 noon (Toronto, Ontario time) on the date of
determination.
SECTION 12.15. 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.
SECTION 12.16. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings in 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.
SECTION 12.17. QUALIFICATION OF THIS INDENTURE.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of any Registration Rights Agreements and shall
pay all reasonable costs and expenses (including attorneys' fees and expenses
for the Company, the Trustee and the Holders) incurred in connection therewith,
including, but not limited to, costs and expenses of qualification of this
Indenture and the Notes and printing this Indenture and the Notes. The Trustee
shall be entitled to receive from the Company any such Officers' Certificates,
Opinions of Counsel or other documentation as it may reasonably request in
connection with any such qualification of this Indenture under the TIA.
[Signatures on following page]
82
SIGNATURES
Dated as of February 7, 2003.
COMPANY:
SUN MEDIA CORPORATION
By: /s/ KIN-MAN XXX
----------------
Name: Kin-Man Xxx
Title: Vice President, Corporate Controller
SUBSIDIARY GUARANTORS:
XXXXX PUBLISHERS LIMITED
By: /s/ KIN-MAN XXX
----------------
Name: Kin-Man Xxx
Title: Vice President, Finance and Administration
SUN MEDIA (TORONTO) CORPORATION
By: /s/ KIN-MAN XXX
----------------
Name: Kin-Man Xxx
Title: Vice President, Corporate Controller
SMC NOMINEECO INC.
By: /s/ XXXXXX XXXXXXXXX
--------------------
Name: Xxxxxx Xxxxxxxxx
Title: President and Chief Executive Officer
TORONTO SUN INTERNATIONAL, INC.
By: /s/ KIN-MAN XXX
----------------
Name: Kin-Man Xxx
Title: Vice President, Corporate Controller
TS PRINTING, INC.
By: /s/ KIN-MAN XXX
----------------
Name: Kin-Man Xxx
Title: Vice President, Corporate Controller
INDENTURE SIGNATURE PAGE
FLORIDA SUN PUBLICATIONS, INC.
By: /s/ KIN-MAN XXX
----------------
Name: Kin-Man Xxx
Title: Vice President, Corporate Controller
3661458 CANADA INC.
By: /s/ KIN-MAN XXX
----------------
Name: Kin-Man Xxx
Title: Vice President, Corporate Controller
3351611 CANADA INC.
By: /s/ XXXXXX XXXXXXXXX
---------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
INDENTURE SIGNATURE PAGE
TRUSTEE:
NATIONAL CITY BANK
By: /s/ XXXXX X. XXXXXXX
---------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
INDENTURE SIGNATURE PAGE
EXHIBIT A
================================================================================
(Face of Note)
7-5/8% SENIOR NOTES DUE 2013
CUSIP _____________
NO.___ US$_______________
SUN MEDIA CORPORATION
promises to pay to CEDE & CO., INC. or its registered assigns, the principal sum
of _________________ Dollars (US$______________) on February 15, 2013.
Interest Payment Dates: February 15 and August 15, commencing August 15, 2003.
Record Dates: February 1 and August 1.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed by its duly authorized officer.
SUN MEDIA CORPORATION
By:
------------------------------
Name:
Title:
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
NATIONAL CITY BANK,
as Trustee
By:
----------------------------
Authorized Signatory
Dated _____________, 2003
A-1
(Back of Note)
7-5/8% SENIOR NOTES DUE 2013
[THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL, ASSIGN, TRANSFER, PLEDGE, ENCUMBER OR OTHERWISE DISPOSE OF SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH
SUN MEDIA CORPORATION (THE "COMPANY") OR ANY OF ITS AFFILIATES WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE OF THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF US$250,000,
FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION OF THE SECURITIES IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE, ASSIGNMENT, TRANSFER, PLEDGE,
ENCUMBRANCE OR OTHER DISPOSITION PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF
THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]
[THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES
IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE 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
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("DTC"), TO THE
A-2
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY
BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST.
Sun Media Corporation, a company continued under the
laws of British Columbia (the "COMPANY"), promises to pay interest (as
defined in the Indenture) on the principal amount of this Note at 7-5/8% per
annum until maturity and shall pay Special Interest, if any, as provided in
the Registration Rights Agreement relating to these Notes. The Company shall
pay interest semi-annually on February 15 and August 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each
an "INTEREST PAYMENT DATE"). Interest on the Notes shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; PROVIDED, HOWEVER, that if there is no existing
Default in the payment of interest, and if this Note is authenticated between
a record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; PROVIDED, FURTHER, that the first Interest Payment Date shall
be August 15, 2003. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time at a rate that is 1% per annum in excess
of the interest rate then in effect under the Indenture and this Note; it
shall pay interest (including post-petition interest in any proceeding under
any Bankruptcy Law) on overdue installments of interest (without regard to
any applicable grace periods), from time to time at the same rate to the
extent lawful. Interest shall be computed on the basis of a 360-day year of
twelve 30-day months. For the purposes of the INTEREST ACT (Canada), the
yearly rate of interest which is equivalent to the rate payable hereunder is
the rate payable multiplied by the actual number of days in the year and
divided by 360.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons in whose name this Note (or one or
more Predecessor Notes) is registered at the close of business on the February 1
or August 1 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes shall be payable as to principal, premium, if any, and
interest at the office or agency of the Company maintained for such purpose, or,
at the option of the Company, payment of interest may be made by check mailed to
the Holders at their addresses set forth in the Security Register; PROVIDED,
HOWEVER, that payment by wire transfer of immediately available funds shall be
required with respect to principal of and interest and premium, if any, on, all
Global Notes and all other Notes the Holders of which shall have provided wire
transfer instructions to the Company or the Paying Agent. Such payment shall be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, National City Bank, the
Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of February 7, 2003 ("Indenture") among the Company, the guarantors party
thereto (the "Subsidiary Guarantors") and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture,
the provisions of the Indenture shall govern and be controlling.
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5. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Paragraph 5, the
Notes shall not be redeemable at the option of the Company prior to February 15,
2008. Beginning on February 15, 2008, the Company may redeem all or a part of
the Notes, at once or over time, in accordance with Section 3.03 of the
Indenture, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest thereon on the Notes
redeemed, to the applicable redemption date (subject to the right of Holders of
record on the relevant Regular Record Date to receive interest due on the
relevant Interest Payment Date), if redeemed during the twelve-month period
commencing on February 15 of the years indicated below:
REDEMPTION YEAR PERCENTAGE
2008................................................................. 103.813%
2009................................................................. 102.542%
2010................................................................. 101.271%
2011 and thereafter.................................................. 100.000%
(b) At any time and from time to time prior to February 15, 2006, the
Company may on one or more occasions redeem up to 35% of the aggregate principal
amount of the Notes issued under this Indenture at a redemption price (expressed
as a percentage of principal amount) equal to 107.625% of the principal amount
thereof, plus accrued and unpaid interest thereon to the redemption date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on the relevant Interest Payment Date) with the net cash
proceeds of one or more Equity Offerings; PROVIDED, HOWEVER, that (i) at least
65% of the aggregate principal amount of the Notes issued under this Indenture
(excluding Notes held by the Company and its Subsidiaries) remain outstanding
immediately following such redemption and (ii) any such redemption shall be made
within 90 days of the date of closing of any such Equity Offering.
(c) If the Company becomes obligated to pay any Additional Amounts
because of a change in the laws or regulations of Canada or any Canadian Taxing
Authority, or a change in any official position regarding the application or
interpretation thereof, in either case that is publicly announced or becomes
effective on or after the Issue Date, the Company may, at any time, redeem all,
but not part, of the Notes at a price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest to the redemption date, PROVIDED that
at any time that the aggregate principal amount of the Notes outstanding is
greater than US$20.0 million, any Holder of the Notes may, to the extent that it
does not adversely affect the Company's after-tax position, at its option, waive
the Company's compliance with the provisions of Section 4.20 of the Indenture;
PROVIDED, FURTHER, that if any Holder waives such compliance, the Company may
not redeem that Holder's Notes pursuant to this clause (c).
(d) Any prepayment pursuant to this paragraph shall be made pursuant to
the provisions of Sections 3.01 through 3.06 of the Indenture.
6. MANDATORY REDEMPTION. Except as set forth in Sections 4.12 and 4.18
of the Indenture, the Company shall not be required to make mandatory redemption
or sinking fund payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the Company shall make
an offer to all Holders to repurchase all (equal to US$1,000 or an integral
multiple of US$1,000) of such Holder's Notes at a purchase price in cash equal
to 101% of the aggregate principal amount of the Notes repurchased, plus accrued
and unpaid interest on the Notes repurchased to the purchase date in accordance
with the procedures set forth in Section 3.09 of the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, it shall not be required to apply any Net Proceeds in accordance with the
Indenture until the aggregate Excess Proceeds from all Asset Sales following the
date the Notes are first issued exceeds US$20.0 million. Thereafter, the Company
shall commence an Asset Sale Offer by applying the Excess Proceeds pursuant to
Section 3.09 of the Indenture to purchase the
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maximum principal amount of Notes (including any Additional Notes) that may be
purchased out of the Excess Proceeds at an offer price in cash equal to 100% of
the principal amount thereof plus accrued and unpaid interest and Special
Interest, if any, to the Purchase Date in accordance with the procedures set
forth in Section 3.09 of the Indenture. To the extent that the aggregate amount
of Notes (including Additional Notes) tendered pursuant to an Asset Sale Offer
is less than the Excess Proceeds, the Company (or such Restricted Subsidiary)
may apply such deficiency for any purpose not prohibited by the Indenture. If
the aggregate principal amount of Notes surrendered by Holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a PRO RATA basis.
8. NOTICE OF REDEMPTION. Notices of redemption shall be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than US$1,000 may be redeemed in part but only in integral multiples of
US$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest shall cease to accrue on Notes or portions
thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of US$1,000 and integral multiples of US$1,000.
This Note shall represent the aggregate principal amount of outstanding Notes
from time to time endorsed hereon and the aggregate principal amount of Notes
represented hereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, the Company need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Company and the Trustee may amend or supplement the Indenture or the Notes
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes, including Additional Notes, if any, voting as a
single class (including consents obtained in connection with a purchase of or
tender offer or exchange offer for the Notes), and, subject to Sections 6.04 and
6.07 of the Indenture, any existing Default or Event of Default (except a
continuing Default or Event of Default (i) in the payment of principal, premium,
if any, interest or Special Interest or Additional Amounts, if any, on the Notes
and (ii) in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the Holder of each Note affected
by such modification or amendment) or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes, including Additional
Notes, if any, then outstanding voting as a single class (including consents
obtained in connection with a purchase of or tender offer or exchange offer for
the Notes). Without the consent of any Holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to (a) cure any ambiguity, defect
or inconsistency; (b) provide for uncertificated Notes in addition to or in
place of certificated Notes (PROVIDED that the uncertificated Notes are issued
in registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code); (c) provide for the assumption of the obligations of the Company and/or a
Subsidiary Guarantor to Holders in the case of a merger, consolidation, or
amalgamation or sale of all or substantially all of the assets of the Company
and/or a Subsidiary Guarantor; PROVIDED, HOWEVER, that the Company shall deliver
to the Trustee (i) an Opinion of Counsel to the effect that Holders will not
recognize income, gain or loss for U.S. Federal income tax purposes as a result
of such assumption by a successor corporation and will be subject to U.S.
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such assumption had not occurred, and (ii)
an Opinion of Counsel in Canada to the effect that Holders will not recognize
income, gain or loss for Canadian federal, provincial or territorial tax
purposes as a result of such assumption by a successor corporation and will be
subject to Canadian federal, provincial or territorial taxes (including
withholding taxes) on the same amounts, in the same manner and at the same times
as would have been the case if such assumption had not occurred; (d) make any
change that would provide any additional rights or benefits to the
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Holders or that does not adversely affect the legal rights under this Indenture
of any such Holder; (e) add additional Guarantees with respect to the Notes or
release Subsidiary Guarantors from Subsidiary Guarantees as provided or
permitted by the terms of the Indenture; (f) provide for the issuance of
Additional Notes in accordance with the Indenture; or (g) comply with
requirements of the SEC in order to effect or maintain the qualification of this
Indenture under the TIA.
12. DEFAULTS AND REMEDIES. Each of the following is an Event of Default
under the Indenture: (a) default for 30 days in the payment when due of interest
on, including Additional Amounts or Special Interest, if any, or with respect
to, the Notes; (b) default in payment, when due at Stated Maturity, upon
acceleration, redemption, required repurchase or otherwise, of the principal of,
or premium, if any, on the Notes; (c) failure by the Company or any Restricted
Subsidiary to comply with the provisions of Section 4.09, 4.10, 4.12, 4.18 or
5.01 of the Indenture; (d) failure by the Company or any Restricted Subsidiary
for 30 days after written notice thereof has been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% of the
aggregate principal amount of the Notes outstanding to comply with any of its
other covenants or agreements in the Indenture; (e) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness by the Company or any Restricted
Subsidiary, or the payment of which is guaranteed by the Company or any
Restricted Subsidiary, whether such Indebtedness or guarantee now exists, or is
created after the Issue Date, if that default: (i) is caused by a failure to pay
principal of, or interest or premium, if any, on, such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of such
default (a "PAYMENT DEFAULT"); or (ii) results in the acceleration of such
Indebtedness prior to its Stated Maturity, and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates US$25.0 million or more; (f)
failure by the Company or any Restricted Subsidiary to pay final, non-appealable
judgments aggregating in excess of US$25.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days; (g) any Subsidiary Guarantee
of a Significant Subsidiary ceases, or the Subsidiary Guarantees of any group of
Subsidiaries that, when taken together, would constitute a Significant
Subsidiary cease, to be in full force and effect (other than in accordance with
the terms of any such Subsidiary Guarantee) or any Subsidiary Guarantor that is
a Significant Subsidiary denies or disaffirms its obligations under its
Subsidiary Guarantee, or a group of Subsidiary Guarantors that, when taken
together, would constitute a Significant Subsidiary deny or disaffirm their
obligations under their respective Subsidiary Guarantees; and (h) certain events
of bankruptcy, insolvency or reorganization affecting the Company or any of its
Significant Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency described in the Indenture, all outstanding Notes shall become due
and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal, premium, if any, or interest or Special Interest or Additional
Amounts, if any) if a majority of the Responsible Officers determines that
withholding notice is in the interests of the Holders. The Holders of a majority
in aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of principal, premium, if
any, or interest or Special Interest or Additional Amounts, if any. The Company
is required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. Subject to certain limitations, 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 of the Company
with the same rights it would have if it were not Trustee.
14. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company or of any
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Indenture, the Notes, the Guarantees or for any claim
based on, in respect of,
A-6
or by reason of, such obligations or their creation. Each Holder by accepting a
Note waives and releases all such liability.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes that are Initial Notes shall have all the rights set forth in
the Registration Rights Agreement, dated as of February 7, 2003, among the
Company and the parties named on the signature pages thereto or, in the case of
Additional Notes, Holders of Restricted Global Notes and Restricted Definitive
Notes shall have the rights set forth in one or more Registration Rights
Agreements, if any, among the Company and the other parties thereto, relating to
rights given by the Company to the purchasers of such Additional Notes.
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption or notices of Offers to Purchase as a
convenience to Holders. No representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or notice of an Offer to Purchase and reliance may be placed only on
the other identification numbers printed thereon and any such redemption or
Offer to Purchase shall not be affected by any defect in or omission of such
numbers.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to: Sun Media
Corporation, 000 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 3XS, Canada, Attention:
Vice President, Corporate Controller.
19. GOVERNING LAW. The internal law of the State of New York shall
govern and be used to construe this Note without giving effect to applicable
principals of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
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Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.12 or 4.18 of the Indenture, check the box below:
[ ] Section 4.12
[ ] Section 4.18
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.12 or Section 4.18 of the Indenture, state the amount you
elect to have purchased: US$_____________________
Date:_____________ Your Signature:________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.:
____________________________________________
SIGNATURE GUARANTEE:
____________________________________________
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements include membership or participation in
the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
________________________________________________________________________________
(Insert assignee's social security or other tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
as agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: ______________
Your Signature: _________________________________
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee:_____________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements
of the Registrar, which requirements include
membership or participation in the Security
Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may
be determined by the Registrar in addition to, or
in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as
amended.
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Principal Amount
Amount of of this Global Note Signature of
decrease in Amount of increase following such authorized signatory
Principal Amount in Principal Amount decrease (or of Trustee or
Date of Exchange of this Global Note of this Global Note increase) Note Custodian
---------------- ------------------- ------------------- --------- --------------
A-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Sun Media Corporation
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Vice President, Corporate Controller
National City Bank
Corporate Trust Department, Locator 01-3116
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Corporate Trust Department
Facsimile No.: (000) 000-0000
Re: 7-5/8% SENIOR NOTES DUE 2013
----------------------------
Reference is hereby made to the Indenture, dated as of
February 7, 2003 (the "INDENTURE"), among Sun Media Corporation, as issuer (the
"COMPANY"), the Subsidiary Guarantors party thereto and National City Bank, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
___________________, (the "TRANSFEROR") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of US$___________ in such Note[s] or interests (the
"TRANSFER"), to ___________________________ (the "TRANSFEREE"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial
interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "SECURITIES ACT"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] Check if Transferee will take delivery of a beneficial
interest in the Regulation S Global Note or a Definitive Note pursuant to
Regulation S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(a) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Distribution Compliance Period, the transfer is not being made
to a U.S. Person or for the account or benefit of a U.S. Person (other than an
Initial Purchaser). Upon consummation of the proposed transfer in accordance
with the terms of the Indenture, the
B-1
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed on
the Regulation S Global Note, the Temporary Regulation S Global Note and/or the
Definitive Note and in the Indenture and the Securities Act.
3. [ ] Check and complete if Transferee will take delivery of a
beneficial interest in the IAI Global Note or a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
Subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that
it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with
the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the
requirements of the exemption claimed, which certification is supported
by (1) a certificate executed by the Transferee in the form of Exhibit
D to the Indenture and (2) if such Transfer is in respect of a
principal amount of Notes at the time of transfer of less than
US$250,000, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with
the Securities Act. Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the IAI
Global Note and/or the Definitive Notes and in the Indenture and the
Securities Act.
4. [ ] Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the
B-2
transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
___________________________
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated: ___________________
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii)[ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE OF (a), (b) OR (c)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii)[ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Sun Media Corporation
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention:
National City Bank
000 Xxxxxx Xxxxxx, Xxxxxxx 00-0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Corporate Trust Department
Facsimile No.: (000) 000-0000
Re: 7-5/8% SENIOR NOTES DUE 2013
----------------------------
Reference is hereby made to the Indenture, dated as of
February 7, 2003 (the "INDENTURE"), among Sun Media Corporation, as issuer (the
"COMPANY"), the Subsidiary Guarantors party thereto and National City Bank, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
__________________________, (the "OWNER") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of US$____________ in such Note[s] or interests (the
"EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial
Interests in a Restricted Global Note for Unrestricted Definitive Notes or
Beneficial Interests in an Unrestricted Global Note
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a beneficial interest in an Unrestricted Global Note in an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the
Restricted Global Note and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for an
Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner's own account without transfer,
(ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Note and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted Definitive
Note is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in
C-1
order to maintain compliance with the Securities Act and (iv) the beneficial
interest is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(d) [ ]CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes for Restricted Definitive Notes or
Beneficial Interests in Restricted Global Notes
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A
RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global Note for a
Restricted Definitive Note with an equal principal amount, the Owner hereby
certifies that the Restricted Definitive Note is being acquired for the Owner's
own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note
issued will continue to be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Note and in
the Indenture and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE
TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CIRCLE ONE] 144A Global Note, Regulation S Global Note, IAI Global Note
with an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Definitive Note and pursuant to and in accordance
with the Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Exchange in accordance with the terms of the Indenture, the beneficial
interest issued will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the relevant Restricted Global Note and
in the Indenture and the Securities Act.
C-2
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
________________________________
[Insert Name of Transferor]
By:_____________________________
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Sun Media Corporation
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention:
National City Bank
000 Xxxxxx Xxxxxx, Xxxxxxx 00-0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Corporate Trust Department
Facsimile No.: (000) 000-0000
Re: 7-5/8% SENIOR NOTES DUE 2013
----------------------------
Reference is hereby made to the Indenture, dated as of
February 7, 2003 (the "INDENTURE"), among Sun Media Corporation, as issuer (the
"COMPANY"), the Subsidiary Guarantors party thereto and National City Bank, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of US$____________
aggregate principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or
any interest therein is subject to certain restrictions and conditions set forth
in the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein) that purchases for its own
account or for the account of a qualified institutional buyer to whom notice is
given that the transfer is being made in reliance on Rule 144A under the
Securities Act, (C) to an institutional "accredited investor" (as defined below)
that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to you and to the Company a signed letter substantially in
the form of this letter and, such transfer is in respect of a minimum principal
amount of Notes of US$250,000, (D) pursuant to offers and sales to non-U.S.
Persons that occur outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act, (E) pursuant to any other available
exemption under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
Person purchasing the Definitive Note or beneficial interest in a Global Note
from us in a transaction meeting the requirements of clauses (A) through (E) of
this paragraph a notice advising such purchaser that resales thereof are
restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you
D-1
and the Company may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment. We have had access to such financial and other
information and have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we deem necessary
in connection with our decision to purchase the Notes.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account, or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion, for investment purposes only and are not acquiring the
Notes with a view to any distribution thereof in a transaction that would
violate the Securities Act of the securities laws of any state of the United
States or any other applicable jurisdiction.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. This letter shall be governed by,
and construed in accordance with, the laws of the State of New York.
____________________________________
[Insert Name of Accredited Investor]
By:_________________________________
Name:
Title:
Dated: ______________________
D-2
EXHIBIT E
FORM OF NOTATION OF GUARANTEE
For value received, each Subsidiary Guarantor (which term
includes any successor Person under the Indenture), jointly and severally,
hereby unconditionally guarantees, to the extent set forth in the Indenture and
subject to the provisions in the Indenture, dated as of February 7, 2003 (the
"INDENTURE"), among Sun Media Corporation, as issuer (the "COMPANY"), the
Subsidiary Guarantors listed on the signature pages thereto and National City
Bank, as trustee (the "TRUSTEE"), (a) the due and punctual payment of the
principal of, premium, if any, and interest and Special Interest and Additional
Amounts, if any, on the Notes, whether at maturity, by acceleration, redemption
or otherwise, the due and punctual payment of interest on overdue principal and
premium, if any, and, to the extent permitted by law, interest and Special
Interest and Additional Amounts, if any, and the due and punctual performance of
all other obligations of the Company to the Holders or the Trustee under the
Notes and the Indenture, all in accordance with the terms of the Notes and the
Indenture; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same shall be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at maturity, by acceleration pursuant to Section 6.02 of the
Indenture, redemption or otherwise. The obligations of the Subsidiary Guarantors
to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee
and the Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to the Indenture for the precise terms of the
Subsidiary Guarantee. Except to the extent provided in the Indenture, including
Sections 8.02, 8.03 and 10.05 thereof, this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained herein
and in the Indenture. Each Holder of a Note, by accepting the same agrees to and
shall be bound by such provisions. Capitalized terms used herein and not defined
are used herein as so defined in the Indenture.
[NAME OF GUARANTOR]
By:__________________________
Name:
Title:
E-1
EXHIBIT F
FORM OF
SUBORDINATION AGREEMENT
This
SUBORDINATION AGREEMENT is dated as of (the "Agreement").
To: National City Bank, for itself and as trustee under the Indenture
referred to below for the holders of the Securities (the "Trustee")
[OBLIGOR] (the "Obligor"), as obligor under the convertible
obligation dated as of , made by the Obligor in favour of [HOLDER]
(the "Subordinated Note"), and [HOLDER], as holder (the "Holder") of the
Subordinated Note, for ten dollars and other good and valuable consideration
received by each of the Obligor and the Holder from the Trustee and by each
of the Obligor and the Holder from the other, agree as follows:
1. INTERPRETATION.
(a) "CASH, PROPERTY OR SECURITIES". "Cash, Property or Securities"
shall not be deemed to include securities of the Obligor or any other Person
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided herein with respect to the
Subordinated Note, to the payment of all Senior Indebtedness which may at the
time be outstanding; provided, however, that (i) all Senior Indebtedness is
assumed by the new Person, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness are
not, without the consent of such holders, altered by such reorganization or
readjustment.
(b) "PAYMENT IN FULL". "payment in full", with respect to Senior
Indebtedness, means the receipt on an irrevocable basis of cash in an amount
equal to the unpaid principal amount of the Senior Indebtedness and premium, if
any, and interest and any special interest thereon to the date of such payment,
together with all other amounts owing with respect to such Senior Indebtedness.
(c) "SENIOR INDEBTEDNESS". "Senior Indebtedness" means, at any date all
indebtedness (including, without limitation, any and all amounts of principal,
interest, special interest, additional amounts, premium, fees, penalties,
indemnities and "post-petition interest" in bankruptcy and any reimbursement of
expenses) under (1) the Indenture, including, without limitation, the "Notes,"
the "Subsidiary Guarantees," the "Exchange Notes," the "Additional Notes" and
any "Guarantee" of the Exchange Notes or the Additional Notes (in each case, as
defined in the Indenture) and (2) the Credit Agreement, dated as of February 7,
2003, among Sun Media Corporation ("Sun Media"), the financial institutions
identified as lenders therein, Banc of America Securities LLC, as joint lead
arranger, Bank of America, N.A., as administrative agent, and Credit Suisse
First Boston Corporation, as joint lead arranger and syndication agent.
2. AGREEMENT ENTERED INTO PURSUANT TO INDENTURE. The Obligor and the
Holder are entering into this Agreement pursuant to the provisions of the
Indenture, dated as of February 7, 2003 (the "Indenture"; capitalized terms
used herein without definition having the meanings set forth therein) among
Sun Media, the Subsidiary Guarantors and the Trustee. Pursuant to the
Indenture, Sun Media has issued and the Subsidiary Guarantors have
guaranteed, US$205,000,000 aggregate principal amount of Sun Media's 7-5/8%
Senior Notes due 2013 (the "Securities").
3. SUBORDINATION. The indebtedness represented by the Subordinated Note
shall be subordinated as follows:
(a) AGREEMENT TO SUBORDINATE. The Obligor, for itself and its
successors and assigns, and the Holder agree, that the indebtedness evidenced by
the Subordinated Note (including, without limitation,
F-1
principal, interest, premium, fees, penalties, indemnities and "post-petition
interest" in bankruptcy and any reimbursement of expenses) is subordinate and
junior in right of payment, to the extent and in the manner provided in this
Section 3, to the prior payment in full of all Senior Indebtedness. The
provisions of this Section 3 are for the benefit of the Trustee acting on behalf
of the holders from time to time of Senior Indebtedness, and such holders are
hereby made obligees hereunder to the same extent as if their names were written
herein as such, and they (collectively or singly) may proceed to enforce such
provisions.
(b) LIQUIDATION, DISSOLUTION OR BANKRUPTCY.
(i) Upon any distribution of assets of the Obligor to creditors or
upon a liquidation or dissolution or winding-up of the Obligor
or in a bankruptcy, arrangement, liquidation, reorganization,
insolvency, receivership or similar case or proceeding relating
to the Obligor or its property or other marshalling of assets
of the Obligor:
(A) the holders of Senior Indebtedness shall be entitled to
receive payment in full of all Senior Indebtedness before
the Holder shall be entitled to receive any payment of
principal of or interest on, or any other amount owing in
respect of, the Subordinated Note;
(B) until payment in full of all Senior Indebtedness, any
distribution of assets of the Obligor of any kind or
character to which the Holder would be entitled but for
this Section 3 is hereby assigned to the holders of Senior
Indebtedness absolutely and shall be paid by the Obligor or
by any receiver, trustee in bankruptcy, liquidating
trustee, agents or other Persons making such payment or
distribution to the Trustee on behalf of the holders of
Senior Indebtedness, as their interests may appear; and
(C) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Obligor of any
kind or character, whether in Cash, Property or Securities,
shall be received by the Holder before all Senior
Indebtedness is paid in full, such payment or distribution
shall be held in trust for the benefit of and shall be paid
over to the Trustee on behalf of the holders of Senior
Indebtedness, as their interests may appear, for
application to the payment of all Senior Indebtedness until
all Senior Indebtedness shall have been paid in full after
giving effect to any concurrent payment or distribution to
the holders of Senior Indebtedness in respect of such
Senior Indebtedness.
(ii) If (A) a bankruptcy, reorganization, insolvency, receivership
or similar proceeding relating to the Obligor or its property
(a "Reorganization Proceeding") is commenced and is continuing
and (B) the Holder does not file proper claims or proofs of
claim in the form required in a Reorganization Proceeding prior
to 45 days before the expiration of the time to file such
claims, then (1) upon the request of the Trustee, the Holder
shall file such claims and proofs of claim in respect of the
Subordinated Note and execute and deliver such powers of
attorney, assignments and proofs of claim or proxies as may be
directed by the Trustee to enable it to exercise in the sole
discretion of the Trustee any and all voting rights
attributable to the Subordinated Note which are capable of
being voted (whether by meeting, written resolution or
otherwise) in a Reorganization Proceeding and enforce any and
all claims upon or in respect of the Subordinated Note and to
collect and receive any and all payments or distributions which
may be payable or deliverable at any time upon or in respect
ii
of the Subordinated Note, and (2) whether or not the Trustee
shall take the action described in clause (1) above, the
Trustee shall nevertheless be deemed to have such powers of
attorney as may be necessary to enable the Trustee to exercise
such voting rights, file appropriate claims and proofs of claim
and otherwise exercise the powers described above for and on
behalf of the Holder.
(c) SUBROGATION. After all Senior Indebtedness is paid in full and
until the Subordinated Note is paid in full, the Holder shall be subrogated to
the rights of the holders of Senior Indebtedness. For purposes of this Section
3(c), a distribution made under this Section 3 to holders of Senior Indebtedness
which otherwise would have been made to the Holder, or a payment made by the
Holder to holders of Senior Indebtedness in respect of a turnover obligation
under this Section 3, is not, as between the Obligor and such holder, a payment
by the Obligor on Senior Indebtedness.
(d) RELATIVE RIGHTS. This Section 3 defines the relative rights of the
Holder and the holders of Senior Indebtedness. Nothing in this Section 3 shall:
(i) impair, as between the Obligor and the Holder, the obligation
of the Obligor, which is absolute and unconditional, to pay
the principal of and interest on the Subordinated Note in
accordance with its terms; or
(ii) affect the relative rights of the Holder and creditors of the
Obligor other than the holders of Senior Indebtedness; or
(iii) affect the relative rights of the holders of Senior
Indebtedness among themselves; or
(iv) prevent the Holder from exercising its available remedies
upon a default, subject to the rights of the holders of
Senior Indebtedness to receive cash, property or other assets
otherwise payable to the Holder.
(e) SUBORDINATION MAY NOT BE IMPAIRED.
(i) No right of any holder of Senior Indebtedness to enforce the
subordination of indebtedness evidenced by the Subordinated
Note shall in any way be prejudiced or impaired by any act or
failure to act by the Obligor or by any such holder or the
Trustee, or by any non-compliance by the Obligor with the
terms, provisions or covenants herein, regardless of any
knowledge thereof which any such holder or the Trustee may
have or be otherwise charged with. Neither the subordination
of the Subordinated Note as herein provided nor the rights of
the holders of Senior Indebtedness with respect hereto shall
be affected by any extension, renewal or modification of the
terms, or the granting of any security in respect of, any
Senior Indebtedness or any exercise or non-exercise of any
right, power or remedy with respect thereto.
(ii) The Holder agrees that all indebtedness evidenced by the
Subordinated Note will be unsecured by any Lien upon or with
respect to any property of the Obligor.
(iii) The Holder agrees not to exercise any offset or counterclaim
or similar right in respect of the indebtedness evidenced by
the Subordinated Note except to the extent payment of such
indebtedness is permitted and will not assign or otherwise
dispose of the Subordinated Note or the indebtedness which it
evidences unless the assignee or acquiror, as the case may
be, agrees to be bound by the terms of this Agreement.
iii
(f) HOLDER ENTITLED TO RELY. Upon any payment or distribution pursuant
to this Section 3, the Holder shall be entitled to rely (i) upon any order or
decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 3(b) are pending, (ii) upon a certificate if the
liquidating trustee or agent or other person in such proceedings making such
payment or distribution to the Holder or its representative, if any, or (iii)
upon a certificate of the Trustee or any representative (if any) of the holders
of Senior Indebtedness for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Obligor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Section 3.
4. ENFORCEABILITY. Each of the Obligor and the Holder represents and
warrants that this Agreement has been duly authorized, executed and delivered
by each of the Obligor and the Holder and constitutes a valid and legally
binding obligation of each of the Obligor and the Holder, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and on the date hereof, the Holder shall deliver an
opinion or opinions of counsel to such effect to the Trustee for the benefit
of the holders of the Securities.
5. MISCELLANEOUS.
(a) Until payment in full of all the Senior Indebtedness, the Obligor
and the Holder agree that no amendment shall be made to the Subordinated Note
which would affect the rights of the holders of the Senior Indebtedness
hereunder.
(b) This Agreement may not be amended or modified in any respect, nor
may any of the terms or provisions hereof be waived, except by an instrument
signed by the Obligor, the Holder and the Trustee.
(c) This Agreement shall be binding upon each of the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
Trustee and each and every holder of Senior Indebtedness and their respective
successors and assigns.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(e) The Holder and the Obligor each hereby irrevocably agrees that any
suits, actions or proceedings arising out of or in connection with this
Agreement may be brought in any state or federal court sitting in The City of
New York or any court in the Province of Quebec and submits and attorns to the
non-exclusive jurisdiction of each such court.
(f) The Holder and the Obligor will whenever and as often as reasonably
requested to do so by the Trustee, do, execute, acknowledge and deliver any and
all such other and further acts, assignments, transfers and any instruments of
further assurance, approvals and consents as are necessary or proper in order to
give complete effect to this Agreement.
(g) Each of the Holder and the Obligor irrevocably appoints CT
Corporation System, as its authorized agent in the State of New York upon which
process may be served in any such suit or proceedings, and agrees that service
of process upon such agent, and written notice of said service to CT Corporation
System, by the person serving the same to the addresses listed below, shall be
deemed in every respect effective service of process upon the Holder or the
Obligor, as applicable, in any such suit or proceeding.
If to the Obligor:
iv
[ ]
If to the Holder:
[ ]
Each of the Holder and the Obligor further agrees to take any and all
action as may be necessary to maintain such designation and appointment of such
agent in full force and effect for a period of ten years from the date of this
Agreement.
v
IN WITNESS WHEREOF, the Obligor and the Holder each have
caused this Agreement to be duly executed.
[OBLIGOR]
by
------------------------------
Name: |X|
Title: |X|
[HOLDER]
by
------------------------------
Name: |X|
Title: |X|
vi
